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TXN · Texas Instruments

29 filings

10-K

TXN 10-K Annual Reports

Texas Instruments - 29 annual reports

Filing record · 2016–202610-K1110-Q338-K110

2025
Texas Instruments Annual Report, Year Ended Dec 31, 2025
Texas Instruments Incorporated (TXN) reported its fiscal year 2025 results, highlighting a robust increase in revenue to $17.68 billion, a 13.0% rise from the prior year. This growth was primarily driven by strong demand in its core Analog segment, which contributed approximately 79% of total revenue, and a notable contribution from the Embedded Processing segment. The company continues to focus on its strategy to maximize long-term free cash flow per share growth, underpinned by a strong business model with four competitive advantages, disciplined capital allocation, and a commitment to efficiency. Financially, TXN demonstrated solid operational performance with $7.15 billion in cash flow from operations. Free cash flow reached $2.94 billion, representing 16.6% of revenue. The company returned significant value to shareholders, with $6.48 billion allocated to dividends and share repurchases. Notably, TXN announced a major acquisition of Silicon Labs for approximately $7.5 billion, expected to close in the first half of 2027, signaling a strategic move to expand its offerings, particularly in the embedded processing space. The company anticipates lower effective tax rates and tax-related cash payments in 2026 and beyond due to the "One Big Beautiful Bill Act" (OBBBA).
Feb 6, 2026
2024
Texas Instruments Annual Report, Year Ended Dec 31, 2024
Texas Instruments Inc. (TXN) reported fiscal year 2024 revenue of $15.64 billion, a decrease of 10.7% from the prior year, primarily driven by lower revenue in its core Analog and Embedded Processing segments. Despite the revenue decline, the company emphasizes its strategy centered on maximizing long-term free cash flow per share, supported by four competitive advantages: manufacturing/technology, broad product portfolio, market channel reach, and product/market diversity. Significant investments are being made in expanding 300mm manufacturing capacity in Texas and Utah to support future growth and cost efficiencies. The company generated $6.32 billion in cash flow from operations and $1.50 billion in free cash flow, representing 9.6% of revenue, and returned $5.72 billion to shareholders through dividends and share repurchases. The CHIPS and Science Act is expected to provide significant financial benefits, including tax credits and direct funding for new manufacturing facilities. While facing industry cyclicality and competitive pressures, Texas Instruments remains focused on disciplined capital allocation and operational efficiency to drive long-term shareholder value.
Feb 14, 2025
2023
Texas Instruments Annual Report, Year Ended Dec 31, 2023
Texas Instruments Inc. (TXN) reported revenue of $17.52 billion for the fiscal year ended December 30, 2023. While overall revenue saw a decrease of 12.5% compared to the prior year, driven primarily by a decline in the Analog segment, the company strategically emphasizes growth in the industrial and automotive markets, which are expected to offer the best long-term opportunities. The company's core strategy remains focused on maximizing long-term free cash flow per share growth through a robust business model centered on analog and embedded processing products, disciplined capital allocation, and operational efficiency. Despite a challenging revenue environment, TXN continues to invest heavily in research and development and capital expenditures, particularly in expanding its 300mm manufacturing capacity, positioning itself for future demand and strengthening its competitive advantages. The company remains committed to returning capital to shareholders through dividends and share repurchases.
Feb 2, 2024
2022
Texas Instruments Annual Report, Year Ended Dec 31, 2022
Texas Instruments Inc. (TXN) reported robust performance in its 2022 10-K filing, driven by its core Analog and Embedded Processing segments. The company generated $20.03 billion in revenue, marking a 9.2% increase year-over-year, largely attributed to higher prices and a favorable product mix. Management's strategy remains focused on maximizing long-term free cash flow per share growth through a strong business model with four competitive advantages, disciplined capital allocation, and operational efficiency. Despite facing a market correction in 2022 and anticipating continued weakness into 2023, TI demonstrated strong profitability with a gross margin of 68.8% and operating profit of 50.6% of revenue. The company returned significant capital to shareholders through dividends and stock repurchases, totaling $7.91 billion. Investments in manufacturing capacity, particularly in 300-mm wafer fabrication, are ongoing to support anticipated long-term growth in industrial and automotive markets.
Feb 3, 2023
2021
Texas Instruments Annual Report, Year Ended Dec 31, 2021
Texas Instruments Inc. (TXN) reported strong financial performance for the fiscal year ended December 30, 2021. The company generated $18.34 billion in revenue, a significant increase of 27% compared to the previous year, driven primarily by its Analog segment, which accounted for 77% of total revenue. The Embedded Processing segment also showed robust growth. Profitability improved substantially, with gross profit increasing by 34% and operating profit rising to 48.8% of revenue. This performance underscores the strength of TI's business model, which is focused on analog and embedded processing products and leverages four key competitive advantages: manufacturing and technology, a broad product portfolio, extensive market channels, and diverse, long-lived products and markets. The company is strategically investing in expanding its 300-millimeter manufacturing capacity to support anticipated long-term demand, particularly in the industrial and automotive sectors. TI's strategy to maximize free cash flow per share growth remains centered on its strong business model, disciplined capital allocation, and continuous pursuit of efficiency. In 2021, the company generated $6.29 billion in free cash flow and returned $4.41 billion to shareholders through dividends and share repurchases, indicating a commitment to shareholder value. Despite facing global economic uncertainties, supply chain challenges, and intense competition, Texas Instruments demonstrates a resilient business and a clear strategy for sustained long-term value creation.
