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Document And Entity Information (USD $)
12 Months Ended
Dec. 31, 2011
Jan. 31, 2012
Jun. 30, 2011
Document And Entity Information [Abstract]
Entity Registrant Name TEXAS INSTRUMENTS INC
Entity Central Index Key 0000097476
Current Fiscal Year End Date --12-31
Entity Well-known Seasoned Issuer Yes
Entity Voluntary Filers No
Entity Current Reporting Status Yes
Entity Filer Category Large Accelerated Filer
Entity Public Float $ 37,518,854,008
Entity Common Stock, Shares Outstanding 1,144,971,512
Document Fiscal Year Focus 2011
Document Fiscal Period Focus FY
Document Type 10-K
Amendment Flag false
Document Period End Date Dec 31, 2011
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Consolidated statements of income (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Revenue $ 13,735 $ 13,966 $ 10,427
Cost of revenue (COR) 6,963 6,474 5,428
Gross profit 6,772 7,492 4,999
Research and development (R&D) 1,715 1,570 1,476
Selling, general and administrative (SG&A) 1,638 1,519 1,320
Restructuring charges 112 33 212
Acquisition charges/divestiture (gain) 315 (144) 0
Operating profit 2,992 4,514 1,991
Other income (expense) net (OI&E) 5 37 26
Interest and debt expense 42 0 0
Income before income taxes 2,955 4,551 2,017
Provision for income taxes 719 1,323 547
Net income $ 2,236 $ 3,228 $ 1,470
Earnings per common share:
Basic $ 1.91 $ 2.66 $ 1.16
Diluted $ 1.88 $ 2.62 $ 1.15
Average shares outstanding (millions):
Basic 1,151 1,199 1,260
Diluted 1,171 1,213 1,269
Cash dividends declared per share of common stock $ 0.56 $ 0.49 $ 0.45
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Consolidated statements of comprehensive income (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Net income $ 2,236 $ 3,228 $ 1,470
Available-for-sale investments:
Unrealized gains (losses), net of tax benefit (expense) of $1, ($3) and ($9) (2) 7 17
Reclassification of recognized transactions, net of tax benefit (expense) of ($7), $0 and ($3) 12 0 6
Net actuarial gains (losses) of defined benefit plans:
Adjustment, net of tax benefit (expense) of $65, $61 and ($38) (124) (154) 91
Reclassification of recognized transactions, net of tax benefit (expense) of ($28), ($36) and ($27) 48 65 62
Prior service cost of defined benefit plans:
Adjustment, net of tax benefit (expense) of $5, ($1) and $1 (9) 2 (1)
Reclassification of recognized transactions, net of tax benefit (expense) of ($1), $0 and $3 2 0 (6)
Change in fair value of derivative instrument, net of tax benefit (expense) of $1 (2) 0 0
Total (75) (80) 169
Total comprehensive income $ 2,161 $ 3,148 $ 1,639
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Consolidated statements of comprehensive income (Parenthetical) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Available-for-sale investments:
Unrealized gains (losses), tax $ 1 $ (3) $ (9)
Reclassification of recognized transactions, tax (7) 0 (3)
Net actuarial gains (losses) of defined benefit plans:
Adjustment, tax 65 61 (38)
Reclassification of recognized transactions, tax (28) (36) (27)
Prior service cost of defined benefit plans:
Adjustment, tax 5 (1) 1
Reclassification of recognized transactions, tax (1) 0 3
Change in fair value of derivative instrument, tax benefit (expense) $ 1 $ 0 $ 0
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Consolidated balance sheets (USD $)
In Millions, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Current assets:
Cash and cash equivalents $ 992 $ 1,319
Short-term investments 1,943 1,753
Accounts receivable, net of allowances of ($19) and ($18) 1,545 1,518
Raw materials 115 122
Work in process 1,004 919
Finished goods 669 479
Inventories 1,788 1,520
Deferred income taxes 1,174 770
Prepaid expenses and other current assets 386 180
Total current assets 7,828 7,060
Property, plant and equipment at cost 7,133 6,907
Less accumulated depreciation (2,705) (3,227)
Property, plant and equipment, net 4,428 3,680
Long-term investments 265 453
Goodwill 4,452 924
Acquisition-related intangibles, net 2,900 76
Deferred income taxes 321 927
Capitalized software licenses, net 206 205
Overfunded retirement plans 40 31
Other assets 57 45
Total assets 20,497 13,401
Current liabilities:
Commercial paper 999 0
Current portion of long-term debt 382 0
Accounts payable 625 621
Accrued compensation 597 629
Income taxes payable 101 109
Accrued expenses and other liabilities 795 622
Total current liabilities 3,499 1,981
Long-term debt 4,211 0
Underfunded retirement plans 701 519
Deferred income taxes 607 86
Deferred credits and other liabilities 527 378
Total liabilities 9,545 2,964
Stockholders' equity:
Preferred stock, $25 par value. Authorized – 10,000,000 shares. Participating cumulative preferred. None issued. 0 0
Common stock, $1 par value. Authorized – 2,400,000,000 shares. Shares issued: 2011 – 1,740,630,391; 2010 – 1,740,166,101 1,741 1,740
Paid-in capital 1,194 1,114
Retained earnings 26,278 24,695
Less treasury common stock at cost. Shares: 2011 – 601,131,631; 2010 – 572,722,397 (17,485) (16,411)
Accumulated other comprehensive income (loss), net of taxes (776) (701)
Total stockholders' equity 10,952 10,437
Total liabilities and stockholders' equity $ 20,497 $ 13,401
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Consolidated balance sheets (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Current assets:
Allowance for doubtful accounts receivable, current $ (19) $ (18)
Stockholders' equity:
Preferred stock, par value (in dollars per share) $ 25 $ 25
Preferred stock, shares authorized (in shares) 10,000,000 10,000,000
Preferred stock, shares issued (in shares) 0 0
Common stock, par value (in dollars per share) $ 1 $ 1
Common stock, shares authorized (in shares) 2,400,000,000 2,400,000,000
Common stock, shares issued (in shares) 1,740,630,391 1,740,166,101
Treasury common stock at cost, shares (in shares) 601,131,631 572,722,397
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Consolidated statements of cash flows (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Cash flows from operating activities:
Net income $ 2,236 $ 3,228 $ 1,470
Adjustments to net income:
Depreciation 904 865 877
Stock-based compensation 269 190 186
Amortization of acquisition-related intangibles 111 48 48
Gain on sales of assets and divestiture (5) (144) 0
Deferred income taxes (119) (188) 146
Increase (decrease) from changes in:
Accounts receivable 112 (231) (364)
Inventories (17) (304) 177
Prepaid expenses and other current assets (29) (8) 115
Accounts payable and accrued expenses 2 57 5
Accrued compensation (77) 246 (38)
Income taxes payable (85) (19) 87
Other (46) 80 (66)
Net cash provided by operating activities 3,256 3,820 2,643
Cash flows from investing activities:
Additions to property, plant and equipment (816) (1,199) (753)
Proceeds from insurance recovery, asset sales and divestiture 16 148 0
Purchases of short-term investments (3,653) (2,510) (2,273)
Sales, redemptions and maturities of short-term investments 3,555 2,564 2,030
Purchases of long-term investments (6) (8) (9)
Redemptions and sales of long-term investments 157 147 64
Business acquisitions:
Property, plant and equipment (865) (200) (3)
Inventories (225) (14) (4)
Other (4,335) 15 (148)
Business acquisitions, net of cash acquired (5,425) (199) (155)
Net cash used in investing activities (6,172) (1,057) (1,096)
Cash flows from financing activities:
Proceeds from issuance of long-term debt and commercial paper borrowings 4,697 0 0
Issuance costs for long-term debt (12) 0 0
Repayment of commercial paper borrowings (200) 0 0
Dividends paid (644) (592) (567)
Sales and other common stock transactions 690 407 109
Excess tax benefit from share-based payments 31 13 1
Stock repurchases (1,973) (2,454) (954)
Net cash provided by (used in) financing activities 2,589 (2,626) (1,411)
Net (decrease) increase in cash and cash equivalents (327) 137 136
Cash and cash equivalents at beginning of year 1,319 1,182 1,046
Cash and cash equivalents at end of year $ 992 $ 1,319 $ 1,182
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Consolidated statements of stockholders' equity (USD $)
In Millions
Total
Common Stock [Member]
Paid-in Capital [Member]
Retained Earnings [Member]
Treasury Common Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Balance at Dec. 31, 2008 $ 1,740 $ 1,022 $ 21,168 $ (13,814) $ (790)
Net income 1,470 0 0 1,470 0 0
Dividends declared and paid 0 0 (567) 0 0
Common stock issued on exercise of stock options 0 (120) 0 226 0
Stock repurchases 0 0 0 (961) 0
Stock-based compensation 0 186 0 0 0
Tax impact from exercise of options (2) 0 (2) 0 0 0
Other comprehensive income (loss), net of tax 169 0 0 0 0 169
Other 0 0 (5) 0 0
Balance at Dec. 31, 2009 1,740 1,086 22,066 (14,549) (621)
Net income 3,228 0 0 3,228 0 0
Dividends declared and paid 0 0 (592) 0 0
Common stock issued on exercise of stock options 0 (182) 0 588 0
Stock repurchases 0 0 0 (2,450) 0
Stock-based compensation 0 190 0 0 0
Tax impact from exercise of options 21 0 21 0 0 0
Other comprehensive income (loss), net of tax (80) 0 0 0 0 (80)
Other 0 (1) (7) 0 0
Balance at Dec. 31, 2010 1,740 1,114 24,695 (16,411) (701)
Net income 2,236 0 0 2,236 0 0
Dividends declared and paid 0 0 (644) 0 0
Common stock issued on exercise of stock options 1 (252) 0 898 0
Stock repurchases 0 0 0 (1,973) 0
Stock-based compensation 0 269 0 0 0
Tax impact from exercise of options 45 0 45 0 0 0
Other comprehensive income (loss), net of tax (75) 0 0 0 0 (75)
Other 0 18 (9) 1 0
Balance at Dec. 31, 2011 $ 1,741 $ 1,194 $ 26,278 $ (17,485) $ (776)
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Consolidated statements of stockholders' equity (Parenthetical) (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Statement of Stockholders' Equity [Abstract]
Dividends declared and paid $ 0.56 $ 0.49 $ 0.45
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Description of business and significant accounting policies and practices
12 Months Ended
Dec. 31, 2011
Description of business and significant accounting policies and practices [Abstract]
Description of business and significant accounting policies and practices
Description of business and significant accounting policies and practices
Business
At Texas Instruments (TI), we design and make semiconductors that we sell to electronics designers and manufacturers all over the world. We have three reportable segments, which are established along major categories of products as follows:

