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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1996
Commission File Number 1-3761
TEXAS INSTRUMENTS INCORPORATED
-----------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 75-0289970
------------------------ ------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
13500 North Central Expressway, P.O. Box 655474, Dallas, Texas, 75265-5474
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 972-995-3773
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ----------------------------- ------------------------
Common Stock, par value $1.00 New York Stock Exchange
London Stock Exchange
Tokyo Stock Exchange
The Swiss Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.X
The aggregate market value of voting stock held by non-affiliates of the
Registrant was approximately $14,825,000,000 as of January 31, 1997.
190,411,694
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(Number of shares of common stock outstanding as of January 31, 1997)
Parts I, II and IV hereof incorporate information by reference to the
Registrant's 1996 annual report to stockholders. Part III hereof incorporates
information by reference to the Registrant's proxy statement for the 1997
annual meeting of stockholders.
PART I
ITEM 1. Business.
General
- -------
Texas Instruments Incorporated (hereinafter the "Registrant,"
including subsidiaries except where the context indicates otherwise) is one of
the world's foremost high technology companies, with sales or manufacturing
operations in more than 30 countries. The Registrant is engaged in the
development, manufacture, and sale of a variety of products in the commercial
electronics and electrical industry primarily for industrial and consumer
markets. These products consist of components, digital products and
metallurgical materials. In addition, the Registrant's patent portfolio has
been established as an ongoing contributor to the Registrant's revenues. The
Registrant's business is based principally on its broad semiconductor
technology and application of this technology to digital solutions for the
networked society. The Registrant from time to time considers acquisitions
and divestitures which may alter its business mix. The Registrant may effect
one or more such transactions at such time or times as the Registrant
determines to be appropriate. As discussed below, the Registrant and Raytheon
Company ("Raytheon") entered into a definitive agreement as of January 4, 1997
under which Raytheon will purchase the Registrant's defense systems and
electronics business. See "ITEM 1. Business, Discontinued Operations."
The information with respect to net revenues, profit and
identifiable assets of the Registrant's industry segments and operations
outside the United States, which is contained in the note to the financial
statements captioned "Industry Segment and Geographic Area Operations" on
pages 28-30 of the Registrant's 1996 annual report to stockholders, is
incorporated herein by reference to such annual report.
Components
- ----------
Components consist of semiconductor integrated circuits (such as
digital signal processors, mixed-signal and analog circuits, microprocessors/
microcontrollers, applications processors, memories, and digital circuits),
semiconductor discrete devices, semiconductor subassemblies (such as custom
modules for specific applications), and electrical and electronic control
devices (such as motor protectors, starting relays, circuit breakers,
thermostats, sensors, and radio-frequency identification systems).
These components are used in a broad range of products for
industrial end-use (such as computers and peripheral equipment,
telecommunications, instrumentation, and industrial motor controls and
automation equipment), consumer end-use (such as cellular phones, modems,
televisions, cameras, automobiles, home appliances, and residential air
conditioning and heating systems), and government end-use (such as defense and
space equipment). The Registrant sells these components primarily to original
equipment manufacturers principally through its own marketing organizations
and to a lesser extent through distributors.
2
Digital Products
- ----------------
Digital products include electronic calculators, software
productivity tools, mobile computing products and other electronic systems.
In 1996, the Registrant sold substantially all of its custom manufacturing
services business and its printer business. Subsequent to year-end 1996, the
Registrant reached an agreement to sell its mobile computing business. Digital
products are used in a broad range of enterprise-wide, work group and personal
information-based applications. The Registrant markets these products through
various channels, including system suppliers, business equipment dealers,
distributors, retailers, and direct sales to end-users and original equipment
manufacturers.
Metallurgical Materials
- -----------------------
Metallurgical materials include clad metals, precision-engineered
parts and electronic connectors for use in a variety of applications such as
appliances, automobiles, electronic components, and industrial and
telecommunications equipment. These metallurgical materials are primarily
sold directly to original equipment manufacturers.
