Item 1. Financial Statements
ITEM 1. Financial statements
For Three Months Ended For Nine Months Ended
Consolidated Statements of Income September 30, September 30,
(In millions, except per-share amounts) 2024 2023 2024 2023
Revenue $ 4,151 $ 4,532 $ 11,634 $ 13,442
Cost of revenue (COR) 1,677 1,717 4,854 4,854
Gross profit 2,474 2,815 6,780 8,588
Research and development (R&D) 492 471 1,468 1,403
Selling, general and administrative (SG&A) 428 452 1,348 1,387
Restructuring charges/other — — ( 124 ) —
Operating profit 1,554 1,892 4,088 5,798
Other income (expense), net (OI&E) 131 128 384 327
Interest and debt expense 131 98 378 255
Income before income taxes 1,554 1,922 4,094 5,870
Provision for income taxes 192 213 500 731
Net income $ 1,362 $ 1,709 $ 3,594 $ 5,139
Earnings per common share (EPS):
Basic $ 1.48 $ 1.87 $ 3.92 $ 5.63
Diluted $ 1.47 $ 1.85 $ 3.89 $ 5.58
Average shares outstanding:
Basic 913 908 912 908
Diluted 920 916 919 916
A portion of net income is allocated to unvested restricted stock units (RSUs) on which we pay dividend equivalents. Diluted EPS is calculated using the following:
Net income $ 1,362 $ 1,709 $ 3,594 $ 5,139
Income allocated to RSUs ( 7 ) ( 10 ) ( 18 ) ( 26 )
Income allocated to common stock for diluted EPS $ 1,355 $ 1,699 $ 3,576 $ 5,113
See accompanying notes.
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For Three Months Ended For Nine Months Ended
Consolidated Statements of Comprehensive Income September 30, September 30,
(In millions) 2024 2023 2024 2023
Net income $ 1,362 $ 1,709 $ 3,594 $ 5,139
Other comprehensive income (loss)
Net actuarial losses of defined benefit plans:
Adjustments, net of tax effect of $ 5 and ($ 3 ); $ 2 and ($ 4 )
( 11 ) 6 ( 5 ) 6
Recognized within net income, net of tax effect of ($ 1 ) and ($ 1 ); ($ 3 ) and ($ 3 )
2 3 7 9
Prior service cost (credit) of defined benefit plans:
Recognized within net income, net of tax effect of $ 0 and $ 0 ; $ 0 and $ 0
1 1 1 1
Derivative instruments:
Change in fair value, net of tax effect of $ 0 and $ 0 ; $ 0 and $ 0
— — 1 1
Available-for-sale investments:
Unrealized gains (losses), net of tax effect of ($ 4 ) and $ 0 ; ($ 2 ) and $ 0
13 1 6 2
Other comprehensive income (loss), net of taxes 5 11 10 19
Total comprehensive income $ 1,367 $ 1,720 $ 3,604 $ 5,158
See accompanying notes.
