Texas Instruments (TXN) 10-K risk factor changes: FY2020 vs FY2019

About [removed: 85%] [added: 90%] of our revenue comes from shipments to locations outside the United States; shipments of products [removed: into China] [added: to China-based customers] represent [removed: a large portion] [added: about 20%] of our revenue.

Certain countries where we operate have experienced, and other countries may experience, [removed: increasing protectionism] [added: trade tension] that affects global trade and macroeconomic conditions through the enactment of tariffs, import or export restrictions, trade embargoes and sanctions, restrictions on cross-border investment and other trade barriers.

[removed: This protectionism impacts] [added: Trade tensions impact] our ability to deliver products and product support into China, [removed: could] cause Chinese customers to seek alternate suppliers and could otherwise adversely affect our operations and financial results.

We are exposed to political, social and economic conditions, security risks, terrorism or other hostile acts, health [removed: conditions,] [added: conditions and epidemics,] labor conditions, and possible disruptions in transportation, communications and information technology networks of the various countries in which we operate.

Additionally, the loss or significant curtailment of purchases by one or more of our large customers, including curtailments due to a change in the design or manufacturing sourcing policies or practices of these customers, the timing of customer or distributor inventory adjustments, [added: changes in demand for customer products,] or trade restrictions, may adversely affect our results of operations and financial condition.

Our results of operations also might suffer because of a general decline in customer demand resulting from, for example: uncertainty regarding the stability of global credit and financial markets; natural [removed: events] [added: events, epidemics] or domestic or international political, social, economic or other conditions; breaches of customer information technology systems that disrupt customer operations; or a customer’s inability to access credit markets and other sources of needed liquidity.

[removed: In addition, when responding to customers’ requests for shorter shipment lead times, we] [added: We] manufacture products based on forecasts of customers’ demands.

[removed: If we inaccurately forecast customer demand, we may] [added: These forecasts are based on multiple assumptions, and if inaccurate, could cause us to] hold inadequate, excess or obsolete inventory that would reduce our profit margins and adversely affect our results of operations and financial condition.

[removed: Our failure to] [added: If we do not] successfully implement these [removed: changes could adversely affect] [added: changes,] our business plans and operating [removed: results.][added: results could be adversely affected.]

We may not achieve or sustain the expected growth, cost savings or other benefits of strategic, business and organizational changes, and [removed: restructuring] charges [added: associated with these actions] could differ materially in amount and timing from our expectations.

We have manufacturing, data and design facilities and other operations in locations subject to natural occurrences such as severe weather, geological events or [removed: health] epidemics that could disrupt operations.

A natural disaster that results in a prolonged disruption, particularly where we have principal manufacturing and design operations, as listed in [added: the Properties section in] Item [removed: 2.][added: 2, may adversely affect our results and financial condition.]

Our results of operations depend in part upon our ability to successfully develop, manufacture and market innovative products in a timely [added: and cost-effective] manner.

Our access to needed goods and services may be adversely affected by potential disputes with suppliers or disruptions in our suppliers’ operations as a result of, for example: quality excursions; uncertainty regarding the stability of global credit and financial markets; domestic or international political, social, economic and other conditions; natural events or [removed: health] epidemics in the locations in which our suppliers operate; or limited or delayed access to key raw materials, natural resources and utilities.

Reliance on these suppliers involves risks, including possible shortages of capacity in periods of high demand, suppliers’ inability to develop and deliver advanced logic manufacturing process technology in a timely, [removed: cost effective,] [added: cost-effective,] and appropriate manner, the possibility of suppliers’ imposition of increased costs on us and the unauthorized disclosure or use of our intellectual property.

We are subject to complex laws, rules and regulations affecting our domestic and international operations relating to, for example, the [removed: environment,] [added: environment and climate change,] safety and health; trade; bribery and corruption; financial reporting; tax; data privacy and protection; labor and employment; competition; market access; [added: epidemics;] intellectual property ownership and infringement; and the movement of currency.

If we [removed: fail to] [added: do not] comply or if we become subject to enforcement activity, we could be subject to fines, penalties or other legal liability.

Our results of operations could be adversely affected by [removed: our] distributors’ promotion of competing product lines or our distributors’ financial performance.

In [removed: 2019,] [added: 2020,] about [removed: 65%] [added: half] of our revenue was generated from sales of our products through distributors.

Our distributors carry competing product lines, and our sales could be affected if [removed: our] [added: semiconductor] distributors promote competing products over our products.

Disputes with [removed: significant] [added: current or former] distributors could be disruptive or harmful to our business.

Our profit margins vary due to a number of factors, which may include customer demand and shipment volume; our manufacturing processes; product mix; inventory levels; tariffs; [added: freight costs;] and new accounting pronouncements or changes in existing accounting practices or standards.

To the extent that we have to rely on [removed: licensed] technology from [removed: others,] [added: others for which a license is required,] there can be no assurance that we will be able to obtain [removed: licenses] [added: such a license] at all or on terms we consider reasonable.

We, directly [removed: or] [added: and] indirectly, face infringement claims from third parties, including non-practicing entities that have acquired patents to pursue enforcement actions against other companies.

In addition, our obligation to make principal and interest payments could divert funds that otherwise [removed: would] [added: might] be invested in our operations or returned to shareholders, or could cause us to raise funds by, for example, issuing new debt or equity or selling assets.

Risks related to our business and industry

The extent to which the COVID-19 pandemic will adversely affect our business, results of operations and financial condition is uncertain.

The global spread of the novel coronavirus, severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), and the coronavirus disease, COVID-19, has created significant uncertainty and economic disruption, both near-term and potentially long-term.

We have modified, and might further modify, our business practices in response to the COVID-19 pandemic, related third-party responses, including from government authorities and our suppliers, customers and distributors, and the economic and social ramifications of the disease and societal responses across the markets in which TI operates.

The extent to which the COVID-19 pandemic will continue to affect our business, results of operation and financial condition is difficult to predict and depends on numerous evolving factors including: the duration and scope of the pandemic; government, social, business and other actions that have been and will be taken in response to the pandemic; and the effect of the pandemic on short- and long-term general economic conditions.

We might experience short- or long-term constrained supply or volatility in customer demand, which could materially and adversely affect our business and financial results in future periods.

Legal and regulatory risks

Risks related to our financing activities and other risks

These forecasts are based on multiple assumptions.

Properties, may adversely affect our results and financial condition.

Our results of operations [removed: discussed below] provides details of our financial results for [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] and year-to-year comparisons between [removed: 2019] [added: 2020] and [removed: 2018.][added: 2019.]

Discussion of [removed: 2017] [added: 2018] items and year-to-year comparisons between [removed: 2018] [added: 2019] and [removed: 2017] [added: 2018] that are not included in this Form 10-K can be found in “Management’s discussion and analysis of financial condition and results of operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, [removed: 2018.][added: 2019.]

Gross margin of [removed: 63.7%] [added: 64.1%] reflected the quality of our product portfolio, as well as the efficiency of our manufacturing strategy, including the benefit of 300-millimeter Analog production.

Our cash flow from operations of [removed: $6.65] [added: $6.14] billion underscored the strength of our business model.

Free cash flow was [removed: $5.80] [added: $5.49] billion and represented [removed: 40.3%] [added: 38.0%] of [removed: revenue, up from 38.4% a year ago.][added: revenue.]

Our [removed: dividends] [added: dividend] represented [removed: 52%] [added: 62%] of free cash flow, underscoring [removed: their] [added: its] sustainability.

[added: -] For an explanation of free cash [removed: flow,] [added: flow and the term “annual operating tax rate,”] see the Non-GAAP financial information section.

Details of financial results – [removed: 2019] [added: 2020] compared with [removed: 2018][added: 2019]

As a percentage of revenue, gross profit [removed: decreased] [added: increased] to [removed: 63.7%] [added: 64.1%] from [removed: 65.1%.][added: 63.7%.]

Operating expenses (R&D and SG&A) were [removed: $3.19] [added: $3.15] billion compared with [removed: $3.24] [added: $3.19] billion.

Acquisition charges [removed: of] [added: were $198 million compared with] $288 million [added: and] were non-cash.

Restructuring charges/other was a [added: charge of $24 million due to an Embedded Processing action, compared with a] credit of $36 million due to the sale of our manufacturing facility in Greenock, [removed: Scotland.][added: Scotland in 2019.]

Operating profit was [removed: $5.72] [added: $5.89] billion, or [removed: 39.8%] [added: 40.8%] of revenue, compared with [removed: $6.71] [added: $5.72] billion, or [removed: 42.5%] [added: 39.8%] of revenue.

Other income and expense (OI&E) was [removed: $175] [added: $313] million of income compared with [removed: $98] [added: $175] million of [added: income, which increased primarily due to higher royalty] income.

Interest and debt expense of [removed: $170] [added: $190] million increased [removed: $45] [added: $20] million due to the issuance of additional long-term debt.

Our provision for income taxes was [removed: $711] [added: $422] million compared with [removed: $1.11 billion.][added: $711 million.]

Our annual operating tax rate, which does not include discrete tax items, was [removed: 16%] [added: 14%] compared with [removed: 20%] [added: 16%] in [removed: 2018.][added: 2019.]

We use “annual operating tax rate” to describe the estimated annual effective tax [removed: rate, as explained further in the Non-GAAP financial information section.][added: rate.]

Our effective tax rate, which includes discrete tax items, was [removed: 12%] [added: 7%] in [removed: 2019] [added: 2020] compared with [removed: 17%] [added: 12%] in [removed: 2018.][added: 2019.]

See Note 4 to the financial statements for a reconciliation of the U.S. statutory [removed: income] [added: corporate] tax rate to our effective tax rate.

Net income was [removed: $5.02] [added: $5.60] billion compared with [removed: $5.58] [added: $5.02] billion.

EPS was [removed: $5.24] [added: $5.97] compared with [removed: $5.59.][added: $5.24.]