Discontinued Operations
- -----------------------
The Registrant's defense systems and electronics business ("DSE")
consists of radar systems, navigation systems, infrared surveillance and fire
control systems, defense suppression missiles, other weapon systems (including
antitank and interdiction weapons), missile guidance and control systems,
electronic warfare systems, and other defense electronic equipment. Sales are
made to the U.S. government (either directly or through prime contractors) and
to international customers approved by the U.S. government.
The Registrant and Raytheon entered into a definitive agreement as
of January 4, 1997 under which Raytheon will purchase DSE. In connection with
the sale, and in accordance with generally accepted accounting principles, the
Registrant has restated prior financial statements and financial information
to segregate the results of DSE from detailed financial components. As such,
defense-related financial results are reported in the Registrant's
consolidated financial statements on pages 18-21 of the Registrant's 1996
annual report to stockholders as discontinued operations. Operating results,
net asset and other information for discontinued operations appears in the
note to the financial statements captioned Discontinued Operations; unless
otherwise indicated, the financial amounts in this Form 10-K have been
adjusted to reflect continuing operations only.
Competition
- -----------
The Registrant is engaged in highly competitive businesses. Its
competitors include several of the largest companies in the United States,
Asia, and elsewhere abroad as well as many small, specialized companies. The
Registrant is a significant competitor in each of its principal businesses.
Generally, the Registrant's businesses are characterized by rapidly changing
technology which has, throughout the Registrant's history, intensified the
competitive factors, primarily performance and price.
Backlog
- -------
The dollar amount of backlog of orders believed by the Registrant to
be firm was $1623 million as of December 31, 1996 and $2294 million as of
December 31, 1995. The Registrant's backlog does not represent actual revenues
and is only an indication of future revenues which may be entered on the books
of account of the Registrant. Backlog orders are, under certain circumstances,
subject to cancellation by the purchaser without penalty and generally do not
reflect any potential adjustments for price decreases.
3
Raw Materials
- -------------
The Registrant purchases materials, parts and supplies from a number
of suppliers. The Registrant's silicon materials operation became part of a
joint venture with MEMC Electronic Materials, Inc., in May 1995. The
Registrant retains a minority ownership interest in the joint venture. The
materials, parts and supplies essential to the Registrant's business are
generally available at present and the Registrant believes at this time that
such materials, parts and supplies will be available in the foreseeable
future.
Patents and Trademarks
- ----------------------
The Registrant owns many patents in the United States and other
countries in fields relating to its business. The Registrant has developed a
strong, broad-based patent portfolio. The Registrant also has several
agreements with other companies involving license rights and anticipates that
other licenses may be negotiated in the future. The Registrant does not
consider its business materially dependent upon any one patent or patent
license, although taken as a whole, the rights of the Registrant and the
products made and sold under patents and patent licenses are important to the
Registrant's business. As noted above, the Registrant's patent portfolio has
been established as an ongoing contributor to the revenues of the Registrant.
See "ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations."
The Registrant owns trademarks that are used in the conduct of its
business. These trademarks are valuable assets, the most important of which
are "Texas Instruments" and the Registrant's corporate monogram.
Research and Development
- ------------------------
The Registrant's research and development expense was $1181 million
in 1996, compared with $842 million in 1995 and $578 million in 1994, and
included a one-time charge in 1996 of $192 million for the value of acquired
in-process research and development as a result of the acquisition of Silicon
Systems, Inc.
Seasonality
- -----------
The Registrant's revenues are subject to some seasonal variation.
Employees
- ---------
The information concerning the number of persons employed by the
Registrant, including persons employed in the Registrant's defense business,
at December 31, 1996 on page 32 of the Registrant's 1996 annual report to
stockholders is incorporated herein by reference to such annual report.
4
ITEM 2. Properties.
The Registrant's principal offices are located at 13500 North
Central Expressway, Dallas, Texas. The Registrant owns and leases plants in
the United States and 15 other countries for manufacturing and related
purposes. The following table indicates the general location of the principal
plants of the Registrant and the industry segments which make major use of
them. Except as otherwise indicated, the principal plants are owned by the
Registrant.
