What changed in this filing

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Item 1. Financial Statements

2024-07-24 compared with 2024-04-24 · 102 added, 44 removed, 377 unchanged (28% of the section changed)

Financial statements

For Three Months Ended

Consolidated Statements of Income March 31,

For Three Months Ended For Six Months Ended

Consolidated Statements of Income June 30, June 30,

(In millions, except per-share amounts) 2024 2023 2024 2023

23 unchanged sentences

See accompanying notes.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

For Three Months Ended

Consolidated Statements of Comprehensive Income March 31,

For Three Months Ended For Six Months Ended

Consolidated Statements of Comprehensive Income June 30, June 30,

(In millions) 2024 2023 2024 2023

3 unchanged sentences

Adjustments, net of tax effect of ($ 1 ) and ($ 2 );

($ 3 ) and ($ 1 )

Recognized within net income, net of tax effect of ($ 1 ) and ($ 1 );

($ 2 ) and ($ 2 )

Derivative instruments:

2 unchanged sentences

Unrealized gains (losses), net of tax effect of $ 0 and $ 0 ;

( 1 ) ( 2 ) ( 7 ) 1

Other comprehensive income (loss), net of taxes 3 6 5 8

1 unchanged sentence

See accompanying notes.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

March 31, December 31,

June 30, December 31,

Consolidated Balance Sheets 2024 2023

41 unchanged sentences

Treasury common stock at cost

March 31, 2024 – 831 ;

June 30, 2024 – 828 ;

December 31, 2023 – 832

4 unchanged sentences

See accompanying notes.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

For Three Months Ended

Consolidated Statements of Cash Flows March 31,

For Six Months Ended

Consolidated Statements of Cash Flows June 30,

(In millions) 2024 2023

26 unchanged sentences

Proceeds from issuance of long-term debt 2,980 3,000

Repayment of debt ( 300 ) ( 500 )

Dividends paid ( 2,368 ) ( 2,250 )

6 unchanged sentences

Cash and cash equivalents at end of period $ 2,740 $ 3,439

Supplemental cash flow information

Investment tax credit (ITC) used to reduce income taxes payable $ 312 $ —

Total cash benefit related to the U.S.

CHIPS and Science Act $ 312 $ —

See accompanying notes.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Notes to financial statements

16 unchanged sentences

Segment information

For Three Months Ended

For Three Months Ended For Six Months Ended

June 30, June 30,

2024 2023 2024 2023

Analog $ 2,928 $ 3,278 $ 5,764 $ 6,567

11 unchanged sentences

Our estimate for revenue based on the geographic location of our end customers’ headquarters, which represents where critical decisions are made, is as follows:

For Three Months Ended

For Three Months Ended For Six Months Ended

June 30, June 30,

2024 2023 2024 2023

United States $ 1,408 37 % $ 1,493 33 % $ 2,696 36 % $ 2,850 32 %

5 unchanged sentences

Total revenue $ 3,822 100 % $ 4,531 100 % $ 7,483 100 % $ 8,910 100 %

(a) Revenue from end customers headquartered in Germany was 13 % in the first quarters of both 2024 and 2023.

(a) Revenue from end customers headquartered in Germany was 11 % and 13 % in the second quarters of 2024 and 2023, respectively, and 12 % and 13 % in the first six months of 2024 and 2023, respectively.

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, 2023.

The Consolidated Statements of Income, Comprehensive Income and Cash Flows for the periods ended March 31, 2024 and 2023, and the Consolidated Balance Sheet as of March 31, 2024, 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 June 30, 2024 and 2023, and the Consolidated Balance Sheet as of June 30, 2024, 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.

1 unchanged sentence

Because the consolidated interim financial statements do not include all of the information and notes required by GAAP for a complete set of financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in our annual report on Form 10-K for the year ended December 31, 2023.

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

The results for the three- and six-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 March 31,

For Three Months Ended June 30,

Net Income Shares EPS Net Income Shares EPS

6 unchanged sentences

Income allocated to common stock $ 1,121 919 $ 1.22 $ 1,714 916 $ 1.87

Potentially dilutive securities representing 14 million and 8 million shares of common stock that were outstanding during the first quarters of 2024 and 2023, respectively, were excluded from the computation of diluted earnings per common share during these periods because their effect would have been anti-dilutive.