Analog – consists of High Volume Analog & Logic (HVAL), Power Management (Power) and High Performance Analog (HPA). Following the acquisition of National Semiconductor Corporation (National), our Analog segment also includes National’s ongoing operations under the name of Silicon Valley Analog (SVA);
Embedded Processing – consists of digital signal processors (DSPs) and microcontrollers used in catalog, communications infrastructure and automotive applications; and
Wireless – consists of OMAP™ applications processors, connectivity products and basebands for wireless applications, including handsets and tablet computers.

We report the results of our remaining business activities in Other. See Note 17 for additional information on our business segments.
Basis of presentation
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP). The basis of these financial statements is comparable for all periods presented herein.

The consolidated financial statements include the accounts of all subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. All dollar amounts in the financial statements and tables in these notes, except per-share amounts, are stated in millions of U.S. dollars unless otherwise indicated. We have reclassified certain amounts in the prior periods’ financial statements to conform to the 2011 presentation. The preparation of financial statements requires the use of estimates from which final results may vary.

On September 23, 2011, we completed the acquisition of National. The consolidated financial statements include the balances and results of operations of National from the date of acquisition. See Note 2 for more detailed information.

Revenue recognition
We recognize revenue from direct sales of our products to our customers, including shipping fees, when title passes to the customer, which usually occurs upon shipment or delivery, depending upon the terms of the sales order; when persuasive evidence of an arrangement exists; when sales amounts are fixed or determinable; and when collectability is reasonably assured. Revenue from sales of our products that are subject to inventory consignment agreements is recognized when the customer pulls product from consignment inventory that we store at designated locations. Estimates of product returns for quality reasons and of price allowances (based on historical experience, product shipment analysis and customer contractual arrangements) are recorded when revenue is recognized. Allowances include volume-based incentives and special pricing arrangements. In addition, we record allowances for accounts receivable that we estimate may not be collected.

We recognize revenue from direct sales of our products to our distributors, net of allowances, consistent with the principles discussed above. Title transfers to the distributors at delivery or when the products are pulled from consignment inventory, and payment is due on our standard commercial terms; payment terms are not contingent upon resale of the products. We also grant discounts to some distributors for prompt payments. We calculate credit allowances based on historical data, current economic conditions and contractual terms. For instance, we sell to distributors at standard published prices, but we may grant them price adjustment credits in response to individual competitive opportunities they may have. To estimate allowances, we use statistical percentages of revenue, determined quarterly, based upon recent historical adjustment trends.

