Texas Instruments Inc 10-Q for FY2023 Q1

Texas Instruments Inc (TXN)

10-Q 2023-04-26 For: 2023-03-31

Added on April 11, 2026

About this 10-Q

Texas Instruments Inc filed this 10-Q on April 26, 2023, covering the quarter ended March 31, 2023 (FY2023 Q1).

Headline figures

Quarter ended March 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $4.38B; down 10.7% from $4.91B a year earlier
Net income: $1.71B; down 22.4% from net income of $2.2B a year earlier
Diluted EPS: $1.85; down 21.3% from $2.35 a year earlier

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Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $1.00	TXN	The Nasdaq Global Select Market


	For Three Months Ended
Consolidated Statements of Income	March 31,
(In millions, except per-share amounts)	2023		2022
Revenue	$	4,379	$	4,905
Cost of revenue (COR)	1,516		1,463
Gross profit	2,863		3,442
Research and development (R&D)	455		391
Selling, general and administrative (SG&A)	474		422

Restructuring charges/other	—		66
Operating profit	1,934		2,563
Other income (expense), net (OI&E)	80		15
Interest and debt expense	68		52
Income before income taxes	1,946		2,526
Provision for income taxes	238		325
Net income	$	1,708	$	2,201

Earnings per common share (EPS):
Basic	$	1.87	$	2.37
Diluted	$	1.85	$	2.35

Average shares outstanding:
Basic	907		923
Diluted	916		934

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	$	1,708	$	2,201
Income allocated to RSUs	(9)		(9)
Income allocated to common stock for diluted EPS	$	1,699	$	2,192

See accompanying notes.


	For Three Months Ended
Consolidated Statements of Comprehensive Income	March 31,
(In millions)	2023		2022
Net income	$	1,708	$	2,201
Other comprehensive income (loss)
Net actuarial losses of defined benefit plans:
Adjustments, net of tax effect of $1 and ($2)	(2)		6
Recognized within net income, net of tax effect of ($1) and ($1)	3		2



Derivative instruments:
Change in fair value, net of tax effect of $1 and $0	(2)		—

Available-for-sale investments:
Unrealized gains (losses), net of tax effect of $0 and $1	3		(4)
Other comprehensive income (loss), net of taxes	2		4
Total comprehensive income	$	1,710	$	2,205

See accompanying notes.


	March 31,		December 31,
Consolidated Balance Sheets	2023		2022
(In millions, except par value)
Assets
Current assets:
Cash and cash equivalents	$	4,477	$	3,050
Short-term investments	5,068		6,017
Accounts receivable, net of allowances of ($13) and ($13)	1,877		1,895
Raw materials	378		353
Work in process	1,850		1,546
Finished goods	1,060		858
Inventories	3,288		2,757
Prepaid expenses and other current assets	313		302
Total current assets	15,023		14,021
Property, plant and equipment at cost	10,791		9,950
Accumulated depreciation	(3,126)		(3,074)
Property, plant and equipment	7,665		6,876
Goodwill	4,362		4,362
Deferred tax assets	486		473
Capitalized software licenses	140		152
Overfunded retirement plans	189		188
Other long-term assets	1,355		1,135
Total assets	$	29,220	$	27,207

Liabilities and stockholders’ equity
Current liabilities:
Current portion of long-term debt	$	500	$	500
Accounts payable	952		851
Accrued compensation	394		799
Income taxes payable	372		189
Accrued expenses and other liabilities	686		646
Total current liabilities	2,904		2,985
Long-term debt	9,626		8,235
Underfunded retirement plans	123		118
Deferred tax liabilities	73		66
Other long-term liabilities	1,251		1,226
Total liabilities	13,977		12,630
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	3,016		2,951
Retained earnings	50,930		50,353
Treasury common stock at cost
Shares: March 31, 2023 – 833; December 31, 2022 – 835	(40,192)		(40,214)
Accumulated other comprehensive income (loss), net of taxes (AOCI)	(252)		(254)
Total stockholders’ equity	15,243		14,577
Total liabilities and stockholders’ equity	$	29,220	$	27,207

See accompanying notes.


