- Revenue is $3.56 Billion and EPS is $0.54 in 4Q07
- For Year, Cash Flow from Operations is $4.41 Billion and
Return on Invested Capital Exceeds 25 Percent
Conference Call on TI Web Site at 4:30 p.m. Central Time Today
www.ti.com
Download
Financials in MS Excel Format (85KB)
Except as noted, financial results are for continuing operations.
The sale of TI’s former Sensors & Controls business was completed
on April 27, 2006, and that business is reported as a discontinued operation.
DALLAS (Jan. 22, 2008) – Financial results reported today by Texas
Instruments Incorporated (TI) (NYSE:TXN) reflect the company’s
strong positions in analog and digital signal processing semiconductors.
Growth resumed in the fourth quarter with a revenue increase of 3 percent
from the same quarter a year ago. This growth was led by demand for
TI’s digital signal processors and high-performance analog products,
which were up 12 percent each. Gross profit increased 10 percent and
operating profit increased 30 percent, reflecting the quality of the
company's product portfolio, the efficiency of its manufacturing strategies
and effective expense management. For the year, cash flow from operations
was a record $4.41 billion and return on invested capital was more than
25 percent.
“It was a good quarter and a good year for TI. We delivered more
value to shareholders and built momentum with customers. Perhaps most
important to our future performance, we sharpened our focus on analog
with increases in dedicated research and development, sales support
and manufacturing capacity. Evidence of our potential in this area was
notable in high-performance analog where we again made substantial market
share gains,” said Rich Templeton, TI president and chief executive
officer. “We move into the first quarter of 2008 expecting year-over-year
growth to accelerate in our semiconductor operations.”
Details of financial performance for both the fourth quarter and the
year are in the following paragraphs.
Fourth Quarter 2007
-
Revenue was $3.56 billion, up 3 percent from the same quarter a year
ago. This was the first year-over-year gain in four quarters, reflecting
renewed growth in the company’s Semiconductor segment. Compared
with the third quarter of the year, revenue decreased 3 percent due
to the expected seasonal decline in graphing calculators, the core
products in the company’s Education Technology segment.
-
Gross profit was $1.93 billion, or 54.2 percent of revenue. This was
down $58 million from the prior quarter primarily due to seasonally
lower revenue from graphing calculators. In addition, the prior quarter
included a $39 million gain from the sale of TI’s product line
for digital subscriber line (DSL) customer premises equipment. These
more than offset higher gross profit in the company’s Semiconductor
segment. Compared with the year-ago quarter, gross profit was up $178
million as a greater percentage of revenue came from more-profitable
analog and digital signal processing products, and as the company
continued to reduce manufacturing costs.
-
Operating expenses were $508 million for research and development (R&D)
and $422 million for selling, general and administrative (SG&A).
R&D expense decreased $34 million from the prior quarter due to
lower costs for severance and semiconductor product development. From
the year-ago quarter, R&D expense decreased $48 million due to
lower costs for semiconductor product development. The company continues
to benefit from more efficient development of advanced digital manufacturing
process technologies through its collaborative work with foundries.
SG&A decreased $7 million from the prior quarter due to seasonally
lower compensation expense. SG&A was about even with the same
quarter a year ago.
-
Operating profit was $996 million, or 28.0 percent of revenue. This was
a decrease of $17 million from the prior quarter as less gross profit
more than offset the benefit of lower operating expenses. Operating
profit increased $229 million from the year-ago quarter, primarily
due to higher gross profit, as well as lower operating expenses.
-
Other income was $46 million. This was down in both comparisons, $7 million
from the prior quarter and $23 million from the year-ago quarter.
The declines were primarily due to the non-recurrence of favorable
items, including a tax interest benefit in the prior quarter and a
settlement with the Italian government in the year-ago quarter.
-
Income from continuing operations was $753 million, including a discrete
tax benefit of $11 million. Income was about even with the prior quarter
and up $82 million, or 12 percent, from the year-ago quarter. Income
in the year-ago quarter included a $72 million benefit from the reinstatement
of the federal R&D tax credit.
-
Earnings per share (EPS) were $0.54 and included a discrete tax benefit
of $0.01. EPS increased in both comparisons, $0.02 from the prior
quarter and $0.09 from the year-ago quarter. EPS in the year-ago quarter
included a $0.05 tax benefit from the reinstatement of the federal
R&D tax credit.