For Six Months Ended June 30,

Net Income Shares EPS Net Income Shares EPS

Net income $ 2,232 $ 3,430

Income allocated to RSUs ( 11 ) ( 17 )

Income allocated to common stock $ 2,221 911 $ 2.44 $ 3,413 907 $ 3.76

Dilutive effect of stock compensation plans 7 9

Net income $ 2,232 $ 3,430

Income allocated to RSUs ( 11 ) ( 18 )

Income allocated to common stock $ 2,221 918 $ 2.42 $ 3,412 916 $ 3.72

Potentially dilutive securities representing 8 million and 9 million shares of common stock that were outstanding during the second quarters of 2024 and 2023, respectively, and 11 million and 9 million shares outstanding during the first six months of 2024 and 2023, 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

9 unchanged sentences

We do not use derivatives for speculative or trading purposes.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Fair values of financial instruments

The fair values of our derivative financial instruments were not material as of March 31, 2024.

The fair values of our derivative financial instruments were not material as of June 30, 2024.

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 March 31, 2024, the carrying value of long-term debt, including the current portion, was $ 14.19 billion, and the estimated fair value was $ 13.33 billion.

As of June 30, 2024, the carrying value of long-term debt, including the current portion, was $ 13.89 billion, and the estimated fair value was $ 12.78 billion.

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

See Note 4 for a description of fair value and the definition of Level 2 inputs.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Provision for income taxes is based on the following:

For Three Months Ended

For Three Months Ended For Six Months Ended

June 30, June 30,

2024 2023 2024 2023

Taxes calculated using the estimated annual effective tax rate $ 170 $ 289 $ 346 $ 565

21 unchanged sentences

Details of our investments are as follows:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

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

12 unchanged sentences

Total $ 2,740 $ 6,948 $ 27 $ 2,964 $ 5,611 $ 34

As of March 31, 2024, and December 31, 2023, unrealized gains and losses associated with our debt investments were not material.

We did no t recognize any credit losses related to debt investments for the first three months of 2024 and 2023.

The following table presents the aggregate maturities of our available-for-sale debt investments as of March 31, 2024:

As of June 30, 2024, and December 31, 2023, unrealized gains and losses associated with our debt investments were not material.

We did no t recognize any credit losses related to debt investments for the first six months of 2024 and 2023.

The following table presents the aggregate maturities of our available-for-sale debt investments as of June 30, 2024:

One year or less $ 6,839

One to two years 1,029

Proceeds from sales, redemptions and maturities of short-term available-for-sale investments were $ 2.63 billion and $ 4.03 billion for the first quarters of 2024 and 2023, respectively.

Proceeds from sales, redemptions and maturities of short-term available-for-sale investments were $ 3.13 billion and $ 3.07 billion for the second quarters of 2024 and 2023, respectively, and $ 5.76 billion and $ 7.09 billion for the first six months of 2024 and 2023, respectively.

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

11 unchanged sentences

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

As of March 31, 2024, and December 31, 2023, we had no Level 3 assets or liabilities.

As of June 30, 2024, and December 31, 2023, we had no Level 3 assets or liabilities.

The following are our assets and liabilities that were accounted for at fair value on a recurring basis.

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.

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Level 1 Level 2 Total Level 1 Level 2 Total

7 unchanged sentences

Total liabilities $ 411 $ — $ 411 $ 393 $ — $ 393

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Postretirement benefit plans

3 unchanged sentences

Defined Benefit

For Three Months Ended March 31, 2024 2023 2024 2023 2024 2023

For Three Months Ended June 30, 2024 2023 2024 2023 2024 2023

Service cost $ 2 $ 2 $ 1 $ 1 $ 4 $ 4

3 unchanged sentences

Net periodic benefit costs (credits) 4 5 ( 2 ) ( 2 ) 1 5

Settlement losses — 1 — — — 1

Total, including other postretirement losses (gains) $ 4 $ 6 $ ( 2 ) $ ( 2 ) $ 1 $ 6

Defined Benefit U.S.

Retiree Health Care Non-U.S.

Defined Benefit

For Six Months Ended June 30, 2024 2023 2024 2023 2024 2023

Service cost $ 4 $ 4 $ 1 $ 1 $ 8 $ 8

Interest cost 12 14 6 7 27 29

Expected return on plan assets ( 11 ) ( 11 ) ( 9 ) ( 9 ) ( 38 ) ( 32 )

Recognized net actuarial losses (gains) 2 3 ( 1 ) ( 3 ) 6 6

Net periodic benefit costs (credits) 7 10 ( 3 ) ( 4 ) 3 11

Settlement losses — 1 — — — 1

Total, including other postretirement losses (gains) $ 7 $ 11 $ ( 3 ) $ ( 4 ) $ 3 $ 12

Debt and lines of credit

1 unchanged sentence

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

As of March 31, 2024, the aforementioned line of credit was a variable-rate, revolving credit facility from a consortium of investment-grade banks that allows us to borrow up to $ 1 billion until March 2025.

