33 unchanged sentences
• Our segments represent groups of similar products that are combined on the basis of similar design and development requirements, product characteristics, manufacturing processes and distribution channels, and how management allocates resources and measures results.
+Added: During the third quarter, we reorganized the product lines within our Analog segment to simplify our business structure into our Power and Signal Chain product lines.
+Added: These changes had no impact on our previously reported consolidated financial statements or on our reportable segment results.
See Note 1 to the financial statements for more information regarding our segments.
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The coronavirus (COVID-19) pandemic and its follow-on effects are impacting and will likely continue to impact business activity across industries worldwide, including TI.
−Removed: While second quarter did not experience the depth of decline we saw in the 2008 financial crisis, nonetheless we remain cautious of how the economy might behave for the next few years.
−Removed: The impact to our lead times and ability to fulfill orders was minimal in the first six months of 2020.
+Added: Therefore, we remain cautious about how the economy might behave for the next few years.
+Added: The impact to our lead times and ability to fulfill orders was minimal in the first nine months of 2020.
However, depending on pandemic-related factors like the potential of local manufacturing restrictions on our factories, we could experience constraints in fulfilling customer orders in future periods.
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Performance summary
−Removed: Our second quarter revenue was $3.24 billion, net income was $1.38 billion and earnings per share (EPS) were $1.48.
−Removed: Revenue decreased 12% from the same quarter a year ago, driven primarily by weakness in the automotive market.
−Removed: In our core businesses, Analog revenue declined 4% and Embedded Processing declined 31% from the same quarter a year ago.
−Removed: Analog and Embedded Processing both had positive sequential growth in the second quarter excluding the automotive market.
+Added: Our third quarter revenue was $3.82 billion, net income was $1.35 billion and earnings per share (EPS) were $1.45.
+Added: Revenue increased 18% sequentially with notable strength from the rebound of automotive demand and growing demand from personal electronics.
+Added: Revenue increased 1% from the same quarter a year ago.
+Added: In our core businesses, Analog revenue grew 18% and Embedded Processing grew 19% sequentially.
+Added: From a year ago, Analog revenue grew 7% and Embedded Processing declined 10%.
Our cash flow from operations of $5.8 billion for the trailing 12 months again underscored the strength of our business model.
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Over the same period, our dividends represented 64% of free cash flow, underscoring their sustainability.
+Added: In September, we announced we would increase our dividend by 13%.
Together, our stock repurchases and dividends reflect our continued commitment to return all free cash flow to our shareholders.
−Removed: Results of operations – second quarter 2020 compared with second quarter 2019
−Removed: Revenue of $3.24 billion decreased $429 million, or 12%, primarily due to lower revenue from Embedded Processing and, to a lesser extent, Analog.
−Removed: Gross profit of $2.08 billion was down $278 million, or 12%, due to lower revenue.
−Removed: As a percentage of revenue, gross profit was 64.3% in both periods.
+Added: Results of operations – third quarter 2020 compared with third quarter 2019
+Added: Revenue of $3.82 billion increased $46 million, or 1%, primarily due to higher revenue from Analog, partially offset by lower revenue from Embedded Processing.
+Added: Gross profit of $2.45 billion was about even.
+Added: As a percentage of revenue, gross profit decreased to 64.3% from 64.9%.
Operating expenses (R&D and SG&A) were $793 million compared with $778 million.
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See Note 5 to the financial statements.
−Removed: Restructuring charges/other was a charge of $24 million, due to an Embedded Processing action, compared with a credit of $36 million due to the sale of our manufacturing facility in Greenock, Scotland in 2019.
Operating profit was $1.61 billion, or 42.2% of revenue, compared with $1.59 billion, or 42.1% of revenue.
−Removed: OI&E was $99 million of income compared with $52 million of income, which increased primarily due to the reversal of interest accrued on an uncertain tax position.
+Added: OI&E was $27 million of income compared with $34 million of income, which decreased primarily due to reduced interest income.
Interest and debt expense of $49 million increased $6 million due to the issuance of additional long-term debt.
−Removed: Our provision for income taxes was a benefit of $101 million compared with an expense of $209 million.
