Press release

TI reports financial results for 1Q09

--Conference call on TI web site at 4:30 p.m. Central time today www.ti.com/ir

Non-GAAP Reconciliation Charts

DALLAS, April 20, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- Texas Instruments Incorporated (TI) (NYSE: TXN) today announced first-quarter revenue of $2.09 billion, net income of $17 million and earnings per share (EPS) of $0.01.

TI's revenue and earnings exceeded expectations for the quarter, but the company emphasized caution about the business climate. Chairman, President and CEO Rich Templeton explained, "Demand for our products has begun to stabilize after sharp drops in the past two quarters. Many customers have increased orders for TI products as they have begun to slow down their inventory reductions. However, we remain sensitive to continuing weakness in the global economy, and we have yet to see signs of a broad-based recovery in our business. In this environment, we will keep our operations flexible so that we can respond quickly to any shifts in demand, whether up or down."

Operational performance in the quarter was good, especially reduction of the company's inventory. "We reduced our own inventory by $277 million, and at the same time worked with distributors to reduce channel inventory by $132 million. Our inventory reductions are essentially complete, and we expect to moderately increase production levels in our factories during the second quarter," Templeton said.

"Our people are focusing on opportunities for growth in Analog and Embedded Processing. Among highlights in the quarter were the acquisition of CICLON Semiconductor, a specialized supplier of analog chips for power management, and qualification of a new assembly/test factory. Both improve our ability to serve customers."

1Q09 financial summary

Amounts are in millions of dollars, except per-share amounts.


                                 1Q09     1Q08  vs. 1Q08   4Q08  vs. 4Q08
                                 ----     ----  --------   ----  --------
                       Revenue: $2086    $3272   -36%     $2491   -16%
              Operating profit: $  10    $ 807   -99%     $  51   -80%
                    Net income: $  17    $ 662   -97%     $ 107   -84%
            Earnings per share: $0.01    $0.49   -98%     $0.08   -88%
     Cash flow from operations: $ 251    $ 649   -61%     $1113   -77%

TI's revenue declined 36 percent compared with the first quarter of 2008 and declined 16 percent compared with the fourth quarter of 2008. Revenue in all segments declined in both comparisons.

TI's operating profit declined 99 percent compared with the year-ago quarter and 80 percent compared with the fourth quarter. The decline from a year ago was due to lower revenue in all segments and the associated lower gross profit, as well as the impact of underutilized manufacturing assets and restructuring charges. Collectively, these more than offset lower operating expenses and manufacturing cost reductions. The decline from the prior quarter was due to lower revenue in all segments and the associated lower gross profit, as well as the impact of underutilized manufacturing assets. These more than offset lower restructuring charges, lower operating expenses and manufacturing cost reductions.

Excluding restructuring charges of $105 million, TI's operating profit was $115 million in the first quarter, or 5.5 percent of revenue, and EPS was $0.07. (See reconciliation table at the end of this release.)

1Q09 segment results


                                1Q09     1Q08  vs. 1Q08   4Q08  vs. 4Q08  Note
                                ----     ----  --------   ----  --------  ----
    Analog:
      Revenue                   $814    $1265     -36%   $1015     -20%   (1)
      Operating profit (loss)   $(35)   $ 372    -109%   $  78    -145%
    Embedded Processing:
      Revenue                   $316    $ 425     -26%   $ 340      -7%   (2)
      Operating profit (loss)   $  2    $  96     -98%   $  (2)    200%
    Wireless:
      Revenue                   $551    $ 921     -40%   $ 646     -15%   (3)
      Operating profit (loss)   $(13)   $ 153    -108%   $ (87)     85%
    Other:
      Revenue                   $405    $ 661     -39%   $ 490     -17%   (4)
      Operating profit          $ 56    $ 186     -70%   $  62     -10%

The product categories in each segment are as follows:

    --  Analog:  high-volume analog & logic, high-performance analog
        (includes data converters, amplifiers and interface products) and power
        management
    --  Embedded Processing:  DSPs and microcontrollers used in catalog,
        communications infrastructure and automotive applications
    --  Wireless:  DSPs and analog used in basebands for handsets, OMAP(TM)
        applications processors and connectivity products for wireless
        applications

    --  Other:  includes DLP(R) products, calculators, ASIC products, RISC
        microprocessors and royalties

    (1)  The decline in Analog revenue from a year ago and from the prior
         quarter was primarily due to lower high-volume analog & logic
         revenue.  High-performance analog and power management revenue also
         declined in both comparisons, although by a lesser amount.