Digital Metallurgical Discontinued
Components Products Materials Operations(4)
---------- -------- ------------- -------------
Dallas, Texas(4) X X X
Austin, Texas(1) X X
Houston, Texas X
Lewisville, Texas(4) X
Lubbock, Texas X
McKinney, Texas(4) X
Plano, Texas(1) X X
Sherman, Texas(1)(4) X X
Temple, Texas X
Santa Cruz, California X
Attleboro, X X
Massachusetts
Almelo, Netherlands X
Freising, Germany X
Avezzano, Italy(2) X
Baguio, X
Philippines(3)
Hiji, Japan X
Kuala Lumpur, X
Malaysia(1)
Miho, Japan X
Singapore(3) X
Taipei, Taiwan X
____________________
(1)Leased or primarily leased.
(2)Owned, subject to mortgage.
(3)Owned on leased land.
(4)The Lewisville and McKinney plants will be sold and certain plants or
portions thereof in Dallas and Sherman will be leased to Raytheon or
Raytheon-related entities in connection with the sale of DSE.
The Registrant's facilities in the United States contained
approximately 19,600,000 square feet as of December 31, 1996, of which
approximately 5,400,000 square feet were leased. The Registrant's facilities
outside the United States contained approximately 7,000,000 square feet as of
December 31, 1996, of which approximately 1,800,000 square feet were leased.
The Registrant believes that its existing properties are in good
condition and suitable for the manufacture of its products. At the end of
1996, the Registrant utilized substantially all of the space in its
facilities.
Leases covering the Registrant's leased facilities expire at varying
dates generally within the next 10 years. The Registrant anticipates no
difficulty in either retaining occupancy through lease renewals, month-to-
month occupancy or purchases of leased facilities, or replacing the leased
facilities with equivalent facilities.
5
ITEM 3. Legal Proceedings.
As indicated in the Registrant's Current Report on Form 8-K dated
November 26, 1996, the Registrant reached agreement on a broad 10-year cross
license agreement with Samsung Electronics Co., Ltd., of Korea, which settled
all pending litigation between the companies, including the litigation
discussed in ITEM 3 of the Registrant's Annual Report on Form 10-K for the
year ended December 31, 1995 and ITEM 1 of the Registrant's Quarterly Reports
on Form 10-Q for the quarters ended March 31 and September 30, 1996.
On July 19, 1991, the Registrant filed a lawsuit in Tokyo District
Court against Fujitsu Limited of Japan ("Fujitsu") seeking injunctive relief,
alleging that Fujitsu's manufacture and sale of certain DRAMs infringe the
Registrant's Japanese patent on the invention of the integrated circuit (the
"Kilby" patent). Concurrently, Fujitsu brought a lawsuit in the same court
against the Registrant, seeking a declaration that Fujitsu is not infringing
the Kilby patent. On August 31, 1994, the district court ruled that Fujitsu's
production of 1-megabit and 4-megabit DRAMs and 32K EPROMs does not infringe
the Kilby patent. The Registrant has appealed the court's decision to the
Tokyo High Court.
The Registrant is involved in various investigations and proceedings
conducted by the federal Environmental Protection Agency and certain state
environmental agencies regarding disposal of waste materials. Although the
factual situations and the progress of each of these matters differ, the
Registrant believes that the amount of its liability will not have a material
adverse effect upon its financial position or results of operations and, in
most cases, the Registrant's liability will be limited to sharing clean-up or
other remedial costs with other potentially responsible parties.
