Texas Instruments (TXN) 10-K risk factor changes: FY2021 vs FY2020

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

We [removed: might experience] [added: have experienced, and continue to experience,] short- or long-term constrained supply or volatility in customer demand, which could materially and adversely affect our business and financial [removed: results in future periods.][added: results.]

About 90% of our revenue comes from shipments to locations outside the United States; shipments of products to China-based customers represent about [removed: 20%] [added: 25%] of our revenue.

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

[removed: These] [added: Our manufacturing] 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.

Our operating results and our reputation could be adversely affected by [added: cybersecurity events,] breaches, disruptions or other incidents relating to our information technology systems.

Our access to needed goods and services may be adversely affected by potential disputes with suppliers or disruptions in our [added: own or] 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 epidemics in the locations in which our suppliers operate; or limited or delayed access to [added: and high costs of] key [removed: raw] materials, natural [removed: resources] [added: resources, services] and utilities.

In particular, our manufacturing processes and critical manufacturing [removed: equipment] [added: equipment, and those of our suppliers,] require that certain key [removed: raw] materials, natural [removed: resources] [added: resources, services] and utilities be available.

Limited or delayed access to and high costs of [removed: these items] [added: key materials, natural resources, services and utilities] could adversely affect our results of operations.

Claims based on warranty, product liability, epidemic or delivery failures, or other grounds relating to our products, [added: software,] manufacturing, services, designs, communications or cybersecurity could lead to significant expenses as we defend the claims or pay damage awards or settlements.

In [removed: 2020,] [added: 2021,] about [removed: half] [added: one-third] of our revenue was generated from sales of our products through distributors.

Our ability to recruit internationally or deploy employees to various locations may be limited by immigration [removed: laws.][added: laws and policies, including changes to, or the administration or interpretation of, those laws and policies.]

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

Some of these complex laws, rules and regulations – for example, those related to environmental, safety and health requirements – may particularly affect us in the jurisdictions in which we manufacture products, especially if such laws and regulations: require the use of abatement equipment beyond what we currently employ; require the addition or elimination of a [removed: raw] material or process to or from our current manufacturing processes; or impose costs, fees or reporting requirements on the direct or indirect use of energy, natural resources, or materials or gases used or emitted into the environment in connection with the manufacture of our products.

A substitute for a prohibited [removed: raw] material or process might not be available, or might not be available at reasonable cost.

We maintain bank accounts, [added: a portfolio of investments, access to] one or more multiyear revolving credit [removed: agreements,] [added: agreements] and [removed: a portfolio of investments] [added: the ability] to [added: issue debt to] support the financing needs of the company.

Material impairments of our goodwill [removed: or intangible assets] could adversely affect our results of operations.

We have a significant amount of goodwill [removed: and intangible assets] on our consolidated balance sheet.

Charges associated with impairments of goodwill [removed: or intangible assets] could adversely affect our financial condition and results of operations.

Due to strong demand, our manufacturing lead times for some products are longer than normal, and lead times might continue to extend.

We manufacture products with the intent to provide high levels of customer service.

For example, the purchase of our 300-millimeter semiconductor factory in Lehi, Utah in 2021.

Climate change might exacerbate these occurrences or cause natural disasters to occur with greater frequency.

Suppliers of these items have and might continue to extend lead times, limit supply or increase prices due to factors beyond our control.

We have made and will continue to make significant investments in manufacturing capacity, and we might not realize our expected return on those investments.

Increased focus from government authorities, investors, customers and other key stakeholders on environmental, social and governance (ESG) matters has led to new and more stringent reporting standards and disclosure requirements.

As the nature, scope and complexity of ESG reporting, diligence and disclosure requirements expand, we might have to undertake costly efforts to control, assess and report on ESG metrics.

We manufacture products based on forecasts of customers’ demands.

Our results of operations and financial condition could be adversely affected if a customer or a distributor suffers a loss with respect to our inventory.

We have consignment inventory programs in place for some of our largest customers and distributors.

If a customer or distributor were to experience a loss with respect to TI-consigned inventory, our results of operations and financial condition would be adversely affected if we do not recover the full value of the lost inventory from the customer, distributor or insurer, or if our recovery is delayed.

Increases in health care and pension benefit costs could affect our results of operations and financial condition.

Federal and state health care reform programs could increase our costs with regard to medical coverage of our employees, which could reduce profitability and affect our results of operations and financial condition.

In addition, obligations related to our pension and other postretirement plans reflect assumptions that affect the planned funding and costs of these plans, including the actual return on plan assets, discount rates, plan participant population demographics and changes in pension regulations.

Changes in these assumptions may affect plan funding, cash flow and results of operations, and our costs and funding obligations could increase significantly if our plans’ actual experience differs from these assumptions.

Our results of operations provides details of our financial results for [removed: 2020] [added: 2021] and [removed: 2019] [added: 2020] and year-to-year comparisons between [removed: 2020] [added: 2021] and [removed: 2019.][added: 2020.]

Discussion of [removed: 2018] [added: 2019] items and year-to-year comparisons between [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] 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: 2019.][added: 2020.]

The coronavirus (COVID-19) pandemic and its [removed: follow-on] effects are impacting and will likely continue to impact [added: market conditions and] business [removed: activity] [added: operations] across industries worldwide, including [added: at] TI.

Therefore, we remain cautious about how the economy might behave for the next few [removed: years.][added: years and continue to monitor potential impact on our operations.]

Gross margin of [removed: 64.1%] [added: 67.5%] reflected the quality of our product portfolio, as well as the efficiency of our manufacturing strategy, including the benefit of 300-millimeter [removed: Analog] production.

Our cash flow from operations of [removed: $6.14] [added: $8.76] billion underscored the strength of our business model.

Free cash flow was [removed: $5.49] [added: $6.29] billion and represented [removed: 38.0%] [added: 34.3%] of revenue.

[removed: Our] [added: Over the same period, our] dividend represented 62% of free cash flow, underscoring its sustainability.

Details of financial results – [removed: 2020] [added: 2021] compared with [removed: 2019][added: 2020]

Revenue of [removed: $14.46] [added: $18.34] billion increased [removed: $78 million,] [added: $3.88 billion,] or [removed: 1%, primarily] [added: 27%,] due to higher revenue from [removed: Analog, partially offset by lower revenue from] [added: Analog and, to a lesser extent,] Embedded Processing.

As a percentage of revenue, gross profit increased to [removed: 64.1%] [added: 67.5%] from [removed: 63.7%.][added: 64.1%.]

Operating expenses (R&D and SG&A) were [removed: $3.15] [added: $3.22] billion compared with [removed: $3.19] [added: $3.15] billion.

Acquisition charges were [removed: $198] [added: $142] million compared with [removed: $288] [added: $198] million and were non-cash.

