TI reports Q4 2022 and 2022 financial results and shareholder returns
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TI reports Q4 2022 and 2022 financial results and shareholder returns

Conference call on TI website at 3:30 p.m. Central time today

DALLAS, Jan. 24, 2023 — (PRNewswire) — Texas Instruments Incorporated (TI) (Nasdaq: TXN) today reported fourth quarter revenue of $4.67 billion, net income of $1.96 billion and earnings per share of $2.13. Earnings per share included an 11-cent benefit that was not in the company's original guidance.

Regarding the company's performance and returns to shareholders, Rich Templeton, TI's chairman, president and CEO, made the following comments:

Free cash flow, a non-GAAP financial measure, is cash flow from operations less capital expenditures.

Earnings summary

(In millions, except per-share amounts)


 Q4 2022


 Q4 2021


Change  

Revenue


$     4,670


$     4,832


(3) %

Operating profit


$     2,176


$     2,503


(13) %

Net income


$     1,962


$     2,138


(8) %

Earnings per share


$       2.13


$       2.27


(6) %

 

Cash generation





Trailing 12 Months

(In millions)


 Q4 2022


 Q4 2022 


 Q4 2021 


 Change  

Cash flow from operations


$     2,042


$  8,720


$  8,756


0 %

Capital expenditures


$        967


$  2,797


$  2,462


14 %

Free cash flow


$     1,075


$  5,923


$  6,294


(6) %

Free cash flow % of revenue




29.6 %


34.3 %



 

Cash return





Trailing 12 Months

(In millions)


 Q4 2022


 Q4 2022


 Q4 2021


Change 

Dividends paid


$     1,123


$     4,297


$     3,886


11 %

Stock repurchases


$        848


$     3,615


$        527


586 %

Total cash returned


$     1,971


$     7,912


$     4,413


79 %

 

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES


Consolidated Statements of Income


For Three Months Ended

December 31,


For Years Ended

December 31,

(In millions, except per-share amounts)


2022


2021


2022


2021

Revenue


$          4,670


$          4,832


$        20,028


$        18,344

Cost of revenue (COR)


1,583


1,482


6,257


5,968

Gross profit


3,087


3,350


13,771


12,376

Research and development (R&D)


434


389


1,670


1,554

Selling, general and administrative (SG&A)


429


404


1,704


1,666

Acquisition charges





142

Restructuring charges/other


48


54


257


54

Operating profit


2,176


2,503


10,140


8,960

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


51


9


106


143

Interest and debt expense


60


49


214


184

Income before income taxes


2,167


2,463


10,032


8,919

Provision for income taxes


205


325


1,283


1,150

Net income


$          1,962


$          2,138


$          8,749


$          7,769










Diluted earnings per common share


$            2.13


$            2.27


$            9.41


$            8.26










Average shares outstanding:









  Basic


906


924


916


923

  Diluted


916


936


926


936










Cash dividends declared per common share


$            1.24


$            1.15


$           4.69


$            4.21










Supplemental Information






Provision for income taxes is based on the following:





Operating taxes (calculated using the estimated annual effective tax rate)


$             237


$             346


$         1,384


$         1,280

Discrete tax items


(32)


(21)


(101)


(130)

Provision for income taxes (effective taxes)


$             205


$             325


$         1,283


$         1,150










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


$          1,962


$          2,138


$         8,749


$         7,769

Income allocated to RSUs


(9)


(9)


(39)


(33)

Income allocated to common stock for diluted EPS


$          1,953


$          2,129


$         8,710


$         7,736

 

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES


Consolidated Balance Sheets


December 31,

(In millions, except par value)


2022


2021

Assets





Current assets:





  Cash and cash equivalents


$            3,050


$            4,631

  Short-term investments


6,017


5,108

  Accounts receivable, net of allowances of ($13) and ($8)


1,895


1,701

  Raw materials


353


245

  Work in process


1,546


1,067

  Finished goods


858


598

  Inventories


2,757


1,910

  Prepaid expenses and other current assets


302


335

  Total current assets


14,021


13,685

Property, plant and equipment at cost


9,950


7,858

  Accumulated depreciation


(3,074)


(2,717)

  Property, plant and equipment


6,876


5,141

Goodwill


4,362


4,362

Deferred tax assets


473


263

Capitalized software licenses


152


85

Overfunded retirement plans


188


392

Other long-term assets


1,135


748

Total assets


$          27,207


$          24,676






Liabilities and stockholders' equity





Current liabilities:





  Current portion of long-term debt


$               500


$               500

  Accounts payable


851


571

  Accrued compensation


799


775

  Income taxes payable


189


121

  Accrued expenses and other liabilities


646


602

  Total current liabilities


2,985


2,569

Long-term debt


8,235


7,241

Underfunded retirement plans


118


79

Deferred tax liabilities


66


87

Other long-term liabilities


1,226


1,367

Total liabilities


12,630


11,343

Stockholders' equity:





  Preferred stock, $25 par value. Shares authorized – 10; none issued



  Common stock, $1 par value. Shares authorized – 2,400; shares issued – 1,741


1,741


1,741

  Paid-in capital


2,951


2,630

  Retained earnings


50,353


45,919

  Treasury common stock at cost





  Shares: 2022 – 835; 2021 – 817


(40,214)


(36,800)

  Accumulated other comprehensive income (loss), net of taxes (AOCI)


(254)


(157)

Total stockholders' equity


14,577


13,333

Total liabilities and stockholders' equity


$         27,207


$         24,676


Certain amounts in the prior period's balance sheet have been reclassified to conform to the current presentation.