Feb 4, 2022
2020
Texas Instruments Annual Report, Year Ended Dec 31, 2020
Texas Instruments Inc. (TXN) reported fiscal year 2020 revenues of $14.46 billion, a slight increase of 1% year-over-year, driven primarily by its Analog segment which accounted for approximately 75% of total revenue. The company maintained strong profitability with a gross margin of 64.1%. Free cash flow for the year was robust at $5.49 billion, representing 38.0% of revenue, underscoring TI's efficient business model focused on analog and embedded processing products. TI continued its commitment to returning value to shareholders, distributing $5.98 billion through dividends and stock repurchases, with dividends representing 62% of free cash flow, indicating a sustainable dividend policy. The company's strategy emphasizes leveraging its four competitive advantages—manufacturing and technology, broad product portfolio, market channel reach, and diversity—while maintaining disciplined capital allocation and operational efficiency to maximize free cash flow per share growth. Despite global economic uncertainties and the ongoing impact of the COVID-19 pandemic, TI's diversified end markets, particularly its focus on industrial and automotive sectors with long product life cycles, provide resilience against market cyclicality.
Feb 5, 2021
2019
Texas Instruments Annual Report, Year Ended Dec 31, 2019
Texas Instruments (TXN) reported its 2019 performance, highlighting its core strengths in Analog and Embedded Processing segments, which are strategically focused on the industrial and automotive markets. The company generated $14.38 billion in revenue, with the Analog segment contributing approximately 71% and the Embedded Processing segment contributing about 20%. TXN emphasizes its sustainable competitive advantages, including manufacturing and technology, a broad product portfolio, market channel reach, and the diversity/longevity of its offerings. The company's capital management strategy is centered on growing free cash flow per share and returning all free cash flow to shareholders through dividends and stock repurchases. While revenue saw a decrease of 9% year-over-year to $14.38 billion, primarily due to lower demand in the Embedded Processing and Analog segments, TXN maintained a strong gross margin of 63.7% and generated $5.80 billion in free cash flow. The company returned $5.97 billion to shareholders in 2019 via dividends and repurchases, demonstrating its commitment to shareholder value. Looking ahead, TXN continues to invest in 300mm manufacturing capacity to support analog growth and remains focused on innovation and expanding direct customer relationships to navigate the cyclical semiconductor market.
Feb 20, 2020
2018
Texas Instruments Annual Report, Year Ended Dec 31, 2018
Texas Instruments Inc. (TXN) reported solid financial performance for the fiscal year ending December 31, 2018, with revenues reaching $15.78 billion, a 6% increase from the previous year. The company's strategic focus on its Analog and Embedded Processing segments, particularly for the industrial and automotive markets, continues to drive growth. These segments benefit from long product life cycles, diversity, and less capital-intensive manufacturing, contributing to strong profitability and cash generation. Despite a slowdown in the semiconductor market towards the end of 2018, TI demonstrated resilience, with significant growth in gross profit and operating profit, and a notable increase in free cash flow to $6.06 billion. The company's financial health is further bolstered by its robust capital management strategy, which prioritizes returning free cash flow to shareholders through dividends and stock repurchases. In 2018, TI returned a substantial $7.66 billion to shareholders. The strong free cash flow generation, coupled with a disciplined approach to expenses and continued investment in its competitive advantages, positions TI favorably for sustained value creation. Investors can note the company's leading market share in the fragmented analog semiconductor market and its strong position in embedded processing, indicating continued potential for market share gains.
Feb 22, 2019
2017
Texas Instruments Annual Report, Year Ended Dec 31, 2017
Texas Instruments Inc. (TXN) reported strong performance for the fiscal year ended December 30, 2017, driven by its core Analog and Embedded Processing segments. The company generated $14.96 billion in revenue, a 12% increase year-over-year, primarily due to robust demand in the industrial and automotive markets. Profitability was strong, with a gross margin of 64.3% and operating profit of $6.08 billion. Free cash flow reached $4.67 billion, underscoring the effectiveness of TI's business model focused on long-term growth, profitability, and shareholder returns. The company's strategic emphasis on Analog and Embedded Processing products, particularly for industrial and automotive applications, continues to be a key driver of its success. These markets offer long product life cycles, diversity, and less capital-intensive manufacturing, contributing to stable profitability and strong cash generation. TI's commitment to reinvesting in the business and returning free cash flow to shareholders through dividends and stock repurchases remains a central tenet of its capital management strategy.
Feb 22, 2018
2016
Texas Instruments Annual Report, Year Ended Dec 31, 2016
Texas Instruments Inc. (TXN) reported strong performance in its 2016 fiscal year, driven by its core Analog and Embedded Processing segments, which accounted for 86% of its revenue. The company generated $13.37 billion in revenue and demonstrated robust profitability with a gross margin of 61.6%. A key focus for TI is its business model centered on differentiated analog and embedded processing semiconductors, supported by a strong manufacturing base and broad market channels. This strategy aims to deliver stable, profitable growth and strong free cash flow generation. TI's financial health appears solid, with significant free cash flow and a commitment to returning value to shareholders through dividends and stock repurchases. The company returned $3.78 billion to investors in 2016. While facing a competitive and cyclical semiconductor market, TI's diversified product portfolio and market reach position it well for continued long-term growth and shareholder value creation. The company also highlighted its strategic investments in R&D, particularly in its core segments, to maintain its competitive edge.
