Item 1. Financial statements

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Item 1. Financial statements


	For Three Months Ended				For Six Months Ended
Consolidated Statements of Income	June 30,				June 30,
(In millions, except per-share amounts)	2023		2022		2023		2022
Revenue	$	4,531	$	5,212	$	8,910	$	10,117
Cost of revenue (COR)	1,621		1,587		3,137		3,050
Gross profit	2,910		3,625		5,773		7,067
Research and development (R&D)	477		414		932		805
Selling, general and administrative (SG&A)	461		422		935		844

Restructuring charges/other	—		66		—		132
Operating profit	1,972		2,723		3,906		5,286
Other income (expense), net (OI&E)	119		7		199		22
Interest and debt expense	89		49		157		101
Income before income taxes	2,002		2,681		3,948		5,207
Provision for income taxes	280		390		518		715
Net income	$	1,722	$	2,291	$	3,430	$	4,492

Earnings per common share (EPS):
Basic	$	1.89	$	2.48	$	3.76	$	4.85
Diluted	$	1.87	$	2.45	$	3.72	$	4.80

Average shares outstanding:
Basic	908		920		907		922
Diluted	916		930		916		932

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

Net income	$	1,722	$	2,291	$	3,430	$	4,492
Income allocated to RSUs	(8)		(10)		(18)		(19)
Income allocated to common stock for diluted EPS	$	1,714	$	2,281	$	3,412	$	4,473

See accompanying notes.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES


	For Three Months Ended				For Six Months Ended
Consolidated Statements of Comprehensive Income	June 30,				June 30,
(In millions)	2023		2022		2023		2022
Net income	$	1,722	$	2,291	$	3,430	$	4,492
Other comprehensive income (loss)
Net actuarial losses of defined benefit plans:
Adjustments, net of tax effect of ($2) and $8; ($1) and $6	2		(40)		—		(34)
Recognized within net income, net of tax effect of ($1) and ($4); ($2) and ($5)	3		16		6		18



Derivative instruments:
Change in fair value, net of tax effect of ($1) and $0; $0 and $0	3		—		1		—

Available-for-sale investments:
Unrealized gains (losses), net of tax effect of $0 and $1; $0 and $2	(2)		(3)		1		(7)
Other comprehensive income (loss), net of taxes	6		(27)		8		(23)
Total comprehensive income	$	1,728	$	2,264	$	3,438	$	4,469

See accompanying notes.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES


	June 30,		December 31,
Consolidated Balance Sheets	2023		2022
(In millions, except par value)
Assets
Current assets:
Cash and cash equivalents	$	3,439	$	3,050
Short-term investments	6,113		6,017
Accounts receivable, net of allowances of ($16) and ($13)	1,956		1,895
Raw materials	388		353
Work in process	2,110		1,546
Finished goods	1,231		858
Inventories	3,729		2,757
Prepaid expenses and other current assets	277		302
Total current assets	15,514		14,021
Property, plant and equipment at cost	11,664		9,950
Accumulated depreciation	(3,139)		(3,074)
Property, plant and equipment	8,525		6,876
Goodwill	4,362		4,362
Deferred tax assets	537		473
Capitalized software licenses	143		152
Overfunded retirement plans	183		188
Other long-term assets	1,675		1,135
Total assets	$	30,939	$	27,207

Liabilities and stockholders’ equity
Current liabilities:
Current portion of long-term debt	$	299	$	500
Accounts payable	923		851
Accrued compensation	561		799
Income taxes payable	121		189
Accrued expenses and other liabilities	807		646
Total current liabilities	2,711		2,985
Long-term debt	10,920		8,235
Underfunded retirement plans	127		118
Deferred tax liabilities	69		66
Other long-term liabilities	1,172		1,226
Total liabilities	14,999		12,630
Stockholders’ equity:
Preferred stock, $25 par value. Shares authorized – 10; none issued	—		—
Common stock, $1 par value. Shares authorized – 2,400; shares issued – 1,741	1,741		1,741
Paid-in capital	3,163		2,951
Retained earnings	51,522		50,353
Treasury common stock at cost
Shares: June 30, 2023 – 833; December 31, 2022 – 835	(40,240)		(40,214)
Accumulated other comprehensive income (loss), net of taxes (AOCI)	(246)		(254)
Total stockholders’ equity	15,940		14,577
Total liabilities and stockholders’ equity	$	30,939	$	27,207

