Texas Instruments 2015 Annual Report Download - page 61

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FORM 10-K
The following table shows the benefits we expect to pay to participants from the plans in the next 10 years and assumes that
retirement eligible participants take their benefits immediately. Almost all of the payments will be made from plan assets and not from
company assets.
U.S. Defined
Benefit
U.S. Retiree
Health Care
Medicare
Subsidy
Non-U.S.
Defined Benefit
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 217 $ 36 $ (4) $ 76
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 37 (4) 78
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 39 (4) 82
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 40 (5) 85
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 40 (5) 89
2020 - 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 435 194 (9) 501
Assumed health care cost trend rates for the U.S. retiree health care benefit plan at December 31 are as follows:
2014 2013
Assumed health care cost trend rate for next year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.0% 7.0%
Ultimate trend rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.0% 5.0%
Year in which ultimate trend rate is reached . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2023 2022
A one percentage point increase or decrease in health care cost trend rates over all future periods would have increased or decreased
the accumulated postretirement benefit obligation for the U.S. retiree health care benefit plan at December 31, 2014, by $27 million or
$22 million, respectively. The service cost and interest cost components of 2014 plan expense would have increased or decreased by
$1 million.
Deferred compensation arrangements
We have a deferred compensation plan that allows U.S. employees whose base salary and management responsibility exceed a certain
level to defer receipt of a portion of their cash compensation. Payments under this plan are made based on the participant’s distribution
election and plan balance. Participants can earn a return on their deferred compensation based on notional investments in the same
investment funds that are offered in our defined contribution plans.
As of December 31, 2014, our liability to participants of the deferred compensation plans was $202 million and is recorded in Deferred
credits and other liabilities on our Consolidated Balance Sheets. This amount reflects the accumulated participant deferrals and earnings
thereon as of that date. As of December 31, 2014, we held $185 million in mutual funds related to these plans that are recorded in
Long-term investments on our Consolidated Balance Sheets, and serve as an economic hedge against changes in fair values of our
other deferred compensation liabilities. We record changes in the fair value of the liability and the related investment in SG&A as
discussed in Note 9.
Debt and lines of credit
Short-term borrowings
We maintain a line of credit to support commercial paper borrowings, if any, and to provide additional liquidity through bank loans.
As of December 31, 2014, we had a variable-rate revolving credit facility from a consortium of investment-grade banks that allows
us to borrow up to $2 billion through March 2019. The interest rate on borrowings under this credit facility, if drawn, is indexed to the
applicable London Interbank Offered Rate (LIBOR). As of December 31, 2014, our credit facility was undrawn and we had no commercial
paper outstanding.
Long-term debt
In March 2014, we issued an aggregate principal amount of $500 million of fixed-rate long-term debt, with $250 million due in 2017
and $250 million due in 2021. We incurred $3 million of issuance and other related costs, which are being amortized to Interest and
debt expense over the term of the debt. The proceeds of the offering were $498 million, net of the original issuance discount and were
used toward the repayment of the $1.0 billion of debt that matured in May 2014.
In May 2013, we issued an aggregate principal amount of $1.0 billion of fixed-rate long-term debt, with $500 million due in 2018 and
$500 million due in 2023. We incurred $6 million of issuance and other related costs that are being amortized to Interest and debt
expense over the term of the debt. The proceeds of the offering were $986 million, net of the original issuance discount and were used
toward the repayment of $1.5 billion of maturing debt, including floating-rate notes. In connection with this repayment, we settled a
floating-to-fixed interest rate swap associated with the maturing debt.
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