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September 30, December 31,
Consolidated Balance Sheets 2024 2023
(In millions, except par value)
Assets
Current assets:
Cash and cash equivalents $ 2,589 $ 2,964
Short-term investments 6,163 5,611
Accounts receivable, net of allowances of ($ 23 ) and ($ 16 )
1,862 1,787
Raw materials 393 420
Work in process 2,081 2,109
Finished goods 1,822 1,470
Inventories 4,296 3,999
Prepaid expenses and other current assets 962 761
Total current assets 15,872 15,122
Property, plant and equipment at cost 15,464 13,268
Accumulated depreciation ( 3,662 ) ( 3,269 )
Property, plant and equipment 11,802 9,999
Goodwill 4,362 4,362
Deferred tax assets 941 757
Capitalized software licenses 229 223
Overfunded retirement plans 184 173
Other long-term assets 1,931 1,712
Total assets $ 35,321 $ 32,348
Liabilities and stockholders’ equity
Current liabilities:
Current portion of long-term debt $ 1,049 $ 599
Accounts payable 794 802
Accrued compensation 721 836
Income taxes payable 108 172
Accrued expenses and other liabilities 1,014 911
Total current liabilities 3,686 3,320
Long-term debt 12,844 10,624
Underfunded retirement plans 117 108
Deferred tax liabilities 54 63
Other long-term liabilities 1,352 1,336
Total liabilities 18,053 15,451
Stockholders’ equity:
Preferred stock, $ 25 par value. Shares authorized – 10 ; none issued
— —
Common stock, $ 1 par value. Shares authorized – 2,400 ; shares issued – 1,741
1,741 1,741
Paid-in capital 3,813 3,362
Retained earnings 52,304 52,283
Treasury common stock at cost
Shares: September 30, 2024 – 829 ; December 31, 2023 – 832
( 40,395 ) ( 40,284 )
Accumulated other comprehensive income (loss), net of taxes (AOCI) ( 195 ) ( 205 )
Total stockholders’ equity 17,268 16,897
Total liabilities and stockholders’ equity $ 35,321 $ 32,348
See accompanying notes.
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For Nine Months Ended
Consolidated Statements of Cash Flows September 30,
(In millions) 2024 2023
Cash flows from operating activities
Net income $ 3,594 $ 5,139
Adjustments to net income:
Depreciation 1,092 853
Amortization of capitalized software 53 48
Stock compensation 309 294
Gains on sales of assets ( 126 ) ( 1 )
Deferred taxes ( 189 ) ( 159 )
Increase (decrease) from changes in:
Accounts receivable ( 75 ) ( 81 )
Inventories ( 297 ) ( 1,151 )
Prepaid expenses and other current assets ( 69 ) 38
Accounts payable and accrued expenses 38 ( 23 )
Accrued compensation ( 127 ) ( 97 )
Income taxes payable 487 ( 65 )
Changes in funded status of retirement plans 2 49
Other ( 372 ) ( 348 )
Cash flows from operating activities 4,320 4,496
Cash flows from investing activities
Capital expenditures ( 3,628 ) ( 3,923 )
Proceeds from asset sales 194 3
Purchases of short-term investments ( 8,807 ) ( 10,140 )
Proceeds from short-term investments 8,461 9,976
Other ( 36 ) 33
Cash flows from investing activities ( 3,816 ) ( 4,051 )
Cash flows from financing activities
Proceeds from issuance of long-term debt 2,980 3,000
Repayment of debt ( 300 ) ( 500 )
Dividends paid ( 3,555 ) ( 3,376 )
Stock repurchases ( 392 ) ( 228 )
Proceeds from common stock transactions 430 218
Other ( 42 ) ( 43 )
Cash flows from financing activities ( 879 ) ( 929 )
Net change in cash and cash equivalents ( 375 ) ( 484 )
Cash and cash equivalents at beginning of period 2,964 3,050
Cash and cash equivalents at end of period $ 2,589 $ 2,566
Supplemental cash flow information
Investment tax credit (ITC) used to reduce income taxes payable $ 532 $ —
Total cash benefit related to the U.S. CHIPS and Science Act $ 532 $ —
See accompanying notes.
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Notes to financial statements
1. Description of business, including segment and geographic area information
We design and manufacture semiconductors that we sell to electronics designers and manufacturers all over the world. We have two reportable segments, Analog and Embedded Processing, each of which represents groups of similar products that are combined on the basis of similar design and development requirements, product characteristics, manufacturing processes and distribution channels. Our segments also reflect how management allocates resources and measures results.
• Analog semiconductors change real-world signals, such as sound, temperature, pressure or images, by conditioning them, amplifying them and often converting them to a stream of digital data that can be processed by other semiconductors, such as embedded processors. Analog semiconductors are also used to manage power in all electronic equipment by converting, distributing, storing, discharging, isolating and measuring electrical energy, whether the equipment is plugged into a wall or using a battery. Our Analog segment consists of two major product lines: Power and Signal Chain.
