Texas Instruments 2009 Annual Report Download - page 43

TEXAS INSTRUMENTS 2009 ANNUAL REPORT PAGE 41
Operating profit was $2.44 billion, or 19.5 percent of revenue, compared with $3.50 billion, or 25.3 percent of revenue, in 2007.
This was a 30 percent decrease due to the decline in revenue and the associated lower gross profit, the impact of underutilized
manufacturing assets, and higher restructuring charges. These more than offset a reduction in operating expenses.
Other income (expense) net (OI&E) was $44 million, a decrease of $151 million from 2007 primarily due to lower interest income.
The decrease in interest income from a year ago was primarily due to lower interest rates, and to a lesser extent, lower average
interest-bearing investments.
The tax provision was $561 million, compared with $1.05 billion for 2007. The decrease was primarily due to lower income before
income taxes. The tax provision for 2008 contained net discrete tax benefits of $122 million, primarily resulting from our decision to
indefinitely reinvest the accumulated earnings of a non-U.S. subsidiary. The tax provision for 2007 contained net discrete tax benefits of
$28 million.
Income from continuing operations was $1.92 billion, a decrease of $721 million from 2007. EPS for 2008 was $1.44 per share,
compared with $1.82 per share for 2007. The impact of restructuring costs reduced EPS by $0.12 per share in 2008 and by $0.02 per
share in 2007. EPS in 2008 benefited $0.12 from a lower number of average shares outstanding as a result of our stock repurchase
program.
Orders were $11.86 billion, which was 13 percent lower than 2007. In the fourth quarter of 2008, orders were $1.86 billion, which
was 42 percent lower than in the third quarter of 2008. The declines in both periods reflected lower demand over a broad range of our
products.
Segment results
A detailed discussion of our segment results appears below. When reviewing each segment’s results, bear in mind that restructuring
charges negatively impacted each segment’s operating profit as follows:
2008 2007
Analog . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 60 $ 18
Embedded Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 4
Wireless . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 20
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 10
Total restructuring. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 254 $ 52
Analog
2008 2007
2008
vs. 2007
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,857 $4,927 -1%
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,050 1,548 -32%
Operating profit % of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.6%31.4%
Analog revenue was about even with 2007 as growth in shipments of high-performance analog products was more than offset by a
decline in shipments of high-volume analog & logic products.
Operating profit was $1.05 billion, or 21.6 percent of revenue. This was a decrease of $498 million from 2007 due to lower gross
profit, and to a lesser extent, higher operating expenses. Higher operating expenses were primarily due to continued investment in R&D
and SG&A, reflecting the strategic importance of this segment to our future growth.
Embedded Processing
2008 2007
2008
vs. 2007
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,631 $1,588 3%
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268 290 -7%
Operating profit % of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.5%18.3%
Embedded Processing revenue grew 3 percent compared with 2007 due to increased shipments during the earlier part of 2008,
although revenue declined during the fourth quarter. The increase in revenue from 2007 was due to increased shipments of products for
communications infrastructure applications, and to a lesser extent, catalog products. These increases more than offset lower revenue
from a decline in shipments of products for automotive applications.
Operating profit was $268 million, or 16.5 percent of revenue. This was a decrease of $22 million compared with 2007 due to higher
restructuring charges.