We also provide distributors an allowance to scrap certain slow-moving or obsolete products in their inventory, estimated as a negotiated fixed percentage of each distributor’s purchases from us. In addition, if we publish a new price for a product that is lower than that paid by distributors for the same product still remaining in each distributor’s on-hand inventory, we may credit them for the difference between those prices. The allowance for this type of credit is based on the identified product price difference applied to our estimate of each distributor’s on-hand inventory of that product. We believe we can reasonably and reliably estimate allowances for credits to distributors in a timely manner.
We determine the amount and timing of royalty revenue based on our contractual agreements with intellectual property licensees. We recognize royalty revenue when earned under the terms of the agreements and when we consider realization of payment to be probable. Where royalties are based on a percentage of licensee sales of royalty-bearing products, we recognize royalty revenue by applying this percentage to our estimate of applicable licensee sales. We base this estimate on historical experience and an analysis of each licensee’s sales results. Where royalties are based on fixed payment amounts, we recognize royalty revenue ratably over the term of the royalty agreement. Where warranted, revenue from licensees may be recognized on a cash basis.

We include shipping and handling costs in COR.

Advertising costs
We expense advertising and other promotional costs as incurred. This expense was $43 million in 2011, $44 million in 2010 and $42 million in 2009.

Income taxes
We account for income taxes using an asset and liability approach. We record the amount of taxes payable or refundable for the current year and the deferred tax assets and liabilities for future tax consequences of events that have been recognized in the financial statements or tax returns. We record a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Other assessed taxes
Some transactions require us to collect taxes such as sales, value-added and excise taxes from our customers. These transactions are presented in our statements of income on a net (excluded from revenue) basis.

Earnings per share (EPS)
Unvested awards of share-based payments with rights to receive dividends or dividend equivalents, such as our restricted stock units (RSUs), are considered to be participating securities and the two-class method is used for purposes of calculating EPS. Under the two-class method, a portion of net income is allocated to these participating securities and, therefore, is excluded from the calculation of EPS allocated to common stock, as shown in the table below. 

Computation and reconciliation of earnings per common share are as follows (shares in millions):
 
 
2011
 
2010
 
2009
 
 
Net Income
 
Shares
 
EPS
 
Net Income
 
Shares
 
EPS
 
Net Income
 
Shares
 
EPS
Basic EPS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
$
2,236

 
 
 
 
 
$
3,228

 
 
 
 
 
$
1,470

 
 
 
 
Less income allocated to RSUs
 
(35
)
 
 
 
 
 
(44
)
 
 
 
 
 
(14
)
 
 
 
 
Income allocated to common stock for basic EPS calculation
 
$
2,201

 
1,151

 
$
1.91

 
$
3,184

 
1,199

 
$
2.66

 
$
1,456

 
1,260

 
$
1.16

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjustment for dilutive shares:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Stock-based compensation plans
 
 

 
20

 
 

 
 

 
14

 
 

 
 

 
9

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted EPS:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Net income
 
$
2,236

 
 

 
 

 
$
3,228

 
 

 
 

 
$
1,470

 
 

 
 

Less income allocated to RSUs
 
(34
)
 
 

 
 

 
(44
)
 
 

 
 

 
(14
)
 
 

 
 

Income allocated to common stock for diluted EPS calculation
 
$
2,202

 
1,171

 
$
1.88

 
$
3,184

 
1,213

 
$
2.62

 
$
1,456

 
1,269

 
$
1.15


 
Options to purchase 41 million, 88 million and 135 million shares of common stock that were outstanding during 2011, 2010 and 2009, respectively, were not included in the computation of diluted EPS because their exercise price was greater than the average market price of the common shares and, therefore, the effect would be anti-dilutive.



Investments
We present investments on our balance sheets as cash equivalents, short-term investments or long-term investments. Specific details are as follows:

Cash equivalents and short-term investments: We consider investments in debt securities with maturities of three months or less from the date of our investment to be cash equivalents. We consider investments in debt securities with maturities beyond three months from the date of our investment as being available for use in current operations and include these investments in short-term investments. The primary objectives of our cash equivalent and short-term investment activities are to preserve capital and maintain liquidity while generating appropriate returns.
Long-term investments: Long-term investments consist of mutual funds, auction-rate securities, venture capital funds and non-marketable equity securities.
Classification of investments: Depending on our reasons for holding the investment and our ownership percentage, we classify investments in securities as available for sale, trading, equity-method or cost-method investments, which are more fully described in Note 9. We determine cost or amortized cost, as appropriate, on a specific identification basis.

Inventories
Inventories are stated at the lower of cost or estimated net realizable value. Cost is generally computed on a currently adjusted standard cost basis, which approximates cost on a first-in first-out basis. Standard cost is based on the normal utilization of installed factory capacity. Cost associated with underutilization of capacity is expensed as incurred. Inventory held at consignment locations is included in our finished goods inventory. Consigned inventory was $129 million and $130 million as of December 31, 2011 and 2010, respectively.

We review inventory quarterly for salability and obsolescence. A specific allowance is provided for inventory considered unlikely to be sold. Remaining inventory includes a salability and obsolescence allowance based on an analysis of historical disposal activity. We write off inventory in the period in which disposal occurs.

Property, plant and equipment; acquisition-related intangibles and other capitalized costs
Property, plant and equipment are stated at cost and depreciated over their estimated useful lives using the straight-line method. Our cost basis includes certain assets acquired in business combinations that were initially recorded at fair value as of the date of acquisition. Leasehold improvements are amortized using the straight-line method over the shorter of the remaining lease term or the estimated useful lives of the improvements. We amortize acquisition-related intangibles on a straight-line basis over the estimated economic life of the assets. Capitalized software licenses generally are amortized on a straight-line basis over the term of the license. Fully depreciated or amortized assets are written off against accumulated depreciation or amortization.

Impairments of long-lived assets
We regularly review whether facts or circumstances exist that indicate the carrying values of property, plant and equipment or other long-lived assets, including intangible assets, are impaired. We assess the recoverability of assets by comparing the projected undiscounted net cash flows associated with those assets to their respective carrying amounts. Any impairment charge is based on the excess of the carrying amount over the fair value of those assets. Fair value is determined by available market valuations, if applicable, or by discounted cash flows.

Goodwill and indefinite-lived intangibles
Goodwill is not amortized but is reviewed for impairment annually or more frequently if certain impairment indicators arise. We complete our annual goodwill impairment tests as of October 1 for our reporting units. The test compares the fair value for each reporting unit to its associated carrying value including goodwill. We have had no impairment of goodwill for 2011 or 2010.