Segment results – [removed: 2019] [added: 2020] compared with [removed: 2018][added: 2019]

*Analog (includes [removed: Power,] [added: Power and] Signal Chain [removed: and High Volume] product lines)*

| | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | | | | | Change | | |

| Revenue | | | $ | [removed: 10,223] [added: 10,886] | | | | | $ | [removed: 10,801] [added: 10,223] | | | | | [removed: (5)] [added: 6] | | % |

| Operating profit | | | [removed: 4,477] [added: 4,912] | | | | | | [removed: 5,109] [added: 4,477] | | | | | | [removed: (12)] [added: 10] | | % |

| Operating profit % of revenue | | | [removed: 43.8] [added: 45.1] | | % | | | | [removed: 47.3] [added: 43.8] | | % | | | | | | |

Operating profit [removed: decreased primarily] [added: increased] due to [removed: lower] [added: higher] revenue and associated gross profit.

*Embedded Processing (includes [removed: Connected Microcontrollers] [added: microcontrollers] and [removed: Processors product lines)*][added: processors)*]

| Revenue | | | $ | [removed: 2,943] [added: 2,570] | | | | | $ | [removed: 3,554] [added: 2,943] | | | | | [removed: (17)] [added: (13)] | | % |

| Operating profit | | | [removed: 907] [added: 743] | | | | | | [removed: 1,205] [added: 907] | | | | | | [removed: (25)] [added: (18)] | | % |

| Operating profit % of revenue | | | [removed: 30.8] [added: 28.9] | | % | | | | [removed: 33.9] [added: 30.8] | | % | | | | | | |

*Other (includes [removed: DLP*®] [added: DLP®*] *products, calculators and custom ASIC products)*

| Revenue | | | $ | [removed: 1,217] [added: 1,005] | | | | | $ | [removed: 1,429] [added: 1,217] | | | | | [removed: (15)] [added: (17)] | | % |

| Operating profit * | | | [removed: 339] [added: 239] | | | | | | [removed: 399] [added: 339] | | | | | | [removed: (15)] [added: (29)] | | % |

| Operating profit % of revenue | | | [removed: 27.9] [added: 23.8] | | % | | | | 27.9 | | % | | | | | | |

Other revenue decreased $212 million, and operating profit decreased [removed: $60] [added: $100] million.

At the end of [removed: 2019,] [added: 2020,] total cash (cash and cash equivalents plus short-term investments) was [removed: $5.39] [added: $6.57] billion, an increase of [removed: $1.15] [added: $1.18] billion from the end of [removed: 2018.][added: 2019.]

Accounts receivable were [removed: $1.07] [added: $1.41] billion, [removed: a decrease] [added: an increase] of [removed: $133] [added: $340] million compared with the end of [removed: 2018.][added: 2019.]

Technology is the foundation of our company, but ultimately, our objective and the best metric to measure progress and generate long-term value for owners is the growth of free cash flow per share.

Our strategy to maximize 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.

During 2020, we reorganized the product lines within our Analog segment to simplify our business structure into our Power and Signal Chain product lines.

These changes had no impact on our previously reported consolidated financial statements or on our reportable segment results.

Impact of COVID-19

The coronavirus (COVID-19) pandemic and its follow-on effects are impacting and will likely continue to impact business activity across industries worldwide, including TI.

Therefore, we remain cautious about how the economy might behave for the next few years.

The impact to our lead times and ability to fulfill orders was minimal in 2020.

However, depending on pandemic-related factors like the potential of local manufacturing restrictions on our factories, we could experience constraints in fulfilling customer orders in future periods.

The coronavirus pandemic remains dynamic with uncertainty around its duration and broader impact.

We continue to monitor and assess the situation and address implications to our business, supply chain and customer demand.

We have long had a business continuity plan in place for unforeseeable situations, like we have seen with COVID-19.

Additionally, over the past several years, we have invested in building inventory and expanding our global internally owned manufacturing footprint.

Investing in these capabilities has given us flexibility, such as the ability to build products across multiple manufacturing sites.

These investments have helped to minimize disruptions, but may not be sufficient to eliminate them.

Our strategic focus is on analog and embedded processing products sold into six end markets: industrial, automotive, personal electronics, communications equipment, enterprise systems and other.

While all end markets represent good opportunities, we place additional strategic emphasis on designing and selling those products into the industrial and automotive markets, which we believe represent the best growth opportunities.

During 2020, consistent with our commitment to return free cash flow to owners, we returned $5.98 billion to shareholders through a combination of dividends and stock repurchases.

Revenue of $14.46 billion increased $78 million, or 1%, primarily due to higher revenue from Analog, partially offset by lower revenue from Embedded Processing.

Gross profit of $9.27 billion was up $105 million, or 1%, due to higher revenue and increased factory loadings.

The decrease was due to higher discrete tax benefits, which included a $249 million benefit from the settlement of a depreciation-related uncertain tax position and, to a lesser extent, higher U.S. tax benefits, partially offset by higher income before income taxes.

Analog revenue increased in both product lines about evenly.

| | | | 2020 | | | | | | 2019 | | | | | | Change | | |

Embedded Processing revenue decreased.

| | | | 2020 | | | | | | 2019 | | | | | | Change | | |

Short-term investments used cash of $241 million in 2020 compared with $1.14 billion in 2019.

For many years, we have run our business with three overarching ambitions in mind.

First, we will act like owners who will own the company for decades.

Second, we will adapt and succeed in a world that is ever changing.

And third, we will be a company that we are personally proud to be a part of and that we would want as our neighbor.

When we are successful in achieving these ambitions, our employees, customers, communities and shareholders all win.

Our business model is designed around the following four sustainable competitive advantages that we believe, in combination, put us in a unique class of companies:

- *A strong foundation of manufacturing and technology.* We invest in manufacturing technologies and do most of our manufacturing in-house.

This strategic decision to directly control our manufacturing helps ensure a consistent supply of products for our customers and also allows us to invest in technology that differentiates the features of our products.

We have focused on creating a competitive manufacturing cost advantage by investing in our advanced analog 300-millimeter capacity, which has about a 40% cost advantage per unpackaged chip over 200-millimeter.

To strengthen this advantage, we are moving forward with our plan to build our new 300-millimeter wafer fabrication facility in Richardson, Texas, as 300-millimeter wafers will continue to support the majority of our Analog growth.

- *Broad portfolio* *of differentiated analog and embedded processing products.* Our customers need multiple chips for their systems.

The breadth of our portfolio means we can meet more of these needs than our competitors can, which gives us access to more customers and the opportunity to sell more products and generate more revenue per customer system.

We invest more than $1 billion each year to develop new products for our portfolio, which includes tens of thousands of products.

- *Reach of market channels.* Customers often begin their initial product selection process and design-in journey on our website, and the breadth of our portfolio attracts more customers to our website than any of our competitors’ websites.

Our web presence and global sales and applications team are advantages that give us unique access and insight to about 100,000 customers designing TI semiconductors into their end products.

- *Diversity and longevity of our products, markets and customer positions.* Together, the attributes above result in diverse and long-lived positions that deliver high terminal value to our shareholders.

Because of the breadth of our portfolio, we are not dependent on any single product, customer, technology or market.

Some of our products generate revenue for decades, which strengthens the return on our investments.

Our strategic focus, and where we invest the majority of our resources, is on Analog and Embedded Processing, with a particular emphasis on designing and selling those products into the industrial and automotive markets.

We believe these markets represent the best growth opportunities over the next decade or longer, due to increasing semiconductor content.

Additionally, analog and embedded processing products sold into industrial and automotive markets provide long product life cycles, intrinsic diversity and less capital-intensive manufacturing, which we believe offer stability, profitability and strong cash generation.

This business model is the foundation of our capital management strategy, which is based on our belief that free cash flow growth, especially on a per-share basis, is important for maximizing shareholder value over the long term.

We also believe that free cash flow will be valued only if it is productively invested in the business or returned to shareholders.

The combined effect of our ambitions, business model and sustainable competitive advantages is that we have continued to build a stronger company.

Over time, we have gained market share in Analog and Embedded Processing and grown and returned all free cash flow to our owners.

In 2019, we continued our focus on analog and embedded processing products and the industrial and automotive markets.

Together, these products and markets represent highly diverse opportunities with thousands of applications and long-term growth potential.

During 2019, we returned $5.97 billion to shareholders through a combination of stock repurchases and dividends.

Our strategy is to return all free cash flow to shareholders.

Revenue of $14.38 billion decreased $1.40 billion, or 9%, primarily due to lower revenue from Embedded Processing and Analog.

Gross profit of $9.16 billion was down $1.11 billion, or 11%, primarily due to lower revenue.

The decrease was due to lower income before income taxes and a lower annual operating tax rate.

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

Analog revenue decreased due to Power, High Volume and, to a lesser extent, Signal Chain.

Embedded Processing revenue decreased in both product lines, led by Processors.

Short-term investments used cash of $1.14 billion in 2019 and provided cash proceeds of $1.07 billion in 2018.

| | | | 2019 | | | | | | 2018 | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

Because most of the aggregate non-U.S. dollar balance sheet exposure is hedged by forward currency exchange contracts, [added: which are] based on year-end [removed: 2019] [added: 2020] balances and currency exchange rates, a hypothetical 10% plus or minus fluctuation in non-U.S. currency exchange rates relative to the U.S. dollar would result in a pretax currency exchange gain or loss of [removed: less than $1] [added: approximately $3] million.

As of December 31, [removed: 2019,] [added: 2020,] we had forward currency exchange contracts outstanding with a notional value of [removed: $458] [added: $416] million to hedge net balance sheet exposures (including [removed: $136] [added: $147] million to sell Japanese yen, [removed: $106] [added: $85] million to sell [removed: Indian rupees] [added: euros] and [removed: $74] [added: $82] million to sell British pounds).

Similar hedging activities existed at year-end [removed: 2018.][added: 2019.]

As of December 31, [removed: 2019,] [added: 2020,] a hypothetical 100 basis point increase in interest rates would decrease the fair value of our investments in cash equivalents and short-term investments by about [removed: $8] [added: $9] million and decrease the fair value of our long-term debt by [removed: $532] [added: $650] million.