	For Three Months Ended
Consolidated Statements of Cash Flows	March 31,
(In millions)	2023		2022
Cash flows from operating activities
Net income	$	1,708	$	2,201
Adjustments to net income:
Depreciation	265		200

Amortization of capitalized software	16		14
Stock compensation	104		74
Gains on sales of assets	—		(2)
Deferred taxes	(8)		(1)
Increase (decrease) from changes in:
Accounts receivable	18		(94)
Inventories	(531)		(150)
Prepaid expenses and other current assets	(4)		21
Accounts payable and accrued expenses	(124)		11
Accrued compensation	(407)		(388)
Income taxes payable	185		284
Changes in funded status of retirement plans	6		21
Other	(68)		(47)
Cash flows from operating activities	1,160		2,144

Cash flows from investing activities
Capital expenditures	(982)		(443)
Proceeds from asset sales	1		2
Purchases of short-term investments	(3,013)		(3,988)
Proceeds from short-term investments	4,026		2,774
Other	(4)		(13)
Cash flows from investing activities	28		(1,668)

Cash flows from financing activities
Proceeds from issuance of long-term debt	1,397		—

Dividends paid	(1,125)		(1,063)
Stock repurchases	(103)		(589)
Proceeds from common stock transactions	85		57
Other	(15)		(7)
Cash flows from financing activities	239		(1,602)

Net change in cash and cash equivalents	1,427		(1,126)
Cash and cash equivalents at beginning of period	3,050		4,631
Cash and cash equivalents at end of period	$	4,477	$	3,505

See accompanying notes.


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	For Three Months Ended March 31,
	2023					2022
	Net Income		Shares	EPS		Net Income		Shares	EPS
Basic EPS:
Net income	$	1,708				$	2,201
Income allocated to RSUs	(9)					(9)
Income allocated to common stock	$	1,699	907	$	1.87	$	2,192	923	$	2.37
Dilutive effect of stock compensation plans			9					11

Diluted EPS:
Net income	$	1,708				$	2,201
Income allocated to RSUs	(9)					(9)
Income allocated to common stock	$	1,699	916	$	1.85	$	2,192	934	$	2.35


	March 31, 2023						December 31, 2022
	Cash and Cash Equivalents		Short-Term Investments		Long-Term Investments		Cash and Cash Equivalents		Short-Term Investments		Long-Term Investments
Measured at fair value:
Money market funds	$	3,040	$	—	$	—	$	1,238	$	—	$	—
Corporate obligations	198		1,350		—		276		1,535		—
U.S. government and agency securities	748		3,570		—		680		4,234		—
Non-U.S. government and agency securities	149		148		—		149		248		—
Mutual funds	—		—		10		—		—		11
Total	4,135		5,068		10		2,343		6,017		11

Other measurement basis:
Equity-method investments	—		—		13		—		—		18
Non-marketable investments	—		—		6		—		—		5
Cash on hand	342		—		—		707		—		—
Total	$	4,477	$	5,068	$	29	$	3,050	$	6,017	$	34


	March 31, 2023						December 31, 2022
	Level 1		Level 2		Total		Level 1		Level 2		Total
Assets:
Money market funds	$	3,040	$	—	$	3,040	$	1,238	$	—	$	1,238
Corporate obligations	—		1,548		1,548		—		1,811		1,811
U.S. government and agency securities	4,318		—		4,318		4,914		—		4,914
Non-U.S. government and agency securities	—		297		297		—		397		397
Mutual funds	10		—		10		11		—		11
Total assets	$	7,368	$	1,845	$	9,213	$	6,163	$	2,208	$	8,371

Liabilities:
Deferred compensation	$	328	$	—	$	328	$	326	$	—	$	326
Total liabilities	$	328	$	—	$	328	$	326	$	—	$	326


	U.S. Defined Benefit				U.S. Retiree Health Care				Non-U.S. Defined Benefit
For Three Months Ended March 31,	2023		2022		2023		2022		2023		2022
Service cost	$	2	$	4	$	—	$	1	$	4	$	7
Interest cost	7		6		4		3		14		10
Expected return on plan assets	(6)		(8)		(5)		(4)		(15)		(18)
Recognized net actuarial losses (gains)	2		—		(1)		—		3		—

Net periodic benefit costs (credits)	5		2		(2)		—		6		(1)
Settlement losses	—		2		—		—		—		1
Total, including other postretirement losses (gains)	$	5	$	4	$	(2)	$	—	$	6	$	—


	Common Stock		Paid-in Capital		Retained Earnings		Treasury Common Stock		AOCI
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, 2023	$	1,741	$	3,016	$	50,930	$	(40,192)	$	(252)


	For Three Months Ended				Impact to Related Statement of Income Lines
	March 31,
	2023		2022
Net actuarial losses of defined benefit plans:
Recognized net actuarial loss and settlement losses (a)	$	4	$	3		Decrease to OI&E
Tax effect	(1)		(1)			Decrease to provision for income taxes
Recognized within net income, net of taxes	$	3	$	2		Decrease to net income


