Texas Instruments 2014 Annual Report Download - page 53

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FORM 10-K
Details of our investments are as follows:
December 31, 2014 December 31, 2013
Cash and Cash
Equivalents
Short-Term
Investments
Long-Term
Investments
Cash and Cash
Equivalents
Short-Term
Investments
Long-Term
Investments
Measured at fair value:
Available-for-sale securities
Money market funds . . . . . . . . . . $ 522 $ — $ — $ 500 $ — $ —
Corporate obligations . . . . . . . . . . 97 390 — 123 217 —
U.S. Government agency and
Treasury securities . . . . . . . . . . . 365 1,952 — 787 1,985 —
Trading securities
Mutual funds . . . . . . . . . . . . . . — — 185 — — 179
Total . . . . . . . . . . . . . . . . . . . . 984 2,342 185 1,410 2,202 179
Other measurement basis:
Equity-method investments . . . . . . — — 27 — — 24
Cost-method investments . . . . . . . — — 12 — — 13
Cash on hand . . . . . . . . . . . . . 215 — — 217 — —
Total . . . . . . . . . . . . . . . . . . . . $ 1,199 $ 2,342 $ 224 $ 1,627 $ 2,202 $ 216
At December 31, 2014 and 2013, we had no significant unrealized gains or losses associated with our available-for-sale investments. We
did not recognize any credit losses related to available-for-sale investments for the years ended December 31, 2014, 2013 and 2012.
For the years ended December 31, 2014, 2013 and 2012, the proceeds from sales, redemptions and maturities of short-term
available-for-sale investments were $2.97 billion, $4.25 billion and $2.20 billion, respectively. Gross realized gains and losses from
these sales were not significant.
The following table presents the aggregate maturities of investments in debt securities classified as available for sale at
December 31, 2014:
Due Fair Value
One year or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,121
One to two years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205
Gross realized gains and losses from sales of long-term investments were not significant for 2014, 2013 and 2012. Other-than-temporary
declines and impairments in the values of these investments recognized in OI&E were not material in 2014, and were $5 million and
$7 million in 2013 and 2012, respectively.
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 discussed 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.