What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-10-26 compared with 2022-07-27 · 82 added, 42 removed, 403 unchanged (24% of the section changed)

Financial statements

For Three Months Ended For Six Months Ended

Consolidated Statements of Income June 30, June 30,

For Three Months Ended For Nine Months Ended

Consolidated Statements of Income September 30, September 30,

(In millions, except per-share amounts) 2022 2021 2022 2021

25 unchanged sentences

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

For Three Months Ended For Six Months Ended

Consolidated Statements of Comprehensive Income June 30, June 30,

For Three Months Ended For Nine Months Ended

Consolidated Statements of Comprehensive Income September 30, September 30,

(In millions) 2022 2021 2022 2021

7 unchanged sentences

($ 9 ) and ($ 7 )

Prior service credit of defined benefit plans:

Adjustments, net of tax effect of $ 0 and $ 0 ;

Recognized within net income, net of tax effect of $ 0 and $ 0 ;

( 1 ) ( 1 ) ( 1 ) ( 1 )

Derivative instruments:

Change in fair value, net of tax effect of $ 0 and $ 0 ;

Available-for-sale investments:

5 unchanged sentences

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

June 30, December 31,

September 30, December 31,

Consolidated Balance Sheets 2022 2021

41 unchanged sentences

Treasury common stock at cost

June 30, 2022 – 826 ;

September 30, 2022 – 831 ;

December 31, 2021 – 817

5 unchanged sentences

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

For Six Months Ended

Consolidated Statements of Cash Flows June 30,

For Nine Months Ended

Consolidated Statements of Cash Flows September 30,

(In millions) 2022 2021

26 unchanged sentences

Cash flows from financing activities

Proceeds from issuance of long-term debt 695 1,495

Repayment of debt ( 500 ) ( 550 )

26 unchanged sentences

Segment information

For Three Months Ended For Six Months Ended

June 30, June 30,

For Three Months Ended For Nine Months Ended

September 30, September 30,

2022 2021 2022 2021

13 unchanged sentences

The geographic revenue information does not necessarily reflect end demand by geography because our products tend to be shipped to the locations where our customers manufacture their products.

For Three Months Ended For Six Months Ended

June 30, June 30,

For Three Months Ended For Nine Months Ended

September 30, September 30,

2022 2021 2022 2021

5 unchanged sentences

Total revenue $ 5,241 $ 4,643 $ 15,358 $ 13,512

(a) Revenue from products shipped into China was $ 2.8 billion and $ 2.5 billion in the second quarters of 2022 and 2021, respectively, and $ 5.3 billion and $ 4.8 billion in the first six months of 2022 and 2021, respectively, which includes shipments to customers that manufacture in China and then export end products to their customers around the world, as well as distributors that transship inventory through China to service other countries.

(a) Revenue from products shipped into China was $ 2.4 billion and $ 2.5 billion in the third quarters of 2022 and 2021, respectively, and $ 7.7 billion and $ 7.3 billion in the first nine months of 2022 and 2021, respectively, which includes shipments to customers that manufacture in China and then export end products to their customers around the world, as well as distributors that transship inventory through China to service other countries.

Basis of presentation and significant accounting policies and practices

1 unchanged sentence

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) and on the same basis as the audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2021.

The Consolidated Statements of Income, Comprehensive Income and Cash Flows for the periods ended June 30, 2022 and 2021, and the Consolidated Balance Sheet as of June 30, 2022, are not audited but reflect all adjustments that are of a normal recurring nature and are necessary for a fair statement of the results of the periods shown.

The Consolidated Statements of Income, Comprehensive Income and Cash Flows for the periods ended September 30, 2022 and 2021, and the Consolidated Balance Sheet as of September 30, 2022, are not audited but reflect all adjustments that are of a normal recurring nature and are necessary for a fair statement of the results of the periods shown.

Certain information and note disclosures normally included in annual consolidated financial statements have been omitted pursuant to the rules and regulations of the U.S.

