Investor Presentaiton
Revenue and margin
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Annual performance
○ TI's revenue growth rate of 2.8 percent was higher in 2016 than in the prior year. Compared with competitor
companies, TI's growth rate was below the median. (It is important to note that the median growth rate of
competitor companies includes the effect of acquisitions, whereas TI's growth rate is entirely organic. If the
effect of acquisitions were excluded from competitor companies, we estimate TI's growth rate would be at or
above the median growth rate.)
O
Revenues for the company's core businesses of Analog and Embedded Processing were up 2.4 percent and
8.5 percent, respectively.
。 Operating profit margin was 35.9 percent, which was above both the prior year's margin and the median
comparison with competitors.
Three-year performance
• Compound annual revenue growth for 2014-2016 was 3.1 percent, which was below the median competitor
comparison.
• Average operating profit for 2014-2016 was 33.0 percent, which was above the median competitor
comparison.
Total shareholder return (TSR)
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TSR was 36.7 percent, better than the median TSR as compared with competitor companies.
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The company again generated strong cash, with free cash flow at 30.5 percent of revenue.² Approximately
93 percent of free cash flow was returned to shareholders in 2016 through share repurchases and dividends.
Share repurchases of $2.1 billion reduced outstanding shares by 1.5 percent (net of stock issuances during the
year). The quarterly dividend rate increased 31.6 percent (the 15th increase in the last 13 years). Share
repurchases and dividend increases are important elements of TI's capital management strategy.
The balance sheet remained robust, ending the year with cash and short-term investments of $3.5 billion.
The three-year compound annual growth rate for TSR was 21.6 percent, which was above the median competitor
comparison.
Strategic progress
• The company's strategic focus on Analog and Embedded Processing semiconductors continues to provide the
foundation for strong results in the near and long terms. The products in TI's portfolio number in the tens of
thousands and offer strong differentiation and longevity, with more products added each year. In 2016,
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•
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86 percent of TI's revenue came from Analog and Embedded Processing semiconductors.
TI's revenue continues to come from a diverse base of thousands of applications. This is an intentional strategy
that prevents dependence on a single market, customer or product.
TI's in-house capability to produce high volumes of Analog semiconductors on 300-millimeter wafers remains a
competitive advantage. In 2016, the company again increased production on 300-millimeter wafers, which
enabled more chips to be produced per wafer, thereby improving margins and cash generation.
In total, the committee determined that TI's strategic position was strengthened by management's decisions and
actions in 2016.
Revenue growth: total TI
Operating margin
Free cash flow as % of revenue
% of free cash flow returned to shareholders
Increase in quarterly dividend rate
Total shareholder return (TSR)
Performance summary
1-Year
3-Year
2.8%
35.9%
3.1% CAGR
33.0% average
30.5%
29.4% average
92.5%
104.9% average
31.6%
66.7%
36.7%
21.6% CAGR
CAGR (compound annual growth rate) is calculated using the formula (Ending Value/Beginning
Value)1/number of years minus 1.
2 Free cash flow was calculated by subtracting Capital expenditures from the GAAP-based Cash flows from operating activities.
For a reconciliation to GAAP, see Appendix A to this proxy statement.
TEXAS INSTRUMENTS
2017 PROXY STATEMENT
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PROXY STATEMENTView entire presentation