• Embedded Processing products are the digital “brains” of many types of electronic equipment. They are designed to handle specific tasks and can be optimized for various combinations of performance, power and cost, depending on the application.
We report the results of our remaining business activities in Other. Other includes operating segments that do not meet the quantitative thresholds for individually reportable segments and cannot be aggregated with other operating segments. Other includes DLP ® products, calculators and custom ASIC products.
Our centralized manufacturing and support organizations, such as facilities, procurement and logistics, provide support to our operating segments, including those in Other. Costs incurred by these organizations, including depreciation, are charged to the segments on a per-unit basis. Consequently, depreciation expense is not an independently identifiable component within the segments’ results and, therefore, is not provided.
Segment information
For Three Months Ended For Nine Months Ended
September 30, September 30,
2024 2023 2024 2023
Revenue:
Analog $ 3,223 $ 3,353 $ 8,987 $ 9,920
Embedded Processing 653 890 1,920 2,616
Other 275 289 727 906
Total revenue $ 4,151 $ 4,532 $ 11,634 $ 13,442
Operating profit:
Analog $ 1,316 $ 1,504 $ 3,371 $ 4,541
Embedded Processing 109 258 294 813
Other (a) 129 130 423 444
Total operating profit $ 1,554 $ 1,892 $ 4,088 $ 5,798
(a) Includes restructuring charges/other
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TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Geographic area information
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 Nine Months Ended
September 30, September 30,
2024 2023 2024 2023
Revenue:
United States $ 1,639 39 % $ 1,541 34 % $ 4,335 37 % $ 4,391 33 %
China 823 20 813 18 2,191 19 2,561 19
Rest of Asia 431 10 434 10 1,249 11 1,263 10
Europe, Middle East and Africa (a) 880 21 1,193 26 2,733 23 3,657 27
Japan 313 8 455 10 935 8 1,373 10
Rest of world 65 2 96 2 191 2 197 1
Total revenue $ 4,151 100 % $ 4,532 100 % $ 11,634 100 % $ 13,442 100 %
(a) Revenue from end customers headquartered in Germany was 11 % and 13 % in the third quarters of 2024 and 2023, respectively, and 12 % and 13 % in the first nine months of 2024 and 2023, respectively.
2. Basis of presentation and significant accounting policies and practices
Basis of presentation
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 September 30, 2024 and 2023, and the Consolidated Balance Sheet as of September 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. Securities and Exchange Commission. 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- and nine-month periods are not necessarily indicative of a full year’s results.
Significant accounting policies and practices
Earnings per share (EPS)
We use the two-class method for calculating EPS because the restricted stock units (RSUs) we grant are participating securities containing nonforfeitable rights to receive dividend equivalents. Under the two-class method, a portion of net income is allocated to RSUs and excluded from the calculation of income allocated to common stock.
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TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Computation and reconciliation of earnings per common share are as follows:
For Three Months Ended September 30,
2024 2023
Net Income Shares EPS Net Income Shares EPS
Basic EPS:
Net income $ 1,362 $ 1,709
Income allocated to RSUs ( 7 ) ( 9 )
Income allocated to common stock $ 1,355 913 $ 1.48 $ 1,700 908 $ 1.87
Dilutive effect of stock compensation plans 7 8
Diluted EPS:
Net income $ 1,362 $ 1,709
Income allocated to RSUs ( 7 ) ( 10 )
Income allocated to common stock $ 1,355 920 $ 1.47 $ 1,699 916 $ 1.85
For Nine Months Ended September 30,
2024 2023
Net Income Shares EPS Net Income Shares EPS
Basic EPS:
Net income $ 3,594 $ 5,139
Income allocated to RSUs ( 18 ) ( 27 )
Income allocated to common stock $ 3,576 912 $ 3.92 $ 5,112 908 $ 5.63
Dilutive effect of stock compensation plans 7 8
Diluted EPS:
Net income $ 3,594 $ 5,139
Income allocated to RSUs ( 18 ) ( 26 )
Income allocated to common stock $ 3,576 919 $ 3.89 $ 5,113 916 $ 5.58
Potentially dilutive securities representing 3 million and 9 million shares of common stock that were outstanding during the third quarters of 2024 and 2023, respectively, and 9 million and 9 million shares outstanding during the first nine 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
We use derivative financial instruments to manage exposure to foreign exchange risk. These instruments are primarily forward foreign currency exchange contracts, which are used as economic hedges to reduce the earnings impact that exchange rate fluctuations may have on our non-U.S. dollar net balance sheet exposures. Gains and losses from changes in the fair value of these forward foreign currency exchange contracts are credited or charged to OI&E. We do not apply hedge accounting to our foreign currency derivative instruments.