Foreign currency
The functional currency for our non-U.S. subsidiaries is the U.S. dollar. Accounts recorded in currencies other than the U.S. dollar are remeasured into the functional currency. Current assets (except inventories), deferred income taxes, other assets, current liabilities and long-term liabilities are remeasured at exchange rates in effect at the end of each reporting period. Property, plant and equipment with associated depreciation and inventories are remeasured at historic exchange rates. Revenue and expense accounts other than depreciation for each month are remeasured at the appropriate daily rate of exchange. Currency exchange gains and losses from remeasurement are credited or charged to OI&E.

Derivatives and hedging
In connection with the issuance of variable-rate long-term debt in May 2011, as more fully described in Note 13, we entered into an interest rate swap designated as a hedge of the variability of cash flows related to interest payments. Gains and losses from changes in the fair value of the interest rate swap are credited or charged to Accumulated other comprehensive income (loss), net of taxes (AOCI).

We also use derivative financial instruments to manage exposure to foreign exchange risk. These instruments are primarily forward foreign currency exchange contracts that are used as economic hedges to reduce the earnings impact exchange rate fluctuations may have on our non-U.S. dollar net balance sheet exposures or for specified non-U.S. dollar forecasted transactions. Gains and losses from changes in the fair value of these forward foreign currency exchange contracts are credited or charged to OI&E. We do not apply hedge accounting to our foreign currency derivative instruments.

We do not use derivatives for speculative or trading purposes.

Changes in accounting standards
In May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. This standard results in a common requirement between the FASB and the International Accounting Standards Board (IASB) for measuring fair value and for disclosing information about fair-value measurements. While this new standard will not affect how we measure or account for assets and liabilities at fair value, disclosures will be required for interim and annual periods beginning January 1, 2012. There will be no impact to our financial condition or results of operation from the adoption of this new standard.

In September 2011, the FASB issued ASU No. 2011-08, Intangibles Goodwill and Other (Topic 350): Testing Goodwill for Impairment. This standard is intended to simplify how we will test goodwill for impairment. Prior to the issuance of this standard, we were required to use a two-step quantitative test to assess impairment of goodwill. Under this new standard, we will have the option to first assess qualitative factors to determine whether that two-step quantitative test should be performed. This standard is effective for goodwill impairment tests performed for fiscal years beginning after December 15, 2011, with early adoption permitted. We will adopt this standard effective January 1, 2012.
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National Semiconductor acquisition (National [Member])
12 Months Ended
Dec. 31, 2011
National [Member]
Business Acquisition [Line Items]
National Semiconductor acquisition
National Semiconductor acquisition
On September 23, 2011, we completed the acquisition of National by acquiring all issued and outstanding common shares in exchange for cash. National designed, developed, manufactured and marketed a wide range of semiconductor products, focused on providing high-performance energy-efficient analog and mixed-signal solutions. The purpose of the acquisition was to grow revenue by combining National’s products with TI’s larger sales force and customer base.

We accounted for this transaction under Accounting Standards Codification (ASC) 805 - Business Combinations, and National’s operating results are included in the Analog segment from the acquisition date as SVA.

The acquisition-date fair value of the consideration transferred is as follows:
Cash payments
 
$
6,535

Fair value of vested share-based awards assumed by TI
 
22

Total consideration transferred to National shareholders
 
$
6,557



We prepared an initial determination of the fair value of assets acquired and liabilities assumed as of the acquisition date using preliminary information. Adjustments were made during the fourth quarter of 2011 to the fair value of assets acquired and liabilities assumed, as a result of refining our estimates. These were retrospectively applied to the September 23, 2011, acquisition date balance sheet. These adjustments are primarily related to tax matters and netted to an increase of goodwill of $1 million. None of the adjustments had a material impact on TI’s previously reported results of operations.
As of December 31, 2011, the allocation of the consideration transferred to the assets acquired and liabilities assumed from National has been finalized. The determination of fair value reflects the assistance of third-party valuation specialists, as well as our own estimates and assumptions. The final allocation of fair value by major class of the assets acquired and liabilities assumed as of the acquisition date is as follows:
 
 
At September 23, 2011
Cash and cash equivalents
 
$
1,145

Current assets
 
451

Inventory
 
225

Property, plant and equipment
 
865

Other assets
 
138

Acquired intangible assets (see details below)
 
2,956

Goodwill
 
3,528

Assumed current liabilities
 
(191
)
Assumed long-term debt
 
(1,105
)
Deferred taxes and other assumed non-current liabilities
 
(1,455
)
Total consideration transferred
 
$
6,557



Identifiable intangible assets acquired and their estimated useful lives as of the acquisition date are as follows:
 
 
Asset Amount
 
Weighted Average
Useful Life (Years)
Developed technology
 
$
2,025

 
10
Customer relationships
 
810

 
8
Other
 
16

 
3
Identified intangible assets subject to amortization
 
2,851

 
 
In-process R&D
 
105

 
(a)
Total identified intangible assets
 
$
2,956

 
 
(a) In-process R&D is not amortized until the associated project has been completed. Alternatively, if the associated project is determined not to be viable, it will be expensed.

The remaining consideration, after adjusting for identified intangible assets and the net assets and liabilities recorded at fair value, was $3.528 billion and was applied to goodwill. Goodwill is attributed to National’s product portfolio and workforce expertise. None of the goodwill related to the National acquisition is deductible for tax purposes.

We assumed $1.0 billion of outstanding debt as a result of our acquisition of National and recorded it at its fair value of $1.105 billion. The excess of the fair value over the stated value is amortized as a reduction to Interest and debt expense over the term of the debt. In 2011, we recognized $9 million related to the amortization of the excess fair value.

The amount of National’s revenue included in our Consolidated statements of income for the period from the acquisition date to December 31, 2011, was $312 million. We do not measure net income at or below our segment levels.

The following unaudited summaries of pro forma combined results of operation for the years ended December 31, 2011 and 2010, give effect to the acquisition as if it had been completed on January 1, 2010. These pro forma summaries do not reflect any operating efficiencies, cost savings or revenue enhancements that may be achieved by the combined companies. In addition, certain non-recurring expenses, such as restructuring charges and retention bonuses that will be incurred within the first 12 months after the acquisition, are not reflected in the pro forma summaries. These pro forma summaries are presented for informational purposes only and are not necessarily indicative of what the actual results of operations would have been had the acquisition taken place as of that date, nor are they indicative of future consolidated results of operations.
 
