Texas Instruments 2007 Annual Report Download - page 20

18 TEXAS INSTRUMENTS 2007 ANNUAL REPORT
2. Discontinued Operations
As discussed in Note 1, in 2006 we sold substantially all of the former Sensors & Controls segment.
The results of operations of the former Sensors & Controls business (which was renamed Sensata Technologies (Sensata)) are
being presented as discontinued operations. The following summarizes results of the discontinued operations for the years ended
December 31, 2007, 2006 and 2005, included in the consolidated statements of income:
2007 2006 2005
Net revenue ................................................................. $ — $ 375 $ 1,057
Operating costs and expenses ................................................... 4 327 825
Income (loss) from discontinued operations before income taxes......................... (4)48 232
Provision (benefit) for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3)19 81
Income (loss) from discontinued operations, net of income taxes......................... (1)29 151
Gain on sale of discontinued operations ............................................ — 2,554 —
Provision (benefit) for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17)880 —
Gain on sale of discontinued operations, net of income taxes............................ 17 1,674 —
Total income from discontinued operations ......................................... $16 $ 1,703 $ 151
Income from discontinued operations per common share: (a)
Basic .................................................................... $ 0.01 $ 1.11 $ 0.09
Diluted ................................................................... $ 0.01 $ 1.09 $ 0.09
(a) Earnings per share amounts from continuing and discontinued operations may not add to net income per share due to rounding.
Total income from discontinued operations in 2007 includes an income tax benefit related to a reduction of a state tax liability
associated with the sale.
Continuing Involvement: Upon closing of the sales transaction, we entered into a Transition Services Agreement (TSA) with Sensata
to provide various temporary support services that are reasonably necessary to facilitate the continuation of the normal conduct
of business of the former Sensors & Controls business such as finance and accounting, human resources, information technology,
warehousing and logistics, and records retention and storage. As of December 31, 2007, the provision of such services has been
substantially completed, although certain information technology-related services may continue to be provided until April 2008. The
fees for these services are generally equivalent to our cost.
Although the services provided under the TSA generate continuing cash flows between us and Sensata, the amounts are not considered
to be significant to the ongoing operations of either entity. In addition, we have no contractual ability through the TSA or any other
agreement to significantly influence the operating or financial policies of Sensata. Under the provisions of EITF Issue No. 03-13,
“Applying the Conditions of Paragraph 42 of FASB Statement No. 144 in Determining Whether to Report Discontinued Operations,” we
therefore have no significant continuing involvement in the operations of the former Sensors & Controls business and have classified the
historical results of that business as discontinued operations.