What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-02-14 compared with 2024-02-02 · 100 added, 84 removed, 963 unchanged (16% of the section changed)

15 unchanged sentences

Selling, general and administrative (SG&A) 1,794 1,825 1,704

Acquisition charges — — 142

Restructuring charges/other ( 124 ) — 257

27 unchanged sentences

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

1 ( 1 ) ( 1 )

Derivative instruments:

59 unchanged sentences

Depreciation 1,508 1,175 925

Amortization of acquisition-related intangibles — — 142

Amortization of capitalized software 72 63 54

30 unchanged sentences

Cash and cash equivalents at end of period $ 3,200 $ 2,964 $ 3,050

Supplemental cash flow information

Investment tax credit (ITC) used to reduce income taxes payable $ 588 $ — $ —

Total cash benefit related to the U.S.

CHIPS and Science Act $ 588 $ — $ —

See accompanying notes.

14 unchanged sentences

Dividend equivalents on RSUs — — ( 18 ) — —

Other — ( 3 ) — — —

Balance, December 31, 2022

26 unchanged sentences

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.

We have two reportable segments, Analog and Embedded Processing, each of which represents groups of products that have similar design and development requirements, product characteristics and manufacturing processes.

Our segments reflect how our chief operating decision maker (CODM), which is our chief executive officer, 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.

14 unchanged sentences

Consequently, depreciation expense is not an independently identifiable component within the segments’ results and, therefore, is not provided.

With the exception of goodwill, we do not identify or allocate assets by operating segment, nor does the chief operating decision maker evaluate operating segments using discrete asset information.

With the exception of goodwill, we do not identify or allocate assets by operating segment, nor does the CODM evaluate operating segments using discrete asset information.

We have no material intersegment revenue.

The accounting policies of the segments are consistent with those described in the summary of significant accounting policies and practices.

The accounting policies of the segments are consistent with those described in the significant accounting policies and practices.

The CODM assesses the performance of our segments and decides how to allocate resources based on each segment’s revenue growth, gross margin and operating profit.

The CODM utilizes these metrics by comparing budget versus actual results as well as benchmarking to our competitors.

Segment information

For Years Ended December 31,

2023 2022 2021

Analog $ 13,040 $ 15,359 $ 14,050

Embedded Processing 3,368 3,261 3,049

Other 1,111 1,408 1,245

Total revenue $ 17,519 $ 20,028 $ 18,344

For Year Ended December 31, 2024

Analog Embedded Processing Other Total

Revenue $ 12,161 $ 2,533 $ 947 $ 15,641

Cost of revenue 4,869 1,315 363 6,547

Gross profit 7,292 1,218 584 9,094

Research and development 1,411 475 73 1,959

Selling, general and administrative 1,273 391 130 1,794

Restructuring charges/other — — ( 124 ) ( 124 )

Operating profit $ 4,608 $ 352 $ 505 $ 5,465

Analog $ 5,821 $ 8,359 $ 7,393

Embedded Processing 1,008 1,253 1,174

Other 502 528 393

Total operating profit $ 7,331 $ 10,140 $ 8,960

For Year Ended December 31, 2023

Analog Embedded Processing Other Total

Revenue $ 13,040 $ 3,368 $ 1,111 $ 17,519

Cost of revenue 4,615 1,493 392 6,500

Gross profit 8,425 1,875 719 11,019

Research and development 1,317 457 89 1,863

Selling, general and administrative 1,287 410 128 1,825

Restructuring charges/other — — — —

Operating profit $ 5,821 $ 1,008 $ 502 $ 7,331

For Year Ended December 31, 2022

Analog Embedded Processing Other Total

Revenue $ 15,359 $ 3,261 $ 1,408 $ 20,028

Cost of revenue 4,610 1,223 424 6,257

Gross profit 10,749 2,038 984 13,771

Research and development 1,178 413 79 1,670

Selling, general and administrative 1,212 372 120 1,704

Restructuring charges/other — — 257 257

Operating profit $ 8,359 $ 1,253 $ 528 $ 10,140

Geographic area information

20 unchanged sentences

Major customer

One of our end customers accounted for 12 % of revenue in 2024 recognized primarily in our Analog segment.