    (2)  The decline in Embedded Processing revenue from a year ago and from
         the prior quarter was primarily due to lower catalog product revenue.
         Revenue from automotive products also declined, although by a lesser
         amount, while revenue from communications infrastructure products was
         up in both comparisons.

    (3) Wireless revenue declined from a year ago and from the prior quarter
        primarily due to lower baseband revenue.  Revenue from OMAP
        applications processors also declined in both comparisons, although by
        a lesser amount.  Revenue from connectivity products declined from the
        prior quarter, although was higher than the year-ago quarter.

    (4) Other revenue decreased from a year ago primarily due to declines in
        RISC microprocessors, DLP products, calculators and royalties, while
        revenue from ASIC products increased.  Other revenue decreased from
        the prior quarter due to declines in DLP products, RISC
        microprocessors, ASIC products and royalties, while calculator revenue
        increased.

Operating profit declined in all segments from a year ago primarily because of lower revenue, as well as restructuring charges. Compared with the prior quarter, operating profit declined in the Analog and Other segments due to lower revenue, although increased in Wireless due to lower restructuring charges.

Restructuring charges were as follows:

                                  1Q09      1Q08      4Q08
                                  ----      ----      ----
                     Analog:      $ 42       $ -      $ 60
        Embedded Processing:      $ 19       $ -      $ 24
                   Wireless:      $ 32       $ -      $130
                      Other:      $ 12       $ -      $ 40
                      Total:      $105       $ -      $254

1Q09 additional financial information

    --  Orders were $2.19 billion, down 34 percent from a year ago although up
        18 percent from the prior quarter.
    --  Capital expenditures were $43 million in the quarter, a decline from
        $219 million in the year-ago quarter and $76 million in the prior
        quarter.
    --  TI used $101 million in the quarter to repurchase 6.6 million shares of
        its common stock and paid dividends of $141 million.

    --  Cash and cash equivalents plus short-term investments totaled $2.43
        billion at the end of the quarter.

Outlook

For the second quarter of 2009, TI expects:

    --  Revenue:  $1.95 - 2.40 billion

    --  Earnings per share:  $0.01 - 0.15

The EPS estimate includes a negative impact of $0.05 per share resulting from about $100 million of restructuring charges.

TI will update its second-quarter outlook on June 8, 2009.

For the full year of 2009, TI continues to expect approximately the following:

    --  R&D expense:  $1.5 billion
    --  Capital expenditures:  $300 million
    --  Depreciation:  $900 million

    --  Annual effective tax rate:  24%

                 TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
                        Consolidated Statements of Income
             (Millions of dollars, except share and per-share amounts)

                                                  For Three Months Ended
                                             Mar. 31,    Mar. 31,    Dec. 31,
                                               2009        2008        2008

    Revenue                                   $2,086      $3,272      $2,491
    Cost of revenue                            1,280       1,516       1,394
    Gross profit                                 806       1,756       1,097
    Research and development (R&D)               386         514         431
    Selling, general and administrative (SG&A)   305         435         361
    Restructuring expense                        105          --         254
    Operating profit                              10         807          51
    Other income (expense) net                     5          33         (15)
    Income before income taxes                    15         840          36
    Provision (benefit) for income taxes          (2)        178         (71)
    Net income                                 $  17      $  662      $  107

    Earnings per common share:
      Basic                                    $ .01      $  .50      $  .08
      Diluted                                  $ .01      $  .49      $  .08

    Average shares outstanding (millions):
      Basic                                    1,275       1,327       1,283
      Diluted                                  1,277       1,345       1,287

    Cash dividends declared per
     share of common stock                     $ .11      $  .10      $  .11

    Percentage of revenue:
    Gross profit                                38.6%       53.7%       44.0%
    R&D                                         18.5%       15.7%       17.3%
    SG&A                                        14.6%       13.3%       14.5%
    Operating profit                             0.5%       24.7%        2.0%

                    TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
                              Consolidated Balance Sheets
                      (Millions of dollars, except share amounts)