6
ITEM 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Executive Officers of the Registrant
The following is an alphabetical list of the names and ages of the
executive officers of the Registrant and the positions or offices with the
Registrant presently held by each person named:
Name Age Position
James R. Adams 57 Director; Chairman of the Board
Richard J. Agnich 53 Senior Vice President, Secretary
and General Counsel
William A. Aylesworth 54 Senior Vice President,
Treasurer and Chief Financial
Officer (Chief Accounting
Officer)
Gary D. Clubb 50 Executive Vice President
(President, Digital Imaging)
Thomas J. Engibous 44 Director; President and
Chief Executive
Officer
David D. Martin 57 Executive Vice President
Charles F. Nielson 59 Vice President
Elwin L. Skiles, Jr. 55 Vice President
Richard K. Templeton 38 Executive Vice President
(President, Semiconductor Group)
William P. Weber 56 Director; Vice Chairman
David W. Welp 56 Executive Vice President (President
Systems Group and Defense Systems &
Electronics)
The term of office of each of the above listed officers is from the
date of his election until his successor shall have been elected and
qualified. Messrs. Adams, Engibous and Templeton were elected June 20, 1996
and Mr. Welp was elected on September 19, 1996 to their respective offices of
the Registrant; the most recent date of election of the other officers was
April 18, 1996. Mr. Adams, who has been a director of the Registrant since
1989; was Group President of SBC Communications Inc. from 1992 until his
retirement in 1995, and President and Chief Executive Officer of Southwestern
Bell Telephone Company from 1988 to 1992. Messrs. Agnich, Aylesworth, Martin,
Nielson, Skiles and Weber have served as officers of the Registrant for more
than five years. Messrs. Clubb and Engibous have served as officers of the
Registrant since 1993; and they and Messrs. Templeton and Welp have
been employees of the Registrant for more than five years.
7
PART II
ITEM 5. Market for Registrant's Common Equity and Related Stockholder
Matters.
The information which is contained in the note to the financial
statements captioned "Common Stock Prices and Dividends" on page 35 of the
Registrant's 1996 annual report to stockholders, and the information
concerning the number of stockholders of record at December 31, 1996 on
page 32 of such annual report, are incorporated herein by reference to such
annual report.
ITEM 6. Selected Financial Data.
The "Summary of Selected Financial Data" for the years 1992 through
1996 which appears on page 32 of the Registrant's 1996 annual report to
stockholders is incorporated herein by reference to such annual report.
ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The first two paragraphs of the Letter to the Stockholders on page 2
of the Registrant's 1996 annual report to stockholders and the information
contained under the caption "Management Discussion and Analysis of Financial
Condition and Results of Operations" on pages 33-35 of such annual report are
incorporated herein by reference to such annual report.
ITEM 8. Financial Statements and Supplementary Data.
The consolidated financial statements of the Registrant at
December 31, 1996 and 1995 and for each of the three years in the period ended
December 31, 1996 and the report thereon of the independent auditors, on pages
18-31 of the Registrant's 1996 annual report to stockholders, are incorporated
herein by reference to such annual report.
The "Quarterly Financial Data" on page 35 of the Registrant's 1996
annual report to stockholders is also incorporated herein by reference to such
annual report.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
8
PART III
ITEM 10. Directors and Executive Officers of the Registrant.
The information with respect to directors' names, ages, positions,
term of office and periods of service, which is contained under the caption
"Nominees for Directorship" in the Registrant's proxy statement for the 1997
annual meeting of stockholders is incorporated herein by reference to such
proxy statement.
Information concerning executive officers is set forth in Part I
hereof under the caption "Executive Officers of the Registrant."
ITEM 11. Executive Compensation.
The information which is contained under the captions "Directors
Compensation" and "Executive Compensation" in the Registrant's proxy statement
for the 1997 annual meeting of stockholders is incorporated herein by
reference to such proxy statement.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
The information concerning (a) the only persons that have reported
beneficial ownership of more than 5% of the common stock of the Registrant,
and (b) the ownership of the Registrant's common stock by the Chief Executive
Officer and the four other most highly compensated executive officers, and all
executive officers and directors as a group, which is contained under the
caption "Voting Securities" in the Registrant's proxy statement for the 1997
annual meeting of stockholders, is incorporated herein by reference to such
proxy statement. The information concerning ownership of the Registrant's
common stock by each of the directors, which is contained under the caption
"Nominees for Directorship" in such proxy statement, is also incorporated
herein by reference to such proxy statement.