−Removed: This change was due to higher discrete tax benefits, which included a $249 million benefit from the settlement of a depreciation-related uncertain tax position, and, to a lesser extent, lower income before income taxes.
+Added: Our provision for income taxes was $234 million compared with $155 million.
+Added: This increase was due to lower discrete tax items, partially offset by a lower annual operating tax rate.
Our annual operating tax rate, which does not include discrete tax items, is about 14% compared with 16% in 2019.
5 unchanged sentences
EPS was $1.45 compared with $1.49.
−Removed: Second quarter 2020 segment results
+Added: Third quarter 2020 segment results
Our segment results compared with the year-ago quarter are as follows:
−Removed: Analog (includes Power, Signal Chain and High Volume product lines)
+Added: Analog (includes Power and Signal Chain product lines)
Q3 2020 Q3 2019 Change
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Operating profit % of revenue 46.1 % 46.0 %
−Removed: Analog revenue decreased in High Volume and Power, while Signal Chain was about even.
−Removed: The decrease in High Volume revenue was due to the mix of products shipped.
−Removed: Operating profit decreased due to lower revenue and associated gross profit.
+Added: Analog revenue increased in both product lines, led by Signal Chain.
+Added: Operating profit increased due to higher revenue and associated gross profit.
Embedded Processing (includes Connected Microcontrollers and Processors product lines)
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Operating profit % of revenue 33.9 % 33.5 %
−Removed: * Includes acquisition charges and restructuring charges/other
+Added: * Includes acquisition charges
Other revenue decreased $72 million, and operating profit decreased $23 million.
−Removed: Results of operations – first six months of 2020 compared with first six months of 2019
−Removed: Revenue of $6.57 billion decreased $694 million, or 10%, primarily due to lower revenue from Embedded Processing and, to a lesser extent, Analog.
+Added: Results of operations – first nine months of 2020 compared with first nine months of 2019
+Added: Revenue of $10.39 billion decreased $648 million, or 6%, primarily due to lower revenue from Embedded Processing.
Gross profit of $6.62 billion was down $444 million, or 6%, due to lower revenue.
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Operating profit was $4.08 billion, or 39.3% of revenue, compared with $4.47 billion, or 40.6% of revenue.
−Removed: OI&E was $124 million of income compared with $88 million of income, which increased primarily due to the reversal of interest accrued on an uncertain tax position.
+Added: OI&E was $151 million of income compared with $122 million of income, which increased primarily due to the reversal of interest accrued on an uncertain tax position, partially offset by lower interest income.
Interest and debt expense of $142 million increased $17 million due to the issuance of additional long-term debt.
−Removed: Our provision for income taxes was a benefit of $51 million compared with an expense of $369 million.
−Removed: This change was due to higher discrete tax benefits, which included a $249 million benefit from the settlement of a depreciation-related uncertain tax position, and, to a lesser extent, lower income before income taxes.
+Added: Our provision for income taxes was $183 million compared with $524 million.
+Added: This decrease was due to higher discrete tax benefits, which included a $249 million benefit from the settlement of a depreciation-related uncertain tax position, and, to a lesser extent, a lower annual operating tax rate and lower income before income taxes.
Net income was $3.91 billion compared with $3.95 billion.
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Operating profit % of revenue 43.8 % 44.4 %
−Removed: Analog revenue decreased in High Volume and Signal Chain due to changes in the mix of products shipped.
−Removed: Power revenue was about even.
−Removed: Operating profit decreased due to lower revenue and associated gross profit.
+Added: Analog revenue was about even in both product lines.
+Added: Operating profit was about even.
Embedded Processing
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Financial condition
−Removed: At the end of the second quarter of 2020, total cash (cash and cash equivalents plus short-term investments) was $4.96 billion, a decrease of $427 million from the end of 2019.
+Added: At the end of the third quarter of 2020, total cash (cash and cash equivalents plus short-term investments) was $5.52 billion, an increase of $131 million from the end of 2019.
Accounts receivable were $1.39 billion, an increase of $318 million compared with the end of 2019.
−Removed: Days sales outstanding at the end of the second quarter of 2020 were 33 compared with 29 at the end of 2019.