Long-term investments at year-end [removed: 2019] [added: 2020] include the following:

Changes in prices of the mutual fund investments are expected to offset related changes in [added: certain] deferred compensation [removed: liabilities such that a 10% increase or decrease in the investments’ fair values would not materially affect operating results.][added: liabilities.]

We also utilize total return swaps to economically hedge exposure to changes in liabilities related to the equity market risks of certain deferred compensation arrangements with employees.

Gains or losses from changes in the fair value of these total return swaps generally offset the related losses or gains on the deferred compensation liabilities.

In [removed: 2019,] [added: 2020,] we generated [removed: $14.38] [added: $14.46] billion of revenue.

[removed: These] [added: The four sustainable competitive] advantages [removed: include (i)] [added: are] a strong foundation of manufacturing and technology, [removed: (ii)] a broad portfolio of [removed: differentiated] analog and embedded processing products, [removed: (iii)] [added: the] reach of [removed: market channels including] our [removed: sales force and TI.com] [added: market channels,] and [removed: (iv)] diversity and longevity of our products, markets and customer positions.

[removed: Our strategic focus, and where] [added: Finally,] we [removed: invest the majority of] [added: focus] our [removed: resources, is on Analog and Embedded Processing, with a particular emphasis] [added: resources] on [removed: designing] [added: analog] and [removed: selling those] [added: embedded processing] products [removed: into the] [added: and] industrial and automotive markets.

We have [removed: tens of thousands of products] [added: a diverse product portfolio] that [removed: are] [added: is] used to accomplish many different things, such as converting and amplifying signals, interfacing with other devices, managing and distributing power, processing data, canceling noise and improving signal resolution.

This broad portfolio includes [added: approximately 80,000] products that are integral to almost [removed: all] [added: every type of] electronic equipment.

Our Analog segment generated [removed: $10.22] [added: $10.89] billion of revenue in [removed: 2019.][added: 2020.]

Sales of our Analog products generated about [removed: 71%] [added: 75%] of our revenue in [removed: 2019.][added: 2020.]

Our Analog segment includes the following major product lines: [removed: Power, Signal Chain] [added: Power] and [removed: High Volume.][added: Signal Chain.]

Power includes products that help customers manage power in electronic [removed: systems.][added: systems in all end markets.]

Our broad portfolio is designed to manage power requirements across different voltage [removed: levels using battery management] [added: levels, including battery-management] solutions, [removed: portable components, power supply controls, point-of-load products, switches] [added: DC/DC switching regulators, AC/DC] and [removed: interfaces, integrated protection devices, high-voltage products] [added: isolated controllers] and [removed: mobile lighting] [added: converters, power switches, linear regulators, voltage supervisors, voltage references] and [removed: display] [added: lighting] products.

Our Signal Chain products, which serve a variety of end markets, include amplifiers, data converters, interface products, motor drives, [removed: clocks] [added: clocks, logic] and sensing products.

Our Embedded Processing segment generated [removed: $2.94] [added: $2.57] billion of revenue in [removed: 2019.][added: 2020.]

Embedded Processing products are the [added: digital] “brains” of many types of electronic equipment.

[removed: Embedded processors] [added: They] are designed to handle specific tasks and can be optimized for various combinations of performance, power and cost, depending on the application.

Our devices vary from simple, low-cost microcontrollers used in applications such as electric toothbrushes to highly specialized, complex devices [removed: used in automotive applications] such as [removed: infotainment systems and advanced driver assistance systems (ADAS).][added: motor control.]

This investment tends to increase the length of our customer relationships because many customers prefer to [removed: re-use] [added: reuse] software from one product generation to the next.

Sales of Embedded Processing products generated about [removed: 20%] [added: 18%] of our revenue in [removed: 2019.][added: 2020.]

Our Embedded Processing segment includes [removed: the following major product lines: Connected Microcontrollers] [added: microcontrollers, digital signal processors (DSPs)] and [removed: Processors.][added: applications processors.]

Other generated [removed: $1.22] [added: $1.01] billion of revenue in [removed: 2019] [added: 2020] and includes revenue from DLP® products (primarily used [removed: in projectors] to [removed: create] [added: project] high-definition images), calculators and certain custom semiconductors known as application-specific integrated circuits (ASICs).

Examples of these items include acquisition charges, restructuring [removed: charges,] [added: charges] and certain corporate-level items, such as litigation expenses, environmental [removed: costs, insurance settlements] [added: costs] and gains and losses from other activities, including asset dispositions.

The table below lists the major markets for our products in [removed: 2019] [added: 2020] and the estimated percentage of our [removed: 2019] [added: 2020] revenue that the market represented.

| [removed: (36% of TI revenue)] | | | | | | Building automation | | |

| | | | | | | Retail automation & [removed: payments] [added: payment] | | |

| [removed: (21%] [added: (20%] of TI revenue) | | | | | | Advanced driver assistance systems (ADAS) | | |

| [removed: (23% of TI revenue)] | | | | | | Portable electronics | | |

| | | | | | | Home [removed: theatre] [added: theater] & entertainment | | |

| [removed: (11%] [added: (8%] of TI revenue) | | | | | | Wired networking | | |

| [removed: (3%] [added: (2%] of TI revenue) | | | | | | | | |

We believe that competitive performance in the semiconductor market generally depends on several factors, including the breadth of a company’s product line, the strength and [removed: depth] [added: reach] of its channels to market, technological innovation, product development execution, technical support, customer service, quality, reliability, [added: price and] manufacturing capacity and [removed: capabilities and price.][added: capabilities.]

[removed: The] [added: A] semiconductor cycle could be affected by the significant time and money required to build and maintain semiconductor manufacturing facilities.

We employ several strategies [removed: to dampen] [added: which have many benefits, including dampening] the effect of the semiconductor cycle on TI.

[removed: These] [added: Generally, our] products [removed: and markets] serve a large and diverse customer base, which reduces our dependence on the performance of [removed: a] [added: any] single [added: product,] market or [removed: small group of customers.][added: customer.]

Industrial and automotive markets also benefit from long product life cycles, [added: with revenue often lasting 10 years or more,] which help to smooth the impact of cyclicality.

We sell our products to [removed: about] [added: over] 100,000 customers.

We market and sell our products through direct sales channels, including our [added: website and] broad sales [removed: force] and [removed: our website,] [added: applications team,] and through distributors.

Over the past several years, we have been investing in new capabilities and evolving our distribution network to better align with our strategy to establish [removed: closer, more] [added: closer] direct relationships with our customers.

[removed: As we expand these direct customer relationships over the next several years, we will have] [added: With] less business flowing through the distribution [removed: channel and therefore will] [added: channel, we] require fewer distributors.

We have focused on creating a competitive manufacturing [added: structural] cost advantage by investing in our advanced analog 300-millimeter [removed: capacity, which has about a 40% cost advantage per unpackaged chip over 200-millimeter.][added: capacity.]

To strengthen this advantage, [removed: we are moving forward with our plan to build] [added: construction is underway on] our new 300-millimeter wafer fabrication facility in Richardson, Texas, as 300-millimeter wafers will continue to support the majority of our Analog growth.

To supplement our manufacturing capacity and maximize our responsiveness to customer demand, we [added: selectively] use the capacity of outside suppliers, commonly known as foundries, and subcontractors.

For decades, we have operated with a passion to create a better world by making electronics more affordable through semiconductors.

We were pioneers in the transition from vacuum tubes to transistors and then to integrated circuits.

As each generation became more reliable, more affordable and lower in power, semiconductors were used by a growing number of customers and markets.

This passion is alive today as we help our customers develop electronics and new applications, particularly in industrial and automotive markets.

As engineers, we are fortunate to work on exciting technology which helps our customers innovate to create a better world.

Technology is the foundation of our company, but ultimately, our objective and the best metric to measure progress and generate long-term value for owners is the growth of free cash flow per share.

Our strategy to maximize free cash flow per share growth has three elements:

The first element of our strategy is a business model that is focused on analog and embedded processing products and built around four competitive advantages.

This business model is the result of a series of strategic decisions made over the years and that continue today.

In combination, these four competitive advantages provide tangible benefits, are difficult to replicate and ultimately separate us from our best peers.

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.

The second element of our strategy to maximize free cash flow per share growth is disciplined allocation of capital.

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.

Over a 10-year period from 2011 to 2020, we allocated $83 billion, which reinforces the importance of discipline in capital allocation.

The largest allocation over this period was to drive organic growth, which includes investments in R&D, sales and marketing, capital expenditures and working capital for inventory.

Beyond that, we also allocated capital to dividends and share repurchases.

Dividends are designed to appeal to a broad set of investors, and share repurchases are made with the goal of the accretive capture of future free cash flow for long-term investors.

Lastly, we allocate to acquisitions for inorganic growth, which we last did in 2011 when we acquired National Semiconductor.

The third element of our strategy is efficiency, which we think of as constantly striving for more output for every dollar spent.

This is about getting our investments in the most impactful areas to maximize the growth of long-term free cash flow per share; it is not just about optimizing cost-cutting to get to the last dollar of expense.

We bring this philosophy of efficiency and continuous improvement to all areas of the company, and this focus on efficiency contributes to revenue growth, improved gross margins, disciplined R&D and SG&A expense, free cash flow margins and ultimately to free cash flow per share growth.

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.

As the digitization of electronics continues, there is a growing need and opportunity for analog chips to provide the power to run devices and the critical interfaces with human beings, the real world and other electronic devices.

| (37% of TI revenue) | | | | | | Medical | | |

| (27% of TI revenue) | | | | | | PC & notebooks | | |

Our competitors also include emerging companies, particularly in Asia.

As an example, we are focused on building closer direct relationships with customers.

When it comes to market cycles, these relationships provide improved insight into customer demand and allow us to more accurately and efficiently manage factory loadings and inventory levels, which lead to more stable lead times and higher product availability.

In addition, they typically have long shelf lives and low risk of obsolescence.

During 2020, we completed our transition to a single worldwide distributor, coupled with a few region-specific distributors, for order fulfillment.

