- TI Revenue about Even with Prior Quarter, Up 28% from Year
Ago
- Operating Profit Reaches All-Time High, More Than Doubles
from Year Ago
- 4Q04 Revenue Outlook Reflects Seasonally Lower Calculator
Sales and Reductions in Inventories by Semiconductor Distributors
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Financials in MS Excel Format (48KB)
DALLAS (October 18, 2004) – Texas Instruments Incorporated (TI)
(NYSE: TXN) today reported third-quarter 2004 revenue of $3250 million,
about even with the second quarter and up 28 percent from the year-ago
quarter. Revenue from the company's wireless and Digital Light Processing™
(DLP™) semiconductor products reached record levels for the second
consecutive quarter. Strong sequential growth in these areas offset declines
in other areas, primarily in standard products, which were affected by
ongoing inventory adjustments, especially in distribution channels.
Compared with the third quarter of last year, the increase in TI's revenue
reflected double-digit growth across all the company's major Semiconductor
operations, with particularly strong contributions from wireless, DLP
and high-performance analog products.
In the segments of TI's business, Semiconductor revenue was even sequentially
and up 31 percent from a year ago. Sensors & Controls revenue seasonally
declined 5 percent from the prior quarter, and increased 14 percent from
the year-ago period due to broad-based demand. Educational & Productivity
Solutions (E&PS) revenue increased 13 percent sequentially primarily
due to seasonal back-to-school demand, and 8 percent from the year- ago
period primarily due to strong retail demand for new graphing calculators.
Earnings per share (EPS) of $0.32 include benefits from taxes, which the
company discussed in its mid-quarter update on Sept. 8, 2004. Earnings
were better than anticipated in the mid-quarter update primarily because
the company had higher non-operating income, operating expenses were further
reduced, and revenue strengthened late in the quarter.
"TI's operating profit in the third quarter more than doubled from a year
ago to reach an all-time high," said Rich Templeton, TI president and
chief executive officer. "The value of TI's diverse product portfolio
was evident as weaker revenue from standard products was offset by record
revenue from both wireless and DLP products. In wireless, TI has achieved
early leadership in the UMTS market, which is widely expected to be the
prevalent global standard for 3G. A strong majority of these 3G cell phones
are based on TI digital signal processors. Likewise, in the nascent market
for digital televisions, our DLP technology is now outselling plasma in
the North American market for big-screen TVs.
"Nonetheless, the environment is not without challenges. In the third
quarter, distributors and customers adjusted semiconductor inventories,
and these adjustments have continued into the fourth quarter. In response,
we have taken quick actions to sharply reduce production loadings, which
should enable us to exit the year with lower inventory levels. We also
tightened expense controls across the board," he said.
"In this more uncertain environment, it is important to note that TI's
operational flexibility has resulted in a more stable financial model
for the company. Our manufacturing strategy combines internal and foundry
capacity so that TI's most capital-intensive, advanced-logic factories
remain highly utilized as the market expands and contracts. This strategy
proved successful in the third quarter as utilization in TI's advanced-logic
factories remained high. In addition, this strategy has allowed us to
reduce capital spending. TI's capital expenditures in each year since
2001 have been lower as a percent of revenue than any in the past decade,"
he said.
"I am very confident in TI's position and future. Cash flow is high, our
long-term prospects are excellent, and our balance sheet is strong. To
increase the return we deliver shareholders, in the quarter we announced
plans for a $1 billion share repurchase and a 17 percent higher dividend,"
Templeton said.
Details of Financial Results
Revenue
In the third quarter, TI revenue of $3250 million increased $9 million
sequentially and $717 million from the year-ago quarter.
Gross Profit
Gross profit of $1489 million, or 45.8 percent of revenue, was about
even sequentially. A reduction in the profit-sharing accrual was offset
by the higher expense that resulted from lower utilization of Semiconductor's
manufacturing assets, particularly for production of analog products.
Compared with the year-ago quarter, gross profit increased by $459 million,
or 45 percent, as a result of higher revenue.
Operating Expenses
Research and development (R&D) expense of $483 million, or 14.9
percent of revenue, declined $31 million compared with the prior quarter
primarily due to the lower profit-sharing accrual, as well as additional
expense reductions. R&D expense increased from $468 million in the
year-ago quarter due to higher product development expenses in Semiconductor,
especially for wireless products.
Selling, general and administrative (SG&A) expense was $349 million,
or 10.7 percent of revenue, down $26 million compared with the prior
quarter due to the lower profit-sharing accrual. SG&A expense increased
from $313 million in the year-ago quarter primarily due to higher marketing
expenses, particularly in Semiconductor.
Operating Profit
Operating profit of $657 million, or 20.2 percent of revenue, increased
$65 million sequentially due to lower operating expenses. Compared with
the year-ago quarter, operating profit increased $408 million due to
higher gross profit.
As discussed in the Sept. 8, 2004, update to the company's outlook,
third- quarter results include a lower profit-sharing accrual compared
with the second quarter, reflecting a downward adjustment in the company's
expectations for its 2004 performance. The adjustment resulted in a
cumulative reduction in the profit-sharing accrual in the third quarter.
There was no profit- sharing accrual in the year-ago quarter. Profit
sharing is allocated across cost of revenue, SG&A and R&D.
Other Income (Expense) Net (OI&E) and Interest Expense
OI&E of $62 million increased $24 million from the prior quarter
due to the partial settlement of matters related to grants from the
Italian government regarding TI's former memory business operations.
Compared with the year-ago quarter, OI&E decreased $81 million due
to a pre-tax gain of $106 million recorded in the third-quarter of 2003
related to the company's sale of Micron Technology, Inc. common stock.
Interest expense of $4 million declined $4 million from the second
and year-ago quarters due to the company's lower debt level.
Net Income
Net income was $563 million, or $0.32 per share, an increase of $122
million sequentially due to higher operating profit, as well as lower
taxes. Compared with the year-ago quarter, net income increased $116
million primarily due to higher operating profit, which more than offset
lower OI&E and higher taxes. The year-ago quarter included the recognition
of a previously reserved tax benefit of $162 million associated with
TI's impairment write-down of Micron stock in the fourth quarter of
2002.
As discussed in the Sept. 8, 2004, update to the company's outlook,
the expected annual tax rate was revised to 26 percent as of the end
of the third quarter, primarily due to an increase in the estimated
U.S. tax benefit for export sales. Net income in the quarter reflects
an effective quarterly tax rate of 21 percent due to the cumulative
reduction in tax expense.
Orders
TI orders of $3019 million decreased 7 percent sequentially primarily
due to lower demand for Semiconductor products, as well as a seasonal
decline in E&PS demand. Compared with the year-ago quarter, TI orders
increased 13 percent due to higher demand for Semiconductor products.
Semiconductor orders were $2623 million, down 5 percent sequentially
primarily due to lower demand for standard products sold through distribution
channels, which more than offset higher demand for wireless and DLP
products. Compared with the year-ago quarter, Semiconductor orders increased
14 percent due to higher demand across a broad range of products.
Cash
At the end of the third quarter, total cash (cash and cash equivalents
plus short-term investments and long-term cash investments) was $5617
million. In the third quarter, as previously announced, TI redeemed
$400 million of 7 percent notes that matured during the quarter.
Cash flow from operations was $942 million, up $436 million sequentially
and $432 million compared with the year-ago quarter.
Capital Expenditures and Depreciation
Capital expenditures of $330 million decreased $26 million sequentially
and increased $97 million from the year-ago quarter. TI's capital expenditures
in the third quarter were used primarily to increase capacity for assembly
and test operations, and for 90-nanometer wafer fabrication.
Depreciation of $378 million increased $15 million sequentially and
$22 million from the year-ago quarter.
Accounts Receivable and Inventory
Accounts receivable of $1965 million increased $35 million sequentially
due to higher shipments in the last month of the third quarter compared
with the last month of the second quarter. Accounts receivable increased
$443 million from the end of the year-ago quarter due to higher revenue.
Days sales outstanding were 54 at the end of the third quarter, the
same as the end of the prior and year-ago quarters.
Inventory of $1356 million at the end of the third quarter increased
$71 million sequentially primarily due to wireless products being manufactured
to support expected seasonally higher shipments early in the fourth
quarter. In addition, inventory growth reflects factory loadings that
were made in anticipation of higher third-quarter demand that failed
in part to materialize, partially offset by sharp reductions in loadings
that were made later in the quarter. Compared with the year-ago quarter,
inventory increased $361 million as the company built inventory to support
higher shipments, as well as to support the company's targets for lead
times and on-time deliveries. Days of inventory at the end of the third
quarter were 69, compared with 66 days at the end of the prior quarter
and 60 days at the end of the year-ago quarter.
Debt
At the end of the third quarter, TI's debt-to-total-capital ratio was
0.03, down from 0.06 at the end of the prior quarter.
Outlook
TI intends to provide a mid-quarter update to its financial outlook
on Dec. 7, 2004, by issuing a press release and holding a conference
call. Both will be available on the company's web site.
For the fourth quarter of 2004, TI expects revenue to be in the following
ranges:
- Total TI, $2960 million to $3200 million;
- Semiconductor, $2630 million to $2830 million;
- Sensors & Controls, $270 million to $290 million; and
- E&PS, $60 million to $80 million, reflecting the end of the back-to-school
season.
TI expects earnings per share to be in the range of $0.24 to $0.28.
For 2004, TI expects: R&D to be about $2.0 billion compared with
the prior estimate of $2.1 billion; capital expenditures to be about $1.3
billion, unchanged from the previous estimate; and depreciation to be
about $1.5 billion, unchanged from the previous estimate.
For 2004, the effective tax rate is expected to be about 25 percent,
which reflects the reinstatement of the federal research tax credit that
was signed into law on Oct. 4, 2004. The effect of the reinstated credit
is not included in the company's third-quarter results because GAAP requires
that companies use the law in effect at the end of the quarter when determining
tax rates. Therefore, in the fourth quarter, TI expects an effective quarterly
tax rate of about 21 percent, which represents the cumulative reduction
in tax expense resulting from the change in the company's effective annual
tax rate.
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Consolidated Statement of Operations
(In millions of dollars, except per-share amounts)
For Three Months Ended
Sept. 30 June 30 Sept. 30
2004 2004 2003
Net revenue $ 3250 $ 3241 $ 2533
Operating costs and expenses:
Cost of revenue 1761 1760 1503
Gross profit 1489 1481 1030
Gross profit % of revenue 45.8% 45.7% 40.7%
Research and development (R&D) 483 514 468
R&D % of revenue 14.9% 15.8% 18.5%
Selling, general and administrative
(SG&A) 349 375 313
SG&A % of revenue 10.7% 11.6% 12.3%
Total 2593 2649 2284
Profit from operations 657 592 249
Operating income % of revenue 20.2% 18.3% 9.8%
Other income (expense) net 62 38 143
Interest on loans 4 8 8
Income before income taxes* 715 622 384
Provision (benefit) for income taxes 152 181 (63)
Net income $ 563 $ 441 $ 447
Diluted earnings per common share** $ .32 $ .25 $ .25
Basic earnings per common share $ .33 $ .25 $ .26
Cash dividends declared per share of
common stock $ .021 $ .021 $ .021
* Income for the third quarter of 2004 includes, in millions of dollars,
a charge of $5 for restructuring actions initiated in the second quarter
of 2003, of which $1 is associated with achieving manufacturing efficiencies
in the Semiconductor business and $4 is associated with moving certain production
lines in the Sensors & Controls business from Attleboro to other TI
sites. The $5 restructuring charge is primarily for severance and benefit
costs and is included in cost of revenue. Income for the second quarter
of 2004 includes, in millions of dollars, a charge of $4 for restructuring
actions initiated in the second quarter of 2003, of which $1 is associated
with achieving manufacturing efficiencies in the Semiconductor business
and $3 is associated with moving certain production lines in the Sensors
& Controls business from Attleboro to other TI sites. The $4 restructuring
charge is primarily for severance and benefit costs and is included in cost
of revenue. Income for the third quarter of 2003 includes, in millions of
dollars, a charge of $56 for restructuring actions initiated in the second
quarter of 2003, of which $48 is associated with achieving manufacturing
efficiencies in the Semiconductor business and $8 is associated with moving
certain production lines in the Sensors & Controls business from Attleboro
to other TI sites. The $56 restructuring charge is primarily for severance
and benefit costs. Of the $56, $48 is included in cost of revenue, $7 is
in selling, general and administrative expense and $1 is in research and
development expense. Income for the third quarter of 2003 also includes
an investment gain of $106, included in other income, from the sale of 24.7
million shares of Micron Technology, Inc. common stock, and a charge of
$23 for purchased in-process R&D costs, included in research and development
expense, from the Radia Communications, Inc. acquisition.
Income includes, in millions of dollars, acquisition-related amortization
of $16, $19 and $26 for the third quarter and second quarter of 2004 and
the third quarter of 2003.
** Diluted earnings per common share are based on average common and dilutive
potential common shares outstanding (in millions of shares, 1759.3, 1771.6
and 1766.8 for the third quarter and second quarter of 2004 and the third
quarter of 2003).
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheet
(In millions of dollars)
Sept. 30 June 30 Sept. 30
2004 2004 2003
Assets
Current assets:
Cash and cash equivalents $ 1674 $ 1623 $ 943
Short-term investments 2312 2311 2360
Accounts receivable, net of allowances
for customer adjustments and doubtful
accounts of $45 million at
September 30, 2004, $42 million at
June 30, 2004, and $62 million
at September 30, 2003 1965 1930 1522
Inventories:
Raw materials 122 135 106
Work in process 885 799 625
Finished goods 349 351 264
Inventories 1356 1285 995
Deferred income taxes 451 467 576
Prepaid expenses and other
current assets 541 491 398
Total current assets 8299 8107 6794
Property, plant and equipment at cost 9830 9831 9443
Less accumulated depreciation (5711) (5654) (5202)
Property, plant and equipment (net) 4119 4177 4241
Long-term cash investments 1631 1600 1235
Equity investments 248 254 684
Goodwill 693 693 703
Acquisition-related intangibles 125 138 184
Deferred income taxes 476 496 612
Other assets 546 585 633
Total assets $16137 $16050 $15086
Liabilities and Stockholders' Equity
Current liabilities:
Loans payable and current portion
long-term debt $ 10 $ 415 $ 434
Accounts payable and accrued expenses 1550 1601 1436
Income taxes payable 124 35 284
Accrued retirement and profit
sharing contributions 208 183 15
Total current liabilities 1892 2234 2169
Long-term debt 373 375 402
Accrued retirement costs 591 611 647
Deferred income taxes 63 59 87
Deferred credits and other liabilities 322 333 353
Stockholders' equity:
Preferred stock, $25 par value.
Authorized -- 10,000,000 shares.
Participating cumulative preferred.
None issued. --- --- ---
Common stock, $1 par value.
Authorized -- 2,400,000,000 shares.
Shares issued: September 30, 2004 --
1,738,141,785; June 30, 2004 --
1,738,123,534; September 30, 2003 --
1,740,470,215 1738 1738 1740
Paid-in capital 789 812 953
Retained earnings 10795 10269 9059
Less treasury common stock at cost:
Shares: September 30, 2004 --
10,216,953; June 30, 2004 --
7,045,901; September 30, 2003 --
9,844,861 (248) (193) (198)
Accumulated other comprehensive
income (loss) (170) (178) (105)
Unearned compensation (8) (10) (21)
Total stockholders' equity 12896 12438 11428
Total liabilities and stockholders'
equity $16137 $16050 $15086
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Statement of Cash Flows
(In millions of dollars)
For Three Months Ended
Sept. 30 June 30 Sept. 30
2004 2004 2003
Cash flows from operating activities:
Net income $ 563 $ 441 $ 447
Depreciation 378 363 356
Amortization of acquisition-related
costs 16 19 26
Purchased in-process research
and development --- --- 23
Write-downs of equity investments 5 1 11
Gains on sale of equity investments (1) (4) (108)
Deferred income taxes 41 62 (79)
(Increase) decrease in working
capital (excluding cash and cash
equivalents, short-term investments,
deferred income taxes, and loans
payable and current portion
long-term debt):
Accounts receivable (37) (254) (72)
Inventories (71) (137) 5
Prepaid expenses and other
current assets (50) 56 (70)
Accounts payable and accrued
expenses (53) 40 139
Income taxes payable 88 (174) 32
Accrued retirement and profit
sharing contributions 26 100 1
Decrease in noncurrent accrued
retirement costs (11) (5) (141)
Other 48 (2) (60)
Net cash provided by operating
activities 942 506 510
Cash flows from investing activities:
Additions to property, plant and
equipment (330) (356) (233)
Purchases of short-term investments (241) (689) (879)
Sales and maturities of short-term
investments 877 1027 743
Purchases of long-term cash
investments (670) (433) (311)
Sales of long-term cash investments 6 51 ---
Purchases of equity investments (2) (12) (8)
Sales of equity investments 1 19 350
Acquisition of businesses, net
of cash acquired --- --- (128)
Net cash used in investing activities (359) (393) (466)
Cash flows from financing activities:
Payments on loans payable (5) --- (3)
Payments on long-term debt (400) (28) (30)
Dividends paid on common stock (36) (37) (37)
Sales and other common stock
transactions 5 69 17
Common stock repurchase program (98) (113) (60)
Net cash used in financing activities (534) (109) (113)
Effect of exchange rate changes on cash 2 4 (7)
Net increase (decrease) in cash and
cash equivalents 51 8 (76)
Cash and cash equivalents at beginning
of period 1623 1615 1019
Cash and cash equivalents at
end of period $ 1674 $ 1623 $ 943
Business Segment Net Revenue
(In millions of dollars)
For Three Months Ended
Sept. 30 June 30 Sept. 30
2004 2004 2003
Semiconductor
Trade $ 2785 $ 2783 $ 2115
Intersegment 1 1 3
2786 2784 2118
Sensors & Controls
Trade 275 289 242
Intersegment 1 1 1
276 290 243
Education Technology
Trade 190 169 177
Corporate activities (2) (2) (5)
Total net revenue $ 3250 $ 3241 $ 2533
Business Segment Profit
(In millions of dollars)
For Three Months Ended
Sept. 30 June 30 Sept. 30
2004 2004 2003
Semiconductor $ 582 $ 526 $ 264
Sensors & Controls 66 77 58
Education Technology 83 68 73
Corporate activities (52) (56) (41)
Charges/gains and acquisition-related
amortization (21) (23) 1
Interest on loans/other income
(expense) net, excluding a third-quarter
2003 gain of $106 included above in
Charges/gains and acquisition-related
amortization 57 30 29
Income before income taxes $ 715 $ 622 $ 384
Semiconductor
- In the third quarter, revenue of $2786 million was even sequentially,
and up 31 percent from the year-ago quarter as shipments across a broad
range of products, especially wireless, DLP and high-performance analog,
increased as a result of higher demand.
- Gross profit was $1287 million, or 46.2 percent of revenue, about
even with the prior quarter as a reduction in the profit-sharing accrual
was offset by the higher expense that resulted from lower utilization
of Semiconductor's manufacturing assets, particularly for production
of analog products. Compared with the year-ago quarter, gross profit
increased $388 million primarily due to higher revenue.
- Operating profit was $582 million, or 20.9 percent of revenue, up
$56 million sequentially due to lower operating expenses that resulted
from the lower profit-sharing accrual, as well as other expense reductions.
Compared with the year-ago quarter, operating profit increased $318
million due to higher gross profit.
- Analog revenue decreased 5 percent sequentially primarily due to lower
shipments that resulted from weaker demand for standard products, including
high-performance analog and commodity linear products, which both are
predominantly sold through distribution channels. Compared with the
year-ago quarter, analog revenue increased 29 percent primarily as shipments
increased due to higher demand for high-performance and wireless analog
products. Revenue from TI's high-performance analog products decreased
7 percent sequentially due primarily to distributor inventory adjustments,
and increased 41 percent from the year-ago quarter due to higher demand.
For the first three quarters of 2004, analog revenue was about 40 percent
of total Semiconductor revenue.
- DSP revenue increased 6 percent sequentially and 33 percent from the
year-ago quarter due to demand in the wireless market. For the first
three quarters of 2004, DSP revenue was about 35 percent of total Semiconductor
revenue.
- TI's remaining Semiconductor revenue was even sequentially, and increased
34 percent compared with the year-ago quarter primarily due to higher
shipments as a result of demand for DLP products.
- Results for TI Semiconductor products sold into key end-equipment
markets were as follows:
- Wireless revenue increased 5 percent sequentially and 40 percent
from the year-ago quarter primarily due to strong overall demand
from major original equipment manufacturers, including higher demand
for TI's 3G UMTS modem products, which are compatible with the W-CDMA,
GPRS and GSM cellular standards. This growth area more than offset
a sequential decline in shipments of wireless chipsets that are
mostly sold to Asian original design manufacturers and Chinese local
manufacturers.
- Broadband communications revenue, which includes DSL and cable
modems, voice over Internet protocol (VoIP) and wireless LAN (WLAN),
increased 2 percent sequentially as gains in VoIP, cable modem and
WLAN products offset lower demand for DSL products. Compared with
the year-ago quarter, broadband revenue increased 32 percent primarily
due to higher demand for VoIP, as well as cable modem products.
- Semiconductor orders of $2623 million declined 5 percent sequentially
and were up 14 percent compared with the year-ago quarter.
Semiconductor Highlights
- Symbian Ltd and TI announced that TI wireless technology, including
OMAP™ processors, powers 28 of 31 Symbian OS-based 2.5G and 3G
cell phones either in the market today or scheduled to ship in the near
future. More than 85 percent of the 5 million Symbian OS-based phones
shipped in the first half of 2004 were based on TI's OMAP platform.
- TI and NTT DoCoMo, Inc. announced plans to jointly develop an integrated
UMTS digital baseband and applications processor based on TI's OMAP
2 architecture and NTT DoCoMo's W-CDMA technology for use in 3G cell-phone
markets worldwide.
- TI announced a fully integrated WLAN Internet Protocol (IP) phone
solution that will speed the development of portable IP phones and enable
end users to talk, receive e-mail and use other data services throughout
an enterprise or home WLAN network.
Sensors & Controls
- Sensors & Controls revenue was $276 million, down 5 percent in
a seasonally lower quarter and up 14 percent from the year-ago quarter
due to higher shipments resulting from broad-based demand.
- Gross profit was $102 million, or 37.1 percent of revenue, a decrease
of $10 million from the prior quarter primarily due to lower revenue,
and up $12 million compared with the year-ago quarter primarily due
to higher revenue.
- Operating profit was $66 million, or 23.9 percent of revenue, a decrease
of $11 million sequentially primarily due to lower gross profit. Compared
with the year-ago quarter, operating profit increased $8 million due
to higher gross profit.
Educational & Productivity Solutions (E&PS)
- E&PS revenue was $190 million, up $21 million sequentially due
to higher shipments resulting from seasonal back-to-school demand. Compared
with the year-ago quarter, revenue increased $13 million due to higher
shipments resulting from strong retail demand for the company's new
graphing calculator products.
- Gross profit was $114 million, or 60.1 percent of revenue, up $15
million sequentially and $11 million from the year-ago quarter due to
higher revenue.
- Operating profit was $83 million, or 43.8 percent of revenue, up $15
million from the prior quarter and $10 million from the year-ago quarter
due to higher gross profit.
###
"Safe Harbor" Statement under the Private Securities Litigation Reform
Act of 1995: This release includes forward-looking statements intended
to qualify for the safe harbor from liability established by the Private
Securities Litigation Reform Act of 1995. These forward-looking statements
generally can be identified by phrases such as TI or its management "believes,"
"expects," "anticipates," "foresees," "forecasts," "estimates" or other
words or phrases of similar import. Similarly, statements in this release
that describe the company's business strategy, outlook, objectives, plans,
intentions or goals also are forward-looking statements. All such forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from those in forward-looking statements.
We urge you to carefully consider the following important factors that
could cause actual results to differ materially from the expectations
of the company or its management:
- Market demand for semiconductors, particularly for analog chips and
digital signal processors in key markets, such as telecommunications
and computers;
- TI's ability to maintain or improve profit margins, including its
ability to utilize its manufacturing facilities at sufficient levels
to cover its fixed operating costs, in an intensely competitive and
cyclical industry;
- TI's ability to develop, manufacture and market innovative products
in a rapidly changing technological environment;
- TI's ability to compete in products and prices in an intensely competitive
industry;
- Losses or curtailments of purchases from key customers;
- The timing and amount of distributor and other customer inventory
adjustments;
- The financial impact of inadequate or excess TI inventories to meet
demand that differs from projections;
- TI's ability to maintain and enforce a strong intellectual property
portfolio and obtain needed licenses from third parties;
- Consolidation of TI's patent licensees and market conditions reducing
royalty payments to TI;
- Economic, social and political conditions in the countries in which
TI, its customers or its suppliers operate, including security risks,
health conditions, possible disruptions in transportation networks and
fluctuations in foreign currency exchange rates;
- Natural events such as severe weather and earthquakes in the locations
in which TI, its customers or its suppliers operate;
- Availability and cost of raw materials and critical manufacturing
equipment;
- Changes in the tax rate applicable to TI as the result of changes
in tax law, the jurisdictions in which profits are determined to be
earned and taxed, and the ability to realize deferred tax assets;
- TI's ability to recruit and retain skilled personnel; and
- Timely implementation of new manufacturing technologies, installation
of manufacturing equipment, and the ability to obtain needed third-
party foundry and assembly/test subcontract services.
For a more detailed discussion of these factors, see the text under the
heading "Cautionary Statements Regarding Future Results of Operations"
in Item 1 of the company's most recent Form 10-K. The forward-looking
statements included in this release are made only as of the date of publication,
and the company undertakes no obligation to update the forward-looking
statements to reflect subsequent events or circumstances.
Texas Instruments Incorporated provides innovative DSP and analog technologies
to meet our customers' real world signal processing requirements. In addition
to Semiconductor, the company's businesses include Sensors & Controls
and Educational & Productivity Solutions. TI is headquartered in Dallas,
Texas, and has manufacturing, design or sales operations in more than
25 countries.
Texas Instruments is traded on the New York Stock Exchange under the
symbol TXN. More information is located on the World Wide Web at http://www.ti.com.
TI Trademarks:
OMAP
Digital Light Processing
DLP
Other trademarks are the property of their respective owners.
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