Texas Instruments 2014 Annual Report Download - page 38

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32
FORM 10-K
Geographic area information
The following geographic area information includes revenue, based on product shipment destination and royalty payor location, and
property, plant and equipment, based on physical location:
For Years Ended December 31,
2014 2013 2012
Revenue:
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,625 $ 1,666 $ 1,596
Asia (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,915 7,370 7,808
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,293 1,926 1,861
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,032 1,072 1,357
Rest of world . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180 171 203
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,045 $ 12,205 $ 12,825
(a) Revenue from products shipped into China, including Hong Kong, was $5.7 billion in 2014, $5.2 billion in 2013 and $5.4 billion
in 2012.
December 31,
2014 2013 2012
Property, plant and equipment, net:
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,436 $ 1,765 $ 1,931
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,096 1,277 1,547
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162 196 241
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 144 174
Rest of world . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 17 19
Total property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,840 $ 3,399 $ 3,912
Basis of presentation and significant accounting policies and practices
Basis of presentation
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United
States ( GAAP). The basis of these financial statements is comparable for all periods presented herein.
The consolidated financial statements include the accounts of all subsidiaries. All intercompany balances and transactions have
been eliminated in consolidation. All dollar amounts in the financial statements and tables in these notes, except per-share amounts,
are stated in millions of U.S. dollars unless otherwise indicated. We have reclassified certain amounts in the prior periods’ financial
statements to conform to the 2014 presentation. The preparation of financial statements requires the use of estimates from which final
results may vary.
Significant accounting policies and practices
Revenue recognition
We recognize revenue from sales of our products, including direct sales to our distributors, when title and risk of loss pass, which
usually occurs upon shipment or delivery to the customer or distributor, depending upon the terms of the sales order; when persuasive
evidence of an arrangement exists; when sales amounts are fixed or determinable; and when collectability is reasonably assured. For
sales to distributors, payment is due on our standard commercial terms and is not contingent upon resale of the products. In 2014,
about 60 percent of our revenue was generated from sales of our products to distributors.
We recognize revenue net of allowances, which are management’s estimates of future credits to be granted to customers or distributors
under programs common in the semiconductor industry. These allowances are based on analysis of historical data, current economic
conditions, and contractual terms and are recorded when revenue is recognized. Allowances may include volume-based incentives,
product returns due to quality issues, incentives designed to maximize growth opportunities and special pricing arrangements. For
instance, we sell to distributors at standard published prices, but we may grant them price adjustment credits in response to individual
competitive opportunities. To estimate allowances, we use statistical percentages of revenue, which are determined quarterly based
upon recent historical adjustment trends. Historical claims data are maintained for each of the programs, with differences among
geographic regions taken into consideration. We continually monitor the actual claimed allowances against our estimates, and we adjust
our estimates as appropriate to reflect trends in distributor revenue and inventory levels. Allowances are also adjusted when recent
historical data do not represent anticipated future activity.
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