Texas Instruments 2007 Annual Report Download - page 43

TEXAS INSTRUMENTS 2007 ANNUAL REPORT 41
There was no significant intersegment revenue.
The following geographic area data includes net revenue, based on product shipment destination and royalty payor location, and
property, plant and equipment based on physical location:
Geographic Area Information
U.S. Asia Europe Japan Rest of World Total
Net revenue
2007 ........................................... $ 1,758 $ 8,013 $ 2,258 $ 1,423 $ 383 $ 13,835
2006 ........................................... 1,868 7,568 2,286 2,008 525 14,255
2005 ........................................... 1,679 6,277 2,060 1,821 498 12,335
Property, plant and equipment, net
2007 ........................................... $ 2,188 $ 965 $190 $252 $14 $3,609
2006 ........................................... 2,517 944 205 271 13 3,950
2005 ........................................... 2,544 705 208 259 14 3,730
Major Customer
Direct sales to the Nokia group of companies were 16 percent of our revenue in 2007 and 11 percent of our revenue in 2006 and 2005;
if indirect sales such as to contract manufacturers are included, Nokia accounted for 19 percent, 15 percent and 16 percent of our
2007, 2006 and 2005 revenue.
17. Subsequent Event
As discussed in Note 3, our short-term investments include auction-rate securities, the interest rates of which are reset through an
auction process, most commonly at intervals of 7, 28 and 35 days. The same auction process is designed to provide a means by which
these securities can be sold, and historically has provided a liquid market for them.
As of December 31, 2007, we had $1.04 billion invested in auction-rate securities. As of mid-February 2008, we had sold down our
holdings of these auction-rate securities to less than $575 million through the normal auction process.
In mid-February 2008, liquidity issues in the global credit markets resulted in the failure of auctions representing substantially all of the
auction-rate securities we hold, as the amount of securities submitted for sale in those auctions exceeded the amount of bids.
Substantially all of our auction-rate investments are backed by pools of student loans guaranteed by the U.S. Department of Education
and we continue to believe that the credit quality of these securities is high based on this guarantee. To date we have collected all
interest payable on all of our auction-rate securities when due and expect to continue to do so in the future. For each unsuccessful
auction, the interest rate moves to a maximum rate defined for each security, generally reset periodically at a level higher than defined
short-term interest benchmarks. The principal associated with failed auctions will not be accessible until successful auctions occur,
a buyer is found outside of the auction process, the issuers establish a different form of financing to replace these securities, or final
payments come due according to contractual maturities ranging from 15 to 40 years. We understand that issuers and financial markets
are working on alternatives that may improve liquidity, although it is not yet clear when or if such efforts will be successful. We expect
that we will receive the principal associated with these auction-rate securities through one of the means described above.
While the recent auction failures will limit our ability to liquidate these investments for some period of time, we do not believe the
auction failures will materially impact our ability to fund our working capital needs, capital expenditures, dividend payments or other
business requirements.