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TI ANNOUNCES 1991 ANNUAL & FOURTH-QUARTER RESULTS, TAKES CHARGE OF $55M IN FOURTH QUARTER, PLANS ADDITIONAL EMPLOYMENT REDUCTIONS OF ABOUT 1,000

TI ANNOUNCES 1991 ANNUAL & FOURTH-QUARTER RESULTS, TAKES CHARGE OF $55M IN FOURTH QUARTER, PLANS ADDITIONAL EMPLOYMENT REDUCTIONS OF ABOUT 1,000
 DALLAS, Jan. 24 /PRNewswire/ -- Texas Instruments (NYSE: TXN) (TI) today announced its 1991 annual and fourth-quarter operating results.
 Financial Summary
 For the fourth quarter of 1991, net revenues were $1,752 million, compared with $1,759 million in the same period of 1990. Loss from operations for the quarter was $43 million, compared with $40 million for the same period of 1990. Fourth-quarter 1991 results include charges of $55 million, equivalent to $0.66 per share, for additional employment reductions affecting about 1,000 people, primarily in semiconductors and information technology, and costs associated with phasing out older semiconductor manufacturing capacity, partially offset by a pension settlement gain associated with a voluntary retirement program carried out during 1991. Before the charges, there was a profit from operations of $12 million.
 Net loss was $85 million in the fourth quarter of 1991, compared with $56 million in the same period of 1990. Loss per share was $1.18 in the fourth quarter of 1991, compared with $0.80 in the same period of 1990. Excluding the charges, net loss was $31 million, and loss per share was $0.52.
 Net revenues in 1991 were $6,784 million, compared with $6,567 million in 1990. Growth in semiconductors and information technology more than offset a decline caused by the timing of defense electronics shipments. Loss from operations was $249 million, compared with a loss of $26 million in 1990. Charges taken for cost reductions across TI, lower semiconductor prices and higher startup expenses related to new semiconductor manufacturing capacity were primarily responsible for the increase in TI's operating loss from 1990.
 Net loss for the year was $409 million, compared with a loss of $39 million in 1990. Loss per share was $5.40, compared with a loss of $0.92 per share in 1990. Excluding the effect of the charges, the 1991 loss from operations was $9 million, net loss was $171 million, and loss per share was $2.49.
 Commentary
 In his letter to stockholders, TI's chairman, president and chief executive officer, Jerry R. Junkins, made the following remarks:
 "Texas Instruments unsatisfactory financial performance in 1991 was well below our expectations as a result of lower than expected economic growth in the United States, our slower than planned rampup of new semiconductor capacity, adverse tax provisions, and charges taken to substantially reduce future costs and streamline organizations across all TI businesses.
 "The cost-reduction actions included a voluntary retirement program in the United States, selected involuntary employment reductions worldwide, and the phasing out of older semiconductor manufacturing capacity. Charges reflecting the cost of these actions totalled $240 million in 1991, equivalent to $2.91 per share. While these charges had a significant impact on TI's financial results in 1991, we expect annualized savings from these actions of approximately $220 million.
 Semiconductor
 "We are continuing to execute our strategies for reshaping the company. Our semiconductor business is undergoing major transitions in products, process technology and global deployment. Our goal of shifting the product mix to more than 50 percent differentiated products gained momentum in 1991. With double-digit revenue growth, application- specific products have now emerged as the largest part of TI's semiconductor business, and we continue to divert submicron CMOS capacity from memory to application-specific products.
 "Progress continues in our buildup of submicron CMOS semiconductor manufacturing capacity worldwide. We are ramping up production of four- megabit DRAMs at our facility in Avezzano, Italy. With this addition to the output from our plant in Miho, Japan, we reached volume production of four-megabit DRAMs in late 1991. "During 1991, we announced a joint- venture agreement with Hewlett-Packard, Canon and the government of Singapore to build a new submicron CMOS facility in that country, with initial production expected in mid-1993. This will be the fifth submicron facility being built with the close cooperation of customers, governments and others. As these new facilities come into full production over the next few years, we will have the capacity in place, along with the new products currently in design, to increase our semiconductor revenues substantially with minimal additional resources.
