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TEXAS INSTRUMENTS 2013 ANNUAL REPORT • 29
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, 2013, we do not expect to return any of the defined benefit pension plans’ assets to TI in the next
12 months.
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
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $208 $ 36 $ (4) $ 81
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 37 (4) 84
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 39 (4) 86
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 40 (5) 91
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 41 (5) 94
2019 - 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421 196 (13) 521
Assumed health care cost trend rates for the U.S. retiree health care plan at December 31 are as follows:
2013 2012
Assumed health care cost trend rate for next year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.0% 7.0%
Ultimate trend rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.0% 5.0%
Year in which ultimate trend rate is reached . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2022 2018
A one percentage point increase or decrease in health care cost trend rates over all future periods would have increased or decreased
the accumulated postretirement benefit obligation for the U.S. retiree health care plan at December 31, 2013, by $22 million or
$18 million, respectively. The service cost and interest cost components of 2013 plan expense would have increased or decreased by
$2 million or $1 million, respectively.
Deferred compensation arrangements
We have a deferred compensation plan that 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. In connection with the National acquisition, we assumed its deferred
compensation plan, consisting of obligations and matching assets held in a Rabbi trust.
As of December 31, 2013, our liability to participants of the deferred compensation plans was $197 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. Except for the Rabbi trust assets of $37 million, no other assets are held in trust for the deferred
compensation plans 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 as discussed in Note 9.
12. Debt and lines of credit
Short-term borrowings
We maintain a line of credit to support commercial paper borrowings, if any, and to provide additional liquidity through bank loans.
As of December 31, 2013, we had a variable-rate revolving credit facility from a consortium of investment-grade banks that allows
us to borrow up to $2 billion through March 2018. The interest rate on borrowings under this credit facility, if drawn, is indexed to the
applicable London Interbank Offered Rate (LIBOR). As of December 31, 2013, our credit facility was undrawn and we had no commercial
paper outstanding.
Long-term debt
In May 2013, we issued an aggregate principal amount of $1.0 billion of fixed-rate long-term debt, with $500 million due in 2018 and
$500 million due in 2023. We also incurred $6 million of issuance and other related costs that are being amortized to Interest and debt
expense over the term of the debt. The proceeds of the offering were $986 million, net of the original issuance discount and were used
toward the repayment of $1.5 billion of maturing debt, including floating-rate notes. In connection with this repayment, we settled a
floating-to-fixed interest rate swap, associated with the maturing debt.