See accompanying notes.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES


	For Six Months Ended
Consolidated Statements of Cash Flows	June 30,
(In millions)	2023		2022
Cash flows from operating activities
Net income	$	3,430	$	4,492
Adjustments to net income:
Depreciation	550		427

Amortization of capitalized software	31		27
Stock compensation	215		159
Gains on sales of assets	(1)		(3)
Deferred taxes	(60)		(15)
Increase (decrease) from changes in:
Accounts receivable	(61)		(489)
Inventories	(972)		(289)
Prepaid expenses and other current assets	10		20
Accounts payable and accrued expenses	(50)		30
Accrued compensation	(242)		(254)
Income taxes payable	(58)		5
Changes in funded status of retirement plans	23		70
Other	(256)		(268)
Cash flows from operating activities	2,559		3,912

Cash flows from investing activities
Capital expenditures	(2,428)		(1,040)
Proceeds from asset sales	2		3
Purchases of short-term investments	(7,060)		(6,449)
Proceeds from short-term investments	7,091		6,974
Other	38		69
Cash flows from investing activities	(2,357)		(443)

Cash flows from financing activities
Proceeds from issuance of long-term debt	3,000		—
Repayment of debt	(500)		(500)
Dividends paid	(2,250)		(2,123)
Stock repurchases	(182)		(1,771)
Proceeds from common stock transactions	150		113
Other	(31)		(17)
Cash flows from financing activities	187		(4,298)

Net change in cash and cash equivalents	389		(829)
Cash and cash equivalents at beginning of period	3,050		4,631
Cash and cash equivalents at end of period	$	3,439	$	3,802

See accompanying notes.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Notes to financial statements

Description of business, including segment and geographic area information

We design and manufacture semiconductors that we sell to electronics designers and manufacturers all over the world. We have two reportable segments, Analog and Embedded Processing, each of which represents groups of similar products that are combined on the basis of similar design and development requirements, product characteristics, manufacturing processes and distribution channels. Our segments also reflect how management allocates resources and measures results.

Analog semiconductors change real-world signals, such as sound, temperature, pressure or images, by conditioning them, amplifying them and often converting them to a stream of digital data that can be processed by other semiconductors, such as embedded processors. Analog semiconductors are also used to manage power in all electronic equipment by converting, distributing, storing, discharging, isolating and measuring electrical energy, whether the equipment is plugged into a wall or using a battery. Our Analog segment consists of two major product lines: Power and Signal Chain.
Embedded Processing products are the digital “brains” of many types of electronic equipment. They are designed to handle specific tasks and can be optimized for various combinations of performance, power and cost, depending on the application.

We report the results of our remaining business activities in Other. Other includes operating segments that do not meet the quantitative thresholds for individually reportable segments and cannot be aggregated with other operating segments. Other includes DLP® products, calculators and custom ASIC products.

Our centralized manufacturing and support organizations, such as facilities, procurement and logistics, provide support to our operating segments, including those in Other. Costs incurred by these organizations, including depreciation, are charged to the segments on a per-unit basis. Consequently, depreciation expense is not an independently identifiable component within the segments’ results and, therefore, is not provided.

Segment information


	For Three Months Ended				For Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Revenue:
Analog	$	3,278	$	3,992	$	6,567	$	7,808
Embedded Processing	894		821		1,726		1,603
Other	359		399		617		706
Total revenue	$	4,531	$	5,212	$	8,910	$	10,117

Operating profit:
Analog	$	1,463	$	2,226	$	3,037	$	4,376
Embedded Processing	318		324		555		639
Other (a)	191		173		314		271
Total operating profit	$	1,972	$	2,723	$	3,906	$	5,286

(a)Includes restructuring charges/other

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Geographic area information

The following geographic area information is based on product shipment destination, which does not reflect end demand by geography.