 Defense Electronics
 "Our defense business is making the cost reductions, resource consolidations and organizational realignments to remain a stable contributor to TI in a smaller defense market. During 1991, we received more than $400 million of new orders for replenishment of high-speed antiradiation missiles (HARM) and laser-guided weapons used in Operation Desert Storm.
 "We are continuing to win new programs for the future, including the F-16 modular mission computer and the U.S. Navy's Advanced Interdiction Weapon System (AIWS), a next-generation missile system that is planned to replace six air-to-ground weapon systems in the U.S. inventory.
 Information Technology
 "We are moving from a hardware focus to a greater software emphasis in our information technology business. With rapid growth in revenues for our flagship software product, the Information Engineering Facility(TM), TI is gaining recognition as a leading supplier in the integrated computer-aided software engineering (I-CASE) market. We accelerated the transition to software in 1991 with the sale of substantially all of our industrial automation and control systems business and the acquisition of the European information engineering business of James Martin Associates.
 1992 Outlook
 "Our outlook for 1992 is based on conservative growth estimates for the major economies and markets of the world. We are planning to return TI to profitability in 1992 through cost reductions, business process and productivity improvements, and emphasis on new products. Actions we are taking to streamline our traditional ways of doing business will make us more responsive to the needs of our customers, while making us less dependent on near-term economic or market growth.
 "Capital spending in 1991 was $504 million, compared with $909 million in 1990. The joint-venture semiconductor manufacturing facilities in Taiwan, Japan and Singapore did not require the same level of spending by TI as similar facilities built in 1990. For 1992, we expect to reduce capital spending further, to about $425 million. We believe these TI investments, coupled with shared investments by customers and others, will allow us to maintain our total effective investment at competitive levels. We also trimmed R&D investments in 1991 to $527 million from $540 million in 1990.
 "TI's heavy investment in R&D over several decades has produced landmark innovations, many of which are broadly used by the electronics industry. Royalty revenues from those who use TI's intellectual property totalled $256 million in 1991, up from $172 million in 1990.
 "Our investments also have resulted in new technologies, including radio-frequency identification, solar energy and digital imaging, that provide promising new business opportunities. We formed a new corporate ventures activity in 1991 to gain maximum leverage from these and other emerging technologies.
 Summary
 "Although 1991 was one of the most difficult years in our history, the actions, both strategic and operational, that we are taking will clearly make us more competitive in 1992 and beyond. With little anticipated improvement in economic and market growth in the near term, our own performance is the key to our return to profitability. We will continue our relentless effort to provide significant added value to our customers' products by providing products and services that enhance quality, improve productivity and reduce time to market."
 NOTE: Information Engineering Facility is a trademark of Texas Instruments Incorporated.
 TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
 Consolidated Income Statement
 (Millions of dollars, except per-share amounts.)
 Years ended Dec. 31: 1991 1990
 Net revenues $ 6784 $ 6567
 Operating costs and expenses:
 Cost of revenues 5662 5327
 General, administrative and marketing 1277 1183
 Employees' pension and profit sharing plans 94 83
 Total 7033 6593
 Profit (loss) from operations (249) (26)
 Other income (expense) net (14) 29
 Interest on loans 41 24
 Income (loss) before provision for
 income taxes (304) (21)
 Provision for income taxes 105 18
 Net income (loss) $ (409) $ (39)
 Net income (loss), less dividends
 accrued on preferred stock $ (443) $ (75)
 Earnings (loss) per common and common
 equivalent share (A) $(5.40) $(0.92)
 Cash dividends declared per share
 of common stock $ 0.72 $ 0.72
 (A) -- Earnings per common and common equivalent share are based on average common shares outstanding (81,970,372 and 81,613,734 shares for 1991 and 1990) and "net income (loss), less dividends accrued on preferred stock."