-
Orders were $3.48 billion. This was a decrease of $75 million from the
prior quarter primarily due to the seasonal decline in graphing calculators,
and an increase of $402 million from the same quarter a year ago due
to stronger demand for the company’s semiconductors.
-
Cash flow from operations was $1.42 billion, a decrease of $109 million
from the prior quarter. The prior quarter included a tax refund. At
the end of the quarter, total cash (cash and cash equivalents plus
short-term investments) was $2.92 billion. This was $745 million lower
than the end of the prior quarter and $793 million lower than the
same quarter a year ago as the company used $1.88 billion to repurchase
57 million shares of its common stock and paid dividends of $138 million.
-
Capital spending totaled $181 million, primarily for equipment and facilities
used to assemble and test semiconductors. Depreciation was $253 million.
-
Accounts receivable were $1.74 billion at the end of the quarter. This
was a decrease of $281 million from the prior quarter and reflected
normal seasonal patterns, for both lower revenue in the final month
of the quarter in the Semiconductor segment and lower revenue in the
company’s Education Technology segment. Accounts receivable
were down $32 million compared with the same quarter a year ago. Days
sales outstanding were 44 at the end of the quarter, compared with
50 at the end of the prior quarter and 46 for the same period in 2006.
-
Inventory was $1.42 billion at the end of the fourth quarter. This was
$32 million lower than the prior quarter and $19 million lower than
the same quarter a year ago. Days of inventory at the end of the fourth
quarter were 78, unchanged from the end of the prior quarter and up
from 75 a year ago.
-
Revenue was $13.83 billion, down 3 percent from 2006, due to lower revenue
for RISC microprocessors, semiconductors used in cell phone applications
and DLP® products. The collective declines in these areas more
than offset strong growth from high-performance analog products.
-
Gross profit was $7.33 billion, or 53.0 percent of revenue. This was
an increase of $74 million as a greater percentage of revenue came
from more-profitable analog and digital signal processing products,
and as the company reduced manufacturing costs.
-
Operating expenses were $2.15 billion for R&D and $1.68 billion for
SG&A. R&D expense decreased $40 million compared with 2006
as the company benefited from more efficient development of advanced
digital manufacturing process technologies through its collaborative
work with foundries. SG&A expense decreased $16 million compared
with 2006.
-
Operating profit was $3.50 billion, or 25.3 percent of revenue. This
was an increase of $130 million, or 4 percent, primarily due to strong
gross profit, as well as lower operating expenses.
-
Other income was $195 million, a decrease of $63 million primarily due
to lower interest income. The year 2006 included a favorable settlement
with the Italian government that was not repeated in 2007.
-
Income from continuing operations was $2.64 billion, about the same
as 2006. Net income was $2.66 billion, down from $4.34 billion in
2006 when the company had $1.70 billion in income from discontinued
operations, almost all of which came from the gain on the sale of
the Sensors & Controls business.
-
EPS from continuing operations was $1.83, up 8 percent from 2006, even
though income from continuing operations was about even. The increase
in EPS reflects fewer shares outstanding. TI’s portfolio now
requires less capital spending and is comprised of higher-margin products.
As a result, the company has generated greater levels of cash that
it has returned to shareholders through stock repurchases. EPS from
discontinued operations was $0.01, compared with $1.09 last year when
a gain on the sale of the Sensors & Controls business was included.
-
Orders were $13.69 billion, down $327 million from 2006, due to lower
demand for semiconductor products.
-
Cash flow from operations was $4.41 billion, an increase of $1.95 billion
from the prior year. Cash flow in 2006 included income tax payments
associated with the gain on the sale of the Sensors & Controls
business and investments made by the company to carry a higher level
of inventory in order to improve its responsiveness to customers.
Cash flow in 2007 included a tax refund. For the year, the company
used $4.89 billion to repurchase 147 million shares of common stock,
reducing shares outstanding by 7 percent. The company paid $425 million
in dividends, more than double the $199 million paid in 2006.
-
Capital spending totaled $686 million, primarily for equipment and facilities
used to assemble and test semiconductors. This was a decrease of $586
million from the prior year. Depreciation was $1.02 billion.