Restructuring charges/other was [removed: a charge of $24] [added: $54] million due to [removed: an Embedded Processing action,] [added: integration charges at our Lehi, Utah, manufacturing facility partially offset by gains on sales of assets,] compared with [removed: a credit of $36] [added: $24] million due to [removed: the sale of our manufacturing facility in Greenock, Scotland] [added: an Embedded Processing action] in [removed: 2019.][added: 2020.]

Operating profit was [removed: $5.89] [added: $8.96] billion, or [removed: 40.8%] [added: 48.8%] of revenue, compared with [removed: $5.72] [added: $5.89] billion, or [removed: 39.8%] [added: 40.8%] of revenue.

Other income and expense (OI&E) was [removed: $313] [added: $143] million of income compared with [removed: $175] [added: $313] million of income, which [removed: increased] [added: decreased] primarily due to [removed: higher] [added: lower] royalty income.

Our provision for income taxes was [removed: $422 million] [added: $1.15 billion] compared with [removed: $711] [added: $422] million.

[removed: The decrease] [added: This increase] was due to higher [added: income before income taxes and lower] discrete tax [removed: benefits,] [added: benefits compared to 2020,] which included a $249 million benefit from the settlement of a depreciation-related uncertain tax [removed: position and, to a lesser extent, higher U.S. tax benefits, partially offset by higher income before income taxes.][added: position.]

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

Our effective tax rate, which includes discrete tax items, was [removed: 7%] [added: 13%] in [removed: 2020] [added: 2021] compared with [removed: 12%] [added: 7%] in [removed: 2019.][added: 2020.]

Net income was [removed: $5.60] [added: $7.77] billion compared with [removed: $5.02] [added: $5.60] billion.

EPS was [removed: $5.97] [added: $8.26] compared with [removed: $5.24.][added: $5.97.]

Segment results – [removed: 2020] [added: 2021] compared with [removed: 2019][added: 2020]

| | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | Change | | |

| Revenue | | | $ | [removed: 10,886] [added: 14,050] | | | | | $ | [removed: 10,223] [added: 10,886] | | | | | [removed: 6] [added: 29] | | % |

| Operating profit | | | [removed: 4,912] [added: 7,393] | | | | | | [removed: 4,477] [added: 4,912] | | | | | | [removed: 10] [added: 51] | | % |

| Operating profit % of revenue | | | [removed: 45.1] [added: 52.6] | | % | | | | [removed: 43.8] [added: 45.1] | | % | | | | | | |

Analog revenue increased in both product [removed: lines about evenly.][added: lines, led by Signal Chain.]

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

| Revenue | | | $ | [removed: 2,570] [added: 3,049] | | | | | $ | [removed: 2,943] [added: 2,570] | | | | | [removed: (13)] [added: 19] | | % |

| Operating profit | | | [removed: 743] [added: 1,174] | | | | | | [removed: 907] [added: 743] | | | | | | [removed: (18)] [added: 58] | | % |

| Operating profit % of revenue | | | [removed: 28.9] [added: 38.5] | | % | | | | [removed: 30.8] [added: 28.9] | | % | | | | | | |

Embedded Processing revenue [removed: decreased.][added: increased.]

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

| Revenue | | | $ | [removed: 1,005] [added: 1,245] | | | | | $ | [removed: 1,217] [added: 1,005] | | | | | [removed: (17)] [added: 24] | | % |

| Operating profit * | | | [removed: 239] [added: 393] | | | | | | [removed: 339] [added: 239] | | | | | | [removed: (29)] [added: 64] | | % |

| Operating profit % of revenue | | | [removed: 23.8] [added: 31.6] | | % | | | | [removed: 27.9] [added: 23.8] | | % | | | | | | |

Other revenue [removed: decreased $212] [added: increased $240] million, and operating profit [removed: decreased $100] [added: increased $154] million.

At the end of [removed: 2020,] [added: 2021,] total cash (cash and cash equivalents plus short-term investments) was [removed: $6.57] [added: $9.74] billion, an increase of [removed: $1.18] [added: $3.17] billion from the end of [removed: 2019.][added: 2020.]

Accounts receivable were [removed: $1.41] [added: $1.70] billion, an increase of [removed: $340] [added: $287] million compared with the end of [removed: 2019.][added: 2020.]

During 2021, we returned $4.41 billion to shareholders through dividends and stock repurchases.

Gross profit of $12.38 billion was up $3.11 billion, or 34%, primarily due to higher revenue.

| | | | 2021 | | | | | | 2020 | | | | | | Change | | |

| | | | 2021 | | | | | | 2020 | | | | | | Change | | |

We also have a variable rate, revolving credit facility.

As we continue to invest to strengthen our competitive advantage in manufacturing and technology as part of our long-term capacity planning, we expect our capital expenditures to be higher than historical levels.

| | | | 2021 | | | | | | 2020 | | |

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.

Increases and decreases in factory loadings tend to correspond to increases and decreases in demand.

Impact of COVID-19

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.

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.

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

See Note 7 to the financial statements.

See Note 12 to the financial statements.

Interest and debt expense of $190 million increased $20 million due to the issuance of additional long-term debt.

Our revolving credit facility is with a consortium of investment-grade banks and allows us to borrow up to $2 billion until March 2024.

This credit facility also serves as support for the issuance of commercial paper.

| | | | 2020 | | | | | | 2019 | | |

Long-term contractual obligations

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

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

| | | | | | | Payments Due by Period | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Contractual Obligations | | | | | | 2021 | | | | | | 2022/2023 | | | | | | 2024/2025 | | | | | | Thereafter | | | | | | Total | | |

| Long-term debt (a) | | | | | | $ | 726 | | | | | $ | 1,326 | | | | | $ | 1,337 | | | | | $ | 6,172 | | | | | $ | 9,561 | |

| Purchase commitments (b) | | | | | | 400 | | | | | | 196 | | | | | | 55 | | | | | | 96 | | | | | | 747 | | |

| Transition tax on indefinitely reinvested earnings (c) | | | | | | 44 | | | | | | 155 | | | | | | 302 | | | | | | — | | | | | | 501 | | |

| Operating leases (d) | | | | | | 76 | | | | | | 98 | | | | | | 59 | | | | | | 138 | | | | | | 371 | | |

| Deferred compensation plans (e) | | | | | | 25 | | | | | | 68 | | | | | | 66 | | | | | | 154 | | | | | | 313 | | |

| Total (f) | | | | | | $ | 1,271 | | | | | $ | 1,843 | | | | | $ | 1,819 | | | | | $ | 6,560 | | | | | $ | 11,493 | |

(a)Principal and related interest payments for our long-term debt obligations, including amounts classified as the current portion of long-term debt.