 

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES


Consolidated Statements of Cash Flows


For Three Months Ended

December 31,


For Years Ended

December 31,

(In millions)


2022


2021


2022


2021

Cash flows from operating activities









  Net income


$            1,962


$            2,138


$            8,749


$            7,769

  Adjustments to net income:









  Depreciation


249


200


925


755

  Amortization of acquisition-related intangibles





142

  Amortization of capitalized software


14


13


54


57

  Stock compensation


62


50


289


230

  Gains on sales of assets



(50)


(3)


(57)

  Deferred taxes


(173)


(4)


(191)


15

  Increase (decrease) from changes in:









  Accounts receivable


145


(48)


(194)


(287)

  Inventories


(353)


(47)


(847)


45

  Prepaid expenses and other current assets


(39)


(42)


6


57

  Accounts payable and accrued expenses


34


(54)


106


33

  Accrued compensation


136


110


22


7

  Income taxes payable


68


34


94


(20)

  Changes in funded status of retirement plans


(12)


14


114


62

  Other


(51)


43


(404)


(52)

Cash flows from operating activities


2,042


2,357


8,720


8,756










Cash flows from investing activities









  Capital expenditures


(967)


(1,282)


(2,797)


(2,462)

  Proceeds from asset sales



68


3


75

  Purchases of short-term investments


(3,688)


(3,697)


(14,483)


(10,124)

  Proceeds from short-term investments


3,650


2,708


13,657


8,478

  Other


(22)


(26)


37


(62)

Cash flows from investing activities


(1,027)


(2,229)


(3,583)


(4,095)










Cash flows from financing activities









  Proceeds from issuance of long-term debt


799



1,494


1,495

  Repayment of debt




(500)


(550)

  Dividends paid


(1,123)


(1,062)


(4,297)


(3,886)

  Stock repurchases


(848)


(142)


(3,615)


(527)

  Proceeds from common stock transactions


50


52


241


377

  Other


(12)


(8)


(41)


(46)

Cash flows from financing activities


(1,134)


(1,160)


(6,718)


(3,137)










Net change in cash and cash equivalents


(119)


(1,032)


(1,581)


1,524

Cash and cash equivalents at beginning of period


3,169


5,663


4,631


3,107

Cash and cash equivalents at end of period


$            3,050


$            4,631


$            3,050


$            4,631

 

Quarterly segment results

(In millions)

Q4 2022


Q4 2021


 Change  

Analog:






  Revenue

$      3,558


$      3,758


(5) %

  Operating profit

$      1,798


$      2,098


(14) %

Embedded Processing:






  Revenue

$         837


$         764


10 %

  Operating profit

$         293


$         293


0 %

Other:






  Revenue

$         275


$         310


(11) %

  Operating profit*

$           85


$         112


(24) %


* Includes acquisition charges and restructuring charges/other.

 

Annual segment results

(In millions)

2022


2021


 Change  

Analog:






  Revenue

$    15,359


$    14,050


9 %

  Operating profit

$      8,359


$      7,393


13 %

Embedded Processing:






  Revenue

$      3,261


$      3,049


7 %

  Operating profit

$      1,253


$      1,174


7 %

Other:






  Revenue

$      1,408


$      1,245


13 %

  Operating profit*

$         528


$         393


34 %


* Includes acquisition charges and restructuring charges/other.

 

Non-GAAP financial information

This release includes references to free cash flow and ratios based on that measure. These are financial measures that were not prepared in accordance with GAAP. Free cash flow was calculated by subtracting capital expenditures from the most directly comparable GAAP measure, cash flows from operating activities (also referred to as cash flow from operations).

We believe that free cash flow and the associated ratios provide insight into our liquidity, our cash-generating capability and the amount of cash potentially available to return to shareholders, as well as insight into our financial performance. These non-GAAP measures are supplemental to the comparable GAAP measures.

Reconciliation to the most directly comparable GAAP measures is provided in the table below.


For Years Ended

December 31,



(In millions)

2022


2021


 Change  

Cash flow from operations (GAAP)

$        8,720


$        8,756


0 %

Capital expenditures

(2,797)


(2,462)



Free cash flow (non-GAAP)

$        5,923


$        6,294


(6) %







Revenue

$      20,028


$      18,344









Cash flow from operations as a percentage of revenue (GAAP)

43.5 %


47.7 %



Free cash flow as a percentage of revenue (non-GAAP)

29.6 %


34.3 %



This release also includes references to operating taxes, a non-GAAP term we use to describe taxes calculated using the estimated annual effective tax rate, a GAAP measure that by definition does not include discrete tax items. We believe the term operating taxes helps to differentiate from effective taxes, which include discrete tax items.

Notice regarding forward-looking statements

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 herein that describe TI'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 TI or our management:

For a more detailed discussion of these factors, see the Risk factors discussion in Item 1A of TI's most recent Form 10-K. The forward-looking statements included in this release are made only as of the date of this release, and we undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances. If we do update any forward-looking statement, you should not infer that we will make additional updates with respect to that statement or any other forward-looking statement.

About Texas Instruments

Texas Instruments Incorporated (Nasdaq: TXN) is a global semiconductor company that designs, manufactures, tests and sells analog and embedded processing chips for markets such as industrial, automotive, personal electronics, communications equipment and enterprise systems. Our passion to create a better world by making electronics more affordable through semiconductors is alive today, as each generation of innovation builds upon the last to make our technology smaller, more efficient, more reliable and more affordable – making it possible for semiconductors to go into electronics everywhere. We think of this as Engineering Progress. It's what we do and have been doing for decades. Learn more at TI.com.

TXN-G

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