Outlook
TI intends to provide a mid-quarter update to its financial outlook
on March 10, 2008, by issuing a press release and holding a conference
call. Both will be available on the company’s web site.
For the first quarter of 2008, TI expects revenue to be in the following
ranges:
-
Total TI, $3.27 billion to $3.55 billion;
-
Semiconductor, $3.20 billion to $3.46 billion; and
-
Education Technology, $70 million to $90 million.
TI expects EPS to be in the range of $0.43 to $0.49.
In 2008, TI expects R&D expense of about $2.0 billion, capital expenditures
of about $0.9 billion and depreciation of about $1.0 billion. The annual
effective tax rate is estimated to be about 31 percent, up from 29 percent
in 2007. The tax rate is based on current tax law and does not assume
reinstatement of the federal R&D tax credit, which expired at the
end of 2007.
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Income
(Millions of dollars, except share and per-share amounts)
For Three Months Ended For Years Ended
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2007 2007 2006 2007 2006
Net revenue $3,556 $3,663 $3,463 $13,835 $14,255
Cost of revenue (COR) 1,630 1,679 1,715 6,502 6,996
Gross profit 1,926 1,984 1,748 7,333 7,259
Research and development (R&D) 508 542 556 2,155 2,195
Selling, general and
administrative (SG&A) 422 429 425 1,681 1,697
Total operating costs
and expenses 2,560 2,650 2,696 10,338 10,888
Profit from operations 996 1,013 767 3,497 3,367
Other income (expense) net 46 53 69 195 258
Income from continuing
operations before
income taxes 1,042 1,066 836 3,692 3,625
Provision for income taxes 289 308 165 1,051 987
Income from continuing
operations 753 758 671 2,641 2,638
Income (loss) from
discontinued operations,
net of income taxes 3 18 (3) 16 1,703
Net income $ 756 $ 776 $ 668 $ 2,657 $ 4,341
Basic earnings per common
share:
Income from continuing
operations $ .55 $ .54 $ .46 $ 1.86 $ 1.73
Net income $ .55 $ .55 $ .45 $ 1.88 $ 2.84
Diluted earnings per common
share:
Income from continuing
operations $ .54 $ .52 $ .45 $ 1.83 $ 1.69
Net income $ .54 $ .54 $ .45 $ 1.84 $ 2.78
Average shares outstanding
(millions):
Basic 1,372 1,417 1,469 1,417 1,528
Diluted 1,399 1,448 1,499 1,446 1,560
Cash dividends declared
per share of common stock $ .10 $ .08 $ .04 $ .30 $ .13
Percentage of revenue:
Gross profit 54.2% 54.2% 50.5% 53.0% 50.9%
R&D 14.3% 14.8% 16.0% 15.6% 15.4%
SG&A 11.9% 11.7% 12.3% 12.1% 11.9%
Operating profit 28.0% 27.6% 22.1% 25.3% 23.6%
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets
(Millions of dollars, except share amounts)
Dec. 31, Sept. 30, Dec. 31,
2007 2007 2006
Assets
Current assets:
Cash and cash equivalents $ 1,328 $ 807 $ 1,183
Short-term investments 1,596 2,862 2,534
Accounts receivable, net of
allowances of ($26), ($30) and ($26) 1,742 2,023 1,774
Raw materials 105 102 105
Work in process 876 934 930
Finished goods 437 414 402
Inventories 1,418 1,450 1,437
Deferred income taxes 654 702 741
Prepaid expenses and other current assets 180 209 185
Total current assets 6,918 8,053 7,854
Property, plant and equipment at cost 7,568 7,597 7,751
Less accumulated depreciation (3,959) (3,916) (3,801)
Property, plant and equipment, net 3,609 3,681 3,950
Equity and other long-term investments 267 265 287
Goodwill 838 796 792
Acquisition-related intangibles 115 108 118
Deferred income taxes 510 425 601
Capitalized software licenses, net 227 242 188
Overfunded retirement plans 105 77 58
Other assets 78 77 82
Total assets $12,667 $13,724 $13,930
Liabilities and Stockholders' Equity
Current liabilities:
Loans payable and current portion
of long-term debt $ -- $ -- $ 43
Accounts payable 657 644 560