 
For Years Ended
December 31,
 
 
2011
 
2010
 
 
(unaudited)
Revenue
 
$
14,805

 
$
15,529

Net income
 
2,438

 
3,218

Earnings per common share – diluted
 
2.05

 
2.61



Acquisition-related charges
We incurred various costs as a result of the acquisition of National that are included in Other consistent with how management measures the performance of its segments. These total acquisition-related charges are as follows:
 
 
For Year Ended December 31, 2011
Inventory related
 
$
96

Property, plant and equipment related
 
15

As recorded in COR
 
111

Amortization of intangible assets
 
87

Severance and other benefits:
 
 
Change of control
 
41

Announced employment reductions
 
29

Stock-based compensation
 
50

Transaction costs
 
48

Retention bonuses
 
46

Other
 
14

As recorded in Acquisition charges/divestiture (gain)
 
315

Total acquisition-related charges
 
$
426



We recognized costs associated with the adjustments to write up the value of acquired inventory and property, plant and equipment to fair value as of the acquisition date. These costs are in addition to the normal expensing of the acquired assets based on their carrying or book value prior to the acquisition.  The total fair-value write-up for the acquired inventory was expensed as that inventory was sold.  The total fair-value write-up for the acquired property, plant and equipment was $436 million, which is being depreciated at a rate of about $15 million per quarter beginning in the fourth quarter of 2011.

The amount of recognized amortization of acquired intangible assets resulting from the National acquisition was $87 million for the period from the acquisition date to December 31, 2011. Amortization of intangible assets is based on estimated useful lives varying between two and ten years.

Severance and other benefits costs relate to former National employees who have been or will be terminated after the closing date. These costs total $70 million for the year ended December 31, 2011, with $41 million in charges related to change of control provisions under existing employment agreements and $29 million in charges for announced employment reductions affecting about 350 jobs. All of these jobs will be eliminated by the end of 2012 as a result of redundancies and cost efficiency measures, with approximately $20 million of additional expense to be recognized in 2012. Of the $70 million in charges recognized, $14 million was paid in 2011. The remaining $56 million will be paid in 2012.

Stock-based compensation of $50 million was recognized for the accelerated vesting of equity awards upon the termination of employees. Additional stock-based compensation will be recognized over any remaining service periods.

Transaction costs include expenses incurred in connection with the National acquisition, such as investment advisory, legal, accounting and printing fees, as well as bridge financing costs incurred in April 2011.

Retention bonuses reflect amounts expected to be paid to former National employees who fulfill agreed-upon service period obligations and will be recognized ratably over the required service period.
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Losses associated with the earthquake in Japan
12 Months Ended
Dec. 31, 2011
Losses Associated with the events in Japan [Abstract]
Losses associated with the earthquake in Japan
Losses associated with the earthquake in Japan
On March 11, 2011, a magnitude 9.0 earthquake struck near two of our three semiconductor manufacturing facilities in Japan. Our manufacturing site in Miho suffered substantial damage during the earthquake, our facility in Aizu experienced significantly less damage and our site in Hiji was undamaged. We maintain earthquake insurance policies in Japan for limited coverage for property damage and business interruption losses.

Assessment and recovery efforts began immediately at these facilities and officially ended in August. Our Aizu factory recovered first and has been in production since the second quarter, while our Miho factory opened a mini-line for products in mid-April and was back to full production in the third quarter of 2011.

During the year ended December 31, 2011, we incurred gross operating losses of $101 million related to property damage, the underutilization expense we incurred from having our manufacturing assets only partially loaded and costs associated with recovery teams assembled from across the world. These losses have been offset by about $23 million in insurance proceeds related to property damage claims. Almost all of these costs and proceeds are included in COR in the Consolidated statements of income and are recorded in Other.

In addition to the costs associated with the earthquake, we also had an impact to revenue. For the year 2011, we recognized $38 million in insurance proceeds related to business interruption claims. These proceeds were recorded as revenue in Other.

We continue to be in discussions with our insurers and their advisors, but at this time we cannot estimate the timing and amount of future proceeds we may ultimately receive from our policies.
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Restructuring charges
12 Months Ended
Dec. 31, 2011
Restructuring and Related Activities [Abstract]
Restructuring charges
Restructuring charges
Restructuring charges may consist of voluntary or involuntary severance-related charges, asset-related charges and other costs to exit activities. We recognize voluntary termination benefits when the employee accepts the offered benefit arrangement. We recognize involuntary severance-related charges depending on whether the termination benefits are provided under an ongoing benefit arrangement or under a one-time benefit arrangement. If the former, we recognize the charges once they are probable and the amounts are estimable. If the latter, we recognize the charges once the benefits have been communicated to employees.

Restructuring activities associated with assets would be recorded as an adjustment to the basis of the asset, not as a liability. When we commit to a plan to abandon a long-lived asset before the end of its previously estimated useful life, we accelerate the recognition of depreciation to reflect the use of the asset over its shortened useful life. When an asset is held to be sold, we write down the carrying value to its net realizable value and cease depreciation.

Restructuring actions related to the acquisition of National are discussed in Note 2 above and are reflected on the Acquisition charges/divestiture (gain) line of our Consolidated statements of income.

2011 actions
In the fourth quarter of 2011, we recognized restructuring charges associated with the announced plans to close two older semiconductor manufacturing facilities in Hiji, Japan, and Houston, Texas, over the next 18 months. Combined, these facilities supported about 4 percent of TI’s revenue in 2011, and each employs about 500 people. As needed, production from these facilities will be moved to other more advanced TI factories. The total charge for these closures is estimated at $215 million, of which $112 million was recognized in the fourth quarter and the remainder will be incurred over the next seven quarters. The Restructuring charges recognized in the fourth quarter of 2011 are included in Other and consisted of $107 million for severance and benefit costs and $5 million of accelerated depreciation of the facilities’ assets. Of the estimated $215 million total cost, about $135 million will be for severance and related benefits, about $30 million will be for accelerated depreciation of facility assets and about $50 million will be for other exit costs.

Previous actions
In October 2008, we announced actions to reduce expenses in our Wireless segment, especially our baseband operation. In January 2009, we announced actions that included broad-based employment reductions to align our spending with weakened demand. Combined, these actions eliminated about 3,900 jobs; they were completed in 2009.

The table below reflects the changes in accrued restructuring balances associated with these actions:

 
 
2011 Actions
 
Previous Actions
 
 
 
 
Severance
and Benefits
 
Other
Charges
 
Severance
and Benefits
 
Other
Charges
 
Total
Accrual at December 31, 2009
 
$

 
$

 
$
84

 
$
10

 
$
94

Restructuring charges
 

 

 
33

 

 
33

Non-cash items (a)
 

 

 
(33
)
 

 
(33
)
Payments
 

 

 
(62
)
 
(2
)
 
(64
)
Remaining accrual at December 31, 2010
 

 

 
22

 
8

 
30

 
 
 
 
 
 
 
 
 
 
 
Restructuring charges
 
107

 
5

 

 

 
112

Non-cash items (a)
 
(11
)
 
(5
)
 

 

 
(16
)
Payments
 

 

 
(9
)
 
(1
)
 
(10
)
Remaining accrual at December 31, 2011
 
$
96

 
$

 
$
13

 
$
7

 
$
116


(a) Reflects charges for stock-based compensation, postretirement benefit plan settlement, curtailment, special
termination benefits and accelerated depreciation.