 Three months ended Dec.31: 1991 1990
 Net revenues $ 1752 $ 1759
 Operating costs and expenses:
 Cost of revenues 1456 1452
 General, administrative and marketing 318 326
 Employees' pension and profit sharing plans 21 21
 Total 1795 1799
 Profit (loss) from operations (43) (40)
 Other income (expense) net -- (7)
 Interest on loans 13 7
 Income (loss) before provision for
 income taxes (56) (54)
 Provision for income taxes 29 2
 Net income (loss) $ (85) $ (56)
 Net income (loss), less dividends
 accrued on preferred stock $ (97) $ (66)
 Earnings (loss) per common and common
 equivalent share(B) $(1.18) $(0.80)
 Cash dividends declared per share
 of common stock $ 0.18 $ 0.18
 (B) -- Earnings per common and common equivalent share are based on average common shares outstanding (82,091,903 and 81,765,822 shares for the fourth quarters of 1991 and 1990) and "net income (loss), less dividends accrued on preferred stock."
 Selected Balance Sheet Items
 (Millions of dollars)
 Dec. 31: 1991 1990
 Cash and short-term investments $ 601 $ 412
 Accounts receivable (net) 905 944
 Inventories (net) 815 887
 Total current assets 2381 2305
 Property, plant and equipment (net) 2354 2480
 Total assets 5009 5048
 Current liabilities 1568 1479
 Long-term debt, loans and current LTD 926 750
 Stockholders' equity 1955 2358
 Supplemental Information
 1991 Results of Operations Compared with 1990
 TI's orders for 1991 were $6,725 million, up 21 percent from $5,551 million in 1990. Significantly higher defense electronics orders were the primary contributor to the change and resulted from timing of receipt of orders for the high-speed antiradiation missile (HARM) plus replenishment orders from Operation Desert Storm.
 TI's net revenues for 1991 were $6,784 million, up 3 percent from $6,567 million in 1990. Loss from operations was $249 million in 1991, compared with $26 million in 1990. The results for 1991 include charges, net of a pension settlement gain in the fourth quarter, of $240 million for cost reductions; charges were $41 million in the fourth quarter of 1990. The financial results for 1990 also included a pretax, nonoperating gain of approximately $15 million from the sale of a majority interest in TI's photomask operation and a pretax, nonoperating charge of $8 million to reduce TI's minority investment in Halliburton Geophysical Services, Inc. On July 1, 1991, TI's remaining interest in Halliburton Geophysical Services, Inc., was acquired by Halliburton Company.
 The income-tax provision for 1991 is primarily for non-U.S. taxes and a decrease in deferred tax assets; for 1990, the provision was primarily for non-U.S. taxes.
 For the fourth quarter of 1991, TI's orders were $1,453 million, compared with $1,344 million for the same period in 1990. The components and defense electronics segments were primarily responsible for the increase.
 Net revenues in the fourth quarter of 1991 were $1,752 million, compared with $1,759 million in the same period of 1990. A decline in defense electronics more than offset higher revenues in the digital products and components segments. Royalty revenue was $57 million in the fourth quarter of 1991, compared with $53 million in the same period of the previous year. Approximately 80 percent of the fourth-quarter 1991 royalty revenue was from ongoing royalties.
 Loss from operations for the fourth quarter was $43 million, compared with $40 million for the same period of 1990. The results for the fourth quarter of 1991 include a $45 million charge for additional employment reductions of about 1,000 people, primarily in semiconductors and information technology, a charge of $35 million associated with phasing out older semiconductor manufacturing capacity, and a $25 million pension settlement gain associated with the voluntary retirement program during 1991. Before the charges, there was a profit from operations of $12 million. The results for the fourth quarter of 1990 included a $41 million charge for cost reductions.
 Net loss was $85 million in the fourth quarter of 1991, compared with $56 million in the same period of 1990. Loss per share was $1.18 in the fourth quarter of 1991, compared with $0.80 in the same period of 1990. After tax, the charges net of the pension settlement gain accounted for $0.66 of the 1991 fourth-quarter loss. Excluding the charges, net loss was $31 million, and loss per share was $0.52.