We are exposed to variability in compensation charges related to certain deferred compensation obligations to employees. We use total return swaps to economically hedge this exposure and offset the related compensation expense, recognizing changes in the value of the swaps and the related deferred compensation liabilities in SG&A.
In connection with the issuance of long-term debt, we may use financial derivatives such as treasury-rate lock agreements that are recognized in AOCI and amortized over the life of the related debt.
The results of these derivative transactions were not material. We do not use derivatives for speculative or trading purposes.
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TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Fair values of financial instruments
The fair values of our derivative financial instruments were not material as of September 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 September 30, 2024, the carrying value of long-term debt, including the current portion, was $ 13.89 billion, and the estimated fair value was $ 13.46 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.
3. Income taxes
Provision for income taxes is based on the following:
For Three Months Ended For Nine Months Ended
September 30, September 30,
2024 2023 2024 2023
Taxes calculated using the estimated annual effective tax rate $ 227 $ 229 $ 573 $ 794
Discrete tax items ( 35 ) ( 16 ) ( 73 ) ( 63 )
Provision for income taxes $ 192 $ 213 $ 500 $ 731
Effective tax rate 12 % 11 % 12 % 12 %
The effective tax rate differs from the 21 % U.S. statutory corporate tax rate due to the effect of U.S. tax benefits.
4. Valuation of debt and equity investments and certain liabilities
Investments measured at fair value
Money market funds, debt investments and mutual funds are stated at fair value, which is generally based on market prices or broker quotes. We classify all debt investments as available-for-sale. See Fair-value considerations . Unrealized gains and losses are recorded as an increase or decrease, net of taxes, in AOCI on our Consolidated Balance Sheets, and any credit losses are recorded as an allowance for credit losses with an offset recognized in OI&E in our Consolidated Statements of Income.
Our mutual funds hold a variety of debt and equity investments intended to generate returns that offset changes in certain deferred compensation liabilities. We record changes in the fair value of these mutual funds and the related deferred compensation liabilities in SG&A.
Other investments
Our other investments include equity-method investments and nonmarketable investments, which are not measured at fair value. These investments consist of interests in venture capital funds and other nonmarketable securities. Gains and losses from equity-method investments are recognized in OI&E based on our ownership share of the investee’s financial results. Nonmarketable securities are measured at cost with adjustments for observable changes in price or impairments. Gains and losses on nonmarketable investments are recognized in OI&E.
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TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Details of our investments are as follows:
September 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
Measured at fair value:
Money market funds $ 515 $ — $ — $ 1,068 $ — $ —
Corporate obligations 461 1,199 — 349 1,605 —
U.S. government and agency securities 747 4,667 — 696 3,808 —
Non-U.S. government and agency securities 150 297 — 50 198 —
Mutual funds — — 11 — — 12
Total 1,873 6,163 11 2,163 5,611 12
Other measurement basis:
Equity-method investments — — 11 — — 17
Nonmarketable investments — — 4 — — 5
Total — — 15 — — 22
Cash on hand 716 — — 801 — —
Total $ 2,589 $ 6,163 $ 26 $ 2,964 $ 5,611 $ 34
As of September 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 nine months of 2024 and 2023.
