Texas Instruments 2012 Annual Report Download - page 49

ANNUAL
REPORT
TEXAS INSTRUMENTS 2012 ANNUAL REPORT • 47
Wireless revenue decreased $460 million, or 15 percent, from 2010 due to decreased shipments of baseband products, and to a much
lesser extent, connectivity products. Partially offsetting these decreases was growth in revenue from OMAP applications processors due
to a more favorable mix of products shipped. Baseband revenue for 2011 was $1.10 billion, a decrease of $609 million, or 36 percent,
compared with 2010.
Operating profit was $412 million, or 16.4 percent of revenue. This was a decrease of $271 million, or 40 percent, compared with
2010 primarily due to lower revenue and associated gross profit.
Other
2011 2010 Change
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,732 $2,936 -7%
Operating profit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 519 1,464 -65%
Operating profit % of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.0% 49.9%
Restructuring charges/other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 112 $ (140)
Acquisition charges* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 —
* Included in Operating profit
Revenue from Other was $2.73 billion in 2011. This was a decrease of $204 million, or 7 percent, from 2010 primarily due to decreased
shipments across most areas.
Operating profit for 2011 from Other was $519 million, or 19.0 percent of revenue. This was a decrease of $945 million, or
65 percent, compared with 2010 due to charges associated with the National acquisition; the absence of a gain on divestiture; lower
revenue and associated gross profit; restructuring charges related to the action initiated in 2011 to close certain manufacturing facilities
in Texas and Japan; and the net losses associated with the Japan earthquake.
Financial condition
At the end of 2012, total cash (Cash and cash equivalents plus Short-term investments) was $3.96 billion, an increase of $1.03 billion
from the end of 2011.
Accounts receivable were $1.23 billion at the end of 2012. This was a decrease of $315 million compared with the end of 2011. The
decrease in accounts receivable was due to lower revenue in December 2012 than in December 2011. Days sales outstanding were 37
at the end of 2012 compared with 41 at the end of 2011.
Inventory was $1.76 billion at the end of 2012. This was a decrease of $31 million from the end of 2011. Days of inventory at the
end of 2012 were 103 compared with 86 at the end of 2011. Our days of inventory increased in order to support higher customer
service levels.
Liquidity and capital resources
Our primary source of liquidity is cash flow from operations. Additional sources of liquidity are Cash and cash equivalents, Short-term
investments and revolving credit facilities. Cash flow from operations for 2012 was $3.41 billion, an increase of $158 million from the
prior year due to an increase in cash provided by working capital.
We had $1.416 billion of Cash and cash equivalents and $2.549 billion of Short-term investments as of December 31, 2012.
We have a variable-rate revolving credit facility with a consortium of investment-grade banks that allows us to borrow up to
$2 billion until March 2017. This credit facility also serves as support for the issuance of commercial paper. As of December 31, 2012,
we had no commercial paper outstanding.
In 2012, investing activities used $1.04 billion. This compares with $6.17 billion used in 2011 primarily for the National acquisition,
net of cash acquired. See Note 2 to the financial statements for details. For 2012, capital expenditures (Additions to property, plant and
equipment) were $495 million compared with $816 million in 2011. Capital expenditures in 2012 were primarily for semiconductor
manufacturing equipment. We used cash of $604 million to make net purchases of short-term investments in 2012 compared with
$98 million in 2011.
In 2012, financing activities used net cash of $1.95 billion and provided $2.59 billion in 2011. In 2012, we received proceeds
of $1.49 billion from the issuance of fixed-rate long-term debt (net of original issuance discount). This compares with proceeds in
2011 of $3.50 billion we received from the issuance of fixed- and variable-rate long-term debt (net of the original issuance discount)
and $1.20 billion from the issuance of commercial paper. The 2011 issuance of long-term debt was used in the National acquisition.
The commercial paper was issued for general corporate purposes and to maintain cash balances at desired levels. See Note 12 to
the financial statements for additional details. We used $1.38 billion to repay debt and commercial paper in 2012 compared with