	Q1 2023			Q1 2022			Change
Revenue	$	3,289		$	3,816		(14)	%
Operating profit	1,574			2,150			(27)	%
Operating profit % of revenue	47.9		%	56.3		%


	For 12 Months Ended
	March 31,
	2023			2022			Change
Cash flow from operations (GAAP)	$	7,736		$	9,050		(15)	%
Capital expenditures	(3,336)			(2,597)
Free cash flow (non-GAAP)	$	4,400		$	6,453		(32)	%

Revenue	$	19,502		$	18,960

Cash flow from operations as a percentage of revenue (GAAP)	39.7		%	47.7		%
Free cash flow as a percentage of revenue (non-GAAP)	22.6		%	34.0		%


	For Three Months Ended
	March 31,
	2023				2022
Revenue:
United States	$	555	13	%	$	494	10	%
China (a)	1,831		41		2,548		52
Rest of Asia	549		13		655		13
Europe, Middle East and Africa	986		23		814		17
Japan	289		6		263		5
Rest of world	169		4		131		3
Total revenue	$	4,379	100	%	$	4,905	100	%


	For Three Months Ended
	March 31,
	2023				2022
Revenue:
United States	$	1,357	31	%	$	1,570	32	%
China	876		20		1,275		26
Rest of Asia	394		9		540		11
Europe, Middle East and Africa (a)	1,270		29		1,079		22
Japan	438		10		392		8
Rest of world	44		1		49		1
Total revenue	$	4,379	100	%	$	4,905	100	%


	Fair Value
One year or less	$	6,089
One to two years	74


	March 31,		December 31,
	2023		2022
Notes due 2023 at 2.25%	$	500	$	500
Notes due 2024 at 2.625%	300		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 2.90%	500		500
Notes due 2028 at 4.60%	500		500
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%	750		—
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		—
Total debt	10,200		8,800
Net unamortized discounts, premiums and issuance costs	(74)		(65)
Total debt, including net unamortized discounts, premiums and issuance costs	10,126		8,735
Current portion of long-term debt	(500)		(500)
Long-term debt	$	9,626	$	8,235


Period	Total Number of Shares Purchased		Average Price Paid per Share			Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (a)
January 1, 2023 through January 31, 2023	366,522		$	171.41		123,710	$	21.46	billion
February 1, 2023 through February 28, 2023	207,615		175.32			207,615	21.42		billion
March 1, 2023 through March 31, 2023	221,555		176.47			221,555	21.38		billion
Total	795,692	(b)	$	173.84	(b)	552,880	$	21.38	billion (c)


Designation of Exhibits in This Report						Description of Exhibit
3(a)						Restated Certificate of Incorporation of the Registrant, dated April 18, 1985, as amended (incorporated by reference to Exhibit 3(a) of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2014).
3(b)						By-Laws of the Registrant (incorporated by reference to Exhibit 3 of the Registrant’s Current Report on Form 8-K filed January 26, 2022).
4(a)						Officers’ Certificate, dated March 14, 2023 (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed March 14, 2023).
31(a)						Certification of Chief Executive Officer of Periodic Report Pursuant to Rule 13a-14(a) or Rule 15d-14(a).†
31(b)						Certification of Chief Financial Officer of Periodic Report Pursuant to Rule 13a-14(a) or Rule 15d-14(a).†
32(a)						Certification by Chief Executive Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350.†
32(b)						Certification by Chief Financial Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350.†
101.ins						XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.†
101.def						XBRL Taxonomy Extension Definition Linkbase Document.†
101.sch						XBRL Taxonomy Extension Schema Document.†
101.cal						XBRL Taxonomy Extension Calculation Linkbase Document.†
101.lab						XBRL Taxonomy Extension Label Linkbase Document.†
101.pre						XBRL Taxonomy Extension Presentation Linkbase Document.†
104						Cover Page Interactive Data File (embedded within the Inline XBRL document).†
† Filed or furnished herewith.


TEXAS INSTRUMENTS INCORPORATED

By:	/s/	Rafael R. Lizardi
	Rafael R. Lizardi, Senior Vice President and Chief Financial Officer


			/s/ Haviv Ilan
			Haviv Ilan President and Chief Executive Officer


			/s/ Rafael R. Lizardi
			Rafael R. Lizardi Senior Vice President and Chief Financial Officer