2 unchanged sentences

Certain amounts in prior periods' financial statements have been reclassified to conform to the current presentation.

The results for the three- and six-month periods are not necessarily indicative of a full year’s results.

The results for the three- and nine-month periods are not necessarily indicative of a full year’s results.

Significant accounting policies and practices

4 unchanged sentences

Computation and reconciliation of earnings per common share are as follows:

For Three Months Ended June 30,

For Three Months Ended September 30,

Net Income Shares EPS Net Income Shares EPS

6 unchanged sentences

Income allocated to common stock $ 2,284 923 $ 2.47 $ 1,938 936 $ 2.07

For Six Months Ended June 30,

For Nine Months Ended September 30,

Net Income Shares EPS Net Income Shares EPS

6 unchanged sentences

Income allocated to common stock $ 6,757 929 $ 7.27 $ 5,607 936 $ 5.99

Potentially dilutive securities representing 6 million and 2 million shares of common stock that were outstanding during the second quarters of 2022 and 2021, respectively, and 5 million and 3 million shares outstanding during the first six months of 2022 and 2021, respectively, were excluded from the computation of diluted earnings per common share during these periods because their effect would have been anti-dilutive.

Potentially dilutive securities representing 6 million and 2 million shares of common stock that were outstanding during the third quarters of 2022 and 2021, respectively, and 5 million and 3 million shares outstanding during the first nine months of 2022 and 2021, respectively, were excluded from the computation of diluted earnings per common share during these periods because their effect would have been anti-dilutive.

Derivatives and hedging

11 unchanged sentences

Fair values of financial instruments

The fair values of our derivative financial instruments were not material as of June 30, 2022.

The fair values of our derivative financial instruments were not material as of September 30, 2022.

Our investments in cash equivalents, short-term investments and certain long-term investments, as well as our deferred compensation liabilities, are carried at fair value.

The carrying values for other current financial assets and liabilities, such as accounts receivable and accounts payable, approximate fair value due to the short maturity of such instruments.

As of June 30, 2022, the carrying value of long-term debt, including the current portion, was $ 7.24 billion, and the estimated fair value was $ 6.72 billion.

As of September 30, 2022, the carrying value of long-term debt, including the current portion, was $ 7.94 billion, and the estimated fair value was $ 6.91 billion.

The estimated fair value is measured using broker-dealer quotes, which are Level 2 inputs.

1 unchanged sentence

Provision for income taxes is based on the following:

For Three Months Ended For Six Months Ended

June 30, June 30,

For Three Months Ended For Nine Months Ended

September 30, September 30,

2022 2021 2022 2021

6 unchanged sentences

tax benefits.

On August 16, 2022, the U.S.

government enacted the Inflation Reduction Act (IRA), which introduces a new 15% corporate minimum tax effective January 1, 2023, based on adjusted financial statement income.

Based on our current analysis of the provisions, we do not believe this legislation will have a material impact on our consolidated financial statements.

Valuation of debt and equity investments and certain liabilities

13 unchanged sentences

Details of our investments are as follows:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Cash and Cash Equivalents Short-Term Investments Long-Term Investments Cash and Cash Equivalents Short-Term Investments Long-Term Investments

11 unchanged sentences

Total $ 3,169 $ 5,921 $ 37 $ 4,631 $ 5,108 $ 62

As of June 30, 2022, and December 31, 2021, unrealized gains and losses associated with our available-for-sale investments were not material.

We did no t recognize any credit losses related to available-for-sale investments for the first six months of 2022 and 2021.

Proceeds from sales, redemptions and maturities of short-term available-for-sale investments were $ 4.20 billion and $ 2.46 billion for the second quarters of 2022 and 2021, respectively, and $ 6.97 billion and $ 4.46 billion for the first six months of 2022 and 2021, respectively.

As of September 30, 2022, and December 31, 2021, unrealized gains and losses associated with our available-for-sale investments were not material.

