Stock Analysis on Net
Stock Analysis on Net

Texas Instruments Inc. (NASDAQ:TXN)

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Analysis of Income Taxes

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Income Tax Expense (Benefit)

Texas Instruments Inc., income tax expense (benefit), continuing operations

US$ in millions

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12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
U.S. federal
Non-U.S.
U.S. state
Current
U.S. federal
Non-U.S.
U.S. state
Deferred
Provision for income taxes

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Texas Instruments Inc. current decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Texas Instruments Inc. deferred decreased from 2019 to 2020 but then increased from 2020 to 2021 not reaching 2019 level.
Provision for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Texas Instruments Inc. provision for income taxes decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Effective Income Tax Rate (EITR)

Texas Instruments Inc., effective income tax rate (EITR) reconciliation

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
U.S. statutory income tax rate
U.S. tax benefit for foreign derived intangible income
U.S. excess tax benefit for stock compensation
U.S. R&D tax credit
Impact of changes in uncertain tax positions
U.S. tax benefit for manufacturing
Other
Effective tax rate, before U.S. Tax Act
U.S. Tax Act transitional non-cash expense
U.S. Tax Act enactment-date effects and measurement period adjustments
Effective tax rate

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Item Description The company
Effective tax rate, before U.S. Tax Act Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Texas Instruments Inc. effective tax rate, before U.S. Tax Act decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Components of Deferred Tax Assets and Liabilities

Texas Instruments Inc., components of deferred tax assets and liabilities

US$ in millions

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Accrued expenses
Deferred loss and tax credit carryforwards
Stock compensation
Inventories and related reserves
Retirement costs for defined benefit and retiree health care
Other
Deferred tax assets, before valuation allowance
Valuation allowance
Deferred tax assets, after valuation allowance
Property, plant and equipment
International earnings
Retirement costs for defined benefit and retiree health care
Acquisition-related intangibles and fair-value adjustments
Other
Deferred tax liabilities
Net deferred tax asset (liability)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Item Description The company
Deferred tax assets, before valuation allowance Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Texas Instruments Inc. deferred tax assets, before valuation allowance increased from 2019 to 2020 but then slightly decreased from 2020 to 2021.
Deferred tax assets, after valuation allowance Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Texas Instruments Inc. deferred tax assets, after valuation allowance increased from 2019 to 2020 but then slightly decreased from 2020 to 2021.
Net deferred tax asset (liability) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Texas Instruments Inc. net deferred tax asset (liability) increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.

Deferred Tax Assets and Liabilities, Classification

Texas Instruments Inc., deferred tax assets and liabilities, classification

US$ in millions

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Deferred tax assets
Deferred tax liabilities

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Item Description The company
Deferred tax assets Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Texas Instruments Inc. deferred tax assets increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.
Deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Texas Instruments Inc. deferred tax liabilities increased from 2019 to 2020 but then slightly decreased from 2020 to 2021.

Adjustments to Financial Statements: Removal of Deferred Taxes

Texas Instruments Inc., adjustments to financial statements

US$ in millions

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Adjustment to Total Assets
Total assets (as reported)
Less: Noncurrent deferred tax assets, net
Total assets (adjusted)
Adjustment to Total Liabilities
Total liabilities (as reported)
Less: Noncurrent deferred tax liabilities, net
Total liabilities (adjusted)
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported)
Less: Net deferred tax assets (liabilities)
Stockholders’ equity (adjusted)
Adjustment to Net Income
Net income (as reported)
Add: Deferred income tax expense (benefit)
Net income (adjusted)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Texas Instruments Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Texas Instruments Inc., adjusted financial ratios

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Net Profit Margin
Reported net profit margin
Adjusted net profit margin
Total Asset Turnover
Reported total asset turnover
Adjusted total asset turnover
Financial Leverage
Reported financial leverage
Adjusted financial leverage
Return on Equity (ROE)
Reported ROE
Adjusted ROE
Return on Assets (ROA)
Reported ROA
Adjusted ROA

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Texas Instruments Inc. adjusted net profit margin ratio improved from 2019 to 2020 and from 2020 to 2021.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Texas Instruments Inc. adjusted total asset turnover ratio deteriorated from 2019 to 2020 and from 2020 to 2021.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Texas Instruments Inc. adjusted financial leverage ratio increased from 2019 to 2020 but then decreased significantly from 2020 to 2021.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Texas Instruments Inc. adjusted ROE improved from 2019 to 2020 but then slightly deteriorated from 2020 to 2021 not reaching 2019 level.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Texas Instruments Inc. adjusted ROA improved from 2019 to 2020 and from 2020 to 2021.

Texas Instruments Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income
Revenue
Profitability Ratio
Net profit margin1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income
Revenue
Profitability Ratio
Adjusted net profit margin2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 Net profit margin = 100 × Net income ÷ Revenue
= 100 × ÷ =

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Revenue
= 100 × ÷ =

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Texas Instruments Inc. adjusted net profit margin ratio improved from 2019 to 2020 and from 2020 to 2021.

Adjusted Total Asset Turnover

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Revenue
Total assets
Activity Ratio
Total asset turnover1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Revenue
Adjusted total assets
Activity Ratio
Adjusted total asset turnover2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 Total asset turnover = Revenue ÷ Total assets
= ÷ =

2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= ÷ =

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Texas Instruments Inc. adjusted total asset turnover ratio deteriorated from 2019 to 2020 and from 2020 to 2021.

Adjusted Financial Leverage

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Total assets
Stockholders’ equity
Solvency Ratio
Financial leverage1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets
Adjusted stockholders’ equity
Solvency Ratio
Adjusted financial leverage2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 Financial leverage = Total assets ÷ Stockholders’ equity
= ÷ =

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= ÷ =

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Texas Instruments Inc. adjusted financial leverage ratio increased from 2019 to 2020 but then decreased significantly from 2020 to 2021.

Adjusted Return on Equity (ROE)

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income
Stockholders’ equity
Profitability Ratio
ROE1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income
Adjusted stockholders’ equity
Profitability Ratio
Adjusted ROE2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × ÷ =

2 Adjusted ROE = 100 × Adjusted net income ÷ Adjusted stockholders’ equity
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Texas Instruments Inc. adjusted ROE improved from 2019 to 2020 but then slightly deteriorated from 2020 to 2021 not reaching 2019 level.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income
Total assets
Profitability Ratio
ROA1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income
Adjusted total assets
Profitability Ratio
Adjusted ROA2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =

2 Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Texas Instruments Inc. adjusted ROA improved from 2019 to 2020 and from 2020 to 2021.