(b)Includes payments for software licenses and contractual arrangements with suppliers when there is a fixed, non-cancellable payment schedule or when minimum payments are due with a reduced delivery schedule.

Excludes cancellable arrangements.

(c)Includes payments for the one-time transition tax on our indefinitely reinvested earnings related to the 2017 enactment of the U.S. Tax Cuts and Jobs Act.

(d)Includes minimum payments for leased facilities and equipment and purchases of industrial gases under contracts accounted for as operating leases.

See Note 10 to the financial statements.

(e)Estimated payments for certain liabilities that existed as of December 31, 2020.

(f)Excludes $89 million of uncertain tax liabilities under ASC 740, as well as any planned future funding contributions to retirement benefit plans.

Amounts associated with uncertain tax liabilities have been excluded because of the difficulty in making reasonably reliable estimates of the timing of cash settlements with the respective taxing authorities.

Our non-U.S. entities own assets or liabilities denominated in U.S. dollars or other [removed: currencies.][added: currencies, and exchange rate fluctuations in those jurisdictions may impact our effective tax rate.]

Because most of the aggregate non-U.S. dollar balance sheet exposure is hedged by forward currency exchange contracts, which are based on year-end [removed: 2020] [added: 2021] 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 approximately [removed: $3] [added: $1] million.

As of December 31, [removed: 2020,] [added: 2021,] we had forward currency exchange contracts outstanding with a notional value of [removed: $416] [added: $313] million to hedge net balance sheet exposures (including [removed: $147] [added: $127] million to sell Japanese yen, [removed: $85] [added: $82] million to sell [removed: euros] [added: British pounds] and [removed: $82] [added: $42] million to sell [removed: British pounds).][added: euros).]

Similar hedging activities existed at year-end [removed: 2019.][added: 2020.]

As of December 31, [removed: 2020,] [added: 2021,] 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: $9] [added: $15] million and decrease the fair value of our long-term debt by [removed: $650] [added: $715] million.

Long-term investments at year-end [removed: 2020] [added: 2021] include the following:

- *Investments in venture capital funds* – includes investments in limited partnerships (accounted for under either the equity method or at cost [removed: as non-marketable equity securities).][added: with adjustments to observable market changes or impairments).]

Exchange rate fluctuations impact taxable income in those jurisdictions and consequently impact our effective tax rate.

In [removed: 2020,] [added: 2021,] we generated [removed: $14.46] [added: $18.34] billion of revenue.

Over a 10-year period from [removed: 2011] [added: 2012] to [removed: 2020,] [added: 2021,] we allocated [removed: $83] [added: $79] billion, which reinforces the importance of discipline in capital allocation.

Our Analog segment generated [removed: $10.89] [added: $14.05] billion of revenue in [removed: 2020.][added: 2021.]

Sales of our Analog products generated about [removed: 75%] [added: 77%] of our revenue in [removed: 2020.][added: 2021.]

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

Our broad portfolio is designed to manage power requirements across different voltage levels, including battery-management solutions, DC/DC switching regulators, AC/DC and isolated controllers and converters, power switches, linear regulators, voltage [removed: supervisors, voltage] references and lighting products.

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

Our Embedded Processing segment generated [removed: $2.57] [added: $3.05] billion of revenue in [removed: 2020.][added: 2021.]

Sales of Embedded Processing products generated about [removed: 18%] [added: 17%] of our revenue in [removed: 2020.][added: 2021.]

Other generated [removed: $1.01] [added: $1.25] billion of revenue in [removed: 2020] [added: 2021] and includes revenue from DLP® products (primarily used to project high-definition images), calculators and certain custom semiconductors known as application-specific integrated circuits (ASICs).

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

The table below lists the major markets for our products in [removed: 2020] [added: 2021] and the estimated percentage of our [removed: 2020] [added: 2021] revenue that the market represented.

| [added: (41% of TI revenue)] | | | | | | Building automation | | |

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

| [added: (24% of TI revenue)] | | | | | | Portable electronics | | |

| [removed: (8%] [added: (6%] of TI revenue) | | | | | | Wired networking | | |

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

Our customer base is diverse, with more than [removed: one-third] [added: 40%] of our revenue derived from customers outside our largest 100.

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

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

[removed: During 2020, we completed our transition] [added: In addition] to [added: doing business directly with TI, we offer customers the option of using] a single worldwide [removed: distributor, coupled with] [added: distributor and] a few region-specific [removed: distributors,] [added: distributors] for order fulfillment.

[removed: Building closer] [added: Closer] direct [removed: customer] relationships [removed: strengthens] [added: with] our [added: customers help to strengthen our] reach of market channel [removed: advantage, which gives] [added: advantage and give] us access to more customers and more of their design projects, leading to [removed: the opportunity] [added: opportunities] to sell more of our products into each design.

This strategic decision to make manufacturing and technology a core competitive advantage [removed: delivers] [added: provides us with] tangible benefits of lower manufacturing costs and greater control of our supply chain.

We have focused on creating a competitive manufacturing structural cost advantage by investing in our advanced [removed: analog] 300-millimeter capacity.

An unpackaged chip built on [added: a] 300-millimeter [removed: wafers] [added: wafer] costs about 40% less than an unpackaged chip built on [added: a] 200-millimeter [removed: wafers.][added: wafer.]

In [removed: 2020,] [added: 2021,] we sourced about 20% of our total wafers from external foundries and about 40% of our assembly/test services from subcontractors.

To meet these objectives and to allow greater flexibility in periods of high demand, [removed: we] [added: our strategy is to] build ahead of demand our broad-based products that are used across a diverse set of applications and customers and have low risk of obsolescence.

| Ahmad S. Bahai | | | | | | [removed: 58] [added: 59] | | | | | | Senior Vice President | | |

| Kyle M. Flessner | | | | | | [removed: 50] [added: 51] | | | | | | Senior Vice President | | |

| Mark S. Gary | | | | | | [removed: 46] [added: 47] | | | | | | Senior Vice President | | |

| Haviv Ilan | | | | | | [removed: 52] [added: 53] | | | | | | [added: Director,] Executive Vice President and Chief Operating Officer | | |

| Hagop H. Kozanian | | | | | | [removed: 38] [added: 39] | | | | | | Senior Vice President | | |

| Rafael R. Lizardi | | | | | | [removed: 48] [added: 49] | | | | | | Senior Vice [removed: President, Chief Financial Officer] [added: President] and Chief [removed: Accounting] [added: Financial] Officer | | |

| Amichai Ron | | | | | | [removed: 43] [added: 44] | | | | | | Senior Vice President | | |

| Richard K. Templeton | | | | | | [removed: 62] [added: 63] | | | | | | Director, Chairman of the Board, President and Chief Executive Officer | | |

| Cynthia Hoff Trochu | | | | | | [removed: 57] [added: 58] | | | | | | Senior Vice President, Secretary and General Counsel | | |

| Darla H. Whitaker | | | | | | [removed: 55] [added: 56] | | | | | | Senior Vice President | | |

[removed: Mr. Templeton] [added: Templeton, Ilan] and [added: Lizardi and] Mses.

