Texas Instruments 2011 Annual Report Download - page 32

TEXAS INSTRUMENTS30 ■ 2011 ANNUAL REPORT
ANNUAL
REPORT
None of the plan assets related to the defined benefit pension plans and retiree health care benefit plan are directly invested in TI
common stock. As of December 31, 2011, we do not expect to return any of the plans’ assets to TI in the next 12 months.
Contributions to the plans meet or exceed all minimum funding requirements. We expect to contribute about $120 million to our
retirement benefit plans in 2012.
The following table shows the benefits we expect to pay to participants from the plans in the next ten years. Almost all of the payments
will be made from plan assets and not from company assets.
U.S. Defined
Benefit U.S. Retiree Health Care Medicare Subsidy
Non-U.S.
Defined
Benefit
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $160 $ 35 $ (4) $ 77
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 37 (4) 80
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 39 (4) 82
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 41 (2) 89
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 43 (2) 92
2017–2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 451 213 (10) 525
Assumed health care cost trend rates for the U.S. retiree health care plan at December 31 are as follows:
2011 2010
Assumed health care cost trend rate for next year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.0% 9.0%
Ultimate trend rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.0% 5.0%
Year in which ultimate trend rate is reached . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2017 2016
Increasing or decreasing health care cost trend rates by one percentage point would have increased or decreased the accumulated
postretirement benefit obligation for the U.S. retiree health care plan at December 31, 2011, by $28 million or $24 million and increased
or decreased the service cost and interest cost components of 2011 plan expense by $1 million.
Deferred compensation arrangements
We have a deferred compensation plan, which allows U.S. employees whose base salary and management responsibility exceed a
certain level to defer receipt of a portion of their cash compensation. Payments under this plan are made based on the participant’s
distribution election and plan balance. Participants can earn a return on their deferred compensation based on notional investments in
the same investment funds that are offered in our defined contribution plans.
As of December 31, 2011, our liability to participants of the deferred compensation plan was $150 million and is recorded in
Deferred credits and other liabilities on our Consolidated balance sheets. This amount reflects the accumulated participant deferrals
and earnings thereon as of that date. No assets are held in trust for the deferred compensation plan and so we remain liable to the
participants. To serve as an economic hedge against changes in fair values of this liability, we invest in similar mutual funds that are
recorded in Long-term investments. We record changes in the fair value of the liability and the related investment in SG&A (see Note 9).
In connection with the National acquisition, we assumed its deferred compensation plan. As of December 31, 2011, this consisted of
$41 million of obligations and matching assets held in a Rabbi trust. No further contributions will be made into this plan.
13. Debt and lines of credit
Debt balances include amounts assumed related to the National acquisition measured at fair value as of the acquisition date.
Short-term borrowings
We maintain lines of credit to support commercial paper borrowings, if any, and to provide additional liquidity through bank loans. As of
December 31, 2011, we had a variable-rate revolving credit facility that allows us to borrow up to $920 million through August 2012. We
have a second variable-rate revolving credit facility that allows us to borrow an additional $1 billion until July 2012. These facilities carry
a variable rate of interest indexed to the London Interbank Offered Rate (LIBOR).
On July 14, 2011, for general corporate purposes and to maintain cash balances at desired levels, we issued an aggregate of
$1.2 billion of commercial paper, which was supported by these existing revolving credit facilities. During the fourth quarter, we repaid
$200 million of those borrowings. As of December 31, 2011, the balance of commercial paper outstanding was $1.0 billion. The
weighted-borrowing rate for the commercial paper outstanding as of December 31, 2011, was 0.25 percent.