	For Three Months Ended								For Six Months Ended
	June 30,								June 30,
	2023				2022				2023				2022
Revenue:
United States	$	715	16	%	$	577	11	%	$	1,270	14	%	$	1,071	11	%
China (a)	1,820		40		2,751		53		3,651		41		5,299		52
Rest of Asia	534		12		644		12		1,083		12		1,299		13
Europe, Middle East and Africa	956		21		822		16		1,942		22		1,636		16
Japan	349		8		276		5		638		7		539		5
Rest of world	157		3		142		3		326		4		273		3
Total revenue	$	4,531	100	%	$	5,212	100	%	$	8,910	100	%	$	10,117	100	%

(a)Revenue from products shipped into China includes shipments to customers that manufacture in China and then export end products to their customers around the world, as well as distributors that transship inventory through China to service other countries.

The following additional geographic information includes our estimate for revenue based on the location of our end customers’ headquarters, providing a better representation of the geographic profile for where critical decisions are made.


	For Three Months Ended								For Six Months Ended
	June 30,								June 30,
	2023				2022				2023				2022
Revenue:
United States	$	1,493	33	%	$	1,706	33	%	$	2,850	32	%	$	3,276	32	%
China	872		19		1,340		26		1,748		20		2,615		26
Rest of Asia	435		10		569		11		829		9		1,109		11
Europe, Middle East and Africa (a)	1,194		26		1,120		21		2,464		28		2,199		22
Japan	480		11		414		8		918		10		806		8
Rest of world	57		1		63		1		101		1		112		1
Total revenue	$	4,531	100	%	$	5,212	100	%	$	8,910	100	%	$	10,117	100	%

(a)Revenue from end customers headquartered in Germany was 13% and 9% in the second quarters of 2023 and 2022, respectively, and 13% and 10% in the first six months of 2023 and 2022, respectively.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Basis of presentation and significant accounting policies and practices

Basis of presentation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) and on the same basis as the audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2022. The Consolidated Statements of Income, Comprehensive Income and Cash Flows for the periods ended June 30, 2023 and 2022, and the Consolidated Balance Sheet as of June 30, 2023, are not audited but reflect all adjustments that are of a normal recurring nature and are necessary for a fair statement of the results of the periods shown. Certain information and note disclosures normally included in annual consolidated financial statements have been omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. Because the consolidated interim financial statements do not include all of the information and notes required by GAAP for a complete set of financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in our annual report on Form 10-K for the year ended December 31, 2022. The results for the three- and six-month periods are not necessarily indicative of a full year’s results.

Significant accounting policies and practices

Earnings per share (EPS)

We use the two-class method for calculating EPS because the restricted stock units (RSUs) we grant are participating securities containing non-forfeitable rights to receive dividend equivalents. Under the two-class method, a portion of net income is allocated to RSUs and excluded from the calculation of income allocated to common stock.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Computation and reconciliation of earnings per common share are as follows:


	For Three Months Ended June 30,
	2023					2022
	Net Income		Shares	EPS		Net Income		Shares	EPS
Basic EPS:
Net income	$	1,722				$	2,291
Income allocated to RSUs	(9)					(10)
Income allocated to common stock	$	1,713	908	$	1.89	$	2,281	920	$	2.48
Dilutive effect of stock compensation plans			8					10

Diluted EPS:
Net income	$	1,722				$	2,291
Income allocated to RSUs	(8)					(10)
Income allocated to common stock	$	1,714	916	$	1.87	$	2,281	930	$	2.45

	For Six Months Ended June 30,
	2023					2022
	Net Income		Shares	EPS		Net Income		Shares	EPS
Basic EPS:
Net income	$	3,430				$	4,492
Income allocated to RSUs	(17)					(19)
Income allocated to common stock	$	3,413	907	$	3.76	$	4,473	922	$	4.85
Dilutive effect of stock compensation plans			9					10

Diluted EPS:
Net income	$	3,430				$	4,492
Income allocated to RSUs	(18)					(19)
Income allocated to common stock	$	3,412	916	$	3.72	$	4,473	932	$	4.80

Potentially dilutive securities representing 9 million and 6 million shares of common stock that were outstanding during the second quarters of 2023 and 2022, respectively, and 9 million and 5 million shares outstanding during the first six months of 2023 and 2022, respectively, were excluded from the computation of diluted earnings per common share during these periods because their effect would have been anti-dilutive.