We did no t recognize any credit losses related to available-for-sale investments for the first nine months of 2022 and 2021.

Proceeds from sales, redemptions and maturities of short-term available-for-sale investments were $ 3.03 billion and $ 1.32 billion for the third quarters of 2022 and 2021, respectively, and $ 10.01 billion and $ 5.77 billion for the first nine months of 2022 and 2021, respectively.

Gross realized gains and losses from these sales were not material.

The following table presents the aggregate maturities of our available-for-sale debt investments as of June 30, 2022:

The following table presents the aggregate maturities of our available-for-sale debt investments as of September 30, 2022:

One year or less $ 7,292

12 unchanged sentences

These values are generally determined using pricing models that utilize management estimates of market participant assumptions.

As of June 30, 2022, our Level 3 assets and liabilities were not material.

As of September 30, 2022, our Level 3 assets and liabilities were not material.

As of December 31, 2021, we had no Level 3 assets or liabilities.

1 unchanged sentence

These tables do not include cash on hand, assets held by our postretirement plans, or assets and liabilities that are measured at historical cost or any basis other than fair value.

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Level 1 Level 2 Total Level 1 Level 2 Total

13 unchanged sentences

Defined Benefit

For Three Months Ended June 30, 2022 2021 2022 2021 2022 2021

For Three Months Ended September 30, 2022 2021 2022 2021 2022 2021

Service cost $ 4 $ 5 $ 1 $ — $ 6 $ 9

2 unchanged sentences

Recognized net actuarial loss 1 3 — — 1 2

Amortization of prior service cost (credit) — — ( 1 ) ( 1 ) — —

Net periodic benefit costs 7 8 — — ( 1 ) —

4 unchanged sentences

Defined Benefit

For Six Months Ended June 30, 2022 2021 2022 2021 2022 2021

For Nine Months Ended September 30, 2022 2021 2022 2021 2022 2021

Service cost $ 12 $ 16 $ 2 $ 2 $ 19 $ 27

2 unchanged sentences

Recognized net actuarial loss 2 11 — — 1 6

Amortization of prior service cost (credit) — — ( 1 ) ( 1 ) — —

Net periodic benefit costs 12 25 — 1 ( 4 ) —

4 unchanged sentences

We maintain a line of credit to support commercial paper borrowings, if any, and to provide additional liquidity through bank loans.

As of June 30, 2022, we had a variable-rate revolving credit facility from a consortium of investment-grade banks that allows us to borrow up to $ 1 billion until March 2023.

As of September 30, 2022, we had a variable-rate revolving credit facility from a consortium of investment-grade banks that allows us to borrow up to $ 1 billion until March 2023.

The interest rate on borrowings under this credit facility, if drawn, is indexed to the applicable Term Secured Overnight Financing Rate (Term SOFR).

As of June 30, 2022, our credit facility was undrawn, and we had no commercial paper outstanding.

As of September 30, 2022, our credit facility was undrawn, and we had no commercial paper outstanding.

Long-term debt

In August 2022, we issued two series of senior unsecured notes for an aggregate principal amount of $ 700 million, consisting of $ 400 million of 3.65 % notes due in 2032 and $ 300 million of 4.10 % notes due in 2052.

We incurred $ 3 million of issuance and other related costs.

The proceeds of the offering were $ 695 million, net of the original issuance discounts, which will be used for general corporate purposes.

In April 2022, we retired $ 500 million of maturing debt.

1 unchanged sentence

Long-term debt outstanding is as follows:

June 30, December 31,

September 30, December 31,

Notes due 2022 at 1.85 %

10 unchanged sentences

Notes due 2048 at 4.15 %

Notes due 2051 at 2.70 %

Notes due 2052 at 4.10 %

Total debt 8,000 7,800

3 unchanged sentences

Long-term debt $ 7,438 $ 7,241

Interest and debt expense was $ 49 million and $ 44 million for the second quarters of 2022 and 2021, respectively, and $ 101 million and $ 90 million for the first six months of 2022 and 2021, respectively.