Feb 23, 2017
2015
Texas Instruments Annual Report, Year Ended Dec 31, 2015
Texas Instruments Inc. (TXN) filed its 2015 10-K on February 23, 2016, reporting on its performance for the fiscal year ending December 30, 2015. The company, a global semiconductor designer and manufacturer, generated $13 billion in revenue. TXN's strategy centers on its Analog and Embedded Processing segments, which represent the vast majority of its revenue and are characterized by long product life cycles, diversity, and lower capital intensity, contributing to stability, profitability, and strong free cash flow generation. This business model underpins their capital management strategy focused on maximizing shareholder value through free cash flow growth. Financially, the company demonstrated resilience, with revenue largely flat year-over-year at $13 billion. Gross margin improved to 58.2%, a record high, driven by the company's product portfolio and manufacturing efficiency. Operating profit saw a healthy increase to $4.27 billion, and net income rose by 6% to $2.99 billion, translating to diluted EPS of $2.82. Free cash flow, a key metric for TXN, also reached a record high, representing 28.6% of revenue, and the company returned $4.2 billion to shareholders through dividends and stock repurchases. TXN's focus on its core segments and efficient operations position it for continued value creation.
Feb 24, 2016
2014
Texas Instruments Annual Report, Year Ended Dec 31, 2014
Texas Instruments (TI) reported strong performance in 2014, driven by its core Analog and Embedded Processing segments, which together represented 83% of total revenue. The company generated $13.05 billion in revenue, a 7% increase year-over-year, with Analog revenue growing 13% and Embedded Processing revenue growing 12%. This growth, coupled with efficient manufacturing strategies and a diverse product portfolio, led to a significant improvement in gross margin to 56.9% and operating profit margin to 30.3%. TI demonstrated robust cash flow generation, with free cash flow at 27% of revenue, enabling substantial returns to shareholders. In 2014, the company returned $4.2 billion to investors through dividends and stock repurchases. The company maintains a strong financial position with significant cash reserves and an undrawn credit facility, positioning it well to navigate the cyclical nature of the semiconductor industry and continue investing in its growth engines.
Feb 24, 2015
2013
Texas Instruments Annual Report, Year Ended Dec 31, 2013
Texas Instruments reported 2013 revenue of $12.21 billion, down 5% from $12.83 billion in 2012, as the decline in its exited legacy wireless products offset growth in its core businesses. Core Analog and Embedded Processing together made up 79% of revenue. Analog revenue rose 3% to $7.19 billion at a 25.8% operating margin, while Embedded Processing grew 9% to $2.45 billion but earned only a 7.6% operating margin. Operating profit jumped to $2.83 billion (23.2% of revenue) from $1.97 billion, helped by a $315 million gain on the transfer of wireless connectivity technology and a sharp drop in restructuring charges. Diluted EPS rose to $1.91 from $1.51. Gross margin improved to 52.1% from 49.6%, reflecting a richer product mix and lower manufacturing costs. Cash generation stayed strong, with operating cash flow of $3.38 billion and free cash flow of $2.97 billion (24% of revenue). TI returned more than $4 billion to shareholders through $2.87 billion of buybacks and $1.18 billion of dividends, and the quarterly dividend was raised from $0.21 to $0.30 during 2013. The balance sheet remains solid, with $3.83 billion in cash and short-term investments against $5.1 billion of gross debt. Management is also cutting about 1,100 jobs in Embedded Processing and Japan, targeting roughly $130 million of annualized savings by the end of 2014, which signals a push to improve the weaker Embedded Processing margins. The main risks for investors are cyclicality in the semiconductor market, heavy exposure to the mobile phone and industrial markets, and the fact that about 85% of revenue comes from outside the U.S., with China a major share. Because most of its manufacturing capacity is owned, a large share of costs is fixed, so margins are sensitive to swings in volume and utilization.
Feb 24, 2014
2012
Texas Instruments Annual Report, Year Ended Dec 31, 2012
Texas Instruments' 2012 Form 10-K (filed February 22, 2013) describes a year of weak semiconductor demand that pressured top-line results: revenue fell 7% to $12.83 billion, operating margin compressed to 15.4% from 21.8%, and diluted EPS dropped to $1.51 from $1.88. The decline was driven largely by the planned exit from Wireless baseband products and a $351 million Wireless restructuring charge (including a $90 million goodwill impairment), along with a full year of acquisition-related amortization from National Semiconductor. Management emphasized that the core Analog and Embedded Processing businesses reached 70% of revenue and generated strong free cash flow of $2.92 billion (23% of revenue), most of which was returned to shareholders through buybacks and a 24% dividend increase. The filing signals a strategic reset. TI is eliminating its Wireless segment, cutting roughly 1,700 jobs and targeting about $450 million in annualized savings, while redirecting OMAP and connectivity products toward embedded markets and expecting smartphone and tablet revenue to largely disappear by the end of 2013. Analog and Embedded Processing are positioned as the primary growth engines, with Analog holding roughly 18% of a $39 billion market and the company claiming the world's fourth-largest semiconductor revenue position. Two older fabs in Hiji, Japan and Houston are also being closed in 2013. Key risks for investors include the cyclical nature of semiconductor demand, high fixed manufacturing costs that pressure margins when utilization falls, heavy exposure to China (about $5.4 billion of 2012 revenue) and to customers in communications and computing, and roughly $4.2 billion of long-term debt that rose after the National acquisition. Gross margin held steady at 49.6%, and the balance sheet remains solid with $3.96 billion in total cash and investments, but the lower operating profit and the Wireless write-down underscore the earnings pressure the company faced entering 2013.