The aggregate market value of voting stock held by non-affiliates of
the Registrant shown on the cover page hereof excludes the shares held by the
Registrant's directors, some of whom disclaim affiliate status, executive vice
presidents and senior vice presidents. These holdings were considered to
include shares credited to certain individuals' profit sharing accounts.
ITEM 13. Certain Relationships and Related Transactions.
Not applicable.
9
PART IV
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) 1 and 2. Financial Statements and Financial Statement
Schedules:
The financial statements and financial statement schedules are
listed in the index on page 16 hereof.
3. Exhibits:
Designation of
Exhibit in
this Report Description of Exhibit
-------------- -------------------------------------------------
2 Asset Purchase Agreement dated as of January 4,
1997 between the Registrant and Raytheon Company
(exhibits and schedules omitted) (incorporated by
reference to Exhibit 2.1 to the Registrant's
Current Report on Form 8-K dated January 4,
1997).
3(a) Restated Certificate of Incorporation of the
Registrant (incorporated by reference to Exhibit
3(a) to the Registrant's Annual Report on Form
10-K for the year 1993).
3(b) Certificate of Amendment to Restated Certificate
of Incorporation of the Registrant (incorporated
by reference to Exhibit 3(b) to the Registrant's
Annual Report on Form 10-K for the year 1993).
3(c) Certificate of Amendment to Restated Certificate
of Incorporation of the Registrant (incorporated
by reference to Exhibit 3(c) to the Registrant's
Annual Report on Form 10-K for the year 1993).
3(d) Certificate of Amendment to Restated Certificate
of Incorporation of the Registrant (incorporated
by reference to Exhibit 3 to the Registrant's
Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996).
3(e) Certificate of Designations relating to the
Registrant's Participating Cumulative Preferred
Stock (incorporated by reference to Exhibit 3(d)
to the Registrant's Annual Report on Form 10-K
for the year 1993).
3(f) Certificate of Ownership Merging Texas
Instruments Automation Controls, Inc. into the
Registrant (incorporated by reference to Exhibit
3(e) to the Registrant's Annual Report on Form
10-K for the year 1993).
3(g) Certificate of Elimination of Designations of
Preferred Stock of the Registrant (incorporated
by reference to Exhibit 3(f) to the Registrant's
Annual Report on Form 10-K for the year 1993).
10
3(h) By-Laws of the Registrant (incorporated by
reference to Exhibit 3 to the Registrant's
Quarterly Report on Form 10-Q for the quarter
ended June 30, 1993).
4(a)(i) Rights Agreement dated as of June 17, 1988
between the Registrant and First Chicago Trust
Company of New York, formerly Morgan Shareholder
Services Trust Company, as Rights Agent, which
includes as Exhibit B the form of Rights
Certificate (incorporated by reference to Exhibit
4(a)(i) to the Registrant's Annual Report on Form
10-K for the year 1993).
4(a)(ii) Assignment and Assumption Agreement dated as of
September 24, 1992 among the Registrant, First
Chicago Trust Company of New York, formerly
Morgan Shareholder Services Trust Company, and
Harris Trust and Savings Bank (incorporated by
reference to Exhibit 4(a)(i) to the Registrant's
Quarterly Report on Form 10-Q for the quarter
ended September 30, 1992).
4(b) The Registrant agrees to provide the Commission,
upon request, copies of instruments defining the
rights of holders of long-term debt of the
Registrant and its subsidiaries.
10(a) Texas Instruments Annual Incentive Plan as
amended November 30, 1995 (incorporated by
reference to Exhibit 10(a) to the Registrant's
Annual Report on Form 10-K for the year
1995).*
10(b)(i) TI Deferred Compensation Plan (incorporated by
reference to Exhibit 10(a)(ii) to the
Registrant's Annual Report on Form 10-K for the
year 1994).*
10(b)(ii) Amendment No. 1 to TI Deferred Compensation Plan
(incorporated by reference to Exhibit 10(a)(iii)
to the Registrant's Annual Report on Form 10-K
for the year 1994).*
10(c) Texas Instruments Long-Term Incentive Plan
(incorporated by reference to Exhibit 10(a)(ii)
to the Registrant's Annual Report on Form 10-K
for the year 1993).*
10(d) Texas Instruments 1996 Long-Term Incentive Plan
(incorporated by reference to Exhibit 10 to the
Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1996).*
10(e) Texas Instruments Restricted Stock Unit Plan for
Directors (incorporated by reference to
Exhibit 10(c) to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended
June 30, 1996).
