Texas Instruments 2007 Annual Report Download - page 40

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38 TEXAS INSTRUMENTS 2007 ANNUAL REPORT
Discontinued Operations Indemnity: In connection with the sale of the former Sensors & Controls business, we have agreed to indemnify
Sensata for certain specified litigation matters, as well as other liabilities, including environmental liabilities. Our indemnification
obligations with respect to breaches of representations and warranties and the specified litigation matters are, generally, subject to
a total deductible of $30 million and our maximum potential exposure is limited to $300 million. There were no significant liabilities
recorded under these indemnification obligations.
14. Supplemental Financial Information
Other Income (Expense) Net
2007 2006 2005
Interest income ................................................................ $ 157 $ 196 $ 165
Interest expense on loans......................................................... (1)(7) (9)
Settlement of Italian grants (a)..................................................... — 28 11
Sales tax refunds (b) ............................................................ — 20 —
Other (c) ..................................................................... 39 21 29
Total......................................................................... $ 195 $ 258 $ 196
(a) Consists of benefits recognized due to the resolution of matters relating to grants from the government of Italy to our former memory business operations in Italy.
(b) Consists of refunds of overpayments attributable to previously divested businesses and interest on refunds relating to settlements of audits of sales and use taxes paid to the State of
Texas.
(c) Includes lease income of approximately $20 million per year, primarily from the purchaser of our former defense electronics business divested in 1997. As of December 31, 2007,
the aggregate amount of non-cancellable future lease payments to be received from these leases is $81 million. These leases contain renewal options. Other also includes
miscellaneous non-operational items such as interest income and expense related to non-investment items such as taxes, gains and losses for our proportionate share of the net
income or loss of our limited partnerships accounted for under the equity method, gains and losses related to previously divested businesses, and gains and losses from currency
exchange rate changes.
Inventories
December 31,
2007 2006
Raw materials and purchased parts ........................................................ $ 105 $ 105
Work in process ....................................................................... 876 930
Finished goods........................................................................ 437 402
Total................................................................................ $ 1,418 $ 1,437
Property, Plant and Equipment at Cost
December 31,
Depreciable Lives 2007 2006
Land ................................................................. — $ 82 $ 82
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-40 years 2,895 2,890
Machinery and equipment ................................................. 3-10 years 4,591 4,779
Total ................................................................. $ 7,568 $ 7,751