Feb 22, 2013
2011
Texas Instruments Annual Report, Year Ended Dec 31, 2011
Texas Instruments' 2011 10-K reports revenue of $13.74 billion, down 2% from $13.97 billion in 2010, with net income falling 31% to $2.24 billion and diluted EPS of $1.88 versus $2.62. The decline was driven by the wind-down of baseband products in Wireless (baseband revenue fell 36% to $1.10 billion, with substantially all expected to cease by end-2012), weaker factory utilization in the second half as the semiconductor market softened, and roughly $426 million of acquisition-related charges tied to the $6.5 billion National Semiconductor acquisition completed September 23, 2011. Operating margin compressed to 21.8% from 32.3%, and gross margin fell to 49.3% from 53.6%. Strategically, management is repositioning TI around Analog (up 7% to $6.37 billion, now about 15% of a roughly $43 billion market) and Embedded Processing (up 2%), which management identifies as the primary growth engines. The National deal added the Silicon Valley Analog product line and additional fab capacity, but also added roughly $2.9 billion of acquisition-related intangibles, $3.5 billion of goodwill, and $4.5 billion of total debt, lifting total assets to $20.5 billion from $13.4 billion. Management also announced closures of two older fabs in Hiji, Japan and Houston, Texas, with about $215 million in total charges and roughly $100 million in expected annual savings. Capital returns remained significant: TI repurchased $1.97 billion of stock and paid $644 million in dividends, and the quarterly dividend was raised 31% to $0.17 per share in September 2011. Investors should weigh the near-term earnings pressure from acquisition amortization (guided to about $170 million of charges in Q1 2012), the planned loss of baseband revenue, customer concentration (Nokia at 13% of revenue), and cyclical end-market exposure against the company's manufacturing scale, Analog franchise, and improved portfolio focus.
Feb 24, 2012
2010
Texas Instruments Annual Report, Year Ended Dec 31, 2010
Texas Instruments closed 2010 with a strong rebound. Revenue rose 34% to $13.97 billion from $10.43 billion, and operating profit more than doubled to $4.51 billion, or 32.3% of revenue, up from 19.1%. Net income reached $3.23 billion, and diluted EPS was $2.62 versus $1.15 in 2009. Gross margin expanded to 53.6% from 47.9%, helped by higher factory utilization and a $144 million gain on the sale of a product line. Management frames 2010 as a turning point in TI's shift toward Analog and Embedded Processing, which it designates as the company's primary growth engines. Analog revenue grew 42% to about $6 billion, and Embedded Processing grew 41% to about $2.1 billion. Management estimates TI is the world's fourth-largest semiconductor company. The balance sheet and cash flow remain strong. Operating cash flow was $3.82 billion, and TI carries no debt. Capital expenditures rose to $1.2 billion as TI bought discounted fabs in Japan and China and added analog wafer capacity, which management says can support more than $5 billion of additional revenue once fully operational. TI returned $2.45 billion through buybacks and about $592 million through dividends. Roughly $7.64 billion of repurchase authorization remains. Investors should weigh several concentration and cyclicality risks. Nokia accounted for 19% of revenue, and Wireless baseband revenue of $1.7 billion is expected to cease by the end of 2012. Management also notes that about 90% of revenue comes from outside the U.S., that the semiconductor market is cyclical, and that a large share of costs is fixed because TI owns much of its manufacturing capacity. Orders of $13.93 billion, up 23%, and backlog of $1.75 billion, roughly flat year over year, suggest continued demand, but backlog is not a reliable forecast of future revenue.
Feb 25, 2011
2009
Texas Instruments Annual Report, Year Ended Dec 31, 2009
Texas Instruments' 2009 10-K shows a company that absorbed a steep cyclical downturn while protecting profitability and positioning for recovery. Revenue fell 17% to $10.43 billion from $12.50 billion, gross margin compressed to 47.9% from 50.0%, and operating margin held at a respectable 19.1%. Net income declined to $1.47 billion (diluted EPS $1.15, versus $1.44 in 2008). The decline was driven by Wireless baseband weakness (Wireless revenue down 24%) and high-volume analog & logic softness, partly offset by cost discipline: R&D fell 24% to $1.48 billion and SG&A fell 18%, supported by roughly 3,900 job eliminations completed in 2009. Management also reported that revenue growth resumed sequentially in Q2 2009 and year-over-year in Q4, with record operating margin in the fourth quarter. The filing signals a strategic pivot toward Analog and Embedded Processing as the company's primary growth engines. TI is exiting standard baseband and custom baseband investment, with baseband revenue ($1.73 billion in 2009) expected to largely cease by the end of 2012. It is also discontinuing advanced logic manufacturing R&D in favor of foundry partners, while investing in a 300-mm analog wafer factory in Richardson, Texas, and a new assembly/test site in the Philippines, both purchased in a weak market. Balance sheet strength is evident: $2.92 billion in cash and short-term investments, no debt, $2.6 billion of remaining buyback authorization, and $2.64 billion in operating cash flow. Investors should note the concentration risk: Nokia accounted for about 21% of 2009 revenue, and about 90% of revenue came from outside the U.S. For 2010, management guided R&D to about $1.5 billion and expects an effective tax rate of about 31%, up from 27% in 2009, as the federal R&D tax credit expired at year-end 2009 and is not assumed reinstated. Shareholder returns were maintained with dividends of $0.45 per share in 2009 (up from $0.41), alongside $954 million of share repurchases.