Building closer direct customer relationships strengthens our reach of market channel advantage, which gives us access to more customers and more of their design projects, leading to the opportunity to sell more of our products into each design.

Additionally, broader and deeper access gives us better insight and knowledge of customer needs.

The entire process takes place in highly specialized facilities that require substantial investments.

This strategic decision to make manufacturing and technology a core competitive advantage delivers tangible benefits of lower manufacturing costs and greater control of our supply chain.

An unpackaged chip built on 300-millimeter wafers costs about 40% less than an unpackaged chip built on 200-millimeter wafers.

We assess and are careful to address potential health, safety, and environmental risks presented by our operations, including our manufacturing operations.

We care for our environment and work to prevent pollution and the potential risks related to climate change by implementing practices such as recycling and reusing materials, controlling harmful emissions, and properly handling hazardous and restricted substances.

Our business model is designed around four sustainable competitive advantages that we believe, in combination, put us in a unique class of companies.

We believe these markets represent the best growth opportunities over the next decade or longer, due to increasing semiconductor content.

Additionally, analog and embedded processing products sold into industrial and automotive markets provide long product life cycles, intrinsic diversity and less capital-intensive manufacturing, which we believe offer stability, profitability and strong cash generation.

This business model is the foundation of our capital management strategy, which is based on our belief that free cash flow growth, especially on a per-share basis, is important for maximizing shareholder value over the long term.

We also believe that free cash flow (cash flow from operations less capital expenditures) will be valued only if it is productively invested in the business or returned to shareholders.

TI’s business model puts us in a unique class of companies with the ability to grow, generate cash and return that cash to shareholders.

The combined effect of our ambitions, business model and sustainable competitive advantages is that we have continued to build a stronger company.

Over time, we have gained market share in Analog and Embedded Processing and grown and returned all free cash flow to our owners.

According to external sources, the market for analog semiconductors was about $54 billion in 2019.

Our Analog segment’s revenue in 2019 was about 19% of this fragmented market, which is the leading position.

We believe we are well positioned to increase our market share over time.

*High Volume*

High Volume includes integrated analog and standard products that are primarily sold into markets such as personal electronics, industrial and automotive.

These products support applications like displays and automotive safety systems.

According to external sources, the market for embedded processors was about $18 billion in 2019.

Our Embedded Processing segment’s revenue in 2019 was about 16% of this fragmented market, which is among the leaders.

*Connected Microcontrollers*

Connected Microcontrollers includes microcontrollers, microcontrollers with integrated wireless capabilities and stand-alone wireless connectivity solutions.

*Processors*

Processors includes digital signal processors (DSPs) and applications processors.

| | | | | | | Medical | | |

| | | | | | | PC & notebooks | | |

Our competitors also include emerging companies, particularly in Asia, that sell products into the same markets in which we operate.

Product cycle

The global semiconductor market is characterized by constant, though generally incremental, advances in product designs and manufacturing processes.

Semiconductor prices and manufacturing costs tend to decline over time as manufacturing processes and product life cycles mature.

We focus our resources on analog and embedded processing products and industrial and automotive markets.

In addition, we plan manufacturing facility and equipment expansion ahead of demand, as well as utilize consignment inventory programs to give us improved insight into customer demand and more accurately manage factory loadings.

In 2019, about 65% of our sales were fulfilled through our distributors, and they maintain inventory of our products.

Closer direct customer relationships give us better insight into customer needs and allow us to provide better service and greater assurance of supply, among other benefits.

The entire process takes place in highly specialized facilities, with most products requiring about two to three months for completion.

Our facilities require substantial investment to construct and are largely fixed-cost assets once in operation.

This strategic decision to directly control our manufacturing helps ensure a consistent supply of products for our customers and also allows us to invest in technology that differentiates the features of our products.

Further, we have improved insight into demand and are better able to manage our factory loadings because over time we have increased consignment inventory programs and are building closer, more direct relationships with our customers.

In 2019, about 65% of TI revenue was fulfilled from consignment programs.

Our strategy and expected customer demand will cause our inventory levels to fluctuate over time.

Backlog

We define backlog as of a particular date as purchase orders with a customer-requested delivery date within a specified length of time.

Our backlog at any particular date may not be indicative of revenue for any future period.

As customer requirements and industry conditions change, orders may be subject to cancellation or modification of terms such as pricing, quantity or delivery date.

For the fiscal year ended December 31, [removed: 2019][added: 2020]

| | | | (Exact Name of Registrant as Specified in Its Charter) | | | | | | | | | | | | [removed: | | | | | |]

| | | | Delaware | | | | | | 75-0289970 | | | | | | [removed: | | | | | |]

| | | | (State of Incorporation) | | | | | | (I.R.S. Employer Identification No.) | | | | | | [removed: | | | | | |]

| | | | 12500 TI Boulevard, Dallas, Texas | | | | | | 75243 | | | | | | [removed: | | | | | |]

| | | | (Address of principal executive offices) | | | | | | (Zip Code) | | | | | | [removed: | | | | | |]

| | | | Registrant’s telephone number, including area code 214-479-3773 | | | | | | | | | | | | [removed: | | | | | |]

| Securities registered pursuant to Section 12(b) of the Act: | | | | | | | | | [removed: | | | | | |]

| Title of each class | | | Trading Symbol(s) | | | Name of each exchange on which registered | | | [removed: | | | | | |]

| Common Stock, par value $1.00 | | | TXN | | | The Nasdaq Global Select Market | | | [removed: | | | | | |]

| Securities registered pursuant to Section 12(g) of the Act: None | | | | | | | | | [removed: | | | | | |]

| Large accelerated filer | | | ☒ | | | | | | Accelerated filer | | | ☐ | | | [removed: | | | | | | | | |]

| Non-accelerated filer | | | ☐ | | | | | | Smaller reporting company | | | ☐ | | | [removed: | | | | | | | | |]

| Emerging growth company | | | ☐ | | | | | | | | | | | | [removed: | | | | | | | | |]

| 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 | | | | | | | | | | | | [removed: | | | | | | | | |] ☐ | | |

The aggregate market value of voting stock held by non-affiliates of the Registrant was approximately [removed: $107,187,939,993] [added: $116,120,360,680] as of June 30, [removed: 2019.][added: 2020.]

Part III hereof incorporates information by reference to the Registrant’s proxy statement for the [removed: 2020] [added: 2021] annual meeting of stockholders.

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| Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. | | | | | | | | | | | | ☒ | | |

920,239,191 (Number of shares of common stock outstanding as of January 27, 2021)

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933,975,619 (Number of shares of common stock outstanding as of February 14, 2020)

| Tucson, Arizona [removed: *] | | | X | | | | | | | | |

Our facilities in the United States contained approximately 12.9 million square feet at December 31, [removed: 2019,] [added: 2020,] of which approximately [removed: 0.5] [added: 0.4] million square feet were leased.

Our facilities outside the United States contained approximately 9.7 million square feet at December 31, [removed: 2019,] [added: 2020,] of which approximately [removed: 1.4] [added: 1.6] million square feet were leased.

At the end of [removed: 2019,] [added: 2020,] we occupied substantially all of the space in our facilities.

At December 31, [removed: 2019,] [added: 2020,] we had [removed: 13,098] [added: 12,624] stockholders of record.

The following table contains information regarding our purchases of our common stock during the fourth quarter of [removed: 2019.][added: 2020.]

| Period | | | | | | Total Number of Shares Purchased | | | | | | | | | [removed: | | |] Average Price Paid per Share | | | | | | | | | [removed: | | |] 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) | | | | | | [removed: | | |]

(a)All open-market purchases during the quarter were made under the authorization from our board of directors to purchase up to [removed: $6.0] [added: $12.0] billion of additional shares of TI common stock announced September [removed: 21, 2017.][added: 20, 2018.]

(b)In addition to open-market purchases, [removed: 6,651] [added: 1,323] shares of common stock were surrendered by employees to satisfy tax withholding obligations in connection with the vesting of restricted stock units.

(c)As of December 31, [removed: 2019,] [added: 2020,] this amount consisted of the remaining portion of the [removed: $6.0 billion authorized in September 2017 and the] $12.0 billion authorized in September 2018.

No expiration date has been specified for [removed: these authorizations.][added: this authorization.]

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| October 1, 2020 through October 31, 2020 | | | | | | 1,323 | | | | | | | | | $ | 146.19 | | | | | | | | — | | | | | | $ | 10.65 | | billion | | |

| November 1, 2020 through November 30, 2020 | | | | | | 91,680 | | | | | | | | | 156.59 | | | | | | | | | 91,680 | | | | | | 10.63 | | | billion | | |

| December 1, 2020 through December 31, 2020 | | | | | | 4,513 | | | | | | | | | 159.96 | | | | | | | | | 4,513 | | | | | | 10.63 | | | billion | | |

| Total | | | | | | 97,516 | | | (b) | | | | | | $ | 156.61 | | (b) | | | | | | 96,193 | | | | | | $ | 10.63 | | billion (c) | | |

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| October 1, 2019 through October 31, 2019 | | | | | | 1,420,035 | | | | | | | | | $ | 124.15 | | | | | | | | 1,413,384 | | | | | | $ | 13.50 | | billion | | | | | | | | | | | |

| November 1, 2019 through November 30, 2019 | | | | | | 2,013,945 | | | | | | | | | 118.57 | | | | | | | | | 2,013,945 | | | | | | 13.26 | | | billion | | | | | | | | | | | |

| December 1, 2019 through December 31, 2019 | | | | | | 618,048 | | | | | | | | | 120.37 | | | | | | | | | 618,048 | | | | | | 13.18 | | | billion | | | | | | | | | | | |

| Total | | | | | | 4,052,028 | | | (b) | | | | | | $ | 120.80 | | (b) | | | | | | 4,045,377 | | | | | | $ | 13.18 | | billion (c) | | | | | | | | | | | |

On September 20, 2018, our board of directors authorized the purchase of an additional $12.0 billion of our common stock.