At December 31, [removed: 2020,] [added: 2021,] we had about [removed: 30,000] [added: 31,000] employees worldwide.

Of those, about [removed: 85%] [added: 87%] were in Sales, R&D or manufacturing.

Our ambitions are foundational to ensuring that we operate in a sustainable, socially thoughtful and environmentally responsible manner.

In this period we allocated just over $8 billion to capital expenditures, and in the years ahead this amount will increase, as we expect it to be the largest driver of long-term free cash flow growth.

Lastly, for inorganic growth, we allocate to acquisitions that meet our financial and strategic objectives.

| | | | | | | Medical | | |

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

For example, in 2021 about two-thirds of our revenue was direct, and transactions on TI.com grew to about 10% of our revenue, as customers valued the convenience of purchasing online.

We expanded the reach of our TI.com e-commerce channel by offering a localized online experience in many countries, with convenience features such as immediate availability, local currency, payment methods, invoicing and importer of record.

We continue to invest to strengthen our competitive advantage in manufacturing and technology as part of our long-term capacity planning.

Progress and investments include:

- continuing construction of RFAB2 (Richardson, Texas), our next 300-millimeter wafer fabrication facility, to begin production in the second half of 2022;

- purchasing a 300-millimeter wafer fabrication facility in Lehi, Utah, to support analog and embedded processing manufacturing, which is expected to begin production in early 2023; and

- planning construction on our next two 300-millimeter wafer fabrication facilities in Sherman, Texas, to begin in 2022.

This North Texas site has the potential for up to four fabrication facilities to meet demand over time, as semiconductor growth in electronics, particularly in industrial and automotive markets, is expected to continue well into the future.

Production is expected to begin in 2025.

Together, these investments are designed to strengthen our manufacturing and technology competitive advantage, provide us with lower costs and greater control of our supply chain, and support growth over the next 10 to 15 years.

Information about our executive officers

| Mark T. Roberts | | | | | | 46 | | | | | | Senior Vice President | | |

| Christine A. Witzsche | | | | | | 37 | | | | | | Senior Vice President | | |

Mr. Roberts and Ms. Witzsche became executive officers in 2021.

Nothing in the Corporate Citizenship Report shall be deemed incorporated by reference into this report.

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

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

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

We employ several strategies which have many benefits, including dampening the effect of the semiconductor cycle on TI.

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.

Finally, we focus our resources on analog and embedded processing products and industrial and automotive markets.

Generally, our products serve a large and diverse customer base, which reduces our dependence on the performance of any single product, market or customer.

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

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

With less business flowing through the distribution channel, we require fewer distributors.

To strengthen this advantage, 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.

Executive officers of the Registrant

| Julie M. Van Haren | | | | | | 51 | | | | | | Senior Vice President | | |

Ilan and Lizardi and Ms. Van Haren became executive officers of the company in 2017.

Information in our Corporate Citizenship Report is not part of this report.

For the fiscal year ended December 31, [removed: 2020][added: 2021]

The aggregate market value of voting stock held by non-affiliates of the Registrant was approximately [removed: $116,120,360,680] [added: $177,340,424,753] as of June 30, [removed: 2020.][added: 2021.]

[removed: 920,239,191] [added: 923,547,062] (Number of shares of common stock outstanding as of January [removed: 27, 2021)][added: 25, 2022)]

Part III hereof incorporates information by reference to the Registrant’s proxy statement for the [removed: 2021] [added: 2022] annual meeting of stockholders.

[added: |] * [added: | | |] Leased. [added: | | | | | |]

[added: |] † [added: | | |] Portions of the facilities are leased and owned. [added: This may include land leases. | | | | | |]

Our facilities in the United States contained approximately [removed: 12.9] [added: 14.9] million square feet at December 31, [removed: 2020,] [added: 2021,] of which approximately [removed: 0.4] [added: 0.3] million square feet were leased.

Our facilities outside the United States contained approximately [removed: 9.7] [added: 10.2] million square feet at December 31, [removed: 2020,] [added: 2021,] of which approximately [removed: 1.6] [added: 1.5] million square feet were leased.

At the end of [removed: 2020,] [added: 2021,] we occupied substantially all of the space in our facilities.

| Lehi, Utah | | | X | | | | | | X | | |

| | | | | | | | | |

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

This may include land leases.

At December 31, [removed: 2020,] [added: 2021,] we had [removed: 12,624] [added: 12,151] stockholders of record.

The following table contains information regarding our purchases of our common stock during the fourth quarter of [removed: 2020.][added: 2021.]

| Period | | | | | | Total Number of Shares Purchased | | | | | | | | | Average Price Paid per Share | | | | | | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a) | | | | | | [added: | | |] Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (a) | | | | | |

(b)In addition to open-market purchases, [removed: 1,323] [added: 13,424] 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: 2020,] [added: 2021,] this amount consisted of the remaining portion of the $12.0 billion authorized in September 2018.

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

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

| October 1, 2021 through October 31, 2021 | | | | | | 109,100 | | | | | | | | | $ | 187.94 | | | | | | | | 109,100 | | | | | | | | | $ | 10.23 | | billion | | |

| November 1, 2021 through November 30, 2021 | | | | | | 364,797 | | | | | | | | | 190.55 | | | | | | | | | 351,373 | | | | | | | | | 10.16 | | | billion | | |

| December 1, 2021 through December 31, 2021 | | | | | | 314,834 | | | | | | | | | 190.89 | | | | | | | | | 314,834 | | | | | | | | | 10.10 | | | billion | | |

| Total | | | | | | 788,731 | | | (b) | | | | | | $ | 190.33 | | (b) | | | | | | 775,307 | | | | | | | | | $ | 10.10 | | billion (c) | | |

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

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

| 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) | | |

No longer required per the amendments to Regulation S-K that eliminate Item 301.