Feb 23, 2010
2008
Texas Instruments Annual Report, Year Ended Dec 31, 2008
Texas Instruments' 2008 10-K shows a sharp downturn in the back half of the year. Revenue fell 10% to $12.50 billion from $13.83 billion, and gross margin slipped to 50.0% from 53.3%. Operating profit dropped 30% to $2.44 billion (19.5% margin vs. 25.3%), and diluted EPS fell to $1.45 from $1.83. Management attributed the decline to a dramatic drop in global semiconductor demand in the second half of 2008, which accelerated in the fourth quarter, when orders were 42% below the third quarter. Q4 operating profit was only $51 million after $254 million of restructuring charges, and management guided to continued pressure on 2009 results. TI's balance sheet remains strong: total cash and short-term investments were $2.54 billion, there is no debt, and $3.55 billion remains authorized for buybacks. Operating cash flow was $3.33 billion, and the company returned capital through $2.12 billion of repurchases and $537 million of dividends. Management responded with a 12% workforce reduction (about 3,400 people) and wireless restructuring, targeting roughly $700 million in annualized savings. Working-capital discipline also improved: receivables fell sharply, and inventory was cut by $200 million from Q3 levels, though days of inventory rose to 89. Key risks for investors include concentration in the wireless segment, where revenue fell 19% and Nokia accounted for about 20% of total revenue, as well as the fixed-cost structure of TI's owned fabs, roughly $482 million of illiquid auction-rate securities (par $535 million), and the cyclicality of the semiconductor market. Management's view that the downturn is a broad economic slowdown rather than a simple inventory correction is the central judgment for the outlook.
Feb 24, 2009
2007
Texas Instruments Annual Report, Year Ended Dec 31, 2007
Texas Instruments' 2007 10-K shows a company that grew profitability while revenue slipped. Net revenue fell 3% to $13.83 billion from $14.26 billion, but profit from operations rose 4% to $3.50 billion and the operating margin widened to 25.3% from 23.6%. Gross margin improved to 53.0%, helped by a richer mix of analog and DSP products and manufacturing cost reductions. Income from continuing operations was essentially flat at $2.64 billion, while diluted EPS from continuing operations rose 8% to $1.83, largely because share repurchases reduced the diluted share count by roughly 114 million. Capital allocation was the central story. TI generated a record $4.41 billion in operating cash flow and capital expenditures fell to $686 million from $1.27 billion as the company shifted toward outsourcing advanced digital production to foundries. The company returned capital aggressively, repurchasing $4.89 billion of stock and paying $425 million in dividends, with the quarterly dividend raised to $0.10 per share by late 2007. Cash and short-term investments totaled $2.92 billion at year-end, and the company has no long-term debt. Investors should weigh two risks. First, roughly $1.04 billion of auction-rate securities failed to settle at auction in mid-February 2008, which limits liquidity on a portion of the portfolio even though the securities are backed by government-guaranteed student loans. Second, the filing flags Ericsson's addition of a second 3G baseband supplier as a revenue headwind that began in Q4 2007, and Nokia accounted for 16% of 2007 revenue, a notable customer concentration.
Feb 26, 2008
2006
Texas Instruments Annual Report, Year Ended Dec 31, 2006
Texas Instruments reported a strong 2006, with revenue up 16% to a record $14.26 billion and diluted EPS from continuing operations up 30% to $1.69. Growth was led by high-performance analog (up 33%) and DSPs (up 16%), and operating margin reached a record 23.6%. Semiconductors made up 96% of revenue and were the company's largest driver of profit, with a segment operating margin of 27.9%. Reported net income of $4.34 billion, or $2.78 per diluted share, was inflated by a one-time $1.67 billion after-tax gain on the sale of the Sensors & Controls business to Bain Capital for $3 billion. Capital returns were the other major theme. TI repurchased $5.3 billion of stock in 2006, reducing shares outstanding by about 9%, and ended the year with $5.49 billion of authorization remaining. Cash and short-term investments fell to $3.72 billion, and operating cash flow dropped 32% to $2.45 billion because of tax payments on the divestiture gain and higher inventory. Inventory rose to 75 days from 64, and management limited fourth-quarter production to work down stock, which signals some near-term demand softness. Looking ahead, TI announced in January 2007 a shift to co-developing digital process technology with foundry partners, plus the closure of an older digital fab. The company expects about $200 million in annual cost savings, about 500 job reductions, and roughly $55 million in restructuring charges during 2007. Key risks include semiconductor cyclicality, dependence on the cell-phone market (Nokia was 11% of revenue), declining royalty income as older patent licenses expire, and exposure to fixed manufacturing costs.