Accrued expenses and other liabilities 1,117 1,092 1,029
Income taxes payable 53 152 284
Accrued profit sharing and retirement 198 143 162
Total current liabilities 2,025 2,031 2,078
Underfunded retirement plans 184 95 208
Deferred income taxes 49 27 23
Deferred credits and other liabilities 434 434 261
Total liabilities 2,692 2,587 2,570
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:
Dec. 31, 2007 -- 1,739,632,601;
Sept. 30, 2007 -- 1,739,579,782;
Dec. 31, 2006 -- 1,739,108,694 1,740 1,740 1,739
Paid-in capital 931 853 885
Retained earnings 19,788 19,172 17,529
Less treasury common stock at cost:
Shares: Dec. 31, 2007 -- 396,421,798;
Sept. 30, 2007 -- 341,373,012;
Dec. 31, 2006 -- 289,078,450 (12,160) (10,344) (8,430)
Accumulated other comprehensive
(loss), net of taxes (324) (284) (363)
Total stockholders' equity 9,975 11,137 11,360
Total liabilities and stockholders' equity $12,667 $13,724 $13,930
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Millions of dollars)
For Three Months Ended For Years Ended
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2007 2007 2006 2007 2006
Cash flows from operating
activities:
Net income $ 756 $ 776 $ 668 $ 2,657 $ 4,341
Adjustments to reconcile
net income to cash
provided by operating
activities of continuing
operations:
(Income) loss from
discontinued operations (3) (18) 3 (16) (1,703)
Depreciation 253 262 249 1,022 1,052
Stock-based compensation 67 66 78 280 332
Amortization of acquisition-
related intangibles 10 10 13 48 59
(Gains) losses on
sales of assets -- (39) -- (39) --
Deferred income taxes 4 36 (77) 34 (200)
Increase (decrease) from
changes in:
Accounts receivable 284 (117) 315 40 (116)
Inventories 32 (34) 54 11 (248)
Prepaid expenses and
other current assets 26 24 (14) 13 (95)
Accounts payable
and accrued expenses (20) 154 (208) 77 (104)
Income taxes payable (57) 378 (156) 188 (716)
Accrued profit sharing
and retirement 52 45 30 33 28
Change in funded status of
retirement plans and
accrued retirement costs (3) (14) (94) (16) (210)
Other 21 2 (21) 74 34
Net cash provided by
operating activities of
continuing operations 1,422 1,531 840 4,406 2,454
Cash flows from investing
activities:
Additions to property,
plant and equipment (181) (152) (214) (686) (1,272)
Proceeds from sales of
assets -- 61 14 61 3,000
Purchases of cash
investments (794) (1,916) (1,275) (5,035) (6,821)
Sales and maturities of
cash investments 2,067 1,374 1,509 5,981 8,418
Purchases of equity
investments (4) (15) (7) (30) (40)
Sales of equity and
debt investments 2 4 2 11 11
Acquisitions, net
of cash acquired (56) (4) -- (87) (205)
Net cash provided by
(used in) investing
activities of continuing
operations 1,034 (648) 29 215 3,091
Cash flows from financing
activities:
Payments on loans and
long-term debt -- -- -- (43) (586)
Dividends paid (138) (114) (59) (425) (199)
Sales and other common
stock transactions 67 166 57 761 418
Excess tax benefit from
stock option exercises 10 16 15 116 100
Stock repurchases (1,877) (1,409) (1,130) (4,886) (5,302)
Net cash used in
financing activities of
continuing operations (1,938) (1,341) (1,117) (4,477) (5,569)
Cash flows from discontinued
operations:
Operating activities -- -- -- -- 7
Investing activities -- -- -- -- (16)
Net cash used in
discontinued operations -- -- -- -- (9)
Effect of exchange
rate changes on cash 3 (1) 1 1 2
Net increase (decrease) in
cash and cash equivalents 521 (459) (247) 145 (31)
Cash and cash equivalents,
beginning of period 807 1,266 1,430 1,183 1,214
Cash and cash equivalents,
end of period $ 1,328 $ 807 $ 1,183 $ 1,328 $ 1,183
Certain amounts in the prior periods' financial statements have been
reclassified to conform to the current presentation.