The accrual balances above are a component of Accrued expenses and other liabilities or Deferred credits and other liabilities on our Consolidated balance sheets, depending on the expected timing of payment.

Restructuring charges recognized by segment from the actions described above are as follows:
 
 
2011
 
2010
 
2009
Analog
 
$

 
$
13

 
$
84

Embedded Processing
 

 
6

 
43

Wireless
 

 
10

 
62

Other
 
112

 
4

 
23

Total
 
$
112

 
$
33

 
$
212

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Stock-based compensation
12 Months Ended
Dec. 31, 2011
Share-based Compensation [Abstract]
Stock-based compensation
Stock-based compensation
We have stock options outstanding to participants under various long-term incentive plans. We also have assumed stock options that were granted by companies that we later acquired, including National. Unless the options are acquisition-related replacement options, the option price per share may not be less than 100 percent of the fair market value of our common stock on the date of the grant. Substantially all the options have a ten-year term and vest ratably over four years. Our options generally continue to vest after the option recipient retires.

We also have restricted stock units (RSUs) outstanding under the long-term incentive plans. Each RSU represents the right to receive one share of TI common stock on the vesting date, which is generally four years after the date of grant. Upon vesting, the shares are issued without payment by the grantee. RSUs generally do not continue to vest after the recipient’s retirement date.

We have options and RSUs outstanding to non-employee directors under various director compensation plans. The plans generally provide for annual grants of stock options and RSUs, a one-time grant of RSUs to each new non-employee director and the issuance of TI common stock upon the distribution of stock units credited to deferred compensation accounts established for such directors.

We also have an employee stock purchase plan under which options are offered to all eligible employees in amounts based on a percentage of the employee’s compensation. Under the plan, the option price per share is 85 percent of the fair market value on the exercise date, and options have a three-month term.

Total stock-based compensation expense recognized was as follows:

 
 
2011
 
2010
 
2009
Stock-based compensation expense recognized in:
 
 
 
 
 
 
Cost of revenue (COR)
 
$
40

 
$
36

 
$
35

Research and development (R&D)
 
58

 
53

 
54

Selling, general and administrative (SG&A)
 
121

 
101

 
97

Acquisition charges
 
50

 

 

Total
 
$
269

 
$
190

 
$
186



These amounts include expense related to non-qualified stock options, RSUs and stock options offered under our employee stock purchase plan and are net of expected forfeitures.

We issue awards of non-qualified stock options generally with graded vesting provisions (e.g., 25 percent per year for four years). We recognize the related compensation cost on a straight-line basis over the minimum service period required for vesting of the award. For awards to employees who are retirement eligible or nearing retirement eligibility, we recognize compensation cost on a straight-line basis over the longer of the service period required to be performed by the employee in order to earn the award, or a six-month period.

Our RSUs generally vest four years after the date of grant. We recognize the related compensation costs on a straight-line basis over the vesting period.

National acquisition-related equity awards
In connection with the acquisition of National, we assumed certain stock options and RSUs granted by National, which were converted into the right to receive TI stock. The awards we assumed were measured at the acquisition date based on the
estimate of fair value, which was a total of $147 million. A portion of that fair value, $22 million, which represented the pre-combination vested service provided by employees to National, was included in the total consideration transferred as part of the acquisition. As of the acquisition date, the remaining portion of the fair value of those awards was $125 million, representing post-combination stock-based compensation expense that would be recognized as these employees provide service over the remaining vesting periods. At December 31, 2011, unrecognized compensation expense was $68 million.

Fair-value methods and assumptions
We account for all awards granted under our various stock-based compensation plans at fair value. We estimate the fair values for non-qualified stock options under long-term incentive and director compensation plans using the Black-Scholes option-pricing model with the following weighted average assumptions (these assumptions exclude options assumed in connection with the National acquisition):
 
 
2011
 
2010
 
2009
Weighted average grant date fair value, per share
 
$
10.37

 
$
6.61

 
$
5.43

Weighted average assumptions used:
 
 
 
 

 
 

Expected volatility
 
30
%
 
32
%
 
48
%
Expected lives (in years)
 
6.9

 
6.4

 
5.9  

Risk-free interest rates
 
2.61
%
 
2.83
%
 
2.63
%
Expected dividend yields
 
1.51
%
 
2.08
%
 
2.94
%


We determine expected volatility on all options granted after July 1, 2005, using available implied volatility rates. We believe that market-based measures of implied volatility are currently the best available indicators of the expected volatility used in these estimates.

We determine expected lives of options based on the historical option exercise experience of our optionees using a rolling ten-year average. We believe the historical experience method is the best estimate of future exercise patterns currently available.

Risk-free interest rates are determined using the implied yield currently available for zero-coupon U.S. government issues with a remaining term equal to the expected life of the options.

Expected dividend yields are based on the approved annual dividend rate in effect and the current market price of our common stock at the time of grant. No assumption for a future dividend rate change is included unless there is an approved plan to change the dividend in the near term.

The fair value per share of RSUs that we grant is determined based on the closing price of our common stock on the date of grant.

Our employee stock purchase plan is a discount-purchase plan and consequently the Black-Scholes option-pricing model is not used to determine the fair value per share of these awards. The fair value per share under this plan equals the amount of the discount.

Long-term incentive and director compensation plans
Stock option and RSU transactions under our long-term incentive and director compensation plans during 2011, including stock options and RSUs assumed in connection with the National acquisition, were as follows:
 
 
Stock Options
 
RSUs
 
 
Shares
 
Weighted Average
Exercise Price
per Share
 
Shares
 
Weighted Average
Grant-Date Fair
Value per Share
Outstanding grants, December 31, 2010
 
150,135,013

 
$
27.70

 
18,567,365

 
$
23.06

Granted
 
10,310,816

 
34.55

 
5,879,409

 
33.20

Assumed in National acquisition
 
1,316,283

 
15.75

 
4,884,774

 
27.22

Vested RSUs
 

 

 
(5,359,066
)
 
28.96

Expired and forfeited
 
(22,906,524
)
 
42.59

 
(613,636
)
 
24.43

Exercised
 
(25,582,194
)
 
24.91

 

 

Outstanding grants, December 31, 2011
 
113,273,394

 
$
25.79

 
23,358,846

 
$
25.09



The weighted average grant-date fair value of RSUs granted during the years 2011, 2010 and 2009 was $33.20, $23.47 and $15.78 per share, respectively. For the years ended December 31, 2011, 2010 and 2009, the total fair value of shares vested from RSU grants was $155 million, $51 million and $28 million, respectively.