Feb 28, 2007
2005
Texas Instruments Annual Report, Year Ended Dec 31, 2005
Texas Instruments closed 2005 with record results: net revenue rose 6% to $13.39 billion, operating margin reached a record 20.8%, and diluted EPS was $1.39, up 32% year over year on net income growth of 25% to $2.32 billion. Semiconductor, which is 87% of revenue, drove the gains. Its operating margin expanded to 23.9% on manufacturing cost reductions and wireless growth, while DSP and analog remain the core franchises. The filing also reflects strong cash generation ($3.77 billion operating cash flow) and aggressive capital return, with $4.15 billion of buybacks in 2005 and a new $5 billion authorization in January 2006. The most significant forward-looking event is the agreement to sell substantially all of Sensors & Controls to an affiliate of Bain Capital for $3 billion, expected to close in the first half of 2006 and to be reported as discontinued operations. Management says this will sharpen focus on DSP and analog, and the RFID business stays in Semiconductor. TI also acquired Chipcon for about $200 million, closed in January 2006. Investors should note that the 2005 comparison is affected by stock-option expense now recognized under SFAS 123(R) from July 2005, and that the company is moving to straight-line depreciation in 2006, which management expects to reduce depreciation by about $350 million. Key risks include semiconductor cyclicality, heavy customer concentration in the cell-phone market (Nokia was just under 10% of revenue directly, and more including indirect sales), and fixed-cost manufacturing exposure. Legal and contingent items include a $112 million patent jury award against Globespan that is subject to a pending antitrust counterclaim, and an Italian government review of roughly $250 million in grants, with about $175 million already finalized. Management does not expect either to have a material adverse effect.
Feb 28, 2006
2004
Texas Instruments Annual Report, Year Ended Dec 31, 2004
Texas Instruments' 2004 Form 10-K (fiscal year ended December 31, 2004) shows a company in a strong growth and profitability recovery. Net revenue rose 28% to $12.58 billion from $9.83 billion, driven by broad-based Semiconductor demand, with the Semiconductor segment (about 85% of revenue) up 31%. Operating profit more than doubled to $2.21 billion (17.5% of revenue, versus 9.8% in 2003), and diluted EPS reached $1.05, up from $0.68. Growth was led by wireless (up 40%, with 3G cell phone products nearly tripling), high-performance analog (up 40%), and DLP products (up 79%). Gross margin expanded to 44.7% from 40.3%, helped by fixed-cost factory utilization, though profit sharing accruals of $243 million weighed on results. Cash generation and capital returns were also strong. Operating cash flow rose 46% to $3.15 billion, and total cash and investments reached $6.36 billion against debt of only $379 million, leaving a debt-to-capital ratio of 0.03. TI repurchased $753 million of stock in 2004 and the board authorized an additional $2 billion buyback in January 2005. Capital expenditures roughly doubled-and-a-half to $1.30 billion as TI invested in 90nm fabrication and a new 300mm facility in Texas. Investors should weigh several risks. Nokia was a key customer, with direct sales just under 10% of revenue and over 10% including indirect sales. The company remains exposed to the semiconductor cycle, the inventory correction seen in the second half of 2004 (with distributor destocking), and high fixed costs. Other items include a pending appeal in the Qualcomm litigation, an Italian government grant review covering about $250 million, and the upcoming FAS 123(R) expensing requirement, which will reduce reported earnings beginning in 2005.
Feb 28, 2005
2003
Texas Instruments Annual Report, Year Ended Dec 31, 2003
Texas Instruments' 2003 10-K shows a sharp earnings rebound driven by its Semiconductor business, which accounted for 85% of 2003 revenue. Net revenue rose 17% to $9.83 billion from $8.38 billion, led by DSP products (up 36%) and wireless (up 32%). Gross margin expanded to 40.3% from 36.6%, as higher factory utilization spread fixed manufacturing costs over more output. Operating profit more than tripled to $965 million, and net income swung to $1.198 billion ($0.68 diluted EPS) from a $344 million loss in 2002. Roughly $993 million of the year-over-year improvement came from Micron-related actions, including the sale of the remaining 57 million Micron shares, which added about $0.20 per share to EPS. The balance sheet remains strong. Total cash and investments were $5.66 billion, up $1.5 billion, and operating cash flow was $2.15 billion. Long-term debt fell to $395 million from $833 million, and the debt-to-capital ratio dropped to 0.07. Management expects 2004 revenue growth and higher operating margins, with profit-sharing accruals of about $60 million per quarter, and plans R&D of about $2.0 billion and capex of about $1.1 billion. Investors should note that the 2003 earnings figure includes non-recurring Micron gains and a $223 million tax valuation allowance reversal, so underlying operating profit is the better guide to sustainable performance. Key risks disclosed include the cyclical semiconductor market, high fixed manufacturing costs, customer concentration (Nokia at 14% of revenue), more than 80% of revenue from outside the U.S., and pending litigation with Qualcomm over the patent portfolio agreement. The Italian government's review of about $250 million in grants could also lead to repayments, though TI does not expect a material impact.
