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TI REPORTS NET INCOME OF $72 MILLION FOR SECOND QUARTER OF 1992; FINANCIAL PERFORMANCE CONTINUES TO STRENGTHEN

 TI REPORTS NET INCOME OF $72 MILLION FOR SECOND QUARTER OF 1992;
 FINANCIAL PERFORMANCE CONTINUES TO STRENGTHEN
 DALLAS, July 17 /PRNewswire/ -- Texas Instruments (NYSE: TXN) today announced its 1992 second-quarter operating results.
 As a result of cost reductions and operating improvements, TI's financial performance continues to strengthen in spite of the slow pace of U.S. economic recovery and weakness in the Japanese economy.
 FINANCIAL SUMMARY
 Net revenues for the three months ended June 30, 1992, were $1867 million, up 11 percent from the same period of 1991. Profit from operations was $128 million. This represents a $65 million increase from this year's first quarter. Net income was $72 million, compared with a net loss of $157 million in the same period of 1991. Earnings per common and common equivalent share were $0.73, compared with a loss of $1.99 per common share in the second quarter of 1991. Last year's second-quarter results included a special charge of $130 million, or $1.59 per common share after tax, for cost-reduction actions.
 COMMENTARY
 In his letter to stockholders, TI's chairman, president and chief executive officer, Jerry R. Junkins, made the following remarks: "Operating results improved over the second quarter of last year in every major TI business. Semiconductor performance improved substantially over the first quarter of this year, particularly in memory, and TI's semiconductor business operated near breakeven in the second quarter of 1992.
 "Results for the quarter include royalty revenues of $124 million, compared with $74 million in the second quarter of 1991 and $95 million in the first quarter of 1992. Second-quarter 1992 royalty revenues include one-time amounts totalling $45 million, reflecting previously announced patent license agreements with Mitsubishi Electric Corporation; New Japan Radio Co., Ltd.; Nippon Precision Circuit, Ltd.; Seiko Epson Corporation; and Toko, Inc.
 SEMICONDUCTOR
 "TI's semiconductor orders reached an all-time high in the second quarter, reflecting record orders for application-specific products and improvement over this year's first quarter in orders for memory, standard logic and linear products. Semiconductor orders increased over the first quarter of this year in all major market regions of the world. Semiconductor revenues were also at record levels in the second quarter.
 "During the quarter, we continued progress toward our goal of generating more than half of our semiconductor revenues from differentiated products by the latter part of the decade. In May we announced production availability of the SuperSPARC(TM) microprocessor, developed jointly by TI and Sun Microsystems Computer Corporation. Our TI486SLC microprocessor, also announced in May, has been well accepted in the computer marketplace. We are also working with customers to define advanced processors that integrate many system functions and technologies around core microprocessors.
 "In addition, productivity and yields have increased steadily in new wafer-fabrication facilities. We are now in volume production of four- megabit dynamic random-access memory (DRAM) chips in Avezzano, Italy. The TI-Acer joint-venture facility in Taiwan is ramping up quickly, and we expect it to be in volume production of four-megabit DRAMs later this year. The KTI facility, built as a joint venture with Kobe Steel in Japan, was officially opened in June. This facility is now in pilot production of 16-megabit DRAMs on eight-inch wafers and is expected to begin production of advanced logic devices in 1993.
 DEFENSE ELECTRONICS
 "Our defense electronics business is maintaining stable profitability and continuing to win key new contracts. During the quarter, we received initial production orders for the U.S. Navy's generic expendable decoy and replenishment orders for Paveway laser- guided weapon systems. In June we received the initial increment of a previously announced five-year development contract for the U.S. Navy's air-to-ground Joint Stand-Off Weapon, formerly known as the Advanced Interdiction Weapon System.
 INFORMATION TECHNOLOGY
 "We are continuing to build a profitable business in information technology, supported by a strong product position in computer-aided software engineering (CASE) tools and growth in notebook computers and laser printers.
 "During the quarter, we signed a letter of intent with Hewlett- Packard Company for that company to acquire TI's commercial UNIX(TM)- based multiuser computer systems and services operations. The planned sale, scheduled to be completed this fall, is consistent with our strategy to concentrate on software products and services, as well as on hardware where we have a sustainable competitive advantage. This sale will allow TI to focus on those priorities while ensuring that our customers will continue to be served with quality products and support. The transaction is not expected to have a material financial impact.