Summarized information about stock options outstanding at December 31, 2011, including options assumed in connection with the National acquisition, is as follows:
 
 
 
Stock Options Outstanding
 
Options Exercisable
Range of
Exercise
Prices
 
Number
Outstanding
(Shares)
 
Weighted Average
Remaining Contractual
Life (Years)
 
Weighted Average
Exercise Price per
Share
 
Number
Exercisable
(Shares)
 
Weighted Average
Exercise Price per
Share
$
.26 to 10.00
 
13,813

 
1.1

 
$
6.64

 
13,813

 
$
6.64

 
10.01 to 20.00
 
26,219,258

 
3.8

 
15.66

 
18,859,398

 
15.91

 
20.01 to 30.00
 
44,961,810

 
5.1

 
24.98

 
31,390,099

 
25.38

 
30.01 to 38.40
 
42,078,513

 
4.3

 
32.99

 
31,971,009

 
32.49

$
.26 to 38.40
 
113,273,394

 
4.5

 
$
25.79

 
82,234,319

 
$
25.97



During the years ended December 31, 2011, 2010 and 2009, the aggregate intrinsic value (i.e., the difference in the closing market price and the exercise price paid by the optionee) of options exercised was $231 million, $140 million and $21 million, respectively.

Summarized information as of December 31, 2011, about outstanding stock options that are vested and expected to vest, as well as stock options that are currently exercisable, is as follows:

 
 
Outstanding Stock Options (Fully
Vested and Expected to Vest) (a)
 
Options
Exercisable
Number of outstanding (shares)
 
112,230,358

 
82,234,319

Weighted average remaining contractual life (in years)
 
4.5

 
3.2

Weighted average exercise price per share
 
$
26.03

 
$
25.97

Intrinsic value (millions of dollars)
 
$
539

 
$
370

(a) Includes effects of expected forfeitures of approximately 1 million shares. Excluding the effects of expected forfeitures, the aggregate intrinsic value of stock options outstanding was $543 million.

As of December 31, 2011, the total future compensation cost related to equity awards not yet recognized in the Consolidated statements of income was $477 million; $144 million related to unvested stock options and $333 million related to RSUs, of which $2 million and $66 million were associated with the National acquisition, respectively. The $477 million will be recognized as follows: $192 million in 2012, $153 million in 2013, $98 million in 2014 and $34 million in 2015.

Employee stock purchase plan
Options outstanding under the employee stock purchase plan at December 31, 2011, had an exercise price of $25.29 per share (85 percent of the fair market value of TI common stock on the date of automatic exercise). Of the total outstanding options, none were exercisable at year-end 2011.

Employee stock purchase plan transactions during 2011 were as follows:
 
 
Employee Stock
Purchase Plan
(Shares)
 
Exercise Price
Outstanding grants, December 31, 2010
 
487,871

 
$
27.83

Granted
 
2,200,718

 
26.04

Exercised
 
(2,108,494
)
 
26.66

Outstanding grants, December 31, 2011
 
580,095

 
$
25.29



The weighted average grant-date fair value of options granted under the employee stock purchase plans during the years 2011, 2010 and 2009 was $4.59, $3.97 and $3.13 per share, respectively. During the years ended December 31, 2011, 2010 and 2009, the total intrinsic value of options exercised under these plans was $10 million, $9 million and $10 million, respectively.

Effect on shares outstanding and treasury shares
Our practice is to issue shares of common stock upon exercise of stock options generally from treasury shares and, on a limited basis, from previously unissued shares. We settled stock option plan exercises using treasury shares of 27,308,311 in 2011; 19,077,274 in 2010 and 6,695,583 in 2009; and previously unissued common shares of 390,438 in 2011; 342,380 in 2010 and 93,648 in 2009.

Upon vesting of RSUs, we issued treasury shares of 3,822,475 in 2011; 1,392,790 in 2010 and 977,728 in 2009, and previously unissued common shares of 73,852 in 2011,with none in 2010 and 2009.

Shares available for future grant and reserved for issuance are summarized below:
 
 
As of December 31, 2011
Shares
 
Long-term Incentive
and Director
Compensation Plans
 
Employee Stock
Purchase Plan
 
Total
Reserved for issuance (a)
 
224,383,737

 
27,967,317

 
252,351,054

Shares to be issued upon exercise of outstanding options and RSUs
 
(136,755,907
)
 
(580,095
)
 
(137,336,002
)
Available for future grants
 
87,627,830

 
27,387,222

 
115,015,052


(a) Includes 123,667 shares credited to directors’ deferred compensation accounts that may settle in shares of TI common stock. These shares are not included as grants outstanding at December 31, 2011.

Effect on cash flows
Cash received from the exercise of options was $690 million in 2011, $407 million in 2010 and $109 million in 2009. The related net tax impact realized was $45 million, $21 million and ($2) million (which includes excess tax benefits realized of $31 million, $13 million and $1 million) in 2011, 2010 and 2009, respectively.
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Profit sharing plans
12 Months Ended
Dec. 31, 2011
Profit sharing plans [Abstract]
Profit sharing plans
Profit sharing plans
Profit sharing benefits are generally formulaic and determined by one or more subsidiary or company-wide financial metrics. We pay profit sharing benefits primarily under the company-wide TI Employee Profit Sharing Plan. This plan provides for profit sharing to be paid based solely on TI’s operating margin for the full calendar year. Under this plan, TI must achieve a minimum threshold of 10 percent operating margin before any profit sharing is paid. At 10 percent operating margin, profit sharing will be 2 percent of eligible payroll. The maximum amount of profit sharing available under the plan is 20 percent of eligible payroll, which is paid only if TI’s operating margin is at or above 35 percent for a full calendar year.

We recognized $143 million, $279 million and $102 million of profit sharing expense under the TI Employee Profit Sharing Plan in 2011, 2010 and 2009, respectively.
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Income taxes
12 Months Ended
Dec. 31, 2011
Income Tax Disclosure [Abstract]
Income taxes
Income taxes
Income before income taxes
 
U.S.
 
Non-U.S.
 
Total
2011
 
$
1,791

 
$
1,164

 
$
2,955

2010
 
3,769

 
782

 
4,551

2009
 
1,375

 
642

 
2,017


 
Provision (benefit) for income taxes
 
U.S. Federal
 
Non-U.S.
 