                                               Mar. 31,  Mar. 31,  Dec. 31,
                                                2009      2008      2008
    Assets
    Current assets:
      Cash and cash equivalents               $ 1,436   $ 1,450  $ 1,046
      Short-term investments                      990       426    1,494
      Accounts receivable, net of allowances
       of ($20), ($25) and ($30)                1,125     1,669      913
      Raw materials                                77       111       99
      Work in process                             712       943      837
      Finished goods                              309       524      439
      Inventories                               1,098     1,578    1,375
      Deferred income taxes                       676       659      695
      Prepaid expenses and other current
       assets                                     207       193      267
      Total current assets                      5,532     5,975    5,790
    Property, plant and equipment at cost       7,030     7,493    7,321
      Less accumulated depreciation            (3,915)   (3,908)  (4,017)
      Property, plant and equipment, net        3,115     3,585    3,304
    Long-term investments                         645       791      653
    Goodwill                                      912       838      840
    Acquisition-related intangibles               120       105       91
    Deferred income taxes                         967       618      990
    Capitalized software licenses, net            160       225      182
    Overfunded retirement plans                    17       122       17
    Other assets                                   52        79       56
    Total assets                              $11,520   $12,338  $11,923

    Liabilities and Stockholders' Equity
    Current liabilities:
      Accounts payable                           $326      $680     $324
      Accrued expenses and other liabilities      907       871    1,034
      Income taxes payable                         21       218       40
      Accrued profit sharing and retirement        33        79      134
      Total current liabilities                 1,287     1,848    1,532
    Underfunded retirement plans                  608       191      640
    Deferred income taxes                          61        60       59
    Deferred credits and other liabilities        354       382      366
    Total liabilities                           2,310     2,481    2,597
    Stockholders' equity:
      Preferred stock, $25 par value.
       Authorized -- 10,000,000 shares.
        Participating cumulative preferred.
         None issued.                              --        --       --
      Common stock, $1 par value.
       Authorized -- 2,400,000,000 shares.
        Shares issued:  March 31, 2009 --
         1,739,723,261; March 31, 2008 --
         1,739,660,927; Dec. 31, 2008 --
         1,739,718,073                          1,740     1,740    1,740
      Paid-in capital                           1,020       926    1,022
      Retained earnings                        21,043    20,318   21,168
      Less treasury common stock at cost:
        Shares:  March 31, 2009 --
         466,270,151; March 31, 2008 --
         416,925,336; Dec. 31, 2008 --
         461,822,215                          (13,852)  (12,776) (13,814)
      Accumulated other comprehensive
       income (loss), net of taxes               (741)     (351)    (790)
      Total stockholders' equity                9,210     9,857    9,326
    Total liabilities and stockholders'
     equity                                   $11,520   $12,338  $11,923

                TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
                     Consolidated Statements of Cash Flows
                              (Millions of dollars)

                                                    For Three Months Ended
                                                 Mar. 31,  Mar. 31,  Dec. 31,
                                                   2009      2008      2008
    Cash flows from operating activities:
      Net income                                 $   17    $  662    $  107
      Adjustments to net income:
        Depreciation                                230       241       283
        Stock-based compensation                     50        54        51
        Amortization of acquisition-related
         intangibles                                 10        10         8
        Losses on sale of assets                     --         6        --
        Deferred income taxes                         3       (74)      (23)
      Increase (decrease) from changes in:
        Accounts receivable                        (218)       89       889
        Inventories                                 279      (160)      200
        Prepaid expenses and other current assets     8       (46)     (100)
        Accounts payable and accrued expenses      (119)     (179)     (211)
        Income taxes payable                         49       165        13
        Accrued profit sharing and retirement       (97)     (122)      (10)
      Other                                          39         3       (94)
    Net cash provided by operating activities       251       649     1,113

    Cash flows from investing activities:
      Additions to property, plant and equipment    (43)     (219)      (76)
      Purchases of short-term investments          (220)     (362)   (1,384)
      Sales and maturities of short-term
       investments                                  729       958       182
      Purchases of long-term investments             (2)       (2)       (1)
      Sales of long-term investments                  3        16         7
      Acquisitions, net of cash acquired           (104)       --        --
    Net cash provided by (used in) investing
     activities                                     363       391    (1,272)

    Cash flows from financing activities:
      Dividends paid                               (141)     (133)     (141)
      Sales and other common stock transactions      18        76        15
      Excess tax benefit from share-based
       payments                                      --        13         2
      Stock repurchases                            (101)     (874)     (386)
    Net cash used in financing activities          (224)     (918)     (510)
    Net increase (decrease) in cash and cash
     equivalents                                    390       122      (669)
    Cash and cash equivalents, beginning
     of period                                    1,046     1,328     1,715
    Cash and cash equivalents, end of period     $1,436    $1,450    $1,046

    Certain amounts in prior periods' financial statements have been
    reclassified to conform to the current presentation.