Derivatives and hedging

We use derivative financial instruments to manage exposure to foreign exchange risk. These instruments are primarily forward foreign currency exchange contracts, which are used as economic hedges to reduce the earnings impact that exchange rate fluctuations may have on our non-U.S. dollar net balance sheet exposures. Gains and losses from changes in the fair value of these forward foreign currency exchange contracts are credited or charged to OI&E. We do not apply hedge accounting to our foreign currency derivative instruments.

We are exposed to variability in compensation charges related to certain deferred compensation obligations to employees. We use total return swaps to economically hedge this exposure and offset the related compensation expense, recognizing changes in the value of the swaps and the related deferred compensation liabilities in SG&A.

In connection with the issuance of long-term debt, we may use financial derivatives such as treasury-rate lock agreements that are recognized in AOCI and amortized over the life of the related debt.

The results of these derivative transactions have not been material. We do not use derivatives for speculative or trading purposes.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Fair values of financial instruments

The fair values of our derivative financial instruments were not material as of June 30, 2023. Our investments in cash equivalents, short-term investments and certain long-term investments, as well as our deferred compensation liabilities, are carried at fair value. The carrying values for other current financial assets and liabilities, such as accounts receivable and accounts payable, approximate fair value due to the short maturity of such instruments. As of June 30, 2023, the carrying value of long-term debt, including the current portion, was $11.22 billion, and the estimated fair value was $10.46 billion. The estimated fair value is measured using broker-dealer quotes, which are Level 2 inputs. See Note 4 for a description of fair value and the definition of Level 2 inputs.

Income taxes

Provision for income taxes is based on the following:


	For Three Months Ended						For Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
Taxes calculated using the estimated annual effective tax rate	$	289		$	395		$	565		$	756
Discrete tax items	(9)			(5)			(47)			(41)
Provision for income taxes	$	280		$	390		$	518		$	715

Effective tax rate	14		%	15		%	13		%	14		%

The effective tax rate differs from the 21% U.S. statutory corporate tax rate due to the effect of U.S. tax benefits.

Valuation of debt and equity investments and certain liabilities

Investments measured at fair value

Money market funds, debt investments and mutual funds are stated at fair value, which is generally based on market prices or broker quotes. We classify all debt investments as available-for-sale. See Fair-value considerations. Unrealized gains and losses are recorded as an increase or decrease, net of taxes, in AOCI on our Consolidated Balance Sheets, and any credit losses are recorded as an allowance for credit losses with an offset recognized in OI&E in our Consolidated Statements of Income.

Our mutual funds hold a variety of debt and equity investments intended to generate returns that offset changes in certain deferred compensation liabilities. We record changes in the fair value of these mutual funds and the related deferred compensation liabilities in SG&A.

Other investments

Our other investments include equity-method investments and non-marketable investments, which are not measured at fair value. These investments consist of interests in venture capital funds and other non-marketable securities. Gains and losses from equity-method investments are recognized in OI&E based on our ownership share of the investee’s financial results.

Non-marketable securities are measured at cost with adjustments for observable changes in price or impairments. Gains and losses on non-marketable investments are recognized in OI&E.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Details of our investments are as follows:


	June 30, 2023						December 31, 2022
	Cash and Cash Equivalents		Short-Term Investments		Long-Term Investments		Cash and Cash Equivalents		Short-Term Investments		Long-Term Investments
Measured at fair value:
Money market funds	$	2,367	$	—	$	—	$	1,238	$	—	$	—
Corporate obligations	384		1,761		—		276		1,535		—
U.S. government and agency securities	100		3,957		—		680		4,234		—
Non-U.S. government and agency securities	50		395		—		149		248		—
Mutual funds	—		—		11		—		—		11
Total	2,901		6,113		11		2,343		6,017		11

