Trailing 12 Months

4Q17

4Q17

4Q16

Change

Dividends paid

$

611

$

2,104

$

1,646

28%

Stock repurchases

$

706

$

2,556

$

2,132

20%

Total cash returned

$

1,317

$

4,660

$

3,778

23%

TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Income

(Millions of dollars, except share and per-share amounts)

For Three Months Ended

For Years Ended

December 31,

December 31,

2017

2016

2017

2016

Revenue

$

3,750

$

3,414

$

14,961

$

13,370

Cost of revenue (COR)

1,310

1,277

5,347

5,113

Gross profit

2,440

2,137

9,614

8,257

Research and development (R&D)

386

340

1,508

1,356

Selling, general and administrative (SG&A)

409

405

1,694

1,742

Acquisition charges

79

80

318

319

Restructuring charges/other

3

(20)

11

(15)

Operating profit

1,563

1,332

6,083

4,855

Other income (expense), net (OI&E)

8

184

75

155

Interest and debt expense

21

19

78

80

Income before income taxes

1,550

1,497

6,080

4,930

Provision for income taxes

1,206

450

2,398

1,335

Net income

$

344

$

1,047

$

3,682

$

3,595

Diluted earnings per common share

$

.34

$

1.02

$

3.61

$

3.48

Average shares outstanding (millions):

Basic

985

998

991

1,003

Diluted

1,007

1,018

1,012

1,021

Cash dividends declared per common share

$

.62

$

.50

$

2.12

$

1.64

Certain amounts in the prior periods have been adjusted to reflect the first-quarter 2017 early adoption of ASU 2017-07 related to the reclassification of certain pension and other retiree benefit costs to OI&E.

Supplemental Information

Provision for income taxes is based on the following:

Operating taxes (calculated using the estimated annual effective tax rate)

$

476

$

465

$

1,858

$

1,489

Discrete tax items

730

(15)

540

(154)

Provision for income taxes (effective taxes)

$

1,206

$

450

$

2,398

$

1,335

Annual operating tax rate

31%

31%

31%

30%

Effective tax rate

78%

30%

39%

27%

As a result of accounting rule ASC 260, which requires a portion of Net income to be allocated to unvested restricted stock units (RSUs) on which we pay dividend equivalents, diluted EPS is calculated using the following:

Net income

$

344

$

1,047

$

3,682

$

3,595

Income allocated to RSUs

(3)

(13)

(33)

(44)

Income allocated to common stock for diluted EPS

$

341

$

1,034

$

3,649

$

3,551