Feb 27, 2004
2002
Texas Instruments Annual Report, Year Ended Dec 31, 2002
Texas Instruments' 2002 10-K shows a company in a cyclical downturn that nonetheless gained competitive ground. Net revenue rose 2% to $8.38 billion, driven by a 30% jump in DSP revenue and a 45% rise in wireless, while gross margin improved sharply to 36.6% from 29.0% on higher factory utilization after the 2001 inventory correction. However, the bottom line was negative: TI posted a net loss of $344 million, or $(0.20) per diluted share, versus a $201 million loss in 2001. The loss was driven almost entirely by a $638 million other-than-temporary write-down on its Micron Technology stake, received when TI sold its memory business to Micron in 1998, and a related $223 million valuation allowance on the deferred tax asset created by that write-down. Excluding these items, the business was near breakeven at the operating line, with operating profit of $288 million after $772 million of special charges and acquisition amortization. Balance sheet strength is a key investor takeaway. TI ended 2002 with $4.14 billion in total cash and investments, debt of only $1.24 billion (debt-to-capital ratio of 0.10), and operating cash flow of $1.99 billion. Capital expenditures fell to $802 million from $1.79 billion, lifting free cash flow to $1.19 billion. Management guided to a Q1 2003 EPS of about $0.06, expected operating margin near 6%, and 2003 R&D of about $1.7 billion and capex of about $800 million, signaling expectations of a recovery in which incremental revenue would fall through at high incremental margins. Key risks remain concentrated. Semiconductors made up 83% of revenue, with DSPs and analog chips the core. More than 76% of revenue came from outside the U.S., and Nokia alone accounted for 12%. The company still holds 57 million Micron shares worth about $555 million at year-end, so further impairments or volatility in that position could affect earnings. Pending Italian government grant reviews (about $250 million in grants) and environmental matters are disclosed but management does not expect them to be material.
Mar 3, 2003
1997
Texas Instruments Annual Report, Year Ended Dec 31, 1997
Texas Instruments' 1997 10-K shows a company in transition. Reported net income more than tripled... no wait, net income rose to $1,805 million from $63 million in 1996, but this figure is inflated by a one-time $1,473 million after-tax gain on the sale of its Defense Systems and Electronics (DSE) business to Raytheon for $2.95 billion. Income from continuing operations was only $302 million, or $0.76 diluted EPS, after a $461 million charge for acquired in-process R&D (mainly the Amati Communications acquisition) and $532 million of net special charges. Excluding special items, management cites diluted EPS of $2.03 from continuing operations versus $0.74 in 1996. Revenue fell 2% to $9.75 billion, but excluding businesses sold, revenue grew 10% and orders rose 19%, driven by digital signal processors (DSPs) and mixed-signal/analog products. Semiconductors, 83% of revenue, is the core story. Segment operating margin recovered to 16.7% from 10.6% as non-memory products (DSPs, analog, microcontrollers) grew, while DRAM prices kept falling and memory revenue dropped about $400 million. The balance sheet strengthened markedly: cash plus short-term investments reached $3.02 billion, debt-to-capital fell to 0.19 from 0.33, and total stockholders' equity rose to $5.9 billion. Management guided to 1998 semiconductor market growth of about 10%, with DSP and mixed-signal growth near 30%, but warned of near-term pressure from DRAM volatility and Asian economic weakness. Its planned joint venture exit with Hitachi and a Q1 1998 special charge are notable forward-looking items. For investors, the headline net income figure overstates the underlying earnings power of the business. The key questions are whether DSP growth can offset memory weakness, whether 1998 capital spending (constrained to $1.4 billion) and R&D (raised to $1.3 billion) will pressure margins, and how the Kilby patent litigation and joint venture restructuring play out.
Feb 23, 1998
1996
Texas Instruments Annual Report, Year Ended Dec 31, 1996
Texas Instruments' fiscal 1996 was a difficult year on the bottom line. Net revenues from continuing operations fell 13% to $9.94 billion from $11.41 billion, driven mainly by an roughly 80% collapse in DRAM prices from Q4 1995 to Q4 1996, lower royalty income, and the divestiture of the custom manufacturing services and printer businesses. Profit from operations swung to a $26 million loss (versus $1.44 billion in 1995) after $208 million of cost-reduction charges and a $192 million in-process R&D write-off tied to the Silicon Systems acquisition. Excluding special charges, management reports continuing-operations profit from operations of $374 million. Net income including discontinued operations was just $63 million, or $0.33 per share, compared with $1.09 billion ($5.63 per share) in 1995. The more strategically important development is the January 1997 agreement to sell the Defense Systems & Electronics business to Raytheon for $2.95 billion in cash, expected to close in Q2 1997. Management says it intends to redeploy the proceeds into its digital solutions focus, and the company has also agreed to sell its mobile computing business to Acer. Together, these transactions signal a portfolio refocus toward semiconductors, particularly differentiated products such as digital signal processors (DSPs) and mixed-signal/analog chips, which management says now account for nearly two-thirds of semiconductor revenue in Q4 1996. Balance sheet and cash flow picture is mixed. Cash and short-term investments fell to about $978 million, debt rose to $1.7 billion in long-term debt (debt-to-total-capital ratio of 0.33, up from 0.17), and capital expenditures reached $2.06 billion, leaving free cash flow negative. Management expects capex to decline to about $1.1 billion in 1997 and R&D to rise to about $1.1 billion. Royalty income, which fell $300 million in 1996, remains a potential offset as TI signed new multi-year licenses with Samsung, Fujitsu, Oki and Matsushita, though the Fujitsu Kilby patent appeal remains pending.