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

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

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

| (Millions of dollars, except share and per-share amounts) | | | 2020 | | | | | | 2019 | | | | | | 2018 | | | | | | 2017 | | | | | | 2016 | | |

| Cash flow data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Cash flows from operating activities | | | $ | 6,139 | | | | | $ | 6,649 | | | | | $ | 7,189 | | | | | $ | 5,363 | | | | | $ | 4,614 | |

| Capital expenditures | | | 649 | | | | | | 847 | | | | | | 1,131 | | | | | | 695 | | | | | | 531 | | |

| Free cash flow (a) | | | 5,490 | | | | | | 5,802 | | | | | | 6,058 | | | | | | 4,668 | | | | | | 4,083 | | |

| Dividends paid | | | 3,426 | | | | | | 3,008 | | | | | | 2,555 | | | | | | 2,104 | | | | | | 1,646 | | |

| Stock repurchases | | | 2,553 | | | | | | 2,960 | | | | | | 5,100 | | | | | | 2,556 | | | | | | 2,132 | | |

| Income statement data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Revenue by segment: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Analog | | | 10,886 | | | | | | 10,223 | | | | | | 10,801 | | | | | | 9,900 | | | | | | 8,536 | | |

| Embedded Processing | | | 2,570 | | | | | | 2,943 | | | | | | 3,554 | | | | | | 3,498 | | | | | | 3,023 | | |

| Other | | | 1,005 | | | | | | 1,217 | | | | | | 1,429 | | | | | | 1,563 | | | | | | 1,811 | | |

| Revenue | | | 14,461 | | | | | | 14,383 | | | | | | 15,784 | | | | | | 14,961 | | | | | | 13,370 | | |

| Gross profit | | | 9,269 | | | | | | 9,164 | | | | | | 10,277 | | | | | | 9,614 | | | | | | 8,257 | | |

| Operating expenses (R&D and SG&A) | | | 3,153 | | | | | | 3,189 | | | | | | 3,243 | | | | | | 3,202 | | | | | | 3,098 | | |

| Acquisition charges | | | 198 | | | | | | 288 | | | | | | 318 | | | | | | 318 | | | | | | 319 | | |

| Restructuring charges/other | | | 24 | | | | | | (36) | | | | | | 3 | | | | | | 11 | | | | | | (15) | | |

| Operating profit | | | 5,894 | | | | | | 5,723 | | | | | | 6,713 | | | | | | 6,083 | | | | | | 4,855 | | |

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

| Income allocated to RSUs | | | (27) | | | | | | (31) | | | | | | (42) | | | | | | (33) | | | | | | (44) | | |

| Income allocated to common shares for diluted EPS | | | $ | 5,568 | | | | | $ | 4,986 | | | | | $ | 5,538 | | | | | $ | 3,649 | | | | | $ | 3,551 | |

| Average diluted shares outstanding (millions) | | | 933 | | | | | | 952 | | | | | | 990 | | | | | | 1,012 | | | | | | 1,021 | | |

| Diluted EPS | | | $ | 5.97 | | | | | $ | 5.24 | | | | | $ | 5.59 | | | | | $ | 3.61 | | | | | $ | 3.48 | |

| Cash dividends declared per common share | | | $ | 3.72 | | | | | $ | 3.21 | | | | | $ | 2.63 | | | | | $ | 2.12 | | | | | $ | 1.64 | |

(a)Free cash flow is a non-GAAP measure derived by subtracting capital expenditures from cash flows from operating activities.

| | | | December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | |

| (Millions of dollars) | | | 2020 | | | | | | 2019 | | | | | | 2018 | | | | | | 2017 | | | | | | 2016 | | |

| Balance sheet data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Cash, cash equivalents and short-term investments | | | $ | 6,568 | | | | | $ | 5,387 | | | | | $ | 4,233 | | | | | $ | 4,469 | | | | | $ | 3,490 | |

| Total assets | | | 19,351 | | | | | | 18,018 | | | | | | 17,137 | | | | | | 17,642 | | | | | | 16,431 | | |

| Current portion of long-term debt | | | 550 | | | | | | 500 | | | | | | 749 | | | | | | 500 | | | | | | 631 | | |

| Long-term debt | | | 6,248 | | | | | | 5,303 | | | | | | 4,319 | | | | | | 3,577 | | | | | | 2,978 | | |

See “Management’s discussion and analysis of financial condition and results of operations” and “Financial statements and supplementary data.”

- Income for each of the three years in the period ended December 31, [removed: 2020][added: 2021]

- Comprehensive income for each of the three years in the period ended December 31, [removed: 2020][added: 2021]

- Balance sheets as of December 31, [removed: 2020] [added: 2021] and [removed: 2019][added: 2020]

- Cash flows for each of the three years in the period ended December 31, [removed: 2020][added: 2021]

- Stockholders’ equity for each of the three years in the period ended December 31, [removed: 2020][added: 2021]

| [removed: (Millions of dollars,] [added: (In millions,] except [removed: share and] per-share amounts) | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Revenue | | | | | | $ | [removed: 14,461] [added: 18,344] | | | | | $ | [removed: 14,383] [added: 14,461] | | | | | $ | [removed: 15,784] [added: 14,383] | |

| Cost of revenue (COR) | | | | | | [removed: 5,192] [added: 5,968] | | | | | | [removed: 5,219] [added: 5,192] | | | | | | [removed: 5,507] [added: 5,219] | | |

| Gross profit | | | | | | [removed: 9,269] [added: 12,376] | | | | | | [removed: 9,164] [added: 9,269] | | | | | | [removed: 10,277] [added: 9,164] | | |

| Research and development (R&D) | | | | | | [removed: 1,530] [added: 1,554] | | | | | | [removed: 1,544] [added: 1,530] | | | | | | [removed: 1,559] [added: 1,544] | | |

| Selling, general and administrative (SG&A) | | | | | | [removed: 1,623] [added: 1,666] | | | | | | [removed: 1,645] [added: 1,623] | | | | | | [removed: 1,684] [added: 1,645] | | |

| Acquisition charges | | | | | | [removed: 198] [added: 142] | | | | | | [removed: 288] [added: 198] | | | | | | [removed: 318] [added: 288] | | |

| Restructuring charges/other | | | | | | [removed: 24] [added: 54] | | | | | | [removed: (36)] [added: 24] | | | | | | [removed: 3] [added: (36)] | | |

| Operating profit | | | | | | [removed: 5,894] [added: 8,960] | | | | | | [removed: 5,723] [added: 5,894] | | | | | | [removed: 6,713] [added: 5,723] | | |

| Other income (expense), net (OI&E) | | | | | | [removed: 313] [added: 143] | | | | | | [removed: 175] [added: 313] | | | | | | [removed: 98] [added: 175] | | |

| Interest and debt expense | | | | | | [removed: 190] [added: 184] | | | | | | [removed: 170] [added: 190] | | | | | | [removed: 125] [added: 170] | | |

| Income before income taxes | | | | | | [removed: 6,017] [added: 8,919] | | | | | | [removed: 5,728] [added: 6,017] | | | | | | [removed: 6,686] [added: 5,728] | | |

| Provision for income taxes | | | | | | [removed: 422] [added: 1,150] | | | | | | [removed: 711] [added: 422] | | | | | | [removed: 1,106] [added: 711] | | |

| Net income | | | | | | $ | [removed: 5,595] [added: 7,769] | | | | | $ | [removed: 5,017] [added: 5,595] | | | | | $ | [removed: 5,580] [added: 5,017] | |

| Basic | | | | | | $ | [removed: 6.05] [added: 8.38] | | | | | $ | [removed: 5.33] [added: 6.05] | | | | | $ | [removed: 5.71] [added: 5.33] | |

| Diluted | | | | | | $ | [removed: 5.97] [added: 8.26] | | | | | $ | [removed: 5.24] [added: 5.97] | | | | | $ | [removed: 5.59] [added: 5.24] | |

