Investor Presentaiton
Non-GAAP financial information
This MD&A includes references to free cash flow and ratios based on that measure. These are financial measures that were not
prepared in accordance with generally accepted accounting principles in the United States (GAAP). Free cash flow was calculated
by subtracting Capital expenditures from the most directly comparable GAAP measure, Cash flows from operating activities (also
referred to as cash flow from operations). We believe that free cash flow and the associated ratios provide insight into our liquidity,
our cash-generating capability and the amount of cash potentially available to return to shareholders, as well as insight into our
financial performance. These non-GAAP measures are supplemental to the comparable GAAP measures. Reconciliation to the most
directly comparable GAAP-based measures is provided in the table below.
Cash flow from operations (GAAP)
Capital expenditures
Free cash flow (non-GAAP)
Revenue
Cash flow from operations as a percent of revenue (GAAP)
Free cash flow as a percent of revenue (non-GAAP)
Long-term contractual obligations
Contractual Obligations
Long-term debt (a) .
Purchase commitments (b)
Operating leases (c) ...
Deferred compensation plans (d)
Total (e).
$ 4,614
(531)
$ 4,083
$ 3,846
For Years Ended December 31,
2016
2015
$ 4,397
(551)
2014
$ 4,054
(385)
$ 3,669
$ 13,370
$13,000
$ 13,045
34.5%
33.8%
31.1%
30.5%
29.6%
28.1%
Payments Due by Period
2017
2018/2019
2020/2021
Thereafter
Total
$ 692
$ 1,350
$ 806
$1,021
$ 3,869
132
173
26
5
336
67
75
41
57
240
18
38
37
99
192
$ 909
$1,636
$ 910
$ 1,182
$ 4,637
(a) Includes the related interest payments and amounts classified as the current portion of long-term debt, specifically
obligations that will mature within 12 months.
(b) Includes payments for software licenses and contractual arrangements with suppliers where there is a fixed, non-cancellable
payment schedule or minimum payments due with a reduced delivery schedule. Excluded from the table are cancellable
arrangements. However, depending on when certain purchase arrangements may be cancelled, an additional $3 million of
cancellation penalties may be required to be paid, which are not reflected in the table.
(c) Includes minimum payments for leased facilities and equipment and purchases of industrial gases under contracts accounted
for as operating leases.
(d) Includes an estimate of payments for certain liabilities that existed at December 31, 2016.
(e) Excluded from the table are $243 million of uncertain tax liabilities under ASC 740, as well as any planned future funding
contributions to retirement benefit plans. Amounts associated with uncertain tax liabilities have been excluded because of the
difficulty in making reasonably reliable estimates of the timing of cash settlements with the respective taxing authorities.
Regarding future funding of retirement benefit plans, we plan to contribute about $100 million in 2017, but funding
projections beyond 2017 are not practical to estimate due to the rules affecting tax-deductible contributions and the impact
from the plans' asset performance, interest rates and potential U.S. and non-U.S. legislation.
Critical accounting policies
In preparing our consolidated financial statements in conformity with accounting principles generally accepted in the United States,
we use statistical analyses, estimates and projections that affect the reported amounts and related disclosures and may vary from
actual results. We consider the following accounting policies to be those that are most important to the portrayal of our financial
condition and that require the most subjective judgment. If actual results differ significantly from management's estimates and
projections, there could be a significant effect on our financial statements.
TEXAS INSTRUMENTS . 2016 FORM 10-K
21
FORM 10-KView entire presentation