 TI's backlog of unfilled orders as of Dec. 31, 1991, was $3,577 million, down $78 million from the end of 1990 and down $318 million from the end of the third quarter of 1991, primarily because of decreases in defense electronics backlog. TI-funded R&D was $140 million in the fourth quarter of 1991, compared with $135 million in the same period of 1990. Customer-funded R&D was $388 million in 1991, compared with $431 million in 1990.
 Capital expenditures were $116 million in the fourth quarter of 1991, compared with $203 million in the same period of 1990. Depreciation for 1991 was $590 million, compared with $541 million in 1990, and $163 million in the fourth quarter of 1991, compared with $146 million in the same period of 1990. Depreciation in 1992 is expected to be approximately $570 million.
 Components Segment
 Orders in the components segment were up 9 percent for the year, and revenues up 10 percent, from 1990. The segment operated at a loss for the year because of losses in semiconductor operations and charges for cost reductions. Semiconductor operating results were substantially lower than in 1990, primarily as a result of lower prices and higher depreciation. The 1991 segment results include charges of $121 million, and the 1990 results included charges of $16 million for cost reductions.
 For the fourth quarter of 1991 compared with the same period of 1990, orders in the components segment were up 6 percent, and revenues were up 5 percent. Excluding the effect of charges, the loss in components increased slightly in the fourth quarter of 1991, compared with the same period of 1990. Semiconductor revenues in the fourth quarter of 1991 declined slightly from the third quarter.
 Defense Electronics Segment
 In TI's defense electronics segment, 1991 orders were up 84 percent, and revenues were down 8 percent, from 1990. Excluding cost-reduction charges, margins in defense electronics were essentially unchanged in 1991 from 1990. There was a total of $67 million of charges in 1991, and 1990 included $12 million for cost reductions.
 For the fourth quarter of 1991 compared with the same period of 1990, orders in the defense electronics segment were up 21 percent, and revenues were down 15 percent because of timing of shipments. Margins improved in the fourth quarter of 1991, compared with the same period of 1990.
 Digital Products Segment
 Orders in TI's digital products segment were up 2 percent in 1991, and revenues up 7 percent, compared with 1990. The 1991 results included charges of $31 million for cost reductions, and the 1990 results include $9 million of similar charges. The loss in this segment increased in 1991 from 1990 by more than the increase in charges. For the fourth quarter of 1991 compared with the same period of 1990, orders were down 1 percent, and revenues were up 13 percent. The segment was profitable in the fourth quarter of 1991.
 Metallurgical Materials Segment
 In the metallurgical materials segment, orders in 1991 were down 5 percent from 1990. Revenues were down 10 percent, primarily because of weakness in the automotive, interconnection and telecommunications markets. Profits were down slightly in 1991, compared with 1990. In the fourth quarter of 1991, orders and revenues were essentially unchanged from the same period of 1990.
 Intellectual Property
 Net revenues for 1991 include royalty revenues of $256 million, compared with $172 million in 1990. The increase in 1991 was primarily the result of new semiconductor patent license agreements with Fujitsu Limited; Matsushita Electric Industrial Co., Ltd.; NEC Corporation; Oki Electric Industry Co., Ltd.; Samsung Electronics Co., Ltd.; and Toshiba Corporation. Recently, new agreements were reached with two other Japanese manufacturers, Ricoh Company, Ltd. and Sharp Corporation, resulting in non-recurring royalty revenue in both the fourth quarter of 1991 and the first quarter of 1992.
 The new agreement with Fujitsu excludes TI's Japanese patent on the invention of the integrated circuit (the "Kilby" patent), and TI is seeking damages and injunctive relief in a lawsuit filed against Fujitsu in Japan. Fujitsu has brought a lawsuit against TI in Japan seeking a declaration that Fujitsu is not infringing the Kilby patent.
