Texas Instruments 2014 Annual Report Download - page 17

 
FORM 10-K

We฀have฀facilities฀in฀35฀countries฀and฀as฀a฀result฀are฀subject฀to฀taxation฀and฀audit฀by฀a฀number฀of฀taxing฀authorities.฀Tax฀rates฀vary฀
among฀the฀jurisdictions฀in฀which฀we฀operate.฀Our฀results฀of฀operations฀could฀be฀affected฀by฀market฀opportunities฀or฀decisions฀we฀make฀
that฀cause฀us฀to฀increase฀or฀decrease฀operations฀in฀one฀or฀more฀countries,฀or฀by฀changes฀in฀applicable฀tax฀rates฀or฀audits฀by฀the฀taxing฀
authorities in countries in which we operate.
In฀addition,฀we฀are฀subject฀to฀laws฀and฀regulations฀in฀various฀jurisdictions฀that฀determine฀how฀much฀profit฀has฀been฀earned฀and฀when฀it฀
is฀subject฀to฀taxation฀in฀that฀jurisdiction.฀Changes฀in฀these฀laws฀and฀regulations฀could฀affect฀the฀locations฀where฀we฀are฀deemed฀to฀earn฀
income,฀which฀could฀in฀turn฀affect฀our฀results฀of฀operations.฀We฀have฀deferred฀tax฀assets฀on฀our฀balance฀sheet.฀Changes฀in฀applicable฀
tax฀laws฀and฀regulations฀or฀in฀our฀business฀performance฀could฀affect฀our฀ability฀to฀realize฀those฀deferred฀tax฀assets,฀which฀could฀also฀
affect฀our฀results฀of฀operations.฀Each฀quarter฀we฀forecast฀our฀tax฀liability฀based฀on฀our฀forecast฀of฀our฀performance฀for฀the฀year.฀If฀that฀
performance฀forecast฀changes,฀our฀forecasted฀tax฀liability฀will฀change.
We฀have฀not฀made฀a฀provision฀for฀U.S.฀income฀tax฀on฀the฀portion฀of฀our฀undistributed฀earnings฀of฀our฀non-U.S.฀subsidiaries฀that฀is฀
considered permanently reinvested outside the United States. If in the future we repatriate any of these foreign earnings, we might incur
incremental U.S. income tax, which could affect our results of operations.


We฀are฀subject฀to฀complex฀laws,฀rules฀and฀regulations฀affecting฀our฀domestic฀and฀international฀operations฀relating฀to,฀for฀example,฀
environmental,฀safety฀and฀health;฀exports฀and฀imports;฀bribery฀and฀corruption;฀tax;฀data฀privacy;฀labor฀and฀employment;฀competition;฀
and฀intellectual฀property฀ownership฀and฀infringement.฀Compliance฀with฀these฀laws,฀rules฀and฀regulations฀may฀be฀onerous฀and฀
expensive, and if we fail to comply฀or฀if฀we฀become฀subject฀to฀enforcement activity, our฀ability฀to฀manufacture our products and operate
our฀business฀could฀be฀restricted฀and฀we฀could฀be฀subject฀to฀fines,฀penalties฀or฀other฀legal฀liability.฀Furthermore,฀should฀these฀laws,฀rules฀
and฀regulations฀be฀amended฀or฀expanded,฀or฀new฀ones฀enacted,฀we฀could฀incur฀materially฀greater฀compliance฀costs฀or฀restrictions฀on฀
our฀ability฀to฀manufacture฀our฀products฀and฀operate฀our฀business.฀
Some of these complex laws, rules and regulations – for example, those related to environmental, safety and health requirements – may
particularly฀affect฀us฀in฀the฀jurisdictions฀in฀which฀we฀manufacture฀products,฀especially฀if฀such฀laws฀and฀regulations:฀require฀the฀use฀of฀
abatement฀equipment฀beyond฀what฀we฀currently฀employ;฀require฀the฀addition฀or฀elimination฀of฀a฀raw฀material฀or฀process฀to฀or฀from฀our฀
current manufacturing processes; or impose costs, fees or reporting requirements on the direct or indirect use of energy, or of materials
or฀gases฀used฀or฀emitted฀into฀the฀environment,฀in฀connection฀with฀the฀manufacture฀of฀our฀products.฀There฀can฀be฀no฀assurance฀that฀in฀
all฀instances฀a฀substitute฀for฀a฀prohibited฀raw฀material฀or฀process฀would฀be฀available,฀or฀be฀available฀at฀reasonable฀cost.

