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TEXAS INSTRUMENTS20 ■ 2011 ANNUAL REPORT
ANNUAL
REPORT
Concentrations of credit risk with respect to accounts receivable are limited due to our large number of customers and their
dispersion across different industries and geographic areas. We maintain an allowance for losses based on the expected collectability of
accounts receivable. These allowances are deducted from accounts receivable on our Consolidated balance sheets.
Details of these allowances are as follows:
Accounts receivable allowances Balance at
Beginning of Year
Additions Charged
(Credited) to
Operating Results Recoveries and
Write-offs, Net Balance at
End of Year
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $18 $ 1 $— $19
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 (4) (1) 18
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 1 (8) 23
9. 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 and trading 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). Unrealized gains and losses on available-for-sale securities are
recorded as an increase or decrease, net of taxes, in AOCI on our Consolidated balance sheets. We record other-than-temporary losses
(impairments) on available-for-sale securities in OI&E in our Consolidated statements of income.
We classify certain mutual funds as trading securities. These mutual funds 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 these mutual
funds and the related deferred compensation liabilities in SG&A. Changes in the fair value of debt securities classified as trading
securities are recorded in OI&E.
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 and 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, 2011 December 31, 2010
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 securities
Money market funds . . . . . . . . . . . . . . . . . . $ 55 $ — $ — $ 167 $ — $ —
Corporate obligations . . . . . . . . . . . . . . . . . . 135 159 — 44 649 —
U.S. Government agency and Treasury securities . . . . . 430 1,691 — 855 1,081 —
Auction-rate securities . . . . . . . . . . . . . . . . . — — 41 — 23 257
Trading securities
Auction-rate securities . . . . . . . . . . . . . . . . . — 93 — — — —
Mutual funds . . . . . . . . . . . . . . . . . . . . . . — — 169 — — 139
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 620 1,943 210 1,066 1,753 396
Other measurement basis:
Equity-method investments . . . . . . . . . . . . . . — — 32 — — 36
Cost-method investments . . . . . . . . . . . . . . . — — 23 — — 21
Cash on hand . . . . . . . . . . . . . . . . . . . . . 372 — — 253 — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . $992 $1,943 $265 $1,319 $1,753 $453
Amounts included in AOCI from
available-for-sale securities:
Unrealized gains (pre-tax) . . . . . . . . . . . . . . . . . $ — $ — $ — $ — $ 1 $ —
Unrealized losses (pre-tax) . . . . . . . . . . . . . . . . . $ — $ — $ 5 $ — $ 1 $ 22