Other measurement basis:
Equity-method investments	—		—		14		—		—		18
Non-marketable investments	—		—		6		—		—		5
Cash on hand	538		—		—		707		—		—
Total	$	3,439	$	6,113	$	31	$	3,050	$	6,017	$	34

As of June 30, 2023, and December 31, 2022, unrealized gains and losses associated with our debt investments were not material. We did not recognize any credit losses related to debt investments for the first six months of 2023 and 2022. All of our debt securities classified as available-for-sale as of June 30, 2023, have maturities within one year.

Proceeds from sales, redemptions and maturities of short-term available-for-sale investments were $3.07 billion and $4.20 billion for the second quarters of 2023 and 2022, respectively, and $7.09 billion and $6.97 billion for the first six months of 2023 and 2022, respectively. Gross realized gains and losses from these sales were not material.

Fair-value considerations

We measure and report certain financial assets and liabilities at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

The three-level hierarchy described below indicates the extent and level of judgment used to estimate fair-value measurements.

Level 1 – Uses unadjusted quoted prices that are available in active markets for identical assets or liabilities as of the reporting date.
Level 2 – Uses inputs other than Level 1 that are either directly or indirectly observable as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data. We utilize a third-party data service to provide Level 2 valuations. We verify these valuations for reasonableness relative to unadjusted quotes obtained from brokers or dealers based on observable prices for similar assets in active markets.
Level 3 – Uses inputs that are unobservable, supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models that utilize management estimates of market participant assumptions. As of June 30, 2023, and December 31, 2022, we had no Level 3 assets or liabilities.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

The following are our assets and liabilities that were accounted for at fair value on a recurring basis. These tables do not include cash on hand, assets held by our postretirement plans, or assets and liabilities that are measured at historical cost or any basis other than fair value.


	June 30, 2023						December 31, 2022
	Level 1		Level 2		Total		Level 1		Level 2		Total
Assets:
Money market funds	$	2,367	$	—	$	2,367	$	1,238	$	—	$	1,238
Corporate obligations	—		2,145		2,145		—		1,811		1,811
U.S. government and agency securities	3,957		100		4,057		4,914		—		4,914
Non-U.S. government and agency securities	—		445		445		—		397		397
Mutual funds	11		—		11		11		—		11
Total assets	$	6,335	$	2,690	$	9,025	$	6,163	$	2,208	$	8,371

Liabilities:
Deferred compensation	$	353	$	—	$	353	$	326	$	—	$	326
Total liabilities	$	353	$	—	$	353	$	326	$	—	$	326

Postretirement benefit plans

Expenses related to defined benefit and retiree health care benefit plans are as follows:


	U.S. Defined Benefit				U.S. Retiree Health Care				Non-U.S. Defined Benefit
For Three Months Ended June 30,	2023		2022		2023		2022		2023		2022
Service cost	$	2	$	4	$	1	$	—	$	4	$	6
Interest cost	7		6		3		2		15		9
Expected return on plan assets	(5)		(8)		(4)		(2)		(17)		(17)
Recognized net actuarial losses (gains)	1		1		(2)		—		3		—

Net periodic benefit costs (credits)	5		3		(2)		—		5		(2)
Settlement losses	1		11		—		—		1		8
Total, including other postretirement losses (gains)	$	6	$	14	$	(2)	$	—	$	6	$	6

	U.S. Defined Benefit				U.S. Retiree Health Care				Non-U.S. Defined Benefit
For Six Months Ended June 30,	2023		2022		2023		2022		2023		2022
Service cost	$	4	$	8	$	1	$	1	$	8	$	13
Interest cost	14		12		7		5		29		19
Expected return on plan assets	(11)		(16)		(9)		(6)		(32)		(35)
Recognized net actuarial losses (gains)	3		1		(3)		—		6		—

Net periodic benefit costs (credits)	10		5		(4)		—		11		(3)
Settlement losses	1		13		—		—		1		9
Total, including other postretirement losses (gains)	$	11	$	18	$	(4)	$	—	$	12	$	6

