Stock Analysis on Net
Stock Analysis on Net
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Texas Instruments Inc. (NASDAQ:TXN)

Analysis of Operating Leases

Advanced level

Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)

Texas Instruments Inc., future operating lease payments (before adoption of FASB Topic 842)

US$ in millions

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Total undiscounted future operating lease payments 224  271  240  261 
Discount rate1 2.77% 2.05% 2.22% 2.30%
 
Total present value of future operating lease payments 205  253  223  241 

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24).

1 Weighted-average interest rate for Texas Instruments Inc.’s debt

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 2.77%
2019 56  2019 56  54 
2020 46  2020 46  44 
2021 36  2021 36  33 
2022 29  2022 29  26 
2023 18  2023 18  16 
2024 and thereafter 39  2024 18  15 
2025 18  15 
2026
Total: 224  224  205 

Based on: 10-K (filing date: 2019-02-22).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 2.05%
2018 68  2018 68  67 
2019 45  2019 45  43 
2020 49  2020 49  46 
2021 29  2021 29  27 
2022 24  2022 24  22 
2023 and thereafter 56  2023 24  21 
2024 24  21 
2025
Total: 271  271  253 

Based on: 10-K (filing date: 2018-02-22).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 2.22%
2017 67  2017 67  66 
2018 47  2018 47  45 
2019 28  2019 28  26 
2020 24  2020 24  22 
2021 17  2021 17  15 
2022 and thereafter 57  2022 17  15 
2023 17  15 
2024 17  14 
2025
Total: 240  240  223 

Based on: 10-K (filing date: 2017-02-23).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 2.30%
2016 69  2016 69  67 
2017 53  2017 53  51 
2018 37  2018 37  35 
2019 21  2019 21  19 
2020 19  2020 19  17 
2021 and thereafter 62  2021 19  17 
2022 19  16 
2023 19  16 
2024
Total: 261  261  241 

Based on: 10-K (filing date: 2016-02-24).


Adjustments to Financial Statements for Operating Leases

Texas Instruments Inc., adjustments to financial statements

US$ in millions

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Adjustment to Total Assets
Total assets (as reported) 18,018  17,137  17,642  16,431  16,230 
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)1 —  205  253  223  241 
Total assets (adjusted) 18,018  17,342  17,895  16,654  16,471 
Adjustment to Total Debt
Total debt (as reported) 5,803  5,068  4,077  3,609  4,120 
Add: Operating lease liability (before adoption of FASB Topic 842)2 —  205  253  223  241 
Add: Current operating lease liabilities (included in Accrued expenses and other liabilities) 73  —  —  —  — 
Add: Long-term operating lease liabilities 259  —  —  —  — 
Total debt (adjusted) 6,135  5,273  4,330  3,832  4,361 

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24).

1, 2 Equal to total present value of future operating lease payments.


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


Adjusted Financial Ratios for Operating Leases (Summary)

Texas Instruments Inc., adjusted financial ratios

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Total Asset Turnover1
Reported total asset turnover 0.80 0.92 0.85 0.81 0.80
Adjusted total asset turnover 0.80 0.91 0.84 0.80 0.79
Debt to Equity2
Reported debt to equity 0.65 0.56 0.39 0.34 0.41
Adjusted debt to equity 0.69 0.59 0.42 0.37 0.44
Return on Assets3 (ROA)
Reported ROA 27.84% 32.56% 20.87% 21.88% 18.40%
Adjusted ROA 27.84% 32.18% 20.58% 21.59% 18.13%

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Texas Instruments Inc.’s adjusted total asset turnover ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
Adjusted debt to equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Texas Instruments Inc.’s adjusted debt to equity ratio deteriorated from 2017 to 2018 and from 2018 to 2019.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Texas Instruments Inc.’s adjusted ROA improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

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


Adjusted Total Asset Turnover

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Revenue 14,383  15,784  14,961  13,370  13,000 
Total assets 18,018  17,137  17,642  16,431  16,230 
Activity Ratio
Total asset turnover1 0.80 0.92 0.85 0.81 0.80
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Revenue 14,383  15,784  14,961  13,370  13,000 
Adjusted total assets 18,018  17,342  17,895  16,654  16,471 
Activity Ratio
Adjusted total asset turnover2 0.80 0.91 0.84 0.80 0.79

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24).

2019 Calculations

1 Total asset turnover = Revenue ÷ Total assets
= 14,383 ÷ 18,018 = 0.80

2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 14,383 ÷ 18,018 = 0.80

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Texas Instruments Inc.’s adjusted total asset turnover ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Adjusted Debt to Equity

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Total debt 5,803  5,068  4,077  3,609  4,120 
Stockholders’ equity 8,907  8,994  10,337  10,473  9,946 
Solvency Ratio
Debt to equity1 0.65 0.56 0.39 0.34 0.41
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt 6,135  5,273  4,330  3,832  4,361 
Stockholders’ equity 8,907  8,994  10,337  10,473  9,946 
Solvency Ratio
Adjusted debt to equity2 0.69 0.59 0.42 0.37 0.44

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24).

2019 Calculations

1 Debt to equity = Total debt ÷ Stockholders’ equity
= 5,803 ÷ 8,907 = 0.65

2 Adjusted debt to equity = Adjusted total debt ÷ Stockholders’ equity
= 6,135 ÷ 8,907 = 0.69

Solvency ratio Description The company
Adjusted debt-to-equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Texas Instruments Inc.’s adjusted debt-to-equity ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Assets (ROA)

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income 5,017  5,580  3,682  3,595  2,986 
Total assets 18,018  17,137  17,642  16,431  16,230 
Profitability Ratio
ROA1 27.84% 32.56% 20.87% 21.88% 18.40%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net income 5,017  5,580  3,682  3,595  2,986 
Adjusted total assets 18,018  17,342  17,895  16,654  16,471 
Profitability Ratio
Adjusted ROA2 27.84% 32.18% 20.58% 21.59% 18.13%

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24).

2019 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 5,017 ÷ 18,018 = 27.84%

2 Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 5,017 ÷ 18,018 = 27.84%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Texas Instruments Inc.’s adjusted ROA improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.