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February
26, 2008
Via
Federal Express
Mr.
Tim
Buchmiller
Senior
Attorney, Division of Corporation Finance
U.S.
Securities and Exchange Commission
Washington,
DC 20549
Re:
Texas
Instruments Incorporated
Annual
Report for the Fiscal Year Ended
December 31, 2006 on Form 10-K File No. 001-3761
Dear
Mr.
Buchmiller:
I
am
writing in response to your letter dated February 14, 2008 to Texas Instruments
Incorporated containing comments on our Form 10-K for the year ended December
31, 2006. As you will note below, we will address your comments in
our Form 10-K for the year ended December 31, 2007, as
appropriate. We intend to include similar disclosures, revised as
appropriate, in our filings for relevant subsequent periods.
COMMENT
1: We have reviewed your response to our prior comment. In your
future filings, as applicable, please expand your disclosure to further clarify
the nature of the securities that you hold. For example, although you
have disclosed that your asset-backed fixed income securities are divided about
equally between mortgage-backed securities secured by “non-subprime mortgage
pools” and “non-mortgage-related asset-backed commercial paper,” please disclose
what type of mortgage pools, and what type of other assets, back the securities
that you hold.
RESPONSE
1: We will expand our disclosure as requested in future
filings. For example, in Note 3 to our financial statements for the
fiscal year ended December 31, 2007, we have added a table and related narrative
disclosure that more fully describes the assets underlying our cash equivalents
and short-term investments.
COMMENT
2: It also appears from footnote 3 to your financial statements
for the year ended December 31, 2006 that approximately $1.68 billion of your
cash equivalents and short-term investments were held in “auction-rate
securities.” In your future filings, as applicable, please clearly
discuss the nature of the material aspects of those securities as necessary
to
provide your investors with information necessary for a clear understanding
of
your balance sheet items. For example, as appropriate, identify the
nature of the auction-rate securities that you hold, the credit rating of those
securities, indicate what factors may affect the value or liquidity of those
securities, disclose how the interest rates on those investments will be
determined and any material risks. Also, if those securities are
reasonably likely to affect your financial condition in a material way, please
expand your discussion and analysis as applicable in future filings to provide
your investors with information necessary for a clear understanding of the
trend
or uncertainty. Refer to Item 303(a) of Regulation
S-K. Also add any appropriate disclosure required by Item 305 of
Regulation S-K.
RESPONSE
2: We will expand our disclosure as requested in future
filings. For example, in Notes 3 and 17 to our financial statements
for the fiscal year ended December 31, 2007, and the Liquidity and Capital
Resources and Quantitative and Qualitative Disclosures about Market Risk
sections of our accompanying MD&A disclosure, we have added a discussion of
auction-rate securities that includes the risks associated with holding such
securities and our expectations regarding the potential impact of these risks
on
our financial condition.
COMMENT
3: In your future filings, as applicable, revise the “Critical
Accounting Policies” section of “Management’s Discussion and Analysis” to
discuss the material accounting estimates and assumptions you make in valuing
the auction-rate securities that you hold. Describe the process by
which you determine the value of those securities, the levels of judgment
involved and the susceptibility of the resulting value to changes in your
estimates and assumptions.
RESPONSE
3: We accounted for our investments in auction-rate securities
held as of December 31, 2007, at fair value based on readily-available market
prices or third-party broker quotes. We did not adjust for or apply
any additional assumptions or estimates to the pricing information we received
from brokers. The pricing information we received from brokers
utilized market participant data, and therefore we believe it was the most
reliable information available regarding the value of our auction-rate
securities. Accordingly, we do not believe it is appropriate to add a
discussion disclosing the estimates and assumptions used to value our
auction-rate securities to the “Critical Accounting Policies” section
of our Form 10-K for 2007.
We
have
revised Note 3 to our financial statements in our Form 10-K for 2007 to disclose
that these investments are stated at fair value based on market prices or broker
quotes, and we will include similar disclosure in future filings, as
appropriate.
Third-party
broker quotes currently are not available for purposes of valuing our auction
rate securities; should that condition persist, we will consider whether we
should expand our Critical Accounting Policies disclosure beginning with our
first-quarter 2008 Form 10-Q.
We
trust
that the above information will be sufficient for your purposes. If you
have any questions, please call Charlie Miller of Texas Instruments at
214-480-6707.
Very
truly yours,
/s/
Kevin P.
March
Kevin
P.
March
Senior
Vice President and
Chief
Financial Officer