Texas Instruments 2007 Annual Report Download - page 41

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TEXAS INSTRUMENTS 2007 ANNUAL REPORT 39
Authorizations for property, plant and equipment expenditures in future years were $416 million at December 31, 2007.
Accrued Expenses and Other Liabilities
December 31,
2007 2006
Accrued salaries, wages and vacation pay ................................................... $ 406 $ 368
Customer incentive programs and allowances ................................................ 206 188
Property and other non-income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 126
Other ............................................................................... 392 347
Total................................................................................ $ 1,117 $ 1,029
Accumulated Other Comprehensive Loss
December 31,
2007 2006
Unrealized losses on available-for-sale investments ............................................ $ (5 ) $ (12 )
Postretirement benefit plans:
Prior service cost .................................................................... 5 6
Net actuarial loss ..................................................................... (324 ) (357)
Total................................................................................ $ (324 ) $ (363 )
15. Restructuring Activities
On January 22, 2007, we announced plans to change how we develop advanced digital manufacturing process technology. Instead of
separately creating our own core process technology, we work collaboratively with our foundry partners to specify and drive the next
generations of digital process technology. Additionally, we have stopped production at an older digital factory and are moving most of
its manufacturing equipment into several of our analog factories to support greater analog output.
These actions are substantially complete and are expected to reduce R&D costs by about $150 million and cost of revenue by about
$50 million annually. As a result of these changes, about 300 jobs were eliminated by year-end 2007.
Profit from operations for 2007 includes a charge of $52 million related to these actions, due to severance and benefit costs of
$31 million and acceleration of depreciation on the facilities’ assets over the remaining service lives of $21 million.
Of the total restructuring charges for the period, $37 million is included in cost of revenue, $14 million is included in R&D expense and
$1 million is included in SG&A. All amounts are reflected in Corporate.
As of December 31, 2007, $10 million has been paid to terminated employees for severance and benefits.
16. Segment and Geographic Area Data
We have two reportable operating segments: Semiconductor and Education Technology.
Our Semiconductor segment designs, manufactures and sells semiconductors, commonly called “chips.” Over the past decade,
we have focused most of the resources of our Semiconductor segment on two areas – analog semiconductors and digital signal
processors (DSPs). In 2007, about 80 percent of the segment’s revenue came from the combination of these two broad types of