| | | | For Years Ended December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| (Millions of dollars, except share and per-share amounts) | | | [removed: 2019 | | | | | | 2018 | | | | | | 2017 | | | | | | 2016 | | | | | | 2015 | | |] [added: 2020] | | | | | | [added: 2019] | | | | | | [added: 2018] | | | | | | [added: 2017] | | | | | | [added: 2016] | | |

| Cash flow data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Cash flows from operating activities | | | $ | [removed: 6,649] [added: 6,139] | | | | | $ | [removed: 7,189] [added: 6,649] | | | | | $ | [removed: 5,363] [added: 7,189] | | | | | $ | [removed: 4,614] [added: 5,363] | | | | | $ | [removed: 4,397 | | | | | | | | | | | | | | | | | | | | | | | | | | |] [added: 4,614] | |

| Capital expenditures | | | [removed: 847 | | | | | | 1,131 | | | | | | 695 | | | | | | 531 | | | | | | 551 | | |] [added: 649] | | | | | | [added: 847] | | | | | | [added: 1,131] | | | | | | [added: 695] | | | | | | [added: 531] | | |

| Free cash flow (a) | | | [removed: 5,802 | | | | | | 6,058 | | | | | | 4,668 | | | | | | 4,083 | | | | | | 3,846 | | |] [added: 5,490] | | | | | | [added: 5,802] | | | | | | [added: 6,058] | | | | | | [added: 4,668] | | | | | | [added: 4,083] | | |

| Dividends paid | | | [removed: 3,008 | | | | | | 2,555 | | | | | | 2,104 | | | | | | 1,646 | | | | | | 1,444 | | |] [added: 3,426] | | | | | | [added: 3,008] | | | | | | [added: 2,555] | | | | | | [added: 2,104] | | | | | | [added: 1,646] | | |

| Stock repurchases | | | [removed: 2,960 | | | | | | 5,100 | | | | | | 2,556 | | | | | | 2,132 | | | | | | 2,741 | | |] [added: 2,553] | | | | | | [added: 2,960] | | | | | | [added: 5,100] | | | | | | [added: 2,556] | | | | | | [added: 2,132] | | |

| Income statement data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Revenue by segment: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Analog | | | [removed: 10,223 | | | | | | 10,801 | | | | | | 9,900 | | | | | | 8,536 | | | | | | 8,339 | | |] [added: 10,886] | | | | | | [added: 10,223] | | | | | | [added: 10,801] | | | | | | [added: 9,900] | | | | | | [added: 8,536] | | |

| Embedded Processing | | | [removed: 2,943 | | | | | | 3,554 | | | | | | 3,498 | | | | | | 3,023 | | | | | | 2,787 | | |] [added: 2,570] | | | | | | [added: 2,943] | | | | | | [added: 3,554] | | | | | | [added: 3,498] | | | | | | [added: 3,023] | | |

| Other | | | [removed: 1,217 | | | | | | 1,429 | | | | | | 1,563 | | | | | | 1,811 | | | | | | 1,874 | | |] [added: 1,005] | | | | | | [added: 1,217] | | | | | | [added: 1,429] | | | | | | [added: 1,563] | | | | | | [added: 1,811] | | |

| Revenue | | | [removed: 14,383 | | | | | | 15,784 | | | | | | 14,961 | | | | | | 13,370 | | | | | | 13,000 | | |] [added: 14,461] | | | | | | [added: 14,383] | | | | | | [added: 15,784] | | | | | | [added: 14,961] | | | | | | [added: 13,370] | | |

| Gross profit | | | [removed: 9,164 | | | | | | 10,277 | | | | | | 9,614 | | | | | | 8,257 | | | | | | 7,575 | | |] [added: 9,269] | | | | | | [added: 9,164] | | | | | | [added: 10,277] | | | | | | [added: 9,614] | | | | | | [added: 8,257] | | |

| Operating expenses (R&D and SG&A) | | | [removed: 3,189 | | | | | | 3,243 | | | | | | 3,202 | | | | | | 3,098 | | | | | | 2,995 | | |] [added: 3,153] | | | | | | [added: 3,189] | | | | | | [added: 3,243] | | | | | | [added: 3,202] | | | | | | [added: 3,098] | | |

| Acquisition charges | | | [removed: 288] [added: 198] | | | | | | [removed: 318] [added: 288] | | | | | | 318 | | | | | | [removed: 319 | | | | | | 329 | | | | | | | | | | | | | | | | | | | | |] [added: 318] | | | | | | [added: 319] | | |

| Restructuring charges/other | | | [removed: (36) | | | | | | 3 | | | | | | 11 | | | | | | (15) | | | | | | (71) | | |] [added: 24] | | | | | | [added: (36)] | | | | | | [added: 3] | | | | | | [added: 11] | | | | | | [added: (15)] | | |

| Operating profit | | | [removed: 5,723 | | | | | | 6,713 | | | | | | 6,083 | | | | | | 4,855 | | | | | | 4,322 | | |] [added: 5,894] | | | | | | [added: 5,723] | | | | | | [added: 6,713] | | | | | | [added: 6,083] | | | | | | [added: 4,855] | | |

| Net income | | | $ | [removed: 5,017] [added: 5,595] | | | | | $ | [removed: 5,580] [added: 5,017] | | | | | $ | [removed: 3,682] [added: 5,580] | | | | | $ | [removed: 3,595] [added: 3,682] | | | | | $ | [removed: 2,986 | | | | | | | | | | | | | | | | | | | | | | | | | | |] [added: 3,595] | |

| A portion of net income is allocated to unvested restricted stock units (RSUs) on which we pay dividend equivalents. Diluted earnings per share (EPS) is calculated using the following: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Income allocated to RSUs | | | [removed: (31) | | | | | | (42) | | | | | | (33)] [added: (27)] | | | | | | [removed: (44)] [added: (31)] | | | | | | (42) | | | | | | [removed: | | | | | | | | | | | | | | |] [added: (33)] | | | | | | [added: (44)] | | |

| Income allocated to common shares for diluted EPS | | | $ | [removed: 4,986] [added: 5,568] | | | | | $ | [removed: 5,538] [added: 4,986] | | | | | $ | [removed: 3,649] [added: 5,538] | | | | | $ | [removed: 3,551] [added: 3,649] | | | | | $ | [removed: 2,944 | | | | | | | | | | | | | | | | | | | | | | | | | | |] [added: 3,551] | |

| Average diluted shares outstanding (millions) | | | [removed: 952 | | | | | | 990 | | | | | | 1,012 | | | | | | 1,021 | | | | | | 1,043 | | |] [added: 933] | | | | | | [added: 952] | | | | | | [added: 990] | | | | | | [added: 1,012] | | | | | | [added: 1,021] | | |

| Diluted EPS | | | $ | [removed: 5.24] [added: 5.97] | | | | | $ | [removed: 5.59] [added: 5.24] | | | | | $ | [removed: 3.61] [added: 5.59] | | | | | $ | [removed: 3.48] [added: 3.61] | | | | | $ | [removed: 2.82 | | | | | | | | | | | | | | | | | | | | | | | | | | |] [added: 3.48] | |

| Cash dividends declared per common share | | | $ | [removed: 3.21] [added: 3.72] | | | | | $ | [removed: 2.63] [added: 3.21] | | | | | $ | [removed: 2.12] [added: 2.63] | | | | | $ | [removed: 1.64] [added: 2.12] | | | | | $ | [removed: 1.40 | | | | | | | | | | | | | | | | | | | | | | | | | | |] [added: 1.64] | |

| | | | December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | |]

| (Millions of dollars) | | | [removed: 2019 | | | | | | 2018 | | | | | | 2017 | | | | | | 2016 | | | | | | 2015] [added: 2020] | | | | | | [added: 2019] | | | | | | [added: 2018] | | | | | | [added: 2017] | | | | | | [added: 2016] | | |

| Balance sheet data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | |]

| Cash, cash equivalents and short-term investments | | | $ | [removed: 5,387] [added: 6,568] | | | | | $ | [removed: 4,233] [added: 5,387] | | | | | $ | [removed: 4,469] [added: 4,233] | | | | | $ | [removed: 3,490] [added: 4,469] | | | | | $ | [removed: 3,218 | | | | | | | | | | | | | | | | | | | | | | | |] [added: 3,490] | |

| Total assets | | | [removed: 18,018 | | | | | | 17,137 | | | | | | 17,642 | | | | | | 16,431 | | | | | | 16,230] [added: 19,351] | | | | | | [added: 18,018] | | | | | | [added: 17,137] | | | | | | [added: 17,642] | | | | | | [added: 16,431] | | |

| Current portion of long-term debt | | | [removed: 500 | | | | | | 749] [added: 550] | | | | | | 500 | | | | | | [removed: 631 | | | | | | 1,000 | | | | | | | | | | | |] [added: 749] | | | | | | [added: 500] | | | | | | [added: 631] | | |

| Long-term debt | | | [removed: 5,303 | | | | | | 4,319 | | | | | | 3,577 | | | | | | 2,978 | | | | | | 3,120] [added: 6,248] | | | | | | [added: 5,303] | | | | | | [added: 4,319] | | | | | | [added: 3,577] | | | | | | [added: 2,978] | | |

See [removed: Management’s] [added: “Management’s] discussion and analysis of financial condition and results of [removed: operations] [added: operations”] and [removed: Financial] [added: “Financial] statements and supplementary [removed: data.][added: data.”]