Feb 25, 1997
1995-A
Texas Instruments Annual Report (Amendment), Year Ended Dec 31, 1995
Texas Instruments' 10-K/A (Amendment No. 1, restating the original 10-K for fiscal 1995, filed June 1996) shows a record year. Net revenues rose 27% to $13.1 billion, net income rose 57% to $1,088 million (the first time above $1 billion), and EPS rose 55% to $5.63 on a split-adjusted basis. Profit from operations increased 47% to $1,594 million, driven mainly by the Components segment (semiconductors), where profit rose 66% on manufacturing productivity and royalties. Orders grew 32% to $13.7 billion and backlog reached $4.5 billion. Return on invested capital was 24.8%, up from 19.5%. Investors should weigh this against a heavy investment program and some near-term headwinds. Management guided 1996 capital expenditures to about $2.5 billion (up from $1.4 billion) and R&D to about $1.1 billion, and depreciation is expected to roughly double to about $1 billion. Management warned of inventory corrections and DRAM and standard logic pricing pressure in the first half of 1996, with new fab costs arriving before incremental revenue. The Digital Products segment operated at a loss due to notebook computer price competition and heavy marketing spend. Free cash flow after capex was only $228 million, and the company issued $300 million of notes in February 1996 to help fund the buildout. Legal and intellectual property matters are significant. TI filed patent infringement litigation against Samsung in January 1996 and faces a Samsung countersuit and ITC complaints. TI's royalty stream was boosted by a one-time $108 million accrual from licenses that expired at end-1995, and several licenses have not yet been renewed. TI also has an appeal pending in the Fujitsu Kilby patent case in Tokyo and remains subject to U.S. defense procurement investigations. This filing is an amendment restating the original February 1996 10-K in its entirety, and the financial data is incorporated by reference from the 1995 annual report.
Jun 21, 1996
1995
Texas Instruments Annual Report, Year Ended Dec 31, 1995
Texas Instruments' 1995 Form 10-K shows a company at a strong earnings peak. Financial Data Schedule figures put 1995 total revenues at $13.128 billion, net income at $1.088 billion, and primary EPS at $5.63, up from $3.63 in 1994 and $2.51 in 1993. Pre-tax income was $1.619 billion against $531 million of tax expense. Total assets were $9.215 billion, with stockholders' equity of roughly $4.1 billion, and long-term debt of $804 million. Fixed-charge coverage rose to 15.6x, up from 11.6x in 1994, indicating very low leverage risk. Backlog grew to $4.528 billion from $3.913 billion, and R&D spending rose to $927 million from $689 million, roughly 7% of revenue. The filing is largely a wrapper that incorporates the financial statements, MD&A, and segment data by reference to the 1995 Annual Report to Stockholders, so detailed segment profitability and the narrative outlook are not included in this document. Investors should note the legal and regulatory overhang: a patent war with Samsung spanning U.S. federal court and ITC proceedings, a long-running Kilby patent dispute with Fujitsu in Japan, and ongoing U.S. government procurement investigations that could lead to suspension or debarment from government contracts. Government sales were about 8% of revenue, concentrated in the defense segment, which is subject to appropriations risk. Subsequent to year-end, TI agreed to sell its custom manufacturing services business, and it also contributed its silicon materials operation to a joint venture with MEMC Electronic Materials in May 1995. Overall, the filing portrays a highly profitable semiconductor-led company with a strong balance sheet, a growing patent licensing income stream, and a clear set of litigation and government-contracting risks that bear watching.
Feb 23, 1996
1993
Texas Instruments Annual Report, Year Ended Dec 31, 1993
Texas Instruments' 1993 10-K shows a company in strong recovery. Net revenues rose 15% to $8,523 million from $7,440 million, and profit from operations jumped 73% to $728 million. Net income reached $472 million, or $5.03 per share, versus $247 million ($2.50) in 1992. Growth was driven almost entirely by the Components segment (semiconductors), where segment profit doubled to $689 million, and by royalty revenue, which climbed 33% to $521 million. Profit after tax return on assets improved to 8.1% from 4.1%, approaching management's sustainable 8-10% target. Results were helped by a one-time $290 million tax credit and a $294 million charge for retiree health care accounting changes, which nearly offset each other in the cumulative effect line (net $4 million charge). Management signaled continued momentum for 1994, forecasting roughly 15% growth in world semiconductor demand and raising capital expenditures to about $1 billion (from $730 million) to expand submicron CMOS capacity and a new Dallas wafer fab. R&D spending is expected to rise to about $700 million. Offsetting this, defense electronics is expected to keep declining as post-Desert Storm orders fade, and the digital products segment, particularly software productivity tools, underperformed expectations. Investors should note several risks disclosed in the filing: ongoing patent litigation with Fujitsu over the Kilby integrated circuit patent in Japan, a $200 million convertible debenture that may be redeemed in late 1994, government procurement investigations affecting defense contractors, and a backlog of $3.8 billion of which about 25% (defense) will not be filled within the year. Overall leverage improved, with the debt-to-total-capital ratio falling to 0.28 from 0.33 and a target of about 0.25.
Mar 21, 1994