The following describes TI's results excluding the impact of restructuring charges. Management believes this presentation provides investors additional insight into the underlying business conditions and results.

                TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
                             Non-GAAP Reconciliation
          (Millions of dollars, except share and per-share amounts)

                                                For the three
                                                 months ended
                                                March 31, 2009

    Operating profit as reported                    $   10
    Pre-tax restructuring charges                      105
    Operating profit excluding
     restructuring charges                          $  115

    Revenue                                         $2,086

    Operating profit percentage of
     revenue excluding restructuring charges           5.5%



                                                For the three
                                                 months ended
                                                March 31, 2009

    Net income as reported                          $   17
    Pre-tax restructuring charges                      105
    Tax impact of restructuring charges                (37)

    Net income excluding restructuring
     charges                                        $   85

    Average diluted shares outstanding               1,277

    Diluted earnings per share excluding
     the impact of restructuring charges            $  .07

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as TI or its management "believes," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar import. Similarly, statements herein that describe the Company's business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements.

We urge you to carefully consider the following important factors that could cause actual results to differ materially from the expectations of TI or its management:

    --  Market demand for semiconductors, particularly in key markets such as
        communications, entertainment electronics and computing;
    --  TI's ability to maintain or improve profit margins, including its
        ability to utilize its manufacturing facilities at sufficient levels to
        cover its fixed operating costs, in an intensely competitive and
        cyclical industry;
    --  TI's ability to develop, manufacture and market innovative products
        in a rapidly changing technological environment;
    --  TI's ability to compete in products and prices in an intensely
        competitive industry;
    --  TI's ability to maintain and enforce a strong intellectual property
        portfolio and obtain needed licenses from third parties;
    --  Expiration of license agreements between TI and its patent licensees,
        and market conditions reducing royalty payments to TI;
    --  Economic, social and political conditions in the countries in which TI,
        its customers or its suppliers operate, including security risks, health
        conditions, possible disruptions in transportation networks and
        fluctuations in foreign currency exchange rates;
    --  Natural events such as severe weather and earthquakes in the locations
        in which TI, its customers or its suppliers operate;
    --  Availability and cost of raw materials, utilities, manufacturing
        equipment, third-party manufacturing services and manufacturing
        technology;
    --  Changes in the tax rate applicable to TI as the result of changes in tax
        law, the jurisdictions in which profits are determined to be earned and
        taxed, the outcome of tax audits and the ability to realize deferred tax
        assets;
    --  Losses or curtailments of purchases from key customers and the timing
        and amount of distributor and other customer inventory adjustments;
    --  Customer demand that differs from our forecasts;
    --  The financial impact of inadequate or excess TI inventory that results
        from demand that differs from projections;
    --  The ability of TI and its customers and suppliers to access their bank
        accounts and lines of credit or otherwise access the capital markets;
    --  Product liability or warranty claims, claims based on epidemic or
        delivery failure or recalls by TI customers for a product containing a
        TI part;
    --  TI's ability to recruit and retain skilled personnel; and

    --  Timely implementation of new manufacturing technologies, installation of
        manufacturing equipment and the ability to obtain needed third-party
        foundry and assembly/test subcontract services.

For a more detailed discussion of these factors, see the "Risk Factors" discussion in Item 1A of the Company's most recent Form 10-K. The forward-looking statements included in this release are made only as of the date of this release, and the Company undertakes no obligation to update the forward-looking statements to reflect subsequent events or circumstances.

About Texas Instruments

Texas Instruments (NYSE: TXN) helps customers solve problems and develop new electronics that make the world smarter, healthier, safer, greener and more fun. A global semiconductor company, TI innovates through design, sales and manufacturing operations in more than 30 countries. For more information, go to www.ti.com.

    TI trademarks:
       OMAP
       DLP

Other trademarks are the property of their respective owners.

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