The following table presents the aggregate maturities of our available-for-sale debt investments as of September 30, 2024:
Fair Value
One year or less $ 6,493
One to two years 1,028
Proceeds from sales, redemptions and maturities of short-term available-for-sale investments were $ 2.70 billion and $ 2.89 billion for the third quarters of 2024 and 2023, respectively, and $ 8.46 billion and $ 9.98 billion for the first nine months of 2024 and 2023, respectively. Gross realized gains and losses from these sales were not material.
Fair-value considerations
We measure and report certain financial assets and liabilities at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
The three-level hierarchy described below indicates the extent and level of judgment used to estimate fair-value measurements.
• Level 1 – Uses unadjusted quoted prices that are available in active markets for identical assets or liabilities as of the reporting date.
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TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
• Level 2 – Uses inputs other than Level 1 that are either directly or indirectly observable as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data. We utilize a third-party data service to provide Level 2 valuations. We verify these valuations for reasonableness relative to unadjusted quotes obtained from brokers or dealers based on observable prices for similar assets in active markets.
• Level 3 – Uses inputs that are unobservable, supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models that utilize management estimates of market participant assumptions. As of September 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.
September 30, 2024 December 31, 2023
Level 1 Level 2 Total Level 1 Level 2 Total
Assets:
Money market funds $ 515 $ — $ 515 $ 1,068 $ — $ 1,068
Corporate obligations — 1,660 1,660 — 1,954 1,954
U.S. government and agency securities 3,021 2,393 5,414 3,618 886 4,504
Non-U.S. government and agency securities — 447 447 — 248 248
Mutual funds 11 — 11 12 — 12
Total assets $ 3,547 $ 4,500 $ 8,047 $ 4,698 $ 3,088 $ 7,786
Liabilities:
Deferred compensation $ 435 $ — $ 435 $ 393 $ — $ 393
Total liabilities $ 435 $ — $ 435 $ 393 $ — $ 393
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TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
5. Postretirement benefit plans
Expenses related to defined benefit and retiree health care benefit plans are as follows:
U.S. Defined Benefit U.S. Retiree Health Care Non-U.S. Defined Benefit
For Three Months Ended September 30, 2024 2023 2024 2023 2024 2023
Service cost $ 2 $ 2 $ — $ — $ 4 $ 4
Interest cost 7 7 4 4 15 14
Expected return on plan assets ( 7 ) ( 6 ) ( 4 ) ( 4 ) ( 22 ) ( 16 )
Recognized net actuarial losses (gains) 1 2 ( 1 ) ( 1 ) 3 3
Amortization of prior service cost (credit) — — — — 1 1
Net periodic benefit costs (credits) 3 5 ( 1 ) ( 1 ) 1 6
Total, including other postretirement losses (gains) $ 3 $ 5 $ ( 1 ) $ ( 1 ) $ 1 $ 6
U.S. Defined Benefit U.S. Retiree Health Care Non-U.S. Defined Benefit
For Nine Months Ended September 30, 2024 2023 2024 2023 2024 2023
Service cost $ 6 $ 6 $ 1 $ 1 $ 12 $ 12
Interest cost 19 21 10 11 42 43
Expected return on plan assets ( 18 ) ( 17 ) ( 13 ) ( 13 ) ( 60 ) ( 48 )
Recognized net actuarial losses (gains) 3 5 ( 2 ) ( 4 ) 9 9
Amortization of prior service cost (credit) — — — — 1 1
Net periodic benefit costs (credits) 10 15 ( 4 ) ( 5 ) 4 17
Settlement losses — 1 — — — 1
Total, including other postretirement losses (gains) $ 10 $ 16 $ ( 4 ) $ ( 5 ) $ 4 $ 18
6. Debt and lines of credit
Short-term borrowings
We maintain a line of credit to provide additional liquidity through bank loans and, if necessary, to support commercial paper borrowings. As of September 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 September 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:
• $ 650 million of 4.60 % notes due in 2027;
• $ 650 million of 4.60 % notes due in 2029;
• $ 600 million of 4.85 % notes due in 2034;
• $ 750 million of 5.15 % notes due in 2054; and
• $ 350 million further issuance of existing 5.05 % notes due in 2063.