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| Net income | | | $ | 5,595 | | | | | $ | 5,017 | | | | | $ | 5,580 | | | | | $ | 3,682 | | | | | $ | 3,595 | |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

[removed: List] [added: List] of financial [removed: statements][added: statements:]

[added: -] Income for each of the three years in the period ended December 31, [removed: 2019][added: 2020]

[added: -] Comprehensive income for each of the three years in the period ended December 31, [removed: 2019][added: 2020]

[added: -] Balance sheets as of December 31, [removed: 2019] [added: 2020] and [removed: 2018][added: 2019]

[added: -] Cash flows for each of the three years in the period ended December 31, [removed: 2019][added: 2020]

[added: -] Stockholders’ equity for each of the three years in the period ended December 31, [removed: 2019][added: 2020]

| Consolidated Statements of Income | | | | | | For Years Ended December 31, | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| (Millions of dollars, except share and per-share amounts) | | | | | | [removed: 2019 | | | | | | 2018 | | | | | | 2017 | | | | | |] [added: 2020] | | | | | | [added: 2019] | | | | | | [added: 2018] | | |

| Revenue | | | | | | $ | [removed: 14,383] [added: 14,461] | | | | | $ | [removed: 15,784] [added: 14,383] | | | | | $ | [removed: 14,961 | | | | | | | | | | | | | | | | | |] [added: 15,784] | |

| Cost of revenue (COR) | | | | | | [removed: 5,219 | | | | | | 5,507 | | | | | | 5,347 | | | | | |] [added: 5,192] | | | | | | [added: 5,219] | | | | | | [added: 5,507] | | |

| Gross profit | | | | | | [removed: 9,164 | | | | | | 10,277 | | | | | | 9,614 | | | | | |] [added: 9,269] | | | | | | [added: 9,164] | | | | | | [added: 10,277] | | |

| Research and development (R&D) | | | | | | [removed: 1,544 | | | | | | 1,559 | | | | | | 1,508 | | | | | |] [added: 1,530] | | | | | | [added: 1,544] | | | | | | [added: 1,559] | | |

| Selling, general and administrative (SG&A) | | | | | | [removed: 1,645 | | | | | | 1,684 | | | | | | 1,694 | | | | | |] [added: 1,623] | | | | | | [added: 1,645] | | | | | | [added: 1,684] | | |

| Acquisition charges | | | | | | [removed: 288] [added: 198] | | | | | | [removed: 318] [added: 288] | | | | | | 318 | | | [removed: | | | | | | | | | | | | | | | | | |]

| Restructuring charges/other | | | | | | [removed: (36) | | | | | | 3 | | | | | | 11 | | | | | |] [added: 24] | | | | | | [added: (36)] | | | | | | [added: 3] | | |

| Operating profit | | | | | | [removed: 5,723 | | | | | | 6,713 | | | | | | 6,083 | | | | | |] [added: 5,894] | | | | | | [added: 5,723] | | | | | | [added: 6,713] | | |

| Other income (expense), net (OI&E) | | | | | | [removed: 175 | | | | | | 98 | | | | | | 75 | | | | | |] [added: 313] | | | | | | [added: 175] | | | | | | [added: 98] | | |

| Interest and debt expense | | | | | | [removed: 170 | | | | | | 125 | | | | | | 78 | | | | | |] [added: 190] | | | | | | [added: 170] | | | | | | [added: 125] | | |

| Income before income taxes | | | | | | [removed: 5,728 | | | | | | 6,686 | | | | | | 6,080 | | | | | |] [added: 6,017] | | | | | | [added: 5,728] | | | | | | [added: 6,686] | | |

| Provision for income taxes | | | | | | [removed: 711 | | | | | | 1,106 | | | | | | 2,398 | | | | | |] [added: 422] | | | | | | [added: 711] | | | | | | [added: 1,106] | | |

| Net income | | | | | | $ | [removed: 5,017] [added: 5,595] | | | | | $ | [removed: 5,580] [added: 5,017] | | | | | $ | [removed: 3,682 | | | | | | | | | | | | | | | | | |] [added: 5,580] | |

| Earnings per common share (EPS): | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| Basic | | | | | | $ | [removed: 5.33] [added: 6.05] | | | | | $ | [removed: 5.71] [added: 5.33] | | | | | $ | [removed: 3.68 | | | | | | | | | | | | | | | | | |] [added: 5.71] | |

| Diluted | | | | | | $ | [removed: 5.24] [added: 5.97] | | | | | $ | [removed: 5.59] [added: 5.24] | | | | | $ | [removed: 3.61 | | | | | | | | | | | | | | | | | |] [added: 5.59] | |

| Average shares outstanding (millions): | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| Basic | | | | | | [removed: 936 | | | | | | 970 | | | | | | 991 | | | | | |] [added: 921] | | | | | | [added: 936] | | | | | | [added: 970] | | |

| Diluted | | | | | | [removed: 952 | | | | | | 990 | | | | | | 1,012 | | | | | |] [added: 933] | | | | | | [added: 952] | | | | | | [added: 990] | | |

| 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: | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| Income allocated to RSUs | | | | | | [removed: (31) | | | | | | (42) | | | | | | (33) | | | | | |] [added: (27)] | | | | | | [added: (31)] | | | | | | [added: (42)] | | |

| Income allocated to common stock for diluted EPS | | | | | | $ | [removed: 4,986] [added: 5,568] | | | | | $ | [removed: 5,538] [added: 4,986] | | | | | $ | [removed: 3,649 | | | | | | | | | | | | | | | | | |] [added: 5,538] | |

| Consolidated Statements of Comprehensive Income | | | | | | For Years Ended December 31, | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | |]

| (Millions of dollars) | | | | | | [removed: 2019 | | | | | | 2018 | | | | | | 2017] [added: 2020] | | | | | | [added: 2019] | | | | | | [added: 2018] | | |

| Net income | | | | | | $ | [removed: 5,017] [added: 5,595] | | | | | $ | [removed: 5,580] [added: 5,017] | | | | | $ | [removed: 3,682 | | | | | | | | | | | |] [added: 5,580] | |

| Other comprehensive income (loss) | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | |]

| Net actuarial losses of defined benefit plans: | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | |]

| Adjustments, net of tax effect of [removed: ($37), $35] [added: $3, ($37)] and [removed: ($26) | | | | | | 88 | | | | | | (98)] [added: $35] | | | | | | [removed: 92] [added: (41)] | | | | | | [added: 88] | | | | | | [added: (98)] | | |

| Recognized within net income, net of tax effect of [removed: ($13), ($15)] [added: ($9), ($13)] and [removed: ($27) | | | | | | 38 | | | | | | 50] [added: ($15)] | | | | | | [removed: 56] [added: 29] | | | | | | [added: 38] | | | | | | [added: 50] | | |

| Prior service credit of defined benefit plans: | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | |]

| Adjustments, net of tax effect of $0, [removed: $1] [added: $0] and $1 | | | | | | — | | | | | | [removed: (6) | | | | | | (2) | | | | | |] [added: —] | | | | | | [added: (6)] | | |

| Recognized within net income, net of tax effect of $0, [removed: $1] [added: $0] and $1 | | | | | | [removed: — | | | | | | (3) | | | | | | (5)] [added: (1)] | | | | | | [added: —] | | | | | | [added: (3)] | | |

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| Shares: 2020 – 821,461,787; 2019 – 808,784,381 | | | | | | (36,578) | | | | | | (34,495) | | |

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| (Millions of dollars) | | | | | | 2020 | | | | | | 2019 | | | | | | 2018 | | |

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| Net income | | | | | | — | | | | | | — | | | | | | 5,595 | | | | | | — | | | | | | — | | |

| Balance, December 31, 2020 | | | | | | $ | 1,741 | | | | | $ | 2,333 | | | | | $ | 42,051 | | | | | $ | (36,578) | | | | | $ | (360) | |

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.

- 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.

During 2020, we reorganized the product lines within our Analog segment to simplify our business structure into our Power and Signal Chain product lines.

These changes had no effect on either our previously reported consolidated financial statements or our reportable segment results.

| Revenue: | | | | | | | | | | | | | | | | | |

| Total revenue | | | $ | 14,461 | | | | | $ | 14,383 | | | | | $ | 15,784 | |

| Net income | | | $ | 5,595 | | | | | | | | | | | | | | | | | $ | 5,017 | | | | | | | | | | | | | | | | | $ | 5,580 | | | | | | | | | | | | | |

| Net income | | | $ | 5,595 | | | | | | | | | | | | | | | | | $ | 5,017 | | | | | | | | | | | | | | | | | $ | 5,580 | | | | | | | | | | | | | |

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.

We adopted the following Accounting Standards Updates (ASU) during the current period, none of which had a material impact on our financial position or results of operations.

| | | | | | | | | | | | | | | |

| | | | For Years Ended December 31, | | | | | | | | | | | | | | |

| R&D | | | 68 | | | | | | 66 | | | | | | 69 | | |

| | | | For Years Ended December 31, | | | | | | | | | | | | | | |

| Granted | | | 4,253,606 | | | | | | 130.48 | | | | | | 1,005,778 | | | | | | 130.59 | | |

| Stock options exercised/RSUs vested | | | (8,392,354) | | | | | | 53.28 | | | | | | (2,034,933) | | | | | | 53.88 | | |

| Forfeited and expired | | | (359,919) | | | | | | 111.06 | | | | | | (157,021) | | | | | | 103.90 | | |

| Outstanding grants, December 31, 2020 | | | 27,995,277 | | | | | | 79.69 | | | | | | 4,711,624 | | | | | | 100.80 | | |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Shares: 2019 – 808,784,381; 2018 – 795,665,646 | | | | | | (34,495) | | | | | | (32,130) | | | | | | | | |

| Balance, December 31, 2016 | | | | | | $ | 1,741 | | | | | $ | 1,674 | | | | | $ | 33,107 | | | | | $ | (25,523) | | | | | $ | (526) | |

| 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

We have two reportable segments, which are established along major categories of products as follows:

- *Analog* – consisting of the following product lines: Power, Signal Chain and High Volume.

- *Embedded Processing* – consisting of the following product lines: Connected Microcontrollers and Processors.

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*Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842)*

We adopted ASU No. 2016-02, *Leases* (ASC 842) effective January 1, 2019, using the modified retrospective transition method applied to leases existing at, or entered into after, the adoption date.

The reported results for 2019 reflect the application of the new accounting guidance, while the reported results for prior periods are not adjusted and continue to be reported in accordance with our historical accounting under ASC 840, *Leases.* In addition, we elected the package of practical expedients permitted under the transition guidance that allowed us to apply prior conclusions related to lease definition, classification and initial direct costs.