No end customer accounted for 10% or more of revenue in 2023 or 2022.

41 unchanged sentences

Leases with an initial lease term of 12 months or less are not recorded on the balance sheet.

we recognize lease expense for these leases on a straight-line basis over the lease term.

Earnings per share (EPS)

26 unchanged sentences

A statistical allowance is provided for inventory considered unlikely to be sold.

The statistical allowance is based on an analysis of historical disposal activity, historical customer shipments, as well as estimated future sales.

The statistical allowance is based on an analysis of historical disposal activity, historical customer shipments and age of inventory.

A specific allowance for each material type will be carried if there is a significant event not captured by the statistical allowance.

4 unchanged sentences

Incentives for specific operating activities are offset against the related expense in the period the expense is incurred.

In August 2022, the U.S.

government enacted the U.S.

CHIPS and Science Act, which provides funding for manufacturing grants and research investments, and it establishes a 25% investment tax credit for certain investments in U.S.

CHIPS and Science Act (CHIPS Act) provides funding for manufacturing grants and research investments, and it establishes a 25% investment tax credit (ITC) for certain investments in U.S.

semiconductor manufacturing.

As of December 31, 2023, we have recognized $ 1.36 billion of receivables with a corresponding reduction to the carrying amounts of the qualifying manufacturing assets.

The receivables are comprised of $ 497 million in prepaid expenses and other current assets and $ 859 million in other long-term assets .

We expect to benefit from the ITC on qualifying manufacturing investments through 2034.

We have also entered into an agreement with the U.S.

Department of Commerce to receive direct funding of up to $ 1.6 billion for our three large-scale 300mm wafer fabs currently under construction in Sherman, Texas, and Lehi, Utah.

Direct funding of the award will be based on the achievement of certain milestones.

The agreement contains representations, warranties and covenants that relate to compliance with requirements for awards provided for in the CHIPS Act.

In addition, the agreement includes certain events of default and related rights and remedies, including clawbacks.

As of December 31, 2024, we have recognized $ 3.15 billion of CHIPS Act receivables, which are comprised of $ 904 million in prepaid expenses and other current assets and $ 2.25 billion in other long-term assets .

We have also recognized deferred income of $ 600 million in other long-term liabilities for eligible expenditures that have not yet been incurred.

See Note 11 for additional information.

In 2023, cost of revenue benefited by $ 45 million from the investment tax credit, recognized as a reduction of depreciation expense.

Property, plant and equipment;

acquisition-related intangibles;

and other capitalized costs

In 2024, the total cash benefit related to the ITC was $ 588 million, which was used to reduce our income taxes payable.

The CHIPS Act ITC and direct funding incentives have reduced the carrying amounts of manufacturing assets by $ 3.14 billion, of which $ 1.78 billion was recognized in 2024.

Cost of revenue benefited by $ 159 million and $ 45 million from the CHIPS Act incentives, recognized as a reduction of depreciation expense in 2024 and 2023, respectively.

Property, plant and equipment and other capitalized costs

Property, plant and equipment are stated at cost and depreciated over their estimated useful lives using the straight-line method.

53 unchanged sentences

SG&A 203 199 165

Restructuring charges/other — — 8

Total $ 387 $ 362 $ 289

37 unchanged sentences

Summarized information about stock options outstanding as of December 31, 2024, is as follows:

Stock Options Outstanding

Exercise Price Range Number Outstanding (Shares) Weighted Average Remaining Contractual Life (Years)

1 unchanged sentence

Options Fully Vested and Expected to Vest (a) Options Exercisable

Options outstanding (shares) 26 17

Stock options outstanding (shares) 24 15

Weighted average remaining contractual life (in years) 5.7 4.0

24 unchanged sentences

$ 4,438 $ 6,445 $ 9,122

1,015 973 910

Total $ 5,453 $ 7,418 $ 10,032

13 unchanged sentences

Foreign derived intangible income ( 6.1 ) ( 6.8 ) ( 7.0 )

R&D tax credit ( 1.3 ) ( 0.9 ) ( 0.9 )

Stock compensation ( 2.1 ) ( 1.0 ) ( 0.7 )

R&D tax credit ( 2.0 ) ( 1.3 ) ( 0.9 )

Changes in uncertain tax positions 0.1 — 0.1

3 unchanged sentences

Provisions of the U.S.

