TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Income

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

For Three Months Ended
June 30,

2020

2019

Revenue

$

3,239

$

3,668

Cost of revenue (COR)

1,308

Gross profit

2,082

2,360

Research and development (R&D)

379

390

Selling, general and administrative (SG&A)

401

420

Acquisition charges

50

80

Restructuring charges/other

24

(36)

Operating profit

1,228

1,506

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

99

52

Interest and debt expense

48

44

Income before income taxes

1,279

1,514

Provision for income taxes

(101)

209

Net income

$

1,380

$

1,305

Diluted earnings per common share

$

1.48

$

1.36

Average shares outstanding (millions):

Basic

916

937

Diluted

927

953

Cash dividends declared per common share

$

.90

$

.77

Supplemental Information

(Quarterly, except as noted)

Provision for income taxes is based on the following:

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

$

164

$

238

Discrete tax items

(265)

(29)

Provision for income taxes (effective taxes)

$

$

209

Annual operating tax rate

13%

16%

Effective tax rate

(8)%

14%

A portion of net income is allocated to unvested restricted stock units (RSUs) on which we pay dividend equivalents. Diluted EPS is calculated using the following:

Net income

$

1,380

$

1,305

Income allocated to RSUs

(7)

(8)

Income allocated to common stock for diluted EPS

$

1,373

$

1,297