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

| Basic | | | | | | [removed: 921] [added: 923] | | | | | | [removed: 936] [added: 921] | | | | | | [removed: 970] [added: 936] | | |

| Diluted | | | | | | [removed: 933] [added: 936] | | | | | | [removed: 952] [added: 933] | | | | | | [removed: 990] [added: 952] | | |

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

| Income allocated to common stock for diluted EPS | | | | | | $ | [removed: 5,568] [added: 7,736] | | | | | $ | [removed: 4,986] [added: 5,568] | | | | | $ | [removed: 5,538] [added: 4,986] | |

| [removed: (Millions of dollars)] [added: (In millions)] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Adjustments, net of tax effect of [removed: $3, ($37)] [added: ($56), $3] and [removed: $35] [added: ($37)] | | | | | | [removed: (41)] [added: 175] | | | | | | [removed: 88] [added: (41)] | | | | | | [removed: (98)] [added: 88] | | |

| Recognized within net income, net of tax effect of [removed: ($9), ($13)] [added: ($8), ($9)] and [removed: ($15)] [added: ($13)] | | | | | | 29 | | | | | | [removed: 38] [added: 29] | | | | | | [removed: 50] [added: 38] | | |

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

| [removed: Recognized] [added: Recognized] within net [removed: income, net of tax effect of $0, $0 and $1] [added: income] | | | [added: (28)] | | | [added: | | | — | | | | | | 2 | | | | | | (9) | | | | | |] (1) | | | | | | [removed: —] [added: (37)] | | | | | | [removed: (3)] [added: 1] | | |

| Other comprehensive income (loss), net of taxes | | | | | | [removed: (13)] [added: 203] | | | | | | [removed: 126] [added: (13)] | | | | | | [removed: (59)] [added: 126] | | |

| Total comprehensive income | | | | | | $ | [removed: 5,582] [added: 7,972] | | | | | $ | [removed: 5,143] [added: 5,582] | | | | | $ | [removed: 5,521] [added: 5,143] | |

| [removed: (Millions of dollars,] [added: (In millions,] except [removed: share] [added: per-share] amounts) | | | | | | [removed: 2020] | | | | | | [removed: 2019] | | | [added: | | | | | | | | | | | | | | | | | |]

| Cash and cash equivalents | | | | | | $ | [removed: 3,107] [added: 4,631] | | | | | $ | [removed: 2,437] [added: 3,107] | |

| Short-term investments | | | | | | [removed: 3,461] [added: 5,108] | | | | | | [removed: 2,950] [added: 3,461] | | |

| Accounts receivable, net of allowances of [removed: ($11) and] ($8) [added: and ($11)] | | | | | | [removed: 1,414] [added: 1,701] | | | | | | [removed: 1,074] [added: 1,414] | | |

| Raw materials | | | | | | [removed: 180] [added: 245] | | | | | | [removed: 176] [added: 180] | | |

| Work in process | | | | | | [removed: 964] [added: 1,067] | | | | | | [removed: 916] [added: 964] | | |

| Finished goods | | | | | | [removed: 811] [added: 598] | | | | | | [removed: 909] [added: 811] | | |

- Reports of independent registered public accounting firm (PCAOB ID: 42)

| (In millions, except par value) | | | | | | 2021 | | | | | | 2020 | | |

| Shares: 2021 – 817; 2020 – 821 | | | | | | (36,800) | | | | | | (36,578) | | |

| (In millions) | | | | | | 2021 | | | | | | 2020 | | | | | | 2019 | | |

| Net income | | | | | | $ | 7,769 | | | | | $ | 5,595 | | | | | $ | 5,017 | |

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

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

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

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

| Net income | | | | | | — | | | | | | — | | | | | | 7,769 | | | | | | — | | | | | | — | | |

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

| Balance, December 31, 2021 | | | | | | $ | 1,741 | | | | | $ | 2,630 | | | | | $ | 45,919 | | | | | $ | (36,800) | | | | | $ | (157) | |

| Total revenue | | | $ | 18,344 | | | | | $ | 14,461 | | | | | $ | 14,383 | |

| Net income | | | $ | 7,769 | | | | | | | | | | | | | | | | | $ | 5,595 | | | | | | | | | | | | | | | | | $ | 5,017 | | | | | | | | | | | | | |

| Net income | | | $ | 7,769 | | | | | | | | | | | | | | | | | $ | 5,595 | | | | | | | | | | | | | | | | | $ | 5,017 | | | | | | | | | | | | | |

We perform a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill.

If, as a result of the qualitative assessment, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then we perform the quantitative goodwill impairment test.

| R&D | | | 67 | | | | | | 68 | | | | | | 66 | | |

| Granted | | | 3 | | | | | | 169.52 | | | | | | 1 | | | | | | 176.08 | | |

| Stock options exercised/RSUs vested | | | (6) | | | | | | 65.89 | | | | | | (2) | | | | | | 81.31 | | |

| Outstanding grants, December 31, 2021 (a) | | | 25 | | | | | | 91.58 | | | | | | 4 | | | | | | 124.80 | | |

(a) Forfeited and expired shares were not material.