This was net of the amortized discounts, premiums and issuance costs.

Interest and debt expense was $ 53 million and $ 45 million for the third quarters of 2022 and 2021, respectively, and $ 154 million and $ 135 million for the first nine months of 2022 and 2021, respectively.

This was net of the amortized discounts, premiums, issuance and other related costs.

Capitalized interest was not material.

23 unchanged sentences

Balance, June 30, 2022 1,741 2,783 48,280 ( 38,532 ) ( 180 )

Net income — — 2,295 — —

Dividends declared and paid ($ 1.15 per share)

— — ( 1,051 ) — —

Common stock issued for stock-based awards — 26 — 52 —

Stock repurchases — — — ( 996 ) —

Stock compensation — 68 — — —

Other comprehensive income (loss), net of taxes — — — — 26

Dividend equivalents on RSUs — — ( 5 ) — —

Balance, September 30, 2022 $ 1,741 $ 2,877 $ 49,519 $ ( 39,476 ) $ ( 154 )

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

20 unchanged sentences

Balance, June 30, 2021 1,741 2,485 43,846 ( 36,596 ) ( 323 )

Net income — — 1,947 — —

Dividends declared and paid ($ 1.02 per share)

— — ( 942 ) — —

Common stock issued for stock-based awards — 27 — 48 —

Stock repurchases — — — ( 139 ) —

Stock compensation — 50 — — —

Other comprehensive income (loss), net of taxes — — — — 10

Dividend equivalents on RSUs — — ( 3 ) — —

Other — 1 ( 1 ) — —

Balance, September 30, 2021 $ 1,741 $ 2,563 $ 44,847 $ ( 36,687 ) $ ( 313 )

Contingencies

3 unchanged sentences

Consequently, we cannot reasonably estimate any future liabilities that may result.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Warranty costs/product liabilities

7 unchanged sentences

Although it is not possible to predict the outcome of these matters, we believe that the results of these proceedings will not have a material adverse effect on our financial condition, results of operations or liquidity.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Supplemental financial information

Restructuring charges/other

During the second quarter and first six months of 2022, restructuring charges/other included $ 66 million and $ 132 million, respectively, related to integration charges at our Lehi, Utah, manufacturing facility.

During the third quarter and first nine months of 2022, restructuring charges/other included $ 77 million and $ 209 million, respectively, related to integration charges at our Lehi, Utah, manufacturing facility.

These costs are included in Other for segment reporting purposes.

Details on amounts reclassified out of accumulated other comprehensive income (loss), net of taxes, to net income

Our Consolidated Statements of Comprehensive Income include items that have been recognized within net income during the second quarters and first six months of 2022 and 2021.

Our Consolidated Statements of Comprehensive Income include items that have been recognized within net income during the third quarters and first nine months of 2022 and 2021.

The table below details where these transactions are recorded in our Consolidated Statements of Income.

For Three Months Ended For Six Months Ended Impact to Related Statement of Income Lines

June 30, June 30,

For Three Months Ended For Nine Months Ended Impact to Related Statement of Income Lines

September 30, September 30,

2022 2021 2022 2021

3 unchanged sentences

Recognized within net income, net of taxes $ 15 $ 8 $ 33 $ 24 Decrease to net income

Prior service credit of defined benefit plans:

Amortization of prior service credit (a) $ ( 1 ) $ ( 1 ) $ ( 1 ) $ ( 1 ) Increase to OI&E

Tax effect — — — — Increase to provision for income taxes

Recognized within net income, net of taxes $ ( 1 ) $ ( 1 ) $ ( 1 ) $ ( 1 ) Increase to net income

(a) Detailed in Note 5

Stock compensation

During the second quarter and first six months of 2022, 1 million and 2 million shares, respectively, were issued from treasury related to stock compensation.

During the third quarter and first nine months of 2022, 1 million and 3 million shares, respectively, were issued from treasury related to stock compensation.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements