10-Q 1 txn-20240630.htm 10-Q txn-20240630
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2024
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number 001-03761
TEXAS INSTRUMENTS INCORPORATED
(Exact Name of Registrant as Specified in Its Charter)
Delaware75-0289970
(State of Incorporation)(I.R.S. Employer Identification No.)
12500 TI Boulevard, Dallas, Texas
75243
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code 214-479-3773

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $1.00TXNThe Nasdaq Global Select Market
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company 
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No ☒
913,045,963
Number of shares of Registrant’s common stock outstanding as of
July 16, 2024


TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 1. Financial statements
 For Three Months EndedFor Six Months Ended
Consolidated Statements of IncomeJune 30,June 30,
(In millions, except per-share amounts)2024202320242023
Revenue$3,822 $4,531 $7,483 $8,910 
Cost of revenue (COR)1,611 1,621 3,177 3,137 
Gross profit2,211 2,910 4,306 5,773 
Research and development (R&D)498 477 976 932 
Selling, general and administrative (SG&A)465 461 920 935 
Restructuring charges/other  (124) 
Operating profit1,248 1,972 2,534 3,906 
Other income (expense), net (OI&E)130 119 253 199 
Interest and debt expense131 89 247 157 
Income before income taxes1,247 2,002 2,540 3,948 
Provision for income taxes120 280 308 518 
Net income$1,127 $1,722 $2,232 $3,430 
Earnings per common share (EPS):    
Basic$1.23 $1.89 $2.44 $3.76 
Diluted$1.22 $1.87 $2.42 $3.72 
Average shares outstanding:    
Basic912 908 911 907 
Diluted919 916 918 916 
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$1,127 $1,722 $2,232 $3,430 
Income allocated to RSUs(6)(8)(11)(18)
Income allocated to common stock for diluted EPS$1,121 $1,714 $2,221 $3,412 
See accompanying notes.    

2


 For Three Months EndedFor Six Months Ended
Consolidated Statements of Comprehensive IncomeJune 30,June 30,
(In millions)2024202320242023
Net income$1,127 $1,722 $2,232 $3,430 
Other comprehensive income (loss)    
Net actuarial losses of defined benefit plans:    
Adjustments, net of tax effect of ($1) and ($2); ($3) and ($1)
1 2 6  
Recognized within net income, net of tax effect of ($1) and ($1); ($2) and ($2)
3 3 5 6 
Derivative instruments:    
Change in fair value, net of tax effect of $0 and ($1); $0 and $0
 3 1 1 
Available-for-sale investments:
Unrealized gains (losses), net of tax effect of $0 and $0; $2 and $0
(1)(2)(7)1 
Other comprehensive income (loss), net of taxes3 6 5 8 
Total comprehensive income$1,130 $1,728 $2,237 $3,438 
See accompanying notes.    

3


June 30,December 31,
Consolidated Balance Sheets20242023
(In millions, except par value)  
Assets  
Current assets:  
Cash and cash equivalents$2,740 $2,964 
Short-term investments6,948 5,611 
Accounts receivable, net of allowances of ($28) and ($16)
1,711 1,787 
Raw materials405 420 
Work in process2,072 2,109 
Finished goods1,629 1,470 
Inventories4,106 3,999 
Prepaid expenses and other current assets1,284 761 
Total current assets16,789 15,122 
Property, plant and equipment at cost14,622 13,268 
Accumulated depreciation(3,448)(3,269)
Property, plant and equipment11,174 9,999 
Goodwill4,362 4,362 
Deferred tax assets905 757 
Capitalized software licenses230 223 
Overfunded retirement plans167 173 
Other long-term assets1,421 1,712 
Total assets$35,048 $32,348 
Liabilities and stockholders’ equity  
Current liabilities:  
Current portion of long-term debt$1,049 $599 
Accounts payable858 802 
Accrued compensation569 836 
Income taxes payable178 172 
Accrued expenses and other liabilities983 911 
Total current liabilities3,637 3,320 
Long-term debt12,842 10,624 
Underfunded retirement plans113 108 
Deferred tax liabilities55 63 
Other long-term liabilities1,187 1,336 
Total liabilities17,834 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 capital3,666 3,362 
Retained earnings52,135 52,283 
Treasury common stock at cost  
Shares: June 30, 2024 – 828; December 31, 2023 – 832
(40,128)(40,284)
Accumulated other comprehensive income (loss), net of taxes (AOCI)(200)(205)
Total stockholders’ equity17,214 16,897 
Total liabilities and stockholders’ equity$35,048 $32,348 
  
See accompanying notes.  
4


 For Six Months Ended
Consolidated Statements of Cash FlowsJune 30,
(In millions)20242023
Cash flows from operating activities  
Net income$2,232 $3,430 
Adjustments to net income:
Depreciation709 550 
Amortization of capitalized software34 31 
Stock compensation222 215 
Gains on sales of assets(126)(1)
Deferred taxes(156)(60)
Increase (decrease) from changes in:
Accounts receivable76 (61)
Inventories(107)(972)
Prepaid expenses and other current assets(46)10 
Accounts payable and accrued expenses25 (50)
Accrued compensation(276)(242)
Income taxes payable332 (58)
Changes in funded status of retirement plans26 23 
Other(357)(256)
Cash flows from operating activities2,588 2,559 
Cash flows from investing activities  
Capital expenditures(2,312)(2,428)
Proceeds from asset sales194 2 
Purchases of short-term investments(6,962)(7,060)
Proceeds from short-term investments5,761 7,091 
Other(10)38 
Cash flows from investing activities(3,329)(2,357)
Cash flows from financing activities  
Proceeds from issuance of long-term debt2,980 3,000 
Repayment of debt(300)(500)
Dividends paid(2,368)(2,250)
Stock repurchases(74)(182)
Proceeds from common stock transactions313 150 
Other(34)(31)
Cash flows from financing activities517 187 
Net change in cash and cash equivalents(224)389 
Cash and cash equivalents at beginning of period2,964 3,050 
Cash and cash equivalents at end of period$2,740 $3,439 
Supplemental cash flow information
Investment tax credit (ITC) used to reduce income taxes payable$312 $ 
Total cash benefit related to the U.S. CHIPS and Science Act$312 $ 
See accompanying notes.  
5


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 EndedFor Six Months Ended
June 30,June 30,
 2024202320242023
Revenue:    
Analog$2,928 $3,278 $5,764 $6,567 
Embedded Processing615 894 1,267 1,726 
Other279 359 452 617 
Total revenue$3,822 $4,531 $7,483 $8,910 
Operating profit:
Analog$1,047 $1,463 $2,055 $3,037 
Embedded Processing80 318 185 555 
Other (a)121 191 294 314 
Total operating profit$1,248 $1,972 $2,534 $3,906 
(a)Includes restructuring charges/other
6

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 EndedFor Six Months Ended
June 30,June 30,
2024202320242023
Revenue:
United States$1,408 37 %$1,493 33 %$2,696 36 %$2,850 32 %
China745 19 872 19 1,368 18 1,748 20 
Rest of Asia417 11 435 10 818 11 829 9 
Europe, Middle East and Africa (a)898 23 1,194 26 1,853 25 2,464 28 
Japan292 8 480 11 622 8 918 10 
Rest of world62 2 57 1 126 2 101 1 
Total revenue$3,822 100 %$4,531 100 %$7,483 100 %$8,910 100 %
(a)Revenue from end customers headquartered in Germany was 11% and 13% in the second quarters of 2024 and 2023, respectively, and 12% and 13% in the first six months of 2024 and 2023, respectively.
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 June 30, 2024 and 2023, and the Consolidated Balance Sheet as of June 30, 2024, are not audited but reflect all adjustments that are of a normal recurring nature and are necessary for a fair statement of the results of the periods shown. Certain information and note disclosures normally included in annual consolidated financial statements have been omitted pursuant to the rules and regulations of the U.S. 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 six-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.
7

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Computation and reconciliation of earnings per common share are as follows:
 For Three Months Ended June 30,
 20242023
Net IncomeSharesEPSNet IncomeSharesEPS
Basic EPS:      
Net income$1,127   $1,722   
Income allocated to RSUs(6)  (9)  
Income allocated to common stock$1,121 912 $1.23 $1,713 908 $1.89 
Dilutive effect of stock compensation plans7  8 
Diluted EPS: 
Net income$1,127  $1,722 
Income allocated to RSUs(6) (8)
Income allocated to common stock$1,121 919 $1.22 $1,714 916 $1.87 
For Six Months Ended June 30,
20242023
Net IncomeSharesEPSNet IncomeSharesEPS
Basic EPS:
Net income$2,232 $3,430 
Income allocated to RSUs(11)(17)
Income allocated to common stock$2,221 911 $2.44 $3,413 907 $3.76 
Dilutive effect of stock compensation plans7 9 
Diluted EPS:
Net income$2,232 $3,430 
Income allocated to RSUs(11)(18)
Income allocated to common stock$2,221 918 $2.42 $3,412 916 $3.72 
Potentially dilutive securities representing 8 million and 9 million shares of common stock that were outstanding during the second quarters of 2024 and 2023, respectively, and 11 million and 9 million shares outstanding during the first six months of 2024 and 2023, respectively, were excluded from the computation of diluted earnings per common share during these periods because their effect would have been anti-dilutive.
Derivatives and hedging
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.
8

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Fair values of financial instruments
The fair values of our derivative financial instruments were not material as of June 30, 2024. Our investments in cash equivalents, short-term investments and certain long-term investments, as well as our deferred compensation liabilities, are carried at fair value. The carrying values for other current financial assets and liabilities, such as accounts receivable and accounts payable, approximate fair value due to the short maturity of such instruments. As of June 30, 2024, the carrying value of long-term debt, including the current portion, was $13.89 billion, and the estimated fair value was $12.78 billion. The estimated fair value is measured using broker-dealer quotes, which are Level 2 inputs. See Note 4 for a description of fair value and the definition of Level 2 inputs.
3. Income taxes
Provision for income taxes is based on the following:
For Three Months EndedFor Six Months Ended
June 30,June 30,
 2024202320242023
Taxes calculated using the estimated annual effective tax rate$170 $289 $346 $565 
Discrete tax items(50)(9)(38)(47)
Provision for income taxes$120 $280 $308 $518 
Effective tax rate10 %14 %12 %13 %
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.
9

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Details of our investments are as follows:
 June 30, 2024December 31, 2023
Cash and Cash EquivalentsShort-Term InvestmentsLong-Term InvestmentsCash and Cash EquivalentsShort-Term InvestmentsLong-Term Investments
Measured at fair value:      
Money market funds$1,105 $ $ $1,068 $ $ 
Corporate obligations372 1,740  349 1,605  
U.S. government and agency securities548 4,962  696 3,808  
Non-U.S. government and agency securities 246  50 198  
Mutual funds  11   12 
Total2,025 6,948 11 2,163 5,611 12 
Other measurement basis:
Equity-method investments  12   17 
Nonmarketable investments  4   5 
Total  16   22 
Cash on hand715   801   
Total$2,740 $6,948 $27 $2,964 $5,611 $34 
As of June 30, 2024, and December 31, 2023, unrealized gains and losses associated with our debt investments were not material. We did not recognize any credit losses related to debt investments for the first six months of 2024 and 2023.
The following table presents the aggregate maturities of our available-for-sale debt investments as of June 30, 2024:
Fair Value
One year or less$6,839 
One to two years1,029 
Proceeds from sales, redemptions and maturities of short-term available-for-sale investments were $3.13 billion and $3.07 billion for the second quarters of 2024 and 2023, respectively, and $5.76 billion and $7.09 billion for the first six months of 2024 and 2023, respectively. Gross realized gains and losses from these sales were not material.
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 June 30, 2024, and December 31, 2023, we had no Level 3 assets or liabilities.
The following are our assets and liabilities that were accounted for at fair value on a recurring basis. These tables do not include cash on hand, assets held by our postretirement plans, or assets and liabilities that are measured at historical cost or any basis other than fair value.
 June 30, 2024December 31, 2023
 Level 1Level 2TotalLevel 1Level 2Total
Assets:      
Money market funds$1,105 $ $1,105 $1,068 $ $1,068 
Corporate obligations 2,112 2,112  1,954 1,954 
U.S. government and agency securities2,930 2,580 5,510 3,618 886 4,504 
Non-U.S. government and agency securities 246 246  248 248 
Mutual funds11  11 12  12 
Total assets$4,046 $4,938 $8,984 $4,698 $3,088 $7,786 
Liabilities:
Deferred compensation$411 $ $411 $393 $ $393 
Total liabilities$411 $ $411 $393 $ $393 
11

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 BenefitU.S. Retiree Health CareNon-U.S. Defined Benefit
For Three Months Ended June 30,202420232024202320242023
Service cost$2 $2 $1 $1 $4 $4 
Interest cost6 7 3 3 13 15 
Expected return on plan assets(5)(5)(6)(4)(19)(17)
Recognized net actuarial losses (gains)1 1  (2)3 3 
Net periodic benefit costs (credits)4 5 (2)(2)1 5 
Settlement losses 1    1 
Total, including other postretirement losses (gains)$4 $6 $(2)$(2)$1 $6 
U.S. Defined BenefitU.S. Retiree Health CareNon-U.S. Defined Benefit
For Six Months Ended June 30,202420232024202320242023
Service cost$4 $4 $1 $1 $8 $8 
Interest cost12 14 6 7 27 29 
Expected return on plan assets(11)(11)(9)(9)(38)(32)
Recognized net actuarial losses (gains)2 3 (1)(3)6 6 
Net periodic benefit costs (credits)7 10 (3)(4)3 11 
Settlement losses 1    1 
Total, including other postretirement losses (gains)$7 $11 $(3)$(4)$3 $12 
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 June 30, 2024, the aforementioned line of credit was a variable-rate, revolving credit facility from a consortium of investment-grade banks that allows us to borrow up to $1 billion until March 2025. The interest rate on borrowings under this credit facility, if drawn, is indexed to the applicable Term Secured Overnight Financing Rate (Term SOFR). As of June 30, 2024, our credit facility was undrawn, and we had no commercial paper outstanding.
Long-term debt
In May 2024, we retired $300 million of maturing debt.
In February 2024, we issued five series of senior unsecured notes for an aggregate principal amount of $3.00 billion, consisting of:
$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:
June 30,December 31,
20242023
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 debt14,000 11,300 
Net unamortized discounts, premiums and issuance costs(109)(77)
Total debt, including net unamortized discounts, premiums and issuance costs13,891 11,223 
Current portion of long-term debt(1,049)(599)
Long-term debt$12,842 $10,624 
Interest and debt expense was $131 million and $89 million for the second quarters of 2024 and 2023, respectively, and $247 million and $157 million for the first six months of 2024 and 2023, respectively. This was net of the amortized discounts, premiums, issuance and other related costs. Capitalized interest was $5 million and $3 million for the second quarters of 2024 and 2023, respectively, and $11 million and $5 million for the first six months of 2024 and 2023, respectively.
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TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
7. Stockholders’ equity
Changes in equity are as follows:
Common StockPaid-in CapitalRetained EarningsTreasury Common StockAOCI
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, 20241,741 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)
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TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Common StockPaid-in CapitalRetained EarningsTreasury Common StockAOCI
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, 20231,741 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)
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.
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.
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TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
9. Supplemental financial information
Restructuring charges/other
During the first six months of 2024, restructuring charges/other was a credit of $124 million primarily due to a gain on the sale of a property.
Prepaid expenses and other current assets
June 30,December 31,
20242023
U.S. CHIPS and Science Act investment tax credit$981 $497 
Other303 264 
Total$1,284 $761 
Other long-term assets
June 30,December 31,
20242023
U.S. CHIPS and Science Act investment tax credit$464 $859 
Other957 853 
Total$1,421 $1,712 
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 second quarters and first six months of 2024 and 2023. The table below details where these transactions are recorded in our Consolidated Statements of Income.
For Three Months EndedFor Six Months EndedImpact to Related Statement of Income Lines
June 30,June 30,
 2024202320242023
Net actuarial losses of defined benefit plans:     
Recognized net actuarial losses and settlement losses (a)$4 $4 $7 $8 Decrease to OI&E
Tax effect(1)(1)(2)(2)Decrease to provision for income taxes
Recognized within net income, net of taxes$3 $3 $5 $6 Decrease 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 1832 
Repurchases 
Shares issued for stock compensation(1)
Balance, March 31831
Repurchases 
Shares issued for stock compensation(3)
Balance, June 30828 
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ITEM 2. Management’s discussion and analysis of financial condition and results of operations
Overview
We design and manufacture semiconductors that we sell to electronics designers and manufacturers all over the world. Technology is the foundation of our company, but ultimately, our objective and the best metric for owners to measure our progress is through the growth of free cash flow per share over the long term.
Our strategy to maximize long-term free cash flow per share growth has three elements:
1.A great business model that is focused on analog and embedded processing products and built around four sustainable competitive advantages. The four sustainable competitive advantages are powerful in combination and provide tangible benefits:
i.A strong foundation of manufacturing and technology that provides lower costs and greater control of our supply chain.
ii.A broad portfolio of analog and embedded processing products that offers more opportunity per customer and more value for our investments.
iii.The reach of our market channels that gives access to more customers and more of their design projects, leading to the opportunity to sell more of our products into each design and gives us better insight and knowledge of customer needs.
iv.Diversity and longevity of our products, markets and customer positions that provide less single point dependency and longer returns on our investments.
Together, these competitive advantages help position TI in a unique class of companies capable of generating and returning significant amounts of cash for our owners. We make our investments with an eye towards long-term strengthening and leveraging of these advantages.
2.Discipline in allocating capital to the best opportunities. This spans how we select R&D projects, develop new capabilities like TI.com, invest in new manufacturing capacity or how we think about acquisitions and returning cash to our owners.
3.Efficiency, which means constantly striving for more output for every dollar spent.
We believe that our business model with the combined effect of our four competitive advantages sets TI apart from our peers and will for a long time to come. We will invest to strengthen our competitive advantages, be disciplined in capital allocation and stay diligent in our pursuit of efficiencies. Finally, we will remain focused on the belief that long-term growth of free cash flow per share is the ultimate measure to generate value.
Management’s discussion and analysis of financial condition and results of operations (MD&A) should be read in conjunction with the financial statements and the related notes that appear elsewhere in this document. In the following discussion of our results of operations:
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. See Note 1 to the financial statements for more information regarding our segments.
When we discuss our results:
Unless otherwise noted, changes in our revenue are attributable to changes in customer demand, which are evidenced by fluctuations in shipment volumes.
New products do not tend to have a significant impact on our revenue in any given period because we sell such a large number of products.
From time to time, our revenue and gross profit are affected by changes in demand for higher-priced or lower-priced products, which we refer to as changes in the “mix” of products shipped.
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Because we own much of our manufacturing capacity, a significant portion of our operating cost is fixed. When factory loadings decrease, our fixed costs are spread over reduced output and, absent other circumstances, our profit margins decrease. Conversely, as factory loadings increase, our fixed costs are spread over increased output and, absent other circumstances, our profit margins increase.
For an explanation of free cash flow, see the Non-GAAP financial information section.
All dollar amounts in the tables are stated in millions of U.S. dollars.
Performance summary
Our second quarter revenue was $3.82 billion, net income was $1.13 billion and earnings per share (EPS) were $1.22.
Revenue decreased 16% from the same quarter a year ago and increased 4% sequentially. Industrial and automotive continued to decline sequentially, while all other end markets grew.
Our cash flow from operations of $6.4 billion for the trailing 12 months again underscored the strength of our business model, the quality of our product portfolio and the benefit of 300mm production. Free cash flow for the same period was $1.5 billion.
Over the past 12 months we invested $3.7 billion in R&D and SG&A, invested $5.0 billion in capital expenditures and returned $4.9 billion to shareholders.
Results of operations – second quarter 2024 compared with second quarter 2023
Revenue of $3.82 billion decreased $709 million, or 16%, primarily due to lower revenue from Analog and Embedded Processing.
Gross profit of $2.21 billion was down $699 million, or 24%, primarily due to lower revenue and, to a lesser extent, higher manufacturing unit costs associated with our planned capacity expansions and reduced factory loadings. As a percentage of revenue, gross profit decreased to 57.8% from 64.2%. Sequentially, gross profit margin increased 60 basis points, primarily due to higher revenue as well as lower manufacturing unit costs due to increased factory loadings and more manufacturing internally, with more wafers on 300mm.
Operating expenses (R&D and SG&A) were $963 million compared with $938 million.
Operating profit was $1.25 billion, or 32.7% of revenue, compared with $1.97 billion, or 43.5% of revenue.
OI&E was $130 million of income compared with $119 million of income, primarily due to higher interest income.
Interest and debt expense of $131 million increased $42 million due to the issuance of additional long-term debt. See Note 6 to the financial statements.
Our provision for income taxes was $120 million compared with $280 million. This decrease was due to lower income before income taxes and higher discrete tax benefits.
Net income was $1.13 billion compared with $1.72 billion. EPS was $1.22 compared with $1.87.
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Second quarter 2024 segment results
Our segment results compared with the year-ago quarter are as follows:
Analog (includes Power and Signal Chain product lines)
Q2 2024Q2 2023Change
Revenue$2,928 $3,278 (11)%
Operating profit1,047 1,463 (28)%
Operating profit % of revenue35.8 %44.6 %
Analog revenue decreased due to the mix of products shipped in both product lines, led by Signal Chain. Operating profit decreased primarily due to lower revenue and higher manufacturing costs.
Embedded Processing (includes microcontrollers and processors)
Q2 2024Q2 2023Change
Revenue$615 $894 (31)%
Operating profit80 318 (75)%
Operating profit % of revenue13.0 %35.6 %
Embedded Processing revenue decreased. Operating profit decreased primarily due to lower revenue and associated gross profit.
Other (includes DLP® products, calculators and custom ASIC products)
Q2 2024Q2 2023Change
Revenue$279 $359 (22)%
Operating profit *121 191 (37)%
Operating profit % of revenue43.4 %53.2 %
* Includes restructuring charges/other
Other revenue decreased $80 million, and operating profit decreased $70 million.
Results of operations – first six months of 2024 compared with first six months of 2023
Revenue of $7.48 billion decreased $1.43 billion, or 16%, primarily due to lower revenue from Analog and, to a lesser extent, Embedded Processing.
Gross profit of $4.31 billion was down $1.47 billion, or 25%, primarily due to lower revenue and, to a lesser extent, higher manufacturing unit costs associated with reduced factory loadings and our planned capacity expansions. As a percentage of revenue, gross profit decreased to 57.5% from 64.8%.
Operating expenses were $1.90 billion compared with $1.87 billion.
Restructuring charges/other was a credit of $124 million primarily due to a gain on the sale of a property during 2024.
Operating profit was $2.53 billion, or 33.9% of revenue, compared with $3.91 billion, or 43.8% of revenue.
OI&E was $253 million of income compared with $199 million of income, primarily due to higher interest income.
Interest and debt expense of $247 million increased $90 million due to the issuance of additional long-term debt.
Our provision for income taxes was $308 million compared with $518 million. This decrease was due to lower income before income taxes.
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Net income was $2.23 billion compared with $3.43 billion. EPS was $2.42 compared with $3.72.
Year-to-date segment results
Our segment results compared with the year-ago period are as follows:
Analog
YTD 2024YTD 2023Change
Revenue$5,764 $6,567 (12)%
Operating profit2,055 3,037 (32)%
Operating profit % of revenue35.7 %46.2 %
Analog revenue decreased due to the mix of products shipped in both product lines, led by Signal Chain. Operating profit decreased primarily due to lower revenue and higher manufacturing costs.
Embedded Processing
YTD 2024YTD 2023Change
Revenue$1,267 $1,726 (27)%
Operating profit185 555 (67)%
Operating profit % of revenue14.6 %32.2 %
Embedded Processing revenue decreased. Operating profit decreased primarily due to lower revenue and associated gross profit.
Other
 YTD 2024YTD 2023Change
Revenue$452 $617 (27)%
Operating profit *294 314 (6)%
Operating profit % of revenue65.0 %50.9 %
* Includes restructuring charges/other
Other revenue decreased $165 million, and