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Debt and lines of credit

Short-term borrowings

We maintain a line of credit to provide additional liquidity through bank loans and, if necessary, to support commercial paper borrowings. As of June 30, 2023, the aforementioned line of credit was a variable-rate, revolving credit facility from a consortium of investment-grade banks that allows us to borrow up to $1 billion until March 2024. The interest rate on borrowings under this credit facility, if drawn, is indexed to the applicable Term Secured Overnight Financing Rate (Term SOFR). As of June 30, 2023, our credit facility was undrawn, and we had no commercial paper outstanding.

Long-term debt

In May 2023, we issued three series of senior unsecured notes for an aggregate principal amount of $1.60 billion, consisting of:

$200 million further issuance of existing 4.60% notes due in 2028;
$200 million further issuance of existing 4.90% notes due in 2033; and
$1.20 billion of 5.05% notes due in 2063.

We incurred $7 million of issuance cost and other related costs. The proceeds of the offering were $1.60 billion, net of the original issuance discounts and premiums, which will be used for general corporate purposes.

In May 2023, we retired $500 million of maturing debt.

In March 2023, we issued two series of senior unsecured notes for an aggregate principal amount of $1.40 billion, consisting of $750 million of 4.90% notes due in 2033 and $650 million of 5.00% notes due in 2053. We incurred $11 million of issuance and other related costs. The proceeds of the offering were $1.40 billion, net of the original issuance discounts, which will be used for general corporate purposes.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Long-term debt outstanding is as follows:


	June 30,		December 31,
	2023		2022
Notes due 2023 at 2.25%	$	—	$	500
Notes due 2024 at 2.625%	300		300
Notes due 2024 at 4.70%	300		300
Notes due 2025 at 1.375%	750		750
Notes due 2026 at 1.125%	500		500
Notes due 2027 at 2.90%	500		500
Notes due 2028 at 4.60%	700		500
Notes due 2029 at 2.25%	750		750
Notes due 2030 at 1.75%	750		750
Notes due 2031 at 1.90%	500		500
Notes due 2032 at 3.65%	400		400
Notes due 2033 at 4.90%	950		—
Notes due 2039 at 3.875%	750		750
Notes due 2048 at 4.15%	1,500		1,500
Notes due 2051 at 2.70%	500		500
Notes due 2052 at 4.10%	300		300
Notes due 2053 at 5.00%	650		—
Notes due 2063 at 5.05%	1,200		—
Total debt	11,300		8,800
Net unamortized discounts, premiums and issuance costs	(81)		(65)
Total debt, including net unamortized discounts, premiums and issuance costs	11,219		8,735
Current portion of long-term debt	(299)		(500)
Long-term debt	$	10,920	$	8,235

Interest and debt expense was $89 million and $49 million for the second quarters of 2023 and 2022, respectively, and $157 million and $101 million for the first six months of 2023 and 2022, respectively. This was net of the amortized discounts, premiums, issuance and other related costs. Capitalized interest was not material.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Stockholders’ equity

Changes in equity are as follows:


	Common Stock		Paid-in Capital		Retained Earnings		Treasury Common Stock		AOCI
Balance, December 31, 2022	$	1,741	$	2,951	$	50,353	$	(40,214)	$	(254)

2023
Net income	—		—		1,708		—		—
Dividends declared and paid ($1.24 per share)	—		—		(1,125)		—		—
Common stock issued for stock-based awards	—		(37)		—		118		—
Stock repurchases	—		—		—		(96)		—
Stock compensation	—		104		—		—		—
Other comprehensive income (loss), net of taxes	—		—		—		—		2
Dividend equivalents on RSUs	—		—		(6)		—		—
Other	—		(2)		—		—		—
Balance, March 31, 2023	1,741		3,016		50,930		(40,192)		(252)