11
10(f) Statement of Policy of Registrant's Board of
Directors on Top Officer and Board Member
Retirement Practices (incorporated by reference
to Exhibit 10(b)(vi) to the Registrant's Annual
Report on Form 10-K for the year 1993).*
11 Computation of earnings per common and common
equivalent share.
12 Computation of Ratio of Earnings to Fixed Charges
and Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends.
13 Registrant's 1996 Annual Report to Stockholders.
(With the exception of the items listed in the
index to financial statements and financial
statement schedules herein, and the items
referred to in ITEMS 1, 5, 6, 7 and 8 hereof, the
1996 Annual Report to Stockholders is not to be
deemed filed as part of this report.)
21 List of subsidiaries of the Registrant.
23 Consent of Ernst & Young LLP.
24 Powers of Attorney.
27 Financial Data Schedule.
________________
*Executive Compensation Plans and Arrangements:
Texas Instruments Annual Incentive Plan as amended November 30,
1995 (incorporated by reference to Exhibit 10(a) to the Registrant's
Annual Report on Form 10-K for the year 1995).
TI Deferred Compensation Plan (incorporated by reference to Exhibit
10(a)(ii) to the Registrant's Annual Report on Form 10-K for the
year 1994).
Amendment No. 1 to TI Deferred Compensation Plan (incorporated by
reference to Exhibit 10(a)(iii) to Registrant's Annual Report on
Form 10-K for the year 1994).
Texas Instruments Long-Term Incentive Plan (incorporated by
reference to Exhibit 10(a)(ii) to the Registrant's Annual Report on
Form 10-K for the year 1993).
Texas Instruments 1996 Long-Term Incentive Plan (incorporated by
reference to Exhibit 10 to the Registrant's Quarterly Report on Form
10-Q for the quarter ended June 30, 1996).
Statement of Policy of Registrant's Board of Directors on Top
Officer and Board Member Retirement Practices (incorporated by
reference to Exhibit 10(b)(vi) to the Registrant's Annual Report on
Form 10-K for the year 1993).
12
(b) Reports on Form 8-K:
The Registrant filed with the Securities and Exchange Commission during the
quarter ended December 31, 1996 a Form 8-K dated November 26, 1996, which
included a news release regarding the Registrant's patent license agreement
with Samsung.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995:
With the exception of historical information, the matters discussed
or incorporated by reference in this Report on Form 10-K are forward-looking
statements that involve risks and uncertainties including, but not limited to,
economic conditions, product demand and industry capacity, competitive
products and pricing, manufacturing efficiencies, new product development,
timely completion of announced asset sales, ability to enforce patents,
availability of raw materials and critical manufacturing equipment, new plant
startups, the regulatory and trade environment, and other risks indicated in
filings with the Securities and Exchange Commission.
13
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this Report
to be signed on its behalf by the undersigned, thereunto duly authorized.
TEXAS INSTRUMENTS INCORPORATED
By: /s/ WILLIAM A. AYLESWORTH
------------------------------
William A. Aylesworth
Senior Vice President,
Treasurer and Chief
Financial Officer
Date: February 24, 1997
14
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on the 24th day of February, 1997.