| Weighted average grant date fair value per share for RSUs | | | $ | 176.08 | | | | | $ | 130.59 | | | | | $ | 106.58 | |

| Total grant date fair value of shares vested for RSUs | | | $ | 115 | | | | | $ | 110 | | | | | $ | 125 | |

| Aggregate intrinsic value of options exercised | | | $ | 611 | | | | | $ | 681 | | | | | $ | 819 | |

| $ | | | 28.13 to 193.58 | | | | | | 25 | | | | | | 5.5 | | | | | | $ | 91.58 | |

| Options outstanding (shares) | | | 25 | | | | | | 16 | | |

| Intrinsic value | | | $ | 2,408 | | | | | $ | 1,952 | |

| Balance, January 1 | | | 821 | | | | | | 809 | | | | | | 796 | | |

| Repurchases | | | 3 | | | | | | 23 | | | | | | 27 | | |

| Shares issued | | | (7) | | | | | | (11) | | | | | | (14) | | |

| Balance, December 31 | | | 817 | | | | | | 821 | | | | | | 809 | | |

| | | | 2021 | | | | | | 2020 | | | | | | 2019 | | |

| | | | 2021 | | | | | | | | | | | | | | | | | | 2020 | | | | | | | | | | | | | | | | | | 2019 | | | | | | | | | | | | | | |

| | | | 2021 | | | | | | 2020 | | | | | | 2019 | | |

| | | | 2021 | | | | | | 2020 | | |

| Retirement costs for defined benefit and retiree health care | | | (15) | | | | | | — | | |

| | | | 2021 | | | | | | 2020 | | |

| Net deferred tax asset | | | $ | 176 | | | | | $ | 253 | |

| | | | 2021 | | | | | | 2020 | | | | | | 2019 | | |

| Derivative instruments: | | | | | | | | | | | | | | | | | | | | |

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

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

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

| Long-term investments | | | | | | 49 | | | | | | 300 | | |

| Acquisition-related intangibles | | | | | | 152 | | | | | | 340 | | |

| Participating cumulative preferred – None issued | | | | | | — | | | | | | — | | |

| Shares issued – 1,740,815,939 | | | | | | 1,741 | | | | | | 1,741 | | |

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

| (Millions of dollars, except per-share amounts) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance, December 31, 2017 | | | | | | $ | 1,741 | | | | | $ | 1,776 | | | | | $ | 34,662 | | | | | $ | (27,458) | | | | | $ | (384) | |

| 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Cumulative effect of accounting changes | | | | | | — | | | | | | — | | | | | | 236 | | | | | | — | | | | | | (30) | | |

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.

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

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

We have a variety of types of contracts with our customers and distributors.

In determining whether a contract exists, we evaluate the terms of the arrangement, the relationship with the customer or distributor and their ability to pay.

We recognize revenue from sales of our products, including sales to our distributors, when control is transferred.

The length of time between invoicing and payment is not significant under any of our payment terms.

In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component.

In addition, we record an allowance for credit losses on accounts receivable that we estimate may not be collected.

We monitor collectability of accounts receivable primarily through review of accounts receivable aging.

When collection is at risk, we assess the impact on amounts recorded for credit losses and, if necessary, record a charge in the period such determination is made.

*Changes in accounting standards – adopted standards for current period*

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.

| ASU | | | | | | Description | | | | | | Adopted Date | | |

| ASU No. 2016-13 | | | | | | *Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments* | | | | | | January 1, 2020 | | |

| ASU No. 2018-13 | | | | | | *Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement* | | | | | | January 1, 2020 | | |

| ASU No. 2018-15 | | | | | | *Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract* | | | | | | January 1, 2020 | | |

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

We believe that market-based measures of implied volatility are currently the best available indicators of the expected volatility used in these estimates.

We believe the historical experience method is the best estimate of future exercise patterns currently available.

Risk-free interest rates are determined using the implied yield currently available for zero-coupon U.S. government issues with a remaining term equal to the expected life of the options.

Our ESPP is a discount-purchase plan and consequently the Black-Scholes-Merton option-pricing model is not used to determine the fair value per share of these awards.

The fair value per share under this plan equals the amount of the discount.

| Outstanding grants, December 31, 2019 | | | 32,493,944 | | | | | | $ | 66.57 | | | | | 5,897,800 | | | | | | $ | 79.62 | |

| 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 | | |

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: 2020] [added: 2021] 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: 2020.][added: 2021.]

Based on our assessment, we believe that, as of December 31, [removed: 2020,] [added: 2021,] 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: 2020,] [added: 2021,] 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: 2020,] [added: 2021,] 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: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] 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: 2020,] [added: 2021,] and the related notes, and our report dated February [removed: 5, 2021,] [added: 4, 2022,] expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

February 4, 2022


February 5, 2021

Section 13(r) of the Securities Exchange Act of 1934 disclosure

During the period covered by this report and as permitted by General License 1B from the U.S. Office of Foreign Assets Control, we engaged with the Russian Federal Security Service (FSB) solely to permit the import, distribution and use of certain of our catalog semiconductor products in Russia.

No gross revenue or net profit is directly attributable to these engagements with the FSB, and we intend to continue them to the extent permitted by law.

Not applicable.

PART III

Not applicable.

PART III

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: 2021] [added: 2022] 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: 2021] [added: 2022] 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: 2021] [added: 2022] 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: 2021] [added: 2022] 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: 2020.][added: 2021.]

(a)Includes shares of TI common stock to be issued under the Texas Instruments 2003 Director Compensation Plan, the Texas Instruments 2009 Long-Term Incentive Plan (the “2009 LTIP”) and [added: its] predecessor stockholder-approved plans, the Texas Instruments 2009 Director Compensation Plan, the TI Employees 2014 Stock Purchase Plan (the “2014 ESPP”) and the Texas Instruments 2018 Director Compensation Plan (the “2018 Director Plan”).

[removed: 38,457,158] [added: 35,385,153] shares remain available for future issuance under the 2009 LTIP and [removed: 1,877,525] [added: 1,843,134] shares remain available for future issuance under the 2018 Director Plan.

(d)Includes [removed: 27,995,277] [added: 24,981,728] shares for issuance upon exercise of outstanding grants of options, [removed: 4,711,624] [added: 4,085,972] shares for issuance upon vesting of outstanding grants of restricted stock units, [removed: 143,046] [added: 121,844] shares for issuance under the 2014 ESPP and [removed: 96,537] [added: 90,618] 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: 2021] [added: 2022] annual meeting of stockholders is incorporated herein by reference to such proxy statement.

| Equity compensation plans approved by security holders | | | | | | 29,280,162 | | | (a) | | | | | | $ | 91.92 | | (b) | | | | | | 69,842,569 | | | (c) | | |

| Total | | | | | | 29,280,162 | | | (d) | | | | | | $ | 91.92 | | | | | | | | 69,842,569 | | | | | |

| Equity compensation plans approved by security holders | | | | | | 32,946,484 | | | (a) | | | | | | $ | 79.99 | | (b) | | | | | | 73,432,285 | | | (c) | | |

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

The information contained under the captions “Related person transactions” and “Director independence” in our proxy statement for the [removed: 2021] [added: 2022] 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: 2021] [added: 2022] annual meeting of stockholders is incorporated herein by reference to such proxy statement.

| 3(b) | | | [By-Laws of the [removed: Registrant](http://www.sec.gov/Archives/edgar/data/97476/000119312520194080/d949258dex3.htm)] [added: Registrant](https://www.sec.gov/Archives/edgar/data/97476/000119312522018409/d252810dex3.htm)] | | | 8-K | | | 001-3761 | | | [removed: July 16, 2020] [added: January 26, 2022] | | | 3 | | | | | |