We฀maintain฀bank฀accounts,฀one฀or฀more฀multi-year฀revolving฀credit฀agreements,฀and฀a฀portfolio฀of฀investments฀to฀support฀the฀financing฀
needs฀of฀the฀company.฀Our฀ability฀to฀fund฀our฀daily฀operations,฀invest฀in฀our฀business,฀make฀strategic฀acquisitions,฀service฀our฀debt฀
obligations฀and฀meet฀our฀cash฀return฀objectives฀requires฀continuous฀access฀to฀our฀bank฀and฀investment฀accounts,฀as฀well฀as฀access฀to฀
our฀bank฀credit฀lines฀that฀support฀commercial฀paper฀borrowings฀and฀provide฀additional฀liquidity฀through฀short-term฀bank฀loans.฀If฀we฀are฀
unable฀to฀access฀these฀accounts฀and฀credit฀lines฀(for฀example,฀due฀to฀instability฀in฀the฀financial฀markets),฀our฀results฀of฀operations฀and฀
financial฀condition฀could฀be฀adversely฀affected.฀Similarly,฀such฀circumstances฀could฀also฀restrict฀our฀ability฀to฀access฀the฀capital฀markets฀
or฀redeem฀our฀investments.฀If฀our฀customers฀or฀suppliers฀are฀unable฀to฀access฀credit฀markets฀and฀other฀sources฀of฀needed฀liquidity,฀we฀
may฀receive฀fewer฀customer฀orders฀or฀be฀unable฀to฀obtain฀needed฀supplies,฀collect฀accounts฀receivable฀or฀access฀needed฀technology.฀
Material impairments of our goodwill or intangible assets could adversely affect our results of operations.
Charges฀associated฀with฀impairments฀of฀our฀goodwill฀or฀intangible฀assets฀could฀adversely฀affect฀our฀financial฀condition฀and฀results฀
of operations. Goodwill is reviewed for impairment annually or more frequently if certain impairment indicators arise or upon the
disposition฀of฀a฀significant฀portion฀of฀a฀reporting฀unit.฀The฀review฀compares฀the฀fair฀value฀for฀each฀reporting฀unit฀to฀its฀associated฀book฀
value฀including฀goodwill.฀A฀decrease฀in฀the฀fair฀value฀associated฀with฀a฀reporting฀unit฀resulting฀from,฀among฀other฀things,฀unfavorable฀
changes฀in฀the฀estimated฀future฀discounted฀cash฀flow฀of฀the฀reporting฀unit,฀may฀require฀us฀to฀recognize฀impairments฀of฀goodwill.฀Most฀of฀
our฀intangible฀assets฀are฀amortized฀over฀their฀estimated฀useful฀lives,฀but฀they฀are฀reviewed฀for฀impairment฀whenever฀events฀or฀changes฀
in฀circumstances฀indicate฀that฀the฀carrying฀amount฀of฀the฀asset฀may฀not฀be฀recoverable.฀If฀the฀sum฀of฀the฀future฀undiscounted฀cash฀
flows฀expected฀to฀result฀from฀the฀use฀of฀the฀intangible฀asset฀and฀its฀eventual฀disposition฀is฀less฀than฀the฀carrying฀amount฀of฀the฀asset,฀
we฀would฀recognize฀an฀impairment฀loss฀to฀the฀extent฀the฀carrying฀amount฀of฀the฀asset฀exceeds฀its฀fair฀value.