We incurred $ 16 million of issuance and other related costs. The proceeds of the offering were $ 2.98 billion, net of the original issuance discounts, which will be used for general corporate purposes.
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TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Long-term debt outstanding is as follows:
September 30, December 31,
2024 2023
Notes due 2024 at 2.625 %
$ — $ 300
Notes due 2024 at 4.70 %
300 300
Notes due 2025 at 1.375 %
750 750
Notes due 2026 at 1.125 %
500 500
Notes due 2027 at 4.60 %
650 —
Notes due 2027 at 2.90 %
500 500
Notes due 2028 at 4.60 %
700 700
Notes due 2029 at 4.60 %
650 —
Notes due 2029 at 2.25 %
750 750
Notes due 2030 at 1.75 %
750 750
Notes due 2031 at 1.90 %
500 500
Notes due 2032 at 3.65 %
400 400
Notes due 2033 at 4.90 %
950 950
Notes due 2034 at 4.85 %
600 —
Notes due 2039 at 3.875 %
750 750
Notes due 2048 at 4.15 %
1,500 1,500
Notes due 2051 at 2.70 %
500 500
Notes due 2052 at 4.10 %
300 300
Notes due 2053 at 5.00 %
650 650
Notes due 2054 at 5.15 %
750 —
Notes due 2063 at 5.05 %
1,550 1,200
Total debt 14,000 11,300
Net unamortized discounts, premiums and issuance costs ( 107 ) ( 77 )
Total debt, including net unamortized discounts, premiums and issuance costs 13,893 11,223
Current portion of long-term debt ( 1,049 ) ( 599 )
Long-term debt $ 12,844 $ 10,624
Interest and debt expense was $ 131 million and $ 98 million for the third quarters of 2024 and 2023, respectively, and $ 378 million and $ 255 million for the first nine months of 2024 and 2023, respectively. This was net of the amortized discounts, premiums, issuance and other related costs. Capitalized interest was $ 5 million and $ 3 million for the third quarters of 2024 and 2023, respectively, and $ 16 million and $ 8 million for the first nine months of 2024 and 2023, respectively.
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TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
7. Stockholders’ equity
Changes in equity are as follows:
Common Stock Paid-in Capital Retained Earnings Treasury Common Stock AOCI
Balance, December 31, 2023 $ 1,741 $ 3,362 $ 52,283 $ ( 40,284 ) $ ( 205 )
2024
Net income — — 1,105 — —
Dividends declared and paid ($ 1.30 per share)
— — ( 1,183 ) — —
Common stock issued for stock-based awards — ( 29 ) — 94 —
Stock repurchases — — — ( 3 ) —
Stock compensation — 106 — — —
Other comprehensive income (loss), net of taxes — — — — 2
Dividend equivalents on RSUs — — ( 7 ) — —
Other — — 1 — —
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 )
Net income — — 1,362 — —
Dividends declared and paid ($ 1.30 per share)
— — ( 1,187 ) — —
Common stock issued for stock-based awards — 62 — 55 —
Stock repurchases — — — ( 322 ) —
Stock compensation — 87 — — —
Other comprehensive income (loss), net of taxes — — — — 5
Dividend equivalents on RSUs — — ( 6 ) — —
Other — ( 2 ) — — —
Balance, September 30, 2024 $ 1,741 $ 3,813 $ 52,304 $ ( 40,395 ) $ ( 195 )
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TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Common Stock Paid-in Capital Retained Earnings Treasury Common Stock AOCI
Balance, December 31, 2022 $ 1,741 $ 2,951 $ 50,353 $ ( 40,214 ) $ ( 254 )
2023
Net income — — 1,708 — —
Dividends declared and paid ($ 1.24 per share)
— — ( 1,125 ) — —
Common stock issued for stock-based awards — ( 37 ) — 118 —
Stock repurchases — — — ( 96 ) —
Stock compensation — 104 — — —
Other comprehensive income (loss), net of taxes — — — — 2
Dividend equivalents on RSUs — — ( 6 ) — —
Other — ( 2 ) — — —
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 )
Net income — — 1,709 — —
Dividends declared and paid ($ 1.24 per share)