The adoption of the new standard resulted in the recognition of $229 million of lease liabilities with corresponding lease assets as of January 1, 2019.

The standard did not materially impact our results of operations and had no impact on cash flows.

The following standards were also adopted:

| ASU No. 2017-12 | | | | | | *Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities* | | | | | | January 1, 2019 | | |

| ASU No. 2018-14 | | | | | | *Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans* | | | | | | January 1, 2019 | | |

*Changes in accounting standards – standards not yet adopted*

This standard requires entities to use a current lifetime expected credit loss methodology to measure impairments of certain financial assets.

Using this methodology will result in earlier recognition of losses than under the current incurred loss approach, which requires waiting to recognize a loss until it is probable of being incurred.

Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses rather than as a reduction to the amortized cost basis of the securities.

We are adopting this standard effective January 1, 2020, applying the guidance on a modified retrospective basis.

In preparation for adoption of the standard, we have updated certain policies and related processes, but this standard will not have a material impact on our financial position or results of operations.

We are evaluating the impact of the following standards, but we do not expect them to have a material impact on our financial position or results of operations.

We are adopting these standards as of their effective dates.

| ASU | | | | | | Description | | | | | | Effective Date | | |

| R&D | | | 66 | | | | | | 69 | | | | | | 59 | | | | | | | | | | | | | | |

| Outstanding grants, December 31, 2018 | | | 39,905,454 | | | | | | $ | 56.10 | | | | | 7,305,543 | | | | | | $ | 66.72 | | | | | | | | | | | | | |

| Granted | | | 4,559,093 | | | | | | 104.51 | | | | | | 1,142,974 | | | | | | 106.58 | | | | | | | | | | | | | | |

| Forfeited and expired | | | (441,429) | | | | | | 83.89 | | | | | | (179,955) | | | | | | 81.57 | | | | | | | | | | | | | | |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| $ | | | 23.05 to 127.35 | | | | | | 32,493,944 | | | | | | 5.9 | | | | | | $ | 66.57 | | | | | 19,646,782 | | | | | | $ | 50.82 | | | | | | | | | | | | | | | | | | | |

| Number of outstanding (shares) | | | 32,001,396 | | | | | | 19,646,782 | | |

| Outstanding grants, December 31, 2018 | | | 229,836 | | | | | | $ | 80.29 | |

There has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) that occurred during the fourth quarter of [removed: 2019] [added: 2020] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

TI management assessed the effectiveness of internal control over financial reporting as of December 31, [removed: 2019.][added: 2020.]

Based on our assessment, we believe that, as of December 31, [removed: 2019,] [added: 2020,] our internal control over financial reporting is effective based on the COSO criteria.

We have audited Texas Instruments Incorporated’s internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Texas Instruments Incorporated (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] and the related notes, and our report dated February [removed: 20, 2020] [added: 5, 2021,] expressed an unqualified opinion thereon.

[removed: ][added: ]

February 5, 2021

*Report of independent registered public accounting firm on internal control over financial reporting*

February 20, 2020

The information with respect to directors’ names, ages, positions, term of office, periods of service and business experience, which is contained under the caption “Election of directors” in our proxy statement for the [removed: 2020] [added: 2021] annual meeting of stockholders, is incorporated herein by reference to such proxy statement.

The information contained under the caption “Committees of the board” with respect to the audit committee and the audit committee financial expert in our proxy statement for the [removed: 2020] [added: 2021] annual meeting of stockholders is incorporated herein by reference to such proxy statement.

The information contained under the captions “Director compensation” and “Executive compensation” in our proxy statement for the [removed: 2020] [added: 2021] annual meeting of stockholders is incorporated herein by reference to such proxy statement, provided that the Compensation Committee report shall not be deemed filed with this Form 10-K.

The information contained under the caption “Compensation committee interlocks and insider participation” in our proxy statement for the [removed: 2020] [added: 2021] annual meeting of stockholders is incorporated herein by reference to such proxy statement.

The following table sets forth information about the company’s equity compensation plans as of December 31, [removed: 2019.][added: 2020.]

| Plan Category | | | | | | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) | | | | | | | | | [removed: | | |] Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (2) | | | | | | | | | [removed: | | |] Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (excluding securities reflected in column (1)) (3) | | | | | | [removed: | | |]

| Equity compensation plans [added: not] approved by security holders | | | | | | [removed: 38,656,075 | | | (a) | | | | | | $] [added: —] | [removed: 66.80] | | [removed: (b)] | | | | | | [removed: 78,894,707] [added: —] | | | [removed: (c)] | | | | | | [added: —] | | | | | |

| Equity compensation plans [removed: not] approved by security holders | | | | | | [removed: —] [added: 32,946,484] | | | [added: (a)] | | | | | | $ | [removed: — | | | | | | | | — |] [added: 79.99] | | [added: (b)] | | | | | | [added: 73,432,285] | | | [added: (c)] | | |

[removed: 43,155,445] [added: 38,457,158] shares remain available for future issuance under the 2009 LTIP and [removed: 1,926,980] [added: 1,877,525] shares remain available for future issuance under the 2018 Director Plan.

(d)Includes [removed: 32,493,944] [added: 27,995,277] shares for issuance upon exercise of outstanding grants of options, [removed: 5,897,800] [added: 4,711,624] shares for issuance upon vesting of outstanding grants of restricted stock units, [removed: 173,849] [added: 143,046] shares for issuance under the 2014 ESPP and [removed: 90,482] [added: 96,537] shares for issuance in settlement of directors’ deferred compensation accounts.

The information that is contained under the captions “Security ownership of certain beneficial owners” and “Security ownership of directors and management” in our proxy statement for the [removed: 2020] [added: 2021] annual meeting of stockholders is incorporated herein by reference to such proxy statement.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Total | | | | | | 32,946,484 | | | (d) | | | | | | $ | 79.99 | | | | | | | | 73,432,285 | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Total | | | | | | 38,656,075 | | | (d) | | | | | | $ | 66.80 | | | | | | | | 78,894,707 | | | | | | | | | | | | | | |

The information contained under the captions “Related person transactions” and “Director independence” in our proxy statement for the [removed: 2020] [added: 2021] annual meeting of stockholders is incorporated herein by reference to such proxy statement.

The information with respect to principal accountant fees and services contained under the caption “Proposal to ratify appointment of independent registered public accounting firm” in our proxy statement for the [removed: 2020] [added: 2021] annual meeting of stockholders is incorporated herein by reference to such proxy statement.

| | | | | | | Incorporated by Reference | | | | | | | | | | | | [removed: | | | | | | | | |] Filed or Furnished Herewith | | |

| Designation of Exhibit | | | Description of Exhibit | | | Form | | | File Number | | | Date of Filing | | | Exhibit Number | | | | | | [removed: | | | | | | | | |]

| 3(a) | | | [Restated Certificate of Incorporation of the Registrant, dated April 18, 1985, as amended](http://www.sec.gov/Archives/edgar/data/97476/000009747615000003/txn-12312014xexhibit3a.htm) | | | 10-K | | | 001-3761 | | | February 24, 2015 | | | 3(a) | | | | | | [removed: | | | | | | | | |]

| 3(b) | | | [By-Laws of the [removed: Registrant](http://www.sec.gov/Archives/edgar/data/97476/000156459016030135/txn-ex3_6.htm)] [added: Registrant](http://www.sec.gov/Archives/edgar/data/97476/000119312520194080/d949258dex3.htm)] | | | 8-K | | | 001-3761 | | | [removed: December 12, 2016] [added: July 16, 2020] | | | 3 | | | | | | [removed: | | | | | | | | |]

| 4(a) | | | [Indenture](http://www.sec.gov/Archives/edgar/data/97476/000119312511147104/dex42.htm) | | | 8-K | | | 001-3761 | | | May 23, 2011 | | | 4.2 | | | | | | [removed: | | | | | | | | |]

| 4(b) | | | [Officer’s Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312513206195/d533359dex42.htm) | | | 8-K | | | 001-3761 | | | May 8, 2013 | | | 4.2 | | | | | | [removed: | | | | | | | | |]

| 4(c) | | | [Officer’s Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312514094885/d691140dex42.htm) | | | 8-K | | | 001-3761 | | | March 12, 2014 | | | 4.2 | | | | | | [removed: | | | | | | | | |]

| 4(d) | | | [Officer’s [removed: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312515173382/d920775dex41.htm)] [added: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312516581435/d194090dex41.htm)] | | | 8-K | | | 001-3761 | | | May 6, [removed: 2015] [added: 2016] | | | 4.1 | | | | | | [removed: | | | | | | | | |]

| 4(e) | | | [Officer’s [removed: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312516581435/d194090dex41.htm)] [added: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312517158011/d582525dex41.htm)] | | | 8-K | | | 001-3761 | | | May [removed: 6, 2016] [added: 4, 2017] | | | 4.1 | | | | | | [removed: | | | | | | | | |]

| 4(f) | | | [Officer’s [removed: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312517158011/d582525dex41.htm)] [added: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312517332507/d482992dex41.htm)] | | | 8-K | | | 001-3761 | | | [removed: May 4,] [added: November 3,] 2017 | | | 4.1 | | | | | | [removed: | | | | | | | | |]

| 4(g) | | | [Officer’s [removed: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312517332507/d482992dex41.htm)] [added: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312518154669/d579571dex41.htm)] | | | 8-K | | | 001-3761 | | | [removed: November 3, 2017] [added: May 7, 2018] | | | 4.1 | | | | | | [removed: | | | | | | | | |]

| 4(h) | | | [Officer’s [removed: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312518154669/d579571dex41.htm)] [added: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312518187735/d603255dex41.htm)] | | | 8-K | | | 001-3761 | | | [removed: May 7,] [added: June 8,] 2018 | | | 4.1 | | | | | | [removed: | | | | | | | | |]

| 4(i) | | | [Officer’s [removed: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312518187735/d603255dex41.htm)] [added: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312519070297/d713107dex41.htm)] | | | 8-K | | | 001-3761 | | | [removed: June 8, 2018] [added: March 11, 2019] | | | 4.1 | | | | | | [removed: | | | | | | | | |]

