Investor Presentaiton
5. Profit sharing plans
Profit sharing benefits are generally formulaic and determined by one or more subsidiary or company-wide financial metrics. We
pay profit sharing benefits primarily under the company-wide TI Employee Profit Sharing Plan. This plan provides for profit sharing
to be paid based solely on TI's operating margin for the full calendar year. Under this plan, TI must achieve a minimum threshold of
10 percent operating margin before any profit sharing is paid. At 10 percent operating margin, profit sharing will be 2 percent of
eligible payroll. The maximum amount of profit sharing available under the plan is 20 percent of eligible payroll, which is paid only
if TI's operating margin is at or above 35 percent for a full calendar year.
We recognized $346 million, $309 million and $269 million of profit sharing expense under the TI Employee Profit Sharing Plan in
2016, 2015 and 2014, respectively.
6. Income taxes
Income before Income Taxes
U.S.
Non-U.S.
Total
Provision (Benefit)
for Income Taxes
U.S. federal
Non-U.S.
U.S. state
Total
For Years Ended December 31,
For Years Ended December 31,
2016
2015
2014
$ 3,953
977
$ 3,218
998
$ 2,684
1,190
$ 4,930
$ 4,216
$ 3,874
Current
2016
Deferred
Total
Current
2015
Deferred
Total
Current
2014
Deferred
$1,289
238
10
$ (122)
(80)
$1,167
$1,110
$ (72)
$ 1,038
$ 911
$ (73)
Total
$ 838
158
10
168
14
182
194
11
205
7
3
10
9
1
10
$1,537
$ (202) $1,335
$ 1,285
$ (55)
$1,230
$ 1,114
$ (61)
$ 1,053
Principal reconciling items from the U.S. statutory income tax rate to the effective tax rate (Provision for income taxes as a
percentage of Income before income taxes) are as follows:
U.S. statutory income tax rate.
Non-U.S. effective tax rates
U.S. excess tax benefit for stock compensation (a)
U.S. tax benefit for manufacturing
U.S. R&D tax credit
U.S. non-deductible expenses
Impact of changes to uncertain tax positions
Other
Effective tax rate
(a) This is related to the adoption of ASU 2016-09 as discussed in Note 2.
For Years Ended December 31,
2016
2015
2014
35.0%
35.0%
35.0%
(3.7)
(4.0)
(5.5)
(3.0)
(1.5)
(1.6)
(1.3)
(1.2)
(1.3)
(1.5)
0.3
0.3
0.2
0.6
0.2
0.1
0.6
0.6
0.2
27.1%
29.2%
27.2%
Our effective tax rate benefits from lower rates (compared with the U.S. statutory income tax rate) applicable to our operations
in many of the jurisdictions in which we operate, and from U.S. tax benefits. These lower non-U.S. tax rates are generally statutory
in nature, without expiration and available to companies that operate in those taxing jurisdictions. Also included in the non-U.S.
effective tax rates reconciling item above are benefits from tax holidays of $30 million, $50 million and $44 million in 2016, 2015
and 2014, respectively. The tax benefits relate to our operations in Malaysia and the Philippines, and expire in 2018 and 2017,
respectively. The terms of the Malaysia tax holiday are currently under governmental review as required for the end of the first five
years of the holiday period.
TEXAS INSTRUMENTS . 2016 FORM 10-K
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