Segment Net Revenue
(Millions of dollars)
For Three Months Ended For Years Ended
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2007 2007 2006 2007 2006
Semiconductor* $ 3,475 $ 3,461 $ 3,385 $13,309 $13,730
Education Technology 81 202 78 526 525
Total net revenue $ 3,556 $ 3,663 $ 3,463 $13,835 $14,255
Segment Profit (Loss)
(Millions of dollars)
For Three Months Ended For Years Ended
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2007 2007 2006 2007 2006
Semiconductor* $ 1,117 $ 1,031 $ 908 $ 3,883 $ 3,831
Education Technology 19 99 19 208 200
Corporate** (140) (117) (160) (594) (664)
Profit from operations $ 996 $ 1,013 $ 767 $ 3,497 $ 3,367
* Semiconductor revenue for the year ended December 31, 2006 includes
a $70 million benefit from a royalty settlement in the second
quarter. Semiconductor profit from operations includes a benefit
of $60 million from the royalty settlement. Semiconductor profit
from operations also includes a benefit in the second quarter of
2006 of $57 million from a $77 million net sales tax refund that
was due to the settlement of an audit of Texas sales taxes paid on
various purchases over a nine-year period. The $57 million effect
on profit from operations is reflected as $31 million in cost of
revenue, $21 million in R&D and $5 million in SG&A. The remaining
$20 million of the net sales tax refund is reflected in Other
income (expense) net.
** Corporate includes a gain on the sale of an asset of $39 million in the
third quarter of 2007 in cost of revenue. Corporate also includes
the following stock-based compensation expense:
COR $ 13 $ 12 $ 15 $ 53 $ 64
R&D 20 20 24 83 101
SG&A 34 34 39 144 167
Profit from operations $ 67 $ 66 $ 78 $ 280 $ 332
Semiconductor Segment
- For the fourth quarter, revenue was $3.48 billion, about even with
the prior quarter. Compared with the same quarter a year ago, revenue
increased 3 percent because demand was higher for TI’s digital
signal processing and analog products.
- For the year, revenue was $13.31 billion, a decrease of $421 million,
or 3 percent, because revenue was lower for RISC microprocessors, semiconductors
used in cell phone applications and DLP products. Combined, the declines
in these areas more than offset strong growth from high-performance
analog products.
- For analog products:
- Fourth quarter revenue was $1.37 billion. This was down 2 percent
from the prior quarter primarily due to the divestiture of a DSL
product line. Revenue was up 4 percent compared with the same quarter
a year ago due to stronger demand for high-performance analog products.
Revenue from high-performance analog products increased 1 percent
from the prior quarter and 12 percent from the same quarter a year
ago.
- Annual revenue was $5.29 billion. This was an increase of 1 percent
due to strong demand for high-performance analog products that was
mostly offset by lower revenue from custom products sold into cell
phone applications. Revenue from high-performance analog products
grew 9 percent.
- For digital signal processing products:
- Fourth quarter revenue was $1.36 billion. This was an increase
of 4 percent from the prior quarter due to demand for products used
in cell phone applications and an increase of 12 percent from the
same quarter a year ago primarily due to products used in cell phone
applications.
- Annual revenue was $5.07 billion, a decrease of 2 percent due
to the divestiture of a DSL product line and declines across a broad
range of markets, including cell phone applications.
- For remaining product lines:
- Fourth quarter revenue was $739 million. This was down 2 percent
compared with the prior quarter as a decline in DLP revenue more
than offset gains in microcontroller revenue and royalties. Revenue
from standard logic products and RISC microprocessors was about
even. Compared with the same quarter a year ago, revenue decreased
14 percent due to declines in DLP revenue, royalties and RISC microprocessor
revenue. Revenue from microcontrollers and standard logic products
grew from a year ago.
- Annual revenue was $2.95 billion, down 12 percent from the prior
year due to lower demand for RISC microprocessors and DLP products.
Revenue from microcontrollers and royalties increased, while standard
logic revenue was about even.
- Gross profit for the fourth quarter was $1.90 billion, or 54.6 percent
of revenue. This was up in both comparisons, $55 million from the prior
quarter and $165 million from the year-ago quarter. The higher gross
profit was a result of a greater percentage of revenue from more-profitable
analog and digital signal processing products, and lower manufacturing
costs.
