Analysis of Debt
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Total Debt (Carrying Amount)
Texas Instruments Inc., balance sheet: debt
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The analysis of the debt data over the five-year period reveals significant growth in both long-term and current portions of debt.
- Current Portion of Long-Term Debt
- This component showed a slight decline from 550 million USD in 2020 to 500 million USD in both 2021 and 2022. However, it then increased notably to 599 million USD in 2023 and continued rising to 750 million USD in 2024, indicating a higher short-term debt obligation in the most recent years.
- Long-Term Debt Excluding Current Portion
- This category experienced a consistent upward trajectory throughout the period. Starting at 6,248 million USD in 2020, it rose steadily each year, reaching 7,241 million USD in 2021, 8,235 million USD in 2022, 10,624 million USD in 2023, and culminating at 12,846 million USD in 2024. This reflects substantial growth in medium to long-term financing.
- Total Long-Term Debt Including Current Portion
- The aggregate long-term debt followed a similar upward trend, increasing from 6,798 million USD at the end of 2020 to 7,741 million USD in 2021, 8,735 million USD in 2022, 11,223 million USD in 2023, and 13,596 million USD in 2024. This trend demonstrates an overall increase in debt levels, with the majority of the rise attributable to the long-term portion.
Overall, the data indicate an expanding debt load over the observed period, with the most pronounced growth seen in long-term debt. The increase in the current portion of long-term debt in the last two years suggests heightened short-term repayment commitments, which may impact liquidity and refinancing risk considerations.
Total Debt (Fair Value)
| Dec 31, 2024 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Total long-term debt, including current portion (fair value) | |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | |
Based on: 10-K (reporting date: 2024-12-31).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on long-term debt:
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| Total | |||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ in millions
2 Weighted-average interest rate = 100 × ÷ =
Interest Costs Incurred
Texas Instruments Inc., interest costs incurred
US$ in millions
| 12 months ended: | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest and debt expense | |||||||||||
| Capitalized interest | |||||||||||
| Interest costs incurred |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Trend in Interest and Debt Expense
- The interest and debt expense displayed a fluctuating yet overall upward trend over the five-year period. Initially, the expense decreased slightly from 190 million USD in 2020 to 184 million USD in 2021. Subsequently, it rose to 214 million USD in 2022 and experienced significant increases in the next two years, reaching 353 million USD in 2023 and peaking at 508 million USD in 2024. This steady increase in the final years reflects a rising cost associated with borrowing or debt servicing.
- Trend in Capitalized Interest
- Capitalized interest data was unavailable for 2020 but was reported from 2021 onward. It started at 8 million USD in 2021, decreased slightly to 6 million USD in 2022, then increased moderately to 11 million USD in 2023 and further to 20 million USD in 2024. This pattern indicates fluctuating capital expenditure or investment activities that allow interest costs to be capitalized, with notable growth in the later years.
- Interest Costs Incurred Analysis
- The total interest costs incurred, which include both interest and debt expense plus capitalized interest, showed a consistent increase year-over-year. Starting at 190 million USD in 2020, the figure rose to 192 million USD in 2021, then 220 million USD in 2022. There was a marked rise in 2023 to 364 million USD, followed by a further significant increase to 528 million USD in 2024. This upward trajectory indicates growing borrowing costs or increased debt levels over the period under review.
- Overall Insights
- The data reveals a general escalation in financing costs over the five-year span. While there was a minor dip in interest and debt expense in 2021, subsequent years showed substantial increases. Capitalized interest, although a smaller component, also increased notably in 2023 and 2024. The substantial increases in both interest expenses and total interest costs incurred in the last two years suggest changes in the company’s debt structure, increased borrowing, or rising interest rates. These trends may warrant further scrutiny to understand their impact on financial performance and future cash flow requirements.
Adjusted Interest Coverage Ratio
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest and debt expense
= ÷ =
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= ÷ =
- Interest Coverage Ratio (without capitalized interest)
- The interest coverage ratio exhibited a fluctuating but overall declining trend over the five-year period. Starting at a ratio of 32.67 in 2020, it significantly increased to 49.47 in 2021 and maintained a similar level at 47.88 in 2022. However, a marked decline occurred thereafter, with the ratio decreasing sharply to 22.01 in 2023 and further dropping to 11.73 in 2024. This downward trend in the latter years indicates a deterioration in the company's ability to cover its interest expenses from operating earnings.
- Adjusted Interest Coverage Ratio (with capitalized interest)
- The adjusted interest coverage ratio follows a pattern closely mirroring the unadjusted ratio. It started at 32.67 in 2020, increased to 47.41 in 2021, and slightly decreased to 46.57 in 2022. Subsequently, the ratio declined significantly to 21.35 in 2023 and further to 11.29 in 2024. The consistency between the adjusted and unadjusted ratios suggests limited impact of capitalized interest on the overall interest coverage position. The pronounced decrease in recent years reflects weakening earnings relative to interest obligations when factoring capitalized interest.
- Overall Analysis
- Both interest coverage metrics suggest that the company's financial leverage or interest expense burden has increased substantially by the end of the observed period. After a peak in 2021 and 2022, the sharp declines in 2023 and 2024 may point to reduced operational profitability or higher interest costs, raising potential concerns about financial risk and the ability to sustain debt servicing comfortably. The similarity between the two ratios implies that capitalized interest does not materially alter the interest coverage perspective.