Texas Instruments 2005 Annual Report Download - page 52

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For the year, Semiconductor orders increased 13 percent to $12.23 billion due to broad-based demand for our DSP and
analog products.
Sensors & Controls Segment
Statement of Operations – Sensors & Controls For years ended
December 31,
2005 2004
Net revenue ............................................................................ $ 1,172 $ 1,127
Cost of revenue ......................................................................... 768 704
Gross profit ............................................................................. 404 423
Gross profit % of revenue ............................................................ 34.5% 37.5%
Profit from operations ................................................................... 266 281
Operating profit % of revenue ........................................................ 22.7% 24.9%
Sensors & Controls revenue for 2005 was $1.17 billion, up 4 percent from 2004 due to increased shipments resulting from
growth in demand for sensor products.
For the year, gross profit was $404 million, or 34.5 percent of revenue, a decrease of $19 million from the prior year
primarily due to costs associated with new products.
Operating profit was $266 million, or 22.7 percent of revenue, a decrease of $15 million from the prior year due to lower
gross profit.
Educational & Productivity Solutions (E&PS) Segment
Statement of Operations – E&PS For years ended
December 31,
2005 2004
Net revenue ............................................................................ $ 506 $ 518
Cost of revenue ......................................................................... 206 226
Gross profit ............................................................................. 300 292
Gross profit % of revenue ............................................................ 59.2% 56.4%
Profit from operations ................................................................... 188 176
Operating profit % of revenue ........................................................ 37.2% 34.0%
E&PS revenue for 2005 was $506 million, down 2 percent from 2004 primarily due to tighter inventory management at
retail customers.
Gross profit of $300 million, or a record 59.2 percent of revenue, increased $8 million from 2004 primarily due to lower
manufacturing costs.
Operating profit was a record $188 million, or 37.2 percent of revenue, an increase of $12 million from 2004 due to higher
gross profit.
2004 Compared with 2003
We delivered excellent growth and improved profitability in 2004 despite a second half that was dampened by inventory
adjustments. In the third and fourth quarters of 2004, distributors and other customers adjusted their semiconductor
inventories. In response, we took action beginning in the third quarter to sharply reduce factory loadings, which resulted
in exiting the year with $100 million lower inventory levels than in the third quarter.
50
TEXAS INSTRUMENTS 2005 ANNUAL REPORT