Signature Title
*JAMES R. ADAMS Chairman of the Board; Director
- ------------------------------------
James R. Adams
*DAVID L. BOREN Director
- ------------------------------------
David L. Boren
*JAMES B. BUSEY IV Director
- ------------------------------------
James B. Busey IV
*THOMAS J. ENGIBOUS President; Chief Executive Officer;
- ------------------------------------ Director
Thomas J. Engibous
*GERALD W. FRONTERHOUSE Director
- ------------------------------------
Gerald W. Fronterhouse
*DAVID R. GOODE Director
- ------------------------------------
David R. Goode
*GLORIA M. SHATTO Director
- ------------------------------------
Gloria M. Shatto
*WILLIAM P. WEBER Vice Chairman; Director
- ------------------------------------
William P. Weber
*CLAYTON K. YEUTTER Director
- ------------------------------------
Clayton K. Yeutter
/s/ WILLIAM A. AYLESWORTH Senior Vice President; Treasurer;
- ------------------------------------ Chief Financial Officer; Chief
William A. Aylesworth Accounting Officer
*By:
/s/ WILLIAM A. AYLESWORTH
-----------------------------
William A. Aylesworth
Attorney-in-fact
15
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
(Item 14(a))
Page Reference
--------------
Annual
Report to
Form 10-K Stockholders
--------- ------------
Information incorporated by reference
to the Registrant's 1996 Annual Report
to Stockholders:
Consolidated Financial Statements:
Income for each of the three 18
years in the period ended
December 31, 1996
Balance sheet at December 31, 19
1996 and 1995
Cash flows for each of the 20
three years in the period
ended December 31, 1996
Stockholders' equity for each of 21
the three years in the period
ended December 31, 1996
Notes to financial statements 22-30
Report of Independent Auditors 31
Consolidated Schedule for each of the three
years in the period ended December 31, 1996:
II. Allowance for losses 17
All other schedules have been omitted since the required information is
not present or not present in amounts sufficient to require submission of the
schedule, or because the information required is included in the consolidated
financial statements or the notes thereto.
16
Schedule II
-----------
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
ALLOWANCE FOR LOSSES
(In Millions of Dollars)
Years Ended December 31, 1996, 1995, and 1994
Additions
Balance at Charged to Balance
Beginning Costs and at End
of Year Expenses Deductions of Year
1996 $45 $163 $118 $90
- ---- ==== ==== ==== ====
1995 $37 $113 $105 $45
- ---- ==== ==== ==== ====
1994 $42 $80 $85 $37
- ---- ==== ==== ==== ====
Allowances for losses from uncollectible accounts, returns, etc., are deducted
from accounts receivable in the balance sheet.
17
EXHIBIT INDEX
Designation of
Exhibit in Paper (P) or
this Report Description of Exhibit Electronic (E)
- -------------- ------------------------------------------ --------------
2 Asset Purchase Agreement dated as of
January 4, 1997 between the Registrant and
Raytheon Company (exhibits and schedules
omitted) (incorporated by reference to Exhibit
2.1 to the Registrant's Current Report on
Form 8-K dated January 4, 1997).
3(a) Restated Certificate of Incorporation of the
Registrant (incorporated by reference to
Exhibit 3(a) to the Registrant's Annual
Report on Form 10-K for the year 1993).
3(b) Certificate of Amendment to Restated
Certificate of Incorporation of the
Registrant (incorporated by reference to
Exhibit 3(b) to the Registrant's Annual
Report on Form 10-K for the year 1993).
3(c) Certificate of Amendment to Restated
Certificate of Incorporation of the
Registrant (incorporated by reference to
Exhibit 3(c) to the Registrant's Annual
Report on Form 10-K for the year 1993).
3(d) Certificate of Amendment to Restated
Certificate of Incorporation of the
Registrant (incorporated by reference to
Exhibit 3 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended
June 30, 1996).
3(e) Certificate of Designations relating to
the Registrant's Participating Cumulative
Preferred Stock (incorporated by reference
to Exhibit 3(d) to the Registrant's Annual
Report on Form 10-K for the year 1993).
3(f) Certificate of Ownership Merging Texas
Instruments Automation Controls, Inc. into
the Registrant (incorporated by reference to
Exhibit 3(e) to the Registrant's Annual
Report on Form 10-K for the year 1993).
3(g) Certificate of Elimination of Designations
of Preferred Stock of the Registrant
(incorporated by reference to Exhibit 3(f) to
the Registrant's Annual Report on Form 10-K
for the year 1993).
3(h) By-Laws of the Registrant (incorporated by
reference to Exhibit 3 to the Registrant's
Quarterly Report on Form 10-Q for the quarter
ended June 30, 1993).