 OUTLOOK
 "We continue to see strength in the U.S. semiconductor market. U.S. distributor resales during the first half of this year were the strongest since the first half of 1984. End-equipment customers, however, remain cautious, and inventories of semiconductors at major customers are at a record low level. The market in Europe is showing only moderate expansion, but strong growth is continuing in the Asia- Pacific semiconductor market. Our outlook for the Japanese market has deteriorated over the past several months.
 "Our semiconductor business is on track, with steadily improving operating performance, but we still have work to do. In defense electronics, we expect revenues to be more stable on a quarter-to- quarter basis than in the past, when revenues were biased toward the second half of the year.
 "TI's operating performance is beginning to reflect the results of our long-term strategies for achieving consistent profitability and improving shareholder value. Despite the slow pace of economic recovery, we've been able to improve our financial performance and maintain our momentum in building a stronger company. We believe that with improved operational efficiency, the ramp-up of leading-edge semiconductor manufacturing facilities, and the depth and breadth of our strategic customer relationships, we are well positioned to benefit from renewed economic growth in the future."
 TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
 Consolidated Income Statement
 (In millions of dollars, except per-share amounts.)
 Periods ended Three months
 June 30 1992 1991
 Net revenues $ 1867 $ 1686
 Operating costs and expenses:
 Cost of revenues 1418 1421
 General, administrative and marketing 288 353
 Employees' pension and
 profit sharing plans 33 23
 Total 1739 1797
 Profit (loss) from operations 128 (111)
 Interest income 6 6
 Other income (expense) net (12) (10)
 Interest on loans 13 9
 Income (loss) before provision
 for income taxes 109 (124)
 Provision for income taxes 37 33
 Net income (loss) $ 72 $ (157)
 Net income (loss), less dividends
 accrued on preferred stock $ 63 $ (163)
 Earnings (loss) per common and
 common equivalent share (A) $ 0.73 $(1.99)
 Cash dividends declared per share
 of common stock $ 0.18 $ 0.18
 (A) Earnings (loss) per common and common equivalent share are based on average common and common equivalent shares outstanding (96.0 and 81.9 million shares for the second quarters of 1992 and 1991). Because of the amount of net income in the second quarter of this year, the average number of shares used in computing per-share earnings for the second quarter assumes the conversion of the company's conversion preferred stock (11.1 million shares) and convertible
debentures (2.4 million shares). In computing per-share earnings, "net income (loss), less dividends accrued on preferred stock" (of $63 million) is increased by $7 million (to $70 million) for the second quarter of 1992 for dividends and interest (net of tax) on the conversion preferred stock and convertible debentures considered dilutive common stock equivalents.
 TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
 Consolidated Income Statement
 (In millions of dollars, except per-share amounts.)
 Periods ended Six months
 June 30, 1992 1991
 Net revenues $ 3561 $ 3333
 Operating costs and expenses:
 Cost of revenues 2742 2781
 General, administrative and marketing 562 652
 Employees' pension and
 profit sharing plans 66 46
 Total 3370 3479
 Profit (loss) from operations 191 (146)
 Interest income 12 13
 Other income (expense) net (6) (16)
 Interest on loans 25 15
 Income (loss) before provision
 for income taxes 172 (164)
 Provision for income taxes 60 48
 Net income (loss) $ 112 $ (212)
 Net income (loss), less dividends
 accrued on preferred stock $ 92 $ (226)
 Earnings (loss) per common and
 common equivalent share(A) $ 1.10 $(2.76)
 Cash dividends declared per share
 of common stock $ 0.36 $ 0.36
 (A) Earnings (loss) per common and common equivalent share are based on average common and common equivalent shares outstanding (85.2 and 81.9 million shares for the six months ended June 30, 1992 and 1991). Because of the amount of net income in the first six months of this year, the average number of shares used in computing per-share earnings for the first six months assumes the conversion of the company's convertible debentures (2.8 million shares). In computing per-share earnings, "net income (loss), less dividends accrued on preferred stock" (of $92 million) is increased by $2 million (to $94 million) for the six months ended June 30, 1992 for interest (net of tax) on the convertible debentures considered dilutive common stock equivalents.
 SELECTED BALANCE SHEET ITEMS
 (Millions of dollars)
 June 30, Dec. 31,
 1992 1991
 Cash and short-term investments $ 508 $ 601
 Accounts receivable (net) 1140 905
 Inventories (net) 812 815
 Total current assets 2526 2381
 Property, plant and equipment (net) 2198 2354
 Total assets 5039 5009
 Current liabilities 1561 1568
 Long-term debt, loans and current LTD 973 926
 Stockholders' equity 1955 1955
 SUPPLEMENTAL FINANCIAL INFORMATION
 TI's orders for the second quarter of 1992 were $1861 million, up 25 percent from $1488 million for the same period of 1991. Orders were up 55 percent in defense electronics, primarily caused by the phasing of orders, 21 percent in components, mainly because of strength in all major semiconductor product lines, and 3 percent in digital products; orders were down 4 percent in metallurgical materials.