- Gross profit for the year was $7.08 billion, or 53.2 percent of revenue.
This was an increase of $30 million from the prior year because a greater
percentage of revenue came from more-profitable analog and digital signal
processing products, and manufacturing costs were lower.
- Operating profit for the fourth quarter was $1.12 billion, or 32.1
percent of revenue. This was an increase of $86 million from the prior
quarter and $209 million from the same quarter a year ago due to higher
gross profit and lower R&D expense.
- Annual operating profit was $3.88 billion, or 29.2 percent of revenue.
This was an increase of $52 million due to higher gross profit and lower
R&D expense.
- Orders in the fourth quarter were $3.40 billion. This was about even
with the prior quarter and up 13 percent from the year-ago quarter primarily
due to higher demand for digital signal processing products, as well
as for analog products.
- Orders for the year were $13.16 billion. This was a decrease of $329
million from the prior year due to lower demand across a broad range
of semiconductor products.
Semiconductor Highlights
- TI introduced a next-generation power management chip to maximize
energy efficiency in multi-kilowatt systems.
- TI delivered the industry’s first sub-1 GHz radio frequency
(RF) system-on-chip solution with an integrated USB controller, enabling
a fast, easy bridge between PCs and RF networks.
- TI announced that Samsung Electronics Co., Ltd. would use TI’s
OMAP™ applications processor and Bluetooth® products in its
next-generation smartphones.
Education Technology Segment
- Revenue in the fourth quarter was $81 million. This was a decrease
of $121 million from the prior quarter as graphing calculator sales
declined with the end of the back-to-school season. It was an increase
of $3 million from the year-ago quarter due to higher demand for graphing
calculators.
- Annual revenue was $526 million. This was about even with the prior
year.
- Gross profit in the fourth quarter was $50 million, or 62.1 percent
of revenue. This was a decrease of $85 million from the prior quarter
due to seasonally lower revenue and an increase of $5 million from the
year-ago quarter primarily due to lower product costs, as well as higher
revenue.
- Gross profit for the year was $340 million, or 64.6 percent of revenue.
This was an increase of $19 million, or 3.5 percentage points of gross
margin, due to lower product costs.
- Operating profit in the fourth quarter was $19 million, or 23.6 percent
of revenue. This was a decrease of $80 million compared with the prior
quarter due to less gross profit. Operating profit was even compared
with the year-ago quarter as greater gross profit was offset by higher
operating expenses.
- Annual operating profit was $208 million, or 39.4 percent of revenue.
This was an increase of $8 million from the prior year due to greater
gross profit.
# # #
Safe Harbor Statement
“Safe Harbor” Statement under the Private Securities Litigation
Reform Act of 1995: 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 in this release that describe
our 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 for analog chips and
digital signal processors in key markets such as communications, entertainment
electronics and computing;
- 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;
- TI’s ability to compete in products and prices in an intensely
competitive industry;
- 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;
- 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 networks and
fluctuations in foreign currency exchange rates;
- Natural events such as severe weather and earthquakes in the locations
in which TI, its customers or its suppliers operate;
- Availability and cost of raw materials, utilities, manufacturing equipment,
third-party manufacturing services and manufacturing technology;
- 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, the outcome of tax audits and the ability to realize
deferred tax assets;
- 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 company forecasts;
- The financial impact of inadequate or excess TI inventories to meet
demand that differs from projections;
- Product liability or warranty claims, or recalls by TI customers for
a product containing a TI part;
- TI’s ability to recruit and retain skilled personnel; and
- Timely implementation of new manufacturing technologies, installation
of manufacturing equipment and the ability to obtain needed third-party
foundry and assembly/test subcontract services.
For a more detailed discussion of these factors, see the text under the
heading “Risk Factors” in Item 1A of our most recent Form
10-K. The forward-looking statements included in this release are made
only as of the date of publication, and we undertake no obligation to
update the forward-looking statements to reflect subsequent events or
circumstances.
About Texas Instruments
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new electronics that make the world smarter, healthier, safer, greener
and more fun. A global semiconductor company, TI innovates through manufacturing,
design and sales operations in more than 25 countries. For more information,
go to www.ti.com.
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