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

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

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

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

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

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

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

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

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

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

| 21 | | | [List of Subsidiaries of the [removed: Registrant](https://www.sec.gov/Archives/edgar/data/97476/000009747621000006/q42020txnex21.htm)] [added: Registrant](https://www.sec.gov/Archives/edgar/data/97476/000009747622000009/q42021txnex21.htm)] | | | | | | | | | | | | | | | X | | |

| 23 | | | [Consent of Independent Registered Public Accounting [removed: Firm](https://www.sec.gov/Archives/edgar/data/97476/000009747621000006/q42020txnex23.htm)] [added: Firm](https://www.sec.gov/Archives/edgar/data/97476/000009747622000009/q42021txnex23.htm)] | | | | | | | | | | | | | | | X | | |

| 31(a) | | | [Rule [removed: 13a-14(a](https://www.sec.gov/Archives/edgar/data/97476/000009747621000006/q42020txnex31a.htm)[Rule] [added: 13a-14(aRule] 13a-14(a)/15(d)-14(a) Certification of Chief Executive [removed: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747621000006/q42020txnex31a.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747622000009/q42021txnex31a.htm)] | | | | | | | | | | | | | | | X | | |

| 31(b) | | | [Rule 13a-14(a)/15(d)-14(a) Certification of Chief Financial [removed: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747621000006/q42020txnex31b.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747622000009/q42021txnex31b.htm)] | | | | | | | | | | | | | | | X | | |

| 32(a) | | | [Section 1350 Certification of Chief Executive [removed: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747621000006/q42020txnex32a.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747622000009/q42021txnex32a.htm)] | | | | | | | | | | | | | | | X | | |

| 32(b) | | | [Section 1350 Certification of Chief Financial [removed: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747621000006/q42020txnex32b.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/97476/000009747622000009/q42021txnex32b.htm)] | | | | | | | | | | | | | | | X | | |

- Evolving cybersecurity and other threats relating to our information technology systems or those of our [removed: customers or suppliers;][added: customers, vendors and other third parties;]

- Our ability to develop, manufacture and market innovative products in a rapidly changing technological environment, [removed: and] our timely implementation of new manufacturing technologies and installation of manufacturing [removed: equipment;][added: equipment, and our ability to realize expected returns on significant investments in manufacturing capacity;]

- Product liability, warranty or other claims relating to our products, [added: software,] manufacturing, delivery, services, design or communications, or recalls by our customers for a product containing one of our parts;

- Losses or curtailments of purchases from key customers or the timing and amount of [removed: distributor and other] customer inventory adjustments;

| [removed: | | |] [added: /s/ Rafael R. Lizardi] | | | | | | [removed: Rafael R. Lizardi] [added: /s/ Julie C. Knecht] | | |

Date: February [removed: 5, 2021][added: 4, 2022]

[removed: Lizardi] [added: Knecht] and Cynthia Hoff Trochu, or any of them, each acting alone, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for such person and in his or her name, place and stead, in any and all capacities in connection with the annual report on Form 10-K of Texas Instruments Incorporated for the year ended December 31, [removed: 2020,] [added: 2021,] to sign any and all amendments to the Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated as of the [removed: 5th] [added: 4th] day of February [removed: 2021.][added: 2022.]

| /s/ Mark A. Blinn | | | | | | [added: /s/ Todd M. Bluedorn] | | |

| Mark A. [removed: Blinn] [added: Blinn, Director] | | | | | | [added: Todd M. Bluedorn,] Director | | |

| /s/ Janet F. Clark | | | | | | [added: /s/ Carrie S. Cox] | | |

| Janet F. [removed: Clark] [added: Clark, Director] | | | | | | [added: Carrie S. Cox,] Director | | |

| /s/ Martin S. Craighead | | | | | | [added: /s/ Jean M. Hobby] | | |

| Martin S. [removed: Craighead] [added: Craighead, Director] | | | | | | [added: Jean M. Hobby,] Director | | |

| /s/ Michael D. Hsu | | | | | | [added: /s/ Haviv Ilan] | | |

| /s/ Ronald Kirk | | | | | | [added: /s/ Pamela H. Patsley] | | |

| Ronald [removed: Kirk] [added: Kirk, Director] | | | | | | [added: Pamela H. Patsley,] Director | | |

| /s/ Robert E. Sanchez | | | | | | [added: /s/ Richard K. Templeton] | | |

| [removed: Richard K. Templeton] [added: Robert E. Sanchez, Director] | | | | | | [added: Richard K. Templeton,] Director, Chairman of the Board, President and Chief Executive Officer | | |

| [removed: Rafael R. Lizardi] | | | | | | [added: Rafael R. Lizardi,] Senior Vice [removed: President, Chief Financial Officer] [added: President] and Chief [removed: Accounting] [added: Financial] Officer | | | [added: | | |]

| 4(n) | | | [Officers](https://www.sec.gov/Archives/edgar/data/0000097476/000119312521273955/d226154dex41.htm)[’](https://www.sec.gov/Archives/edgar/data/0000097476/000119312521273955/d226154dex41.htm) [Certificate](https://www.sec.gov/Archives/edgar/data/0000097476/000119312521273955/d226154dex41.htm) | | | 8-K | | | 001-3761 | | | September 15, 2021 | | | 4.1 | | | | | |

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

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

Lizardi, Julie C.

| Michael D. Hsu, Director | | | | | | Haviv Ilan, Director, Executive Vice President and Chief Operating Officer | | |

| Rafael R. Lizardi, Senior Vice President and Chief Financial Officer | | | | | | Julie C. Knecht, Vice President and Chief Accounting Officer | | |

- A loss suffered by one of our customers or distributors with respect to TI-consigned inventory;

- Increases in health care and pension benefit costs;

| | | | | | | | | | Senior Vice President, | | |

| | | | | | | | | | Chief Financial Officer | | |

| | | | | | | | | | and Chief Accounting Officer | | |

| | | | | | | | | |

| Signature | | | | | | Title | | |

| /s/ Todd M. Bluedorn | | | | | | | | |

| Todd M. Bluedorn | | | | | | Director | | |

| /s/ Carrie S. Cox | | | | | | | | |

| Carrie S. Cox | | | | | | Director | | |

| /s/ Jean M. Hobby | | | | | | | | |

| Jean M. Hobby | | | | | | Director | | |

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

| /s/ Pamela H. Patsley | | | | | | | | |

| Pamela H. Patsley | | | | | | Director | | |

| Robert E. Sanchez | | | | | | Director | | |

| /s/ Richard K. Templeton | | | | | | | | |

| /s/ Rafael R. Lizardi | | | | | | | | |