 TI's revenues for the second quarter of 1992 were $1867 million, up 11 percent from $1686 million for the same period of last year. Revenues were up 15 percent in components, primarily because of shipment strength in application-specific and memory products, 8 percent in defense electronics, and 2 percent in digital products; revenues were down 2 percent in metallurgical materials. The 1991 second-quarter revenues for digital products included the industrial automation and control systems business, substantially all of which was sold in the fourth quarter of 1991.
 Profit from operations for the second quarter was $128 million, compared with a loss from operations of $111 million a year ago. The results for the second quarter of 1991 included a pretax charge of $130 million associated with cost-reduction actions. Operating performance in all major segments improved. The largest increase was in components, primarily because of benefits from the cost-reduction actions initiated last year and higher shipments.
 The income tax rate for the second quarter of 1992 was 33.3 percent, bringing the year-to-date tax rate to 34.6 percent, which is the current estimate for the total year.
 For the first six months of 1992, revenues were $3561 million, up 7 percent from $3333 million for the same period of 1991. The increase was primarily in components and was mainly because of higher royalties and increased shipments of application-specific and memory products. Included in revenues for the first half of 1992 and 1991 are royalty revenues of $218 million and $150 million, respectively.
 The profit from operations for the first six months of 1992 was $191 million, compared with a loss from operations of $146 million in the same period of last year. Operating performance in all major segments improved, with the largest increase being in components. The results for the first six months of 1991 included a pretax charge of $130 million in the second quarter associated with cost-reduction actions.
 Net income for the first half of 1992 was $112 million, compared with a net loss of $212 million for the first six months of 1991. For the first six months of 1992, the earnings per share were $1.10, compared with a loss per share of $2.76 in the same period of last year.
 During the first half of 1992, cash and cash equivalents plus short- term investments decreased by $93 million to $508 million as of June 30, 1992. During the first quarter, the company purchased and retired, at an immaterial gain, $100 million of its 2.75 percent convertible subordinated debentures due 2002. On April 1, 1992, the company issued $150 million of 8.75 percent notes due 2007. The proceeds were used in part to reimburse the company's general funds for the purchases of the convertible debentures.
 The remaining proceeds are being used for general corporate purposes, which may include possible further purchases of existing debt securities of the company. The company redeemed $71 million of its auction-rate preferred stock on March 3, 1992. Cash was also used during the half to support working capital needs. On June 25, 1992, the company filed a shelf registration with the Securities and Exchange Commission for $300 million of debt securities, to provide flexibility for possible future debt issuance. TI's debt-to-total-capital ratio was 0.33 at the end of the second quarter of 1992, compared with 0.30 at the end of the first quarter and 0.32 at year-end 1991.
 TI's backlog of unfilled orders as of June 30, 1992, was $3,762 million, up $83 million from the end of last year's second quarter and down $6 million from the end of this year's first quarter. The change from the end of the second quarter of last year was primarily in defense electronics. Backlog increases in components and digital products during the second quarter of this year were offset by a decline in defense electronics.
 TI-funded R&D was $120 million in the second quarter of 1992, compared with $135 million for the same period of 1991, and was $237 million for the first six months of this year, compared with $263 million last year.
 Capital expenditures for the second quarter of this year were $86 million, compared with $127 million in 1991's second quarter, and were $167 million in the first half of this year, compared with $284 million in the same period of 1991.
 Depreciation in the second quarter of 1992 was $154 million, compared with $139 million in last year's second quarter, and was $300 million for the first six months of this year, compared with $271 million last year. Depreciation for 1992 is currently expected to be more than $600 million.
 -0- 7/17/92
 /NOTE TO EDITORS: Texas Instruments Incorporated, headquartered in Dallas, is a high-technology company with sales or 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.
 SuperSPARC is a trademark of Texas Instruments.
 SPARC is a trademark of SPARC International, Inc.
 UNIX is a registered trademark of UNIX System Laboratories./
 /CONTACT: Terri West, 214-995-3481, or Leslie Price, 214-995-2355, both of Texas Instruments/
 (TXN) CO: Texas Instruments ST: Texas IN: CPR SU: ERN


SH -- NY008 -- 0111 07/17/92 09:45 EDT
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