Tax Cuts and Jobs Act (the Tax Act), such as the one-time tax on indefinitely reinvested earnings and the global intangible low-taxed income (GILTI) tax for years beginning in 2018, eliminate any additional U.S.

Tax Cuts and Jobs Act, such as the one-time tax on indefinitely reinvested earnings and the global intangible low-taxed income (GILTI) tax for years beginning in 2018, eliminate any additional U.S.

taxation resulting from repatriation of earnings of non-U.S.

13 unchanged sentences

Stock compensation 186 163

Inventories and related reserves 104 88

Inventories 105 104

Retirement costs for defined benefit and retiree health care 17 37

4 unchanged sentences

Property, plant and equipment ( 441 ) ( 592 )

CHIPS Act incentives ( 336 ) —

International earnings ( 33 ) ( 33 )

10 unchanged sentences

This assessment is based on our evaluation of relevant criteria, including the existence of deferred tax liabilities that can be used to absorb deferred tax assets, taxable income in prior carryback years and expectations for future taxable income.

Valuation allowances increased $ 9 million in 2023, increased $ 1 million in 2022 and increased $ 9 million in 2021.

Valuation allowances increased $ 14 million, $ 9 million and $ 1 million in 2024, 2023 and 2022, respectively.

These changes had no impact to net income in 2024, 2023 or 2022.

We have no material tax loss carryforwards as of December 31, 2024.

Cash payments made for income taxes, net of refunds, were $ 1.35 billion, $ 1.48 billion and $ 1.20 billion in 2023, 2022 and 2021, respectively.

Cash payments made for income taxes, net of refunds, were $ 451 million, $ 1.35 billion and $ 1.48 billion in 2024, 2023 and 2022, respectively.

In 2024, the total cash benefit related to the CHIPS Act ITC was $ 588 million, which was used to reduce our income taxes payable.

Uncertain tax positions

9 unchanged sentences

Reductions for tax positions of prior years — ( 3 ) —

Settlements with tax authorities — — ( 23 )

Expiration of the statute of limitations for assessing taxes — — —

Balance, December 31 $ 85 $ 82 $ 82

2 unchanged sentences

The liability for uncertain tax positions is a component of other long-term liabilities on our Consolidated Balance Sheets.

All of the $ 82 million liabilities for uncertain tax positions at both December 31, 2023 and 2022 are comprised of positions that, if recognized, would lower the effective tax rate.

All of the $ 85 million and $ 82 million liabilities for uncertain tax positions as of December 31, 2024 and 2023, respectively, are comprised of positions that, if recognized, would lower the effective tax rate.

If these liabilities are ultimately realized, no existing deferred tax assets in 2024 or 2023 would also be realized.

9 unchanged sentences

Our forward foreign currency exchange contracts outstanding as of December 31, 2024, had a notional value of $ 565 million to hedge our non-U.S.

dollar net balance sheet exposures, including $ 102 million to sell Japanese yen, $ 77 million to sell British pounds and $ 58 million to buy Chinese yuan.

dollar net balance sheet exposures, including $ 180 million to buy Indian rupee, $ 91 million to sell British pounds and $ 78 million to sell Japanese yen.

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.

12 unchanged sentences

These allowances are deducted from accounts receivable on our Consolidated Balance Sheets.

Accounts receivable allowances changed to reflect amounts charged (credited) to operating results by $ 3 million, $ 5 million and ($ 3 ) million in 2023, 2022 and 2021, respectively.

Accounts receivable allowances changed to reflect amounts charged to operating results by $ 5 million, $ 3 million and $ 5 million in 2024, 2023 and 2022, respectively.

Valuation of debt and equity investments and certain liabilities

38 unchanged sentences

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.

• 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.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date.

The three-level hierarchy described below indicates the inputs 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 measurement date.