Net income	—		—		1,722		—		—
Dividends declared and paid ($1.24 per share)	—		—		(1,125)		—		—
Common stock issued for stock-based awards	—		36		—		29		—
Stock repurchases	—		—		—		(77)		—
Stock compensation	—		111		—		—		—
Other comprehensive income (loss), net of taxes	—		—		—		—		6
Dividend equivalents on RSUs	—		—		(5)		—		—

Balance, June 30, 2023	$	1,741	$	3,163	$	51,522	$	(40,240)	$	(246)

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES


	Common Stock		Paid-in Capital		Retained Earnings		Treasury Common Stock		AOCI
Balance, December 31, 2021	$	1,741	$	2,630	$	45,919	$	(36,800)	$	(157)

2022
Net income	—		—		2,201		—		—
Dividends declared and paid ($1.15 per share)	—		—		(1,063)		—		—
Common stock issued for stock-based awards	—		(36)		—		93		—
Stock repurchases	—		—		—		(584)		—
Stock compensation	—		74		—		—		—
Other comprehensive income (loss), net of taxes	—		—		—		—		4
Dividend equivalents on RSUs	—		—		(5)		—		—
Other	—		(1)		1		—		—
Balance, March 31, 2022	1,741		2,667		47,053		(37,291)		(153)

Net income	—		—		2,291		—		—
Dividends declared and paid ($1.15 per share)	—		—		(1,060)		—		—
Common stock issued for stock-based awards	—		31		—		25		—
Stock repurchases	—		—		—		(1,266)		—
Stock compensation	—		85		—		—		—
Other comprehensive income (loss), net of taxes	—		—		—		—		(27)
Dividend equivalents on RSUs	—		—		(4)		—		—

Balance, June 30, 2022	$	1,741	$	2,783	$	48,280	$	(38,532)	$	(180)

Contingencies

Indemnification guarantees

We routinely sell products with an intellectual property indemnification included in the terms of sale. Historically, we have had only minimal, infrequent losses associated with these indemnities. Consequently, we cannot reasonably estimate any future liabilities that may result.

Warranty costs/product liabilities

Our stated warranties for semiconductor products obligate us to repair, replace or credit the purchase price of a covered product back to the buyer. Product claim consideration may exceed the price of our products. Historically, we have experienced a low rate of payments on product claims. Although we cannot predict the likelihood or amount of any future claims, we do not believe they will have a material adverse effect on our consolidated financial statements. We accrue for known product-related claims if a loss is probable and can be reasonably estimated. During the periods presented, there have been no material accruals or payments regarding product warranty or product liability.

General

We are subject to various legal and administrative proceedings. Although it is not possible to predict the outcome of these matters, we believe that the results of these proceedings will not have a material adverse effect on our consolidated financial statements.

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Supplemental financial information

Restructuring charges/other

During the second quarter and first six months of 2022, restructuring charges/other included $66 million and $132 million, respectively, of preproduction costs at our Lehi, Utah, manufacturing facility, which were included in Other for segment reporting purposes. These costs transitioned primarily to cost of revenue after production began in December 2022.

Other long-term assets


	June 30,		December 31,
	2023		2022
U.S. CHIPS and Science Act investment tax credit	$	921	$	395
Other	754		740
Total	$	1,675	$	1,135

Details on amounts reclassified out of accumulated other comprehensive income (loss), net of taxes, to net income

Our Consolidated Statements of Comprehensive Income include items that have been recognized within net income during the second quarters and first six months of 2023 and 2022. The table below details where these transactions are recorded in our Consolidated Statements of Income.


	For Three Months Ended				For Six Months Ended				Impact to Related Statement of Income Lines
	June 30,				June 30,
	2023		2022		2023		2022
Net actuarial losses of defined benefit plans:
Recognized net actuarial loss and settlement losses (a)	$	4	$	20	$	8	$	23	Decrease to OI&E
Tax effect	(1)		(4)		(2)		(5)		Decrease to provision for income taxes
Recognized within net income, net of taxes	$	3	$	16	$	6	$	18	Decrease to net income

(a)Detailed in Note 5

Stock compensation

During the first six months of 2023, 3 million shares were issued from treasury related to stock compensation. Shares issued from treasury during the second quarter of 2023 were less than 1 million.

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