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TEXAS INSTRUMENTS 2009 ANNUAL REPORT
PAGE 18
Details of these allowances are as follows:
Accounts receivable allowances Balance at
Beginning of Year
Additions Charged
to Operating
Results
Recoveries and
Write-offs, Net
Balance at
End of Year
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $30 $ 1 $ (8)$23
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $26 $ 7 $ (3)$30
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $26 $ — $— $26
7. Valuation of debt and equity investments and certain liabilities
Debt and equity investments
We classify our investments as available-for-sale, trading, equity method or cost method. Most of our investments are classified as
available-for-sale.
Available-for-sale securities consist primarily of money market funds and debt securities. Available-for-sale securities are stated
at fair value, which is generally based on market prices, broker quotes or, when necessary, financial models (see fair value discussion
below). We record other-than-temporary losses (impairments) on these securities in OI&E in our statements of income, and all other
unrealized gains and losses as an increase or decrease, net of taxes, in AOCI on our balance sheet.
Trading securities are stated at fair value based on market prices. Our trading securities consist exclusively of mutual funds that hold
a variety of debt and equity investments intended to generate returns that offset changes in certain deferred compensation liabilities.
We record changes in the fair value of our trading securities and the related deferred compensation liabilities in selling, general and
administrative (SG&A) expense in our statements of income.
Our other investments are not measured at fair value but are accounted for using either the equity method or cost method. These
investments consist of interests in venture capital funds and other non-marketable equity securities. Gains or losses from equity
method investments are reflected in OI&E based on our ownership share of the investee’s financial results. Gains and losses on cost
method investments are recorded in OI&E when realized or when an impairment of the investment’s value is warranted based on our
assessment of the recoverability of each investment.
Details of our investments and related unrealized gains and losses included in AOCI are as follows:
December 31, 2009 December 31, 2008
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
Money market funds . . . . . . . . . . . . . . . . . . . $563 $ — $ — $796 $ — $ —
Corporate obligations. . . . . . . . . . . . . . . . . . . 100 438 —50 590 —
U.S. Government agency and Treasury securities. . . 360 1,305 ——654 —
Mortgage-backed and other securities. . . . . . . . — — — —250 —
Auction-rate securities. . . . . . . . . . . . . . . . . . — — 458 — — 482
Trading
Mutual funds . . . . . . . . . . . . . . . . . . . . . . . . — — 123 — — 96
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,023 1,743 581 846 1,494 578
Other measurement basis:
Equity method investments . . . . . . . . . . . . . . . — — 33 — — 53
Cost method investments . . . . . . . . . . . . . . . . — — 23 — — 22
Cash on hand. . . . . . . . . . . . . . . . . . . . . . . . 159 — — 200 — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,182 $1,743 $637 $1,046 $1,494 $653
Amounts included in AOCI from
available-for-sale securities:
Unrealized gains (pre-tax). . . . . . . . . . . . . . . . . . $ — $ 1 $ — $ — $ 6 $ —
Unrealized losses (pre-tax) . . . . . . . . . . . . . . . . . $ — $ — $ 32 $ — $ 19 $53