| 4(j) | | | [Officer’s [removed: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312519070297/d713107dex41.htm)] [added: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312519237540/d783480dex41.htm)] | | | 8-K | | | 001-3761 | | | [removed: March 11,] [added: September 4,] 2019 | | | 4.1 | | | | | | [removed: | | | | | | | | |]

| 4(k) | | | [Officer’s [removed: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312519237540/d783480dex41.htm)] [added: Certificate](http://www.sec.gov/Archives/edgar/data/97476/000119312520071568/d883949dex41.htm)] | | | 8-K | | | 001-3761 | | | [removed: September 4, 2019] [added: March 12, 2020] | | | 4.1 | | | | | | [removed: | | | | | | | | |]

| [removed: 4(l)] [added: 4(m)] | | | [Description of [removed: Securities](https://www.sec.gov/Archives/edgar/data/97476/000009747620000009/q42019txnex4l.htm) | | | | | | | | |] [added: Securities](http://www.sec.gov/Archives/edgar/data/97476/000009747620000009/q42019txnex4l.htm)] | | | [added: 10-K] | | | [removed: X] [added: 001-3761] | | | [added: February 20, 2020] | | | [added: 4(l)] | | | | | |

| 10(a) | | | [TI Deferred Compensation Plan, as amended*](http://www.sec.gov/Archives/edgar/data/97476/000156459016013126/txn-ex10a_325.htm) | | | 10-K | | | 001-3761 | | | February 24, 2016 | | | 10(a) | | | | | | [removed: | | | | | | | | |]

| 10(b) | | | [TI Employees Non-Qualified Pension Plan, effective January 1, 2009, as amended*](http://www.sec.gov/Archives/edgar/data/97476/000156459016013126/txn-ex10b_263.htm) | | | 10-K | | | 001-3761 | | | February 24, 2016 | | | 10(b) | | | | | | [removed: | | | | | | | | |]

| 10(c) | | | [TI Employees Non-Qualified Pension Plan II*](http://www.sec.gov/Archives/edgar/data/97476/000156459016013126/txn-ex10c_264.htm) | | | 10-K | | | 001-3761 | | | February 24, 2016 | | | 10(c) | | | | | | [removed: | | | | | | | | |]

| 10(d) | | | [Texas Instruments Long-Term Incentive Plan, adopted April 15, 1993*](http://www.sec.gov/Archives/edgar/data/97476/000009747612000010/txn-12312011xexhibit10c.htm) | | | 10-K | | | 001-3761 | | | February 24, 2012 | | | 10(c) | | | | | | [removed: | | | | | | | | |]

| 10(e) | | | [Texas Instruments [removed: 2000 Long-Term Incentive] [added: 2003 Director Compensation] Plan as amended [removed: October 16, 2008*](http://www.sec.gov/Archives/edgar/data/97476/000009747615000003/txn-12312014xexhibit10e.htm)] [added: January 19, 2012](http://www.sec.gov/Archives/edgar/data/97476/000009747615000003/txn-12312014xexhibit10j.htm)] | | | 10-K | | | 001-3761 | | | February 24, 2015 | | | [removed: 10(e) | | | | | | | | |] [added: 10(j)] | | | | | |

| [removed: 10(f)] [added: 10(i)] | | | [Texas Instruments [removed: 2003] [added: 2009] Director Compensation Plan as amended January 19, [removed: 2012](http://www.sec.gov/Archives/edgar/data/97476/000009747615000003/txn-12312014xexhibit10j.htm)] [added: 2012](http://www.sec.gov/Archives/edgar/data/97476/000156459017002142/txn-ex10n_1020.htm)] | | | 10-K | | | 001-3761 | | | February [removed: 24, 2015 | | | 10(j) | | | | | |] [added: 23, 2017] | | | [added: 10(n)] | | | | | |

| [removed: 10(g)] [added: 10(f)] | | | [Form of Non-Qualified Stock Option Agreement for Executive Officers under the Texas Instruments 2009 Long-Term Incentive Plan*](http://www.sec.gov/Archives/edgar/data/97476/000156459017002142/txn-ex10k_1019.htm) | | | 10-K | | | 001-3761 | | | February 23, 2017 | | | 10(k) | | | | | | [removed: | | | | | | | | |]

| [removed: 10(h)] [added: 10(g)] | | | [Form of Restricted Stock Unit Award Agreement for Executive Officers under the Texas Instruments 2009 Long-Term Incentive Plan*](http://www.sec.gov/Archives/edgar/data/97476/000156459017002142/txn-ex10l_1018.htm) | | | 10-K | | | 001-3761 | | | February 23, 2017 | | | 10(l) | | | | | | [removed: | | | | | | | | |]

| [removed: 10(i)] [added: 10(h)] | | | [Texas Instruments 2009 Long-Term Incentive Plan as amended April 21, 2016*](http://www.sec.gov/Archives/edgar/data/97476/000119312516497866/d117862ddef14a.htm) | | | DEF 14A | | | 001-3761 | | | March 9, 2016 | | | Appendix B | | | | | | [removed: | | | | | | | | |]

| 10(j) | | | [Texas Instruments [removed: 2009] [added: 2018] Director Compensation Plan as amended [removed: January 19, 2012](http://www.sec.gov/Archives/edgar/data/97476/000156459017002142/txn-ex10n_1020.htm)] [added: December 5, 2019](http://www.sec.gov/Archives/edgar/data/97476/000009747620000009/q42019txnex10k.htm)] | | | 10-K | | | 001-3761 | | | February [removed: 23, 2017 | | | 10(n) | | | | | |] [added: 20, 2020] | | | [added: 10(k)] | | | | | |

| 21 | | | [List of Subsidiaries of the [removed: Registrant](https://www.sec.gov/Archives/edgar/data/97476/000009747620000009/q42019txnex21.htm)] [added: Registrant](https://www.sec.gov/Archives/edgar/data/97476/000009747621000006/q42020txnex21.htm)] | | | | | | | | | | | | | | | X | | | [removed: | | | | | | | | |]

| 23 | | | [Consent of Independent Registered Public Accounting [removed: Firm](https://www.sec.gov/Archives/edgar/data/97476/000009747620000009/q42019txnex23.htm)] [added: Firm](https://www.sec.gov/Archives/edgar/data/97476/000009747621000006/q42020txnex23.htm)] | | | | | | | | | | | | | | | X | | | [removed: | | | | | | | | |]

| 31(a) | | | [Rule [added: 13a-14(a](https://www.sec.gov/Archives/edgar/data/97476/000009747621000006/q42020txnex31a.htm)[Rule] 13a-14(a)/15(d)-14(a) Certification of Chief Executive [removed: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747620000009/q42019txnex31a.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747621000006/q42020txnex31a.htm)] | | | | | | | | | | | | | | | X | | | [removed: | | | | | | | | |]

| 31(b) | | | [Rule 13a-14(a)/15(d)-14(a) Certification of Chief Financial [removed: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747620000009/q42019txnex31b.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747621000006/q42020txnex31b.htm)] | | | | | | | | | | | | | | | X | | | [removed: | | | | | | | | |]

| 32(a) | | | [Section 1350 Certification of Chief Executive [removed: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747620000009/q42019txnex32a.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747621000006/q42020txnex32a.htm)] | | | | | | | | | | | | | | | X | | | [removed: | | | | | | | | |]

| 32(b) | | | [Section 1350 Certification of Chief Financial [removed: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747620000009/q42019txnex32b.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747621000006/q42020txnex32b.htm)] | | | | | | | | | | | | | | | X | | | [removed: | | | | | | | | |]

| 101.ins | | | Instance Document | | | | | | | | | | | | | | | X | | | [removed: | | | | | | | | |]

| 101.sch | | | XBRL Taxonomy Schema | | | | | | | | | | | | | | | X | | | [removed: | | | | | | | | |]

| 101.cal | | | XBRL Taxonomy Calculation Linkbase | | | | | | | | | | | | | | | X | | | [removed: | | | | | | | | |]

| 101.def | | | XBRL Taxonomy Definitions Document | | | | | | | | | | | | | | | X | | | [removed: | | | | | | | | |]

| 101.lab | | | XBRL Taxonomy Labels Linkbase | | | | | | | | | | | | | | | X | | | [removed: | | | | | | | | |]

| 101.pre | | | XBRL Taxonomy Presentation Linkbase | | | | | | | | | | | | | | | X | | | [removed: | | | | | | | | |]

| 104 | | | Cover Page Interactive Data File (embedded within the Inline XBRL document) | | | | | | | | | | | | | | | X | | | [removed: | | | | | | | | |]

- Our ability to successfully implement and realize opportunities from strategic, business and organizational changes, or our ability to realize our expectations regarding the amount and timing of [added: associated] restructuring charges and [removed: associated] cost savings;

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| 4(l) | | | [Officer’s Certificate](http://www.sec.gov/Archives/edgar/data/97476/000156459020020837/txn-ex41_7.htm) | | | 8-K | | | 001-3761 | | | May 4, 2020 | | | 4.1 | | | | | |

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| | | | | | | Incorporated by Reference | | | | | | | | | | | | Filed or Furnished Herewith | | |

| Designation of Exhibit | | | Description of Exhibit | | | Form | | | File Number | | | Date of Filing | | | Exhibit Number | | | | | |

- The duration and scope of the COVID-19 pandemic, government and other third-party responses to it and the consequences for the global economy, including to our business and the businesses of our suppliers, customers and distributors;

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| | | | | | | | | | | | |

| /s/ Michael D. Hsu | | | | | | | | |

| Michael D. Hsu | | | | | | Director | | |

| | | | | | | | | |

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| 10(k) | | | [Texas Instruments 2018 Director Compensation Plan as amended December 5, 2019](https://www.sec.gov/Archives/edgar/data/97476/000009747620000009/q42019txnex10k.htm) | | | | | | | | | | | | | | | X | | | | | | | | | | | |

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