As of June 30, 2024, the aforementioned line of credit was a variable-rate, revolving credit facility from a consortium of investment-grade banks that allows us to borrow up to $ 1 billion until March 2025.

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 March 31, 2024, our credit facility was undrawn, and we had no commercial paper outstanding.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

As of June 30, 2024, our credit facility was undrawn, and we had no commercial paper outstanding.

Long-term debt

In May 2024, we retired $ 300 million of maturing debt.

In February 2024, we issued five series of senior unsecured notes for an aggregate principal amount of $ 3.00 billion, consisting of:

6 unchanged sentences

The proceeds of the offering were $ 2.98 billion, net of the original issuance discounts, which will be used for general corporate purposes.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Long-term debt outstanding is as follows:

March 31, December 31,

June 30, December 31,

Notes due 2024 at 2.625 %

24 unchanged sentences

Long-term debt $ 12,842 $ 10,624

Interest and debt expense was $ 116 million and $ 68 million for the first quarters of 2024 and 2023, respectively.

Interest and debt expense was $ 131 million and $ 89 million for the second quarters of 2024 and 2023, respectively, and $ 247 million and $ 157 million for the first six months of 2024 and 2023, respectively.

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

Capitalized interest was $ 6 million and $ 2 million for the first quarters of 2024 and 2023, respectively.

Capitalized interest was $ 5 million and $ 3 million for the second quarters of 2024 and 2023, respectively, and $ 11 million and $ 5 million for the first six months of 2024 and 2023, respectively.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

13 unchanged sentences

Balance, March 31, 2024 1,741 3,439 52,199 ( 40,193 ) ( 203 )

Net income — — 1,127 — —

Dividends declared and paid ($ 1.30 per share)

— — ( 1,185 ) — —

Common stock issued for stock-based awards — 111 — 137 —

Stock repurchases — — — ( 72 ) —

Stock compensation — 116 — — —

Other comprehensive income (loss), net of taxes — — — — 3

Dividend equivalents on RSUs — — ( 6 ) — —

Balance, June 30, 2024 $ 1,741 $ 3,666 $ 52,135 $ ( 40,128 ) $ ( 200 )

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Common Stock Paid-in Capital Retained Earnings Treasury Common Stock AOCI

10 unchanged sentences

Balance, March 31, 2023 1,741 3,016 50,930 ( 40,192 ) ( 252 )

Net income — — 1,722 — —

Dividends declared and paid ($ 1.24 per share)

— — ( 1,125 ) — —

Common stock issued for stock-based awards — 36 — 29 —

Stock repurchases — — — ( 77 ) —

Stock compensation — 111 — — —

Other comprehensive income (loss), net of taxes — — — — 6

Dividend equivalents on RSUs — — ( 5 ) — —

Balance, June 30, 2023 $ 1,741 $ 3,163 $ 51,522 $ ( 40,240 ) $ ( 246 )

Contingencies

10 unchanged sentences

During the periods presented, there have been no material accruals or payments regarding product warranty or product liability.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

We are subject to various legal and administrative proceedings.

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 consolidated financial statements.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Supplemental financial information

Restructuring charges/other

During the first quarter of 2024, restructuring charges/other was a credit of $ 124 million primarily due to a gain on the sale of a property.

During the first six months of 2024, restructuring charges/other was a credit of $ 124 million primarily due to a gain on the sale of a property.

Prepaid expenses and other current assets

March 31, December 31,

June 30, December 31,

CHIPS and Science Act investment tax credit $ 981 $ 497

2 unchanged sentences

Other long-term assets

March 31, December 31,

June 30, December 31,

CHIPS and Science Act investment tax credit $ 464 $ 859

2 unchanged sentences

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 first quarters of 2024 and 2023.

Our Consolidated Statements of Comprehensive Income include items that have been recognized within net income during the second quarters and first six months of 2024 and 2023.

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

For Three Months Ended Impact to Related Statement of Income Lines

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

June 30, June 30,

2024 2023 2024 2023

Net actuarial losses of defined benefit plans:

Recognized net actuarial losses (a) $ 3 $ 4 Decrease to OI&E

Recognized net actuarial losses and settlement losses (a) $ 4 $ 4 $ 7 $ 8 Decrease to OI&E

Tax effect ( 1 ) ( 1 ) ( 2 ) ( 2 ) Decrease to provision for income taxes

7 unchanged sentences

Balance, March 31 831

Repurchases —

Shares issued for stock compensation ( 3 )

Balance, June 30 828

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