— — ( 1,126 ) — —
Common stock issued for stock-based awards — 38 — 35 —
Stock repurchases — — — ( 48 ) —
Stock compensation — 79 — — —
Other comprehensive income (loss), net of taxes — — — — 11
Dividend equivalents on RSUs — — ( 6 ) — —
Other — — ( 1 ) — —
Balance, September 30, 2023 $ 1,741 $ 3,280 $ 52,098 $ ( 40,253 ) $ ( 235 )
8. Contingencies
Indemnification guarantees
We routinely sell products with an intellectual property indemnification included in the terms of sale. Historically, we have had only minimal, infrequent losses associated with these indemnities. Consequently, we cannot reasonably estimate any future liabilities that may result.
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TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Warranty costs/product liabilities
Our stated warranties for semiconductor products obligate us to repair, replace or credit the purchase price of a covered product back to the buyer. Product claim consideration may exceed the price of our products. Historically, we have experienced a low rate of payments on product claims. Although we cannot predict the likelihood or amount of any future claims, we do not believe they will have a material adverse effect on our consolidated financial statements. We accrue for known product-related claims if a loss is probable and can be reasonably estimated. During the periods presented, there have been no material accruals or payments regarding product warranty or product liability.
General
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.
9. Supplemental financial information
Restructuring charges/other
During the first nine 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
September 30, December 31,
2024 2023
U.S. CHIPS and Science Act investment tax credit $ 621 $ 497
Other 341 264
Total $ 962 $ 761
Other long-term assets
September 30, December 31,
2024 2023
U.S. CHIPS and Science Act investment tax credit $ 806 $ 859
Operating lease right-of-use assets 800 579
Other 325 274
Total $ 1,931 $ 1,712
Other long-term liabilities
September 30, December 31,
2024 2023
Operating lease liabilities $ 681 $ 478
Other 671 858
Total $ 1,352 $ 1,336
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TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
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 third quarters and first nine months of 2024 and 2023. The table below details where these transactions are recorded in our Consolidated Statements of Income.
For Three Months Ended For Nine Months Ended Impact to Related Statement of Income Lines
September 30, September 30,
2024 2023 2024 2023
Net actuarial losses of defined benefit plans:
Recognized net actuarial losses and settlement losses (a) $ 3 $ 4 $ 10 $ 12 Decrease to OI&E
Tax effect ( 1 ) ( 1 ) ( 3 ) ( 3 ) Decrease to provision for income taxes
Recognized within net income, net of taxes $ 2 $ 3 $ 7 $ 9 Decrease to net income
Prior service cost (credit) of defined benefit plans:
Amortization of prior service cost (credit) (a) $ 1 $ 1 $ 1 $ 1 Decrease (increase) to OI&E
Tax effect — — — — (Decrease) increase to provision for income taxes
Recognized within net income, net of taxes $ 1 $ 1 $ 1 $ 1 Decrease (increase) to net income
(a) Detailed in Note 5
Effect on shares outstanding and treasury shares
The following table reflects the changes in treasury shares:
2024
Balance, January 1 832
Repurchases —
Shares issued for stock compensation ( 1 )
Balance, March 31 831
Repurchases —
Shares issued for stock compensation ( 3 )
Balance, June 30 828
Repurchases 2
Shares issued for stock compensation ( 1 )
Balance, September 30 829
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.