 TI is also in litigation with other companies concerning its patents relating to microcomputer systems and plastic-encapsulated integrated circuits.
 Negotiations with additional potential licensees are ongoing. These negotiations by their nature are not predictable as to outcome or timing, and results may vary depending on the parties' relative patent positions, the use by each party of the other's patents, the sales volume of each party, and other factors. TI expects to earn a significant ongoing stream of royalty revenue.
 Financial Condition
 During 1991, cash and cash equivalents plus short-term investments increased by $189 million to $601 million, primarily as a result of several financing actions taken throughout the year. In March, the company issued $150 million of 9-percent notes due 2001, and the proceeds were used in April to redeem $150 million of auction-rate preferred stock. In June, the company issued $150 million of 9.25-percent notes due 2003, and the proceeds were used in July to redeem at par $150 million of 8.875-percent notes due 1993. In August, TI exchanged new auction-rate preferred stock for its outstanding auction-rate preferred stock to adjust for market conditions. The new series have a higher maximum dividend rate, and none of the series is convertible. In September, the company issued 2,778,500 shares of Series A conversion preferred stock, which is also known as Preferred Equity Redemption Cumulative Stock(TM), or PERCS(TM). A portion of the net proceeds of $314 million was used in November 1991 to redeem $75 million of auction-rate preferred stock; the remaining proceeds are being used for general corporate purposes, which may include purchase or further redemption of existing securities of the company. Borrowing also was increased by $26 million during the year by utilizing international incentive-rate financing facilities net of repaying international working-capital financing.
 The company maintains unused lines of credit to support commercial paper borrowing and to provide additional liquidity. Unused lines of credit were approximately $625 million at Dec. 31, 1991. Of this amount, $500 million was available to support commercial paper borrowing. Commercial paper was issued during 1991, but none was outstanding at year end. The company also has $150 million remaining in a debt shelf registration and is considering issuing additional debt for general corporate purposes including possible purchase of existing debt securities. The year-end current ratio of 1.5 and debt-to-total-capital ratio of .32 are within the company's desired operating ranges.
 The company believes that its financial condition provides the foundation for continued support of the programs essential to TI's future.
 NOTE: Preferred Equity Redemption Cumulative Stock and PERCS are trademarks of Morgan Stanley & Co. Inc.
 Industry Segment Net Revenues
 (In millions of Dollars)
 1991 1990 1989
 Components
 Trade $3421 $3103 $3211
 Intersegment 49 56 58
 Total 3470 3159 3269
 Defense Electronics
 Trade 1933 2111 2148
 Intersegment 17 13 11
 Total 1950 2124 2159
 Digital Products
 Trade 1306 1210 1000
 Intersegment 22 33 24
 Total 1328 1243 1024
 Metallurgical Materials
 Trade 121 138 165
 Intersegment 22 21 26
 Total 143 159 191
 Eliminations and other (107) (118) (121)
 Total $6784 $6567 $6522
 1991 1990 1989
 Components $(188) $ (76) $ 276
 Defense Electronics 111 170 196
 Digital Products (52) (13) (68)
 Metallurgical Materials 2 6 12
 Eliminations and
 corporate items (177) (108) (61)
 Income (loss) before provision
 for income taxes $(304) $ (21) $ 355
 /NOTE TO EDITORS: Texas Instruments Incorporated, headquartered in Dallas, Texas, is a high-technology company with sales and manufacturing operations in more than 30 countries. TI develops, manufactures and markets semiconductors, defense electronics systems, software productivity tools, computer systems and peripheral products, custom engineering and manufacturing services, electrical controls, metallurgical materials, and consumer electronic products.
 -0- 1/24/92
 /CONTACT: Terri West, 214-995-3481, or Leslie Price, 214-995-2355, both of Texas Instruments/
 /NOTE TO EDITORS: Do not publish these numbers/
 (TXN) CO: Texas Instruments ST: Texas IN: SU: ERN


TS -- NY009 -- 3146 01/24/92 09:17 EST
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