• Level 2 – Uses inputs other than Level 1 that are either directly or indirectly observable as of the measurement date through correlation with market data.

Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active and models or other pricing methodologies that do not require significant judgment.

We utilize a third-party data service to provide Level 2 valuations, and we verify these valuations for reasonableness.

• 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 December 31, 2024 and 2023, we had no Level 3 assets or liabilities.

25 unchanged sentences

As of December 31, 2024 and 2023, as a result of employees’ elections, TI’s U.S.

defined contribution plans held shares of TI common stock totaling 5 million shares and 6 million shares valued at $ 873 million and $ 940 million, respectively.

defined contribution plans held shares of TI common stock totaling 5 million shares in both periods valued at $ 852 million and $ 873 million, respectively.

Dividends paid on these shares in 2024 and 2023 were $ 26 million and $ 27 million, respectively.

1 unchanged sentence

Our aggregate expense for the U.S.

defined contribution plans was $ 75 million in 2023, $ 70 million in 2022 and $ 63 million in 2021.

defined contribution plans was $ 76 million, $ 75 million and $ 70 million in 2024, 2023 and 2022, respectively.

The defined benefit pension plans include employees still accruing benefits, as well as employees and participants who no longer accrue service-related benefits, but instead, may participate in the enhanced defined contribution plan.

14 unchanged sentences

As of December 31, 2024 and 2023, as a result of employees’ elections, TI’s non-U.S.

defined contribution plans held TI common stock valued at $ 34 million and $ 33 million, respectively.

defined contribution plans held TI common stock valued at $ 34 million in both periods.

Dividends paid on these shares of TI common stock in 2024 and 2023 were not material.

31 unchanged sentences

Settlements ( 2 ) ( 40 ) — — ( 6 ) ( 6 )

Curtailments — — — — — ( 4 )

Actuarial loss (gain) ( 6 ) 1 ( 12 ) ( 6 ) ( 106 ) 80

38 unchanged sentences

Defined Benefit Total

Net Actuarial Loss Net Actuarial Gain Prior Service Cost Net Actuarial Loss Prior Service Cost Net Actuarial Loss Prior Service Cost

Net Actuarial Loss Net Actuarial Gain Prior Service Cost Net Actuarial Loss Prior Service Credit Net Actuarial Loss Prior Service Credit

AOCI balance, net of taxes, December 31, 2023

120 unchanged sentences

Long-term 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 of 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.

We retired $ 300 million of maturing debt in May 2024 and an additional $ 300 million in November 2024.

In March 2023, we issued two series of senior unsecured notes for an aggregate principal amount of $ 1.40 billion, consisting of $ 750 million of 4.90 % notes due in 2033 and $ 650 million of 5.00 % notes due in 2053.

12 unchanged sentences

The proceeds of the offering were $ 799 million, net of the original issuance discounts, which will be used for general corporate purposes.

In February 2021, we retired $ 550 million of maturing debt.

In September 2021, we issued three series of senior unsecured notes for an aggregate principal amount of $ 1.5 billion, consisting of $ 500 million of 1.125 % notes due in 2026, $ 500 million of 1.90 % notes due in 2031 and $ 500 million of 2.70 % notes due in 2051.

We incurred $ 10 million of issuance costs.

The proceeds of the offering were $ 1.5 billion, net of the original issuance discounts, which will be used for general corporate purposes.

Long-term debt outstanding is as follows:

17 unchanged sentences

Notes due 2052 at 4.10 %

Notes due 2053 at 5.00 %

Notes due 2054 at 5.15 %

Notes due 2063 at 5.05 %

Total debt 13,700 11,300

50 unchanged sentences

Restructuring charges/other

Restructuring charges/other are included in Other for segment reporting purposes and are comprised of the following components:

For Years Ended December 31,

2023 2022 2021

Integration charges (a) $ — $ 257 $ 104

Gains on sales of assets (b) — — ( 50 )

Restructuring charges/other $ — $ 257 $ 54

(a) Includes costs related to our purchase of the Lehi, Utah, manufacturing facility, as well as preproduction costs before December 2022.