4(a)(i) Rights Agreement dated as of June 17, 1988
between the Registrant and First Chicago Trust
Company of New York, formerly Morgan Shareholder
Services Trust Company, as Rights Agent, which
includes as Exhibit B the form of Rights
Certificate (incorporated by reference to Exhibit
4(a)(i) to the Registrant's Annual Report on Form
10-K for the year 1993).
4(a)(ii) Assignment and Assumption Agreement dated as
of September 24, 1992 among the Registrant,
First Chicago Trust Company of New York,
formerly Morgan Shareholder Services Trust
Company, and Harris Trust and Savings Bank
(incorporated by reference to Exhibit 4(a)(i)
to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1992).
4(b) The Registrant agrees to provide the Commission,
upon request, copies of instruments defining the
rights of holders of long-term debt of the
Registrant and its subsidiaries.
10(a) Texas Instruments Annual Incentive Plan as
amended November 30, 1995 (incorporated by
reference to Exhibit 10(a) to the Registrant's
Annual Report on Form 10-K for the year 1995).*
10(b)(i) TI Deferred Compensation Plan (incorporated by
reference to Exhibit 10(a)(ii) to the
Registrant's Annual Report on Form 10-K for the
year 1994).*
10(b)(ii) Amendment No. 1 to TI Deferred Compensation Plan
(incorporated by reference to Exhibit 10(a)(iii)
to the Registrant's Annual Report on Form 10-K
for the year 1994).*
10(c) Texas Instruments Long-Term Incentive Plan
(incorporated by reference to Exhibit 10(a)(ii)
to the Registrant's Annual Report on Form 10-K
for the year 1993).*
10(d) Texas Instruments 1996 Long-Term Incentive Plan
(incorporated by reference to Exhibit 10 to the
Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1996).*
10(e) Texas Instruments Restricted Stock Unit Plan for
Directors (incorporated by reference to
Exhibit 10(c) to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended
June 30, 1996).
10(f) Statement of Policy of Registrant's Board of
Directors on Top Officer and Board Member
Retirement Practices (incorporated by reference
to Exhibit 10(b)(vi) to the Registrant's Annual
Report on Form 10-K for the year 1993).*
11 Computation of earnings per common and common
equivalent share.
12 Computation of Ratio of Earnings to Fixed Charges
and Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends.
13 Registrant's 1996 Annual Report to Stockholders.
(With the exception of the items listed in the
index to financial statements and financial
statement schedules herein, and the items
referred to in ITEMS 1, 5, 6, 7 and 8 hereof, the
1996 Annual Report to Stockholders is not to be
deemed filed as part of this report.)
21 List of subsidiaries of the Registrant.
23 Consent of Ernst & Young LLP.
24 Powers of Attorney.
27 Financial Data Schedule.
________________
*Executive Compensation Plans and Arrangements:
Texas Instruments Annual Incentive Plan as amended November 30,
1995 (incorporated by reference to Exhibit 10(a) to the Registrant's
Annual Report on Form 10-K for the year 1995).
TI Deferred Compensation Plan (incorporated by reference to Exhibit
10(a)(ii) to the Registrant's Annual Report on Form 10-K for the
year 1994).
Amendment No. 1 to TI Deferred Compensation Plan (incorporated by
reference to Exhibit 10(a)(iii) to Registrant's Annual Report on
Form 10-K for the year 1994).
Texas Instruments Long-Term Incentive Plan (incorporated by
reference to Exhibit 10(a)(ii) to the Registrant's Annual Report on
Form 10-K for the year 1993).
Texas Instruments 1996 Long-Term Incentive Plan (incorporated by
reference to Exhibit 10 to the Registrant's Quarterly Report on Form
10-Q for the quarter ended June 30, 1996).
Statement of Policy of Registrant's Board of Directors on Top
Officer and Board Member Retirement Practices (incorporated by
reference to Exhibit 10(b)(vi) to the Registrant's Annual Report on
Form 10-K for the year 1993).