+Added: Days sales outstanding at the end of the third quarter of 2020 were 33 compared with 29 at the end of 2019.
Inventory was $2.07 billion, an increase of $71 million from the end of 2019.
−Removed: Days of inventory at the end of the second quarter of 2020 were 166 compared with 144 at the end of 2019.
+Added: Days of inventory at the end of the third quarter of 2020 were 137 compared with 144 at the end of 2019.
The increase in inventory reflects our desire to maintain high optionality with our operating plan so we can keep our lead times stable and product availability high, particularly during this time when our customers' ability to forecast their demand is limited.
−Removed: It is also higher as we reduce the number of distributors this year and have a closer, more direct relationship with our customers.
+Added: It is also higher as we reduce the number of distributors this year and have a closer, direct relationship with our customers.
Liquidity and capital resources
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Additional sources of liquidity are cash and cash equivalents, short-term investments and a variable-rate, revolving credit facility.
−Removed: Cash flows from operating activities for the first six months of 2020 were $2.57 billion, a decrease of $332 million from the year-ago period primarily due to an increase in cash used for working capital.
+Added: Cash flows from operating activities for the first nine months of 2020 were $4.01 billion, a decrease of $881 million from the year-ago period primarily due to an increase in cash used for working capital.
Our revolving credit facility is with a consortium of investment-grade banks and allows us to borrow up to $2 billion until March 2024.
This credit facility also serves as support for the issuance of commercial paper.
−Removed: As of June 30, 2020, our credit facility was undrawn, and we had no commercial paper outstanding.
−Removed: Investing activities for the first six months of 2020 provided $2.26 billion compared with $915 million in the year-ago period.
+Added: As of September 30, 2020, our credit facility was undrawn, and we had no commercial paper outstanding.
+Added: Investing activities for the first nine months of 2020 provided $74 million compared with $1 million in the year-ago period.
Capital expenditures were $437 million compared with $684 million in the year-ago period and were primarily for semiconductor manufacturing equipment and facilities in both periods.
−Removed: Short-term investments provided cash of $2.55 billion compared with $1.40 billion in the year-ago period.
−Removed: Financing activities for the first six months of 2020 used $2.98 billion compared with $2.44 billion in the year-ago period.
+Added: Short-term investments provided cash of $523 million compared with $630 million in the year-ago period.
+Added: Financing activities for the first nine months of 2020 used $3.70 billion compared with $3.44 billion in the year-ago period.
In 2020, we received net proceeds of $1.50 billion from the issuance of fixed-rate, long-term debt, and we retired maturing debt of $500 million.
−Removed: In the year-ago period, we received net proceeds of $743 million from the issuance of fixed-rate, long-term debt.
+Added: In the year-ago period, we received net proceeds of $1.49 billion from the issuance of fixed-rate, long-term debt, and we retired maturing debt of $750 million.
Dividends paid were $2.49 billion compared with $2.17 billion in the year-ago period, reflecting an increase in the dividend rate, partially offset by fewer shares outstanding.
1 unchanged sentence
Employee exercises of stock options provided cash proceeds of $356 million compared with $491 million in the year-ago period.
−Removed: We had $4.29 billion of cash and cash equivalents and $666 million of short-term investments as of June 30, 2020.
+Added: We had $2.82 billion of cash and cash equivalents and $2.70 billion of short-term investments as of September 30, 2020.
We believe we have the necessary financial resources and operating plans to fund our working capital needs, capital expenditures, dividend and debt-related payments, and other business requirements for at least the next 12 months.
7 unchanged sentences
For 12 Months Ended
+Added: September 30,
2020 2019 Change
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Information regarding long-term contractual obligations is in Item 7 of our Form 10-K for the year ended December 31, 2019.
−Removed: Additionally, in the first six months of 2020, we issued $750 million principal amount of 1.375% notes maturing in 2025 and $750 million principal amount of 1.75% notes maturing in 2030.
+Added: Additionally, in the first nine months of 2020, we issued $750 million principal amount of 1.375% notes maturing in 2025 and $750 million principal amount of 1.75% notes maturing in 2030.
We retired $500 million of maturing debt in April 2020.
2 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.