Texas Instruments 2014 Annual Report Download - page 125

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PROXY STATEMENT
Appendix
Non-GAAP reconciliations
This proxy statement refers to (1) revenue excluding legacy wireless products (baseband products, and OMAP applications processors
and connectivity products sold into smartphone and consumer tablet applications) and (2) ratios based on free cash flow. These are
financial measures that were not prepared in accordance with generally accepted accounting principles in the U.S. (GAAP). Free cash
flow is a non-GAAP measure calculated by subtracting Capital expenditures from the most directly comparable GAAP measure, Cash
flows from operating activities (also referred to as Cash flow from operations). We believe revenue excluding legacy wireless products
provides insight into our underlying business results. We believe free cash flow and these ratios based on it provide insight into our
liquidity, our cash-generating capability and the amount of cash potentially available to return to investors, as well as insight into our
financial performance. These non-GAAP measures are supplemental to the comparable GAAP measures and are reconciled in the tables
below to the most directly comparable GAAP measures.
Revenue Excluding Legacy Wireless Products
For Years Ended December 31, 2014
One-Year
Growth
2014
Three-Year
CAGR *2014 2013 2012 2011
(Millions of dollars)
Revenue (GAAP) . . . . . . . . . . . . . . . . . . . . . $ 13,045 $ 12,205 $ 12,825 $ 13,735 6.9% -1.7%
Legacy wireless revenue . . . . . . . . . . . . . . . . . (25) (470) (1,200) (2,391)
TI Revenue less legacy wireless revenue (non-GAAP) . . . $ 13,020 $ 11,735 $ 11,625 $ 11,344 11.0% 4.7%
* CAGR (compound annual growth rate) is calculated using the formula: (Ending Value/Beginning Value)1/number of years-1.
Free Cash Flow as a Percentage of Revenue
Percentage of Revenue
For Years Ended December 31, For Years Ended December 31,
2014 2013 2012 Total 2014 2013 2012 Total
(Millions of dollars)
Revenue . . . . . . . . . . . . . . . . . $ 13,045 $ 12,205 $ 12,825 $ 38,075
Cash flow from operations (GAAP) . . . . $ 3,892 $ 3,384 $ 3,414 $ 10,690 29.8% 27.7% 26.6% 28.1%
Capital expenditures . . . . . . . . . . . (385) (412) (495) (1,292)
Free cash flow (non-GAAP) . . . . . . . . $ 3,507 $ 2,972 $ 2,919 $ 9,398 26.9% 24.4% 22.8% 24.7%
Total Cash Returned to Shareholders as a Percentage of Free Cash Flow
For Years Ended December 31,
Total2014 2013 2012
(Millions of dollars)
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,323 $ 1,175 $ 819 $ 3,317
Stock repurchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,831 2,868 1,800 7,499
Total cash returned to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,154 $ 4,043 $ 2,619 $ 10,816
Percentage of Cash flow from operations (GAAP) . . . . . . . . . . . . . . . . . . . . 106.7% 119.5% 76.7% 101.2%
Percentage of free cash flow (non-GAAP) . . . . . . . . . . . . . . . . . . . . . . . . 118.4% 136.0% 89.7% 115.1%