(b) Includes a $ 50 million gain from the sale of property in October 2021.

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

During 2023, there were no restructuring charges/other.

During 2022, restructuring charges/other was a cost of $ 257 million related to preproduction costs at our Lehi, Utah, manufacturing facility.

These amounts are included in Other for segment reporting purposes.

Other income (expense), net (OI&E)

4 unchanged sentences

Total $ 496 $ 440 $ 106

(a) Other income includes interest, royalty and lease income, as well as investment gains and losses.

(b) Other expense includes a portion of pension and other retiree benefit costs, lease expense, tax interest, currency gains and losses and miscellaneous items.

(a) I ncludes interest, royalty and lease income.

(b) I ncludes a portion of pension and other retiree benefit costs, lease expense, tax interest, currency gains and losses and miscellaneous items.

Prepaid expenses and other current assets

CHIPS and Science Act investment tax credit $ 497 $ —

CHIPS Act incentives $ 904 $ 497

Other 296 264

2 unchanged sentences

Depreciable Lives (Years) December 31,

Land n/a $ 150 $ 132

Buildings and improvements 5 – 40

Land $ 113 $ 150

Buildings and improvements Up to 40

Machinery and equipment 5 – 10

7 unchanged sentences

Other long-term assets

CHIPS and Science Act investment tax credit $ 859 $ 395

CHIPS Act incentives $ 2,246 $ 859

Other 1,102 853

7 unchanged sentences

Net actuarial loss $ ( 144 ) $ ( 207 )

Prior service cost — ( 1 )

Unrealized gains (losses) on available-for-sale investments 2 ( 3 )

Prior service credit 1 —

Unrealized gains on available-for-sale investments 2 2

Cash flow hedge derivative instruments 1 —

15 unchanged sentences

Report of independent registered public accounting firm

To the Shareholders and the Board of Directors of Texas Instruments Incorporated

To the Stockholders and the Board of Directors of Texas Instruments Incorporated

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of Texas Instruments Incorporated (the Company) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of Texas Instruments Incorporated (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S.

19 unchanged sentences

Uncertainty in a tax position may arise because tax laws are subject to interpretation.

The Company uses significant judgment to (1) determine whether, based on the technical merits, a tax position is more likely than not to be sustained and (2) measure the amount of tax benefit that qualifies for recognition.

Auditing management’s estimate of the amount of tax benefit that qualifies for recognition involved auditor judgment because management’s estimate is complex, requires a high degree of judgment and is based on interpretations of tax laws and legal rulings.

How we addressed the matter in our audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s accounting process for uncertain tax positions.

For example, this included controls over the Company’s assessment of the technical merits of tax positions and management’s process to measure the benefit of those tax positions.

Among other procedures performed, we involved our tax professionals to assess the technical merits of the Company’s tax positions.

This included assessing the Company’s correspondence with the relevant tax authorities and evaluating income tax opinions or other third-party advice obtained by the Company.

We also evaluated the appropriateness of the Company’s accounting for its tax positions taking into consideration relevant international and local income tax laws and legal rulings.

We analyzed the Company’s assumptions and data used to determine the amount of tax benefit to recognize and tested the accuracy of the calculations.

The Company evaluates uncertain tax positions to determine whether, based on the technical merits, a tax position is more likely than not to be sustained upon examination by the taxing authorities.

Auditing management’s evaluation of whether an uncertain tax position is more likely than not to be sustained is complex and is based on interpretations of tax laws and legal rulings.

How we addressed the matter in our audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s process for interpretation and application of tax laws and rulings used in evaluation of uncertain tax positions.

To test the Company’s assessment of the technical merits of tax positions, we performed audit procedures that included, among others, evaluating management’s assumptions and analysis which detailed the basis and technical merits of the uncertain tax positions.

We involved our tax professionals to assess the technical merits of the Company’s tax positions and used our knowledge of relevant tax laws and experience with related taxing authorities.

We also evaluated the adequacy of the Company’s financial statement disclosures in Note 4 to the consolidated financial statements related to these tax matters.

6 unchanged sentences

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-K

Item 8. Financial Statements and Supplementary Data