U.S. State
 
Total
2011:
 
 
 
 
 
 
 
 
Current
 
$
692

 
$
138

 
$
8

 
$
838

Deferred
 
(154
)
 
24

 
11

 
(119
)
Total
 
$
538

 
$
162

 
$
19

 
$
719

 
 
 
 
 
 
 
 
 
2010:
 
 

 
 

 
 

 
 

Current
 
$
1,401

 
$
92

 
$
18

 
$
1,511

Deferred
 
(188
)
 
(2
)
 
2

 
(188
)
Total
 
$
1,213

 
$
90

 
$
20

 
$
1,323

 
 
 
 
 
 
 
 
 
2009:
 
 

 
 

 
 

 
 

Current
 
$
318

 
$
79

 
$
4

 
$
401

Deferred
 
124

 
23

 
(1
)
 
146

Total
 
$
442

 
$
102

 
$
3

 
$
547



Principal reconciling items from income tax computed at the statutory federal rate follow:
 
 
2011
 
2010
 
2009
Computed tax at statutory rate
 
$
1,034

 
$
1,593

 
$
706

Non-U.S. effective tax rates
 
(245
)
 
(184
)
 
(123
)
U.S. R&D tax credit
 
(58
)
 
(54
)
 
(28
)
U.S. tax benefit for manufacturing
 
(31
)
 
(63
)
 
(21
)
Other
 
19

 
31

 
13

Total provision for income taxes
 
$
719

 
$
1,323

 
$
547



The primary components of deferred income tax assets and liabilities were as follows:

 
 
December 31,
 
 
2011
 
2010
Deferred income tax assets:
 
 
 
 
Inventories and related reserves
 
$
913

 
$
525

Postretirement benefit costs recognized in AOCI
 
431

 
404

Deferred loss and tax credit carryforwards
 
400

 
220

Stock-based compensation
 
357

 
357

Accrued expenses
 
323

 
251

Other
 
217

 
208

 
 
2,641

 
1,965

Less valuation allowance
 
(178
)
 
(3
)
 
 
2,463

 
1,962

Deferred income tax liabilities:
 
 
 
 

Acquisition-related intangibles and fair-value adjustments
 
(1,096
)
 
(21
)
Accrued retirement costs (defined benefit and retiree health care)
 
(180
)
 
(190
)
Property, plant and equipment
 
(147
)
 
(83
)
International earnings
 
(92
)
 
(26
)
Other
 
(60
)
 
(31
)
 
 
(1,575
)
 
(351
)
Net deferred income tax asset
 
$
888

 
$
1,611



As of December 31, 2011 and 2010, net deferred income tax assets of $888 million and $1.61 billion were presented in the balance sheets, based on tax jurisdiction, as deferred income tax assets of $1.50 billion and $1.70 billion and deferred income tax liabilities of $607 million and $86 million, respectively. The decrease in net deferred income tax assets from December 31, 2010, to December 31, 2011, is due to the recording of $881 million of net deferred tax liabilities associated with the acquisition of National, partially offset by the $119 million deferred tax provision.

We make an ongoing assessment regarding the realization of U.S. and non-U.S. deferred tax assets. In 2011, we recognized a net increase of $175 million in our valuation allowance. This increase was due to valuation allowances on unutilized tax credits associated with the acquisition of National. While the net deferred assets of $2.46 billion at December 31, 2011, are not assured of realization, our assessment is that a valuation allowance is not required on this balance. This assessment is based on our evaluation of relevant criteria including the existence of deferred tax liabilities that can be used to absorb deferred tax assets, taxable income in prior carryback years and expectations for future taxable income.

We have U.S. and non-U.S. tax loss carryforwards of approximately $202 million, of which $124 million expire through the year 2021.

Provision has been made for deferred taxes on undistributed earnings of non-U.S. subsidiaries to the extent that dividend
payments from these subsidiaries are expected to result in additional tax liability. The remaining undistributed earnings (approximately $4.12 billion at December 31, 2011) have been indefinitely reinvested; therefore, no provision has been made for taxes due upon remittance of these earnings. The indefinitely reinvested earnings of our non-U.S. subsidiaries are primarily invested in tangible assets such as inventory and property, plant and equipment. Determination of the amount of unrecognized deferred income tax liability is not practical because of the complexities associated with its hypothetical calculation.

Cash payments made for income taxes, net of refunds, were $902 million, $1.47 billion and $331 million for the years ended December 31, 2011, 2010 and 2009, respectively.

Uncertain tax positions
We operate in a number of tax jurisdictions, and our income tax returns are subject to examination by tax authorities in those jurisdictions who may challenge any item on these tax returns. Because the matters challenged by authorities are typically complex, their ultimate outcome is uncertain. Before any benefit can be recorded in the financial statements, we must determine that it is “more likely than not” that a tax position will be sustained by the appropriate tax authorities. We recognize accrued interest related to uncertain tax positions and penalties as components of OI&E.


The changes in the total amounts of uncertain tax positions are summarized as follows:
 
 
2011
 
2010
 
2009
Balance, January 1
 
$
103

 
$
56

 
$
148

Additions based on tax positions related to the current year
 
15

 
12

 
10

Additions from the acquisition of National
 
132

 

 

Additions for tax positions of prior years
 
3

 
50

 
6

Reductions for tax positions of prior years
 
(39
)
 
(12
)
 
(18
)
Settlements with tax authorities
 
(4
)
 
(3
)
 
(90
)
Balance, December 31
 
$
210

 
$
103

 
$
56

Interest income (expense) recognized in the year ended December 31
 
$
1

 
$
(2
)
 
$

Accrued interest payable (receivable) as of December 31
 
$
3

 
$
(5
)
 
$
(9
)


The liability for uncertain tax positions and the accrued interest payable are components of Deferred credits and other liabilities on our December 31, 2011, balance sheet.

Within the $210 million liability for uncertain tax positions as of December 31, 2011, are uncertain tax positions totaling $233 million that, if recognized, would impact the tax rate. If these tax liabilities are ultimately realized, $83 million of deferred tax assets would also be realized, primarily related to refunds from counterparty jurisdictions resulting from procedures for relief from double taxation.

Within the $103 million liability for uncertain tax positions as of December 31, 2010, are uncertain tax positions totaling $136 million that, if recognized, would impact the tax rate. If these tax liabilities are ultimately realized, $101 million of deferred tax assets would also be realized, primarily related to refunds from counterparty jurisdictions resulting from procedures for relief from double taxation.

As of December 31, 2011, the statute of limitations remains open for U.S. federal tax returns for 1999 and following years. Audits of our U.S. federal tax returns through 2006 have been completed except for certain pending tax treaty procedures for relief from double taxation. These procedures pertain to U.S. federal tax returns for the years 2003 through 2007.

In non-U.S. jurisdictions, the years open to audit represent the years still subject to the statute of limitations. With respect to major jurisdictions outside the U.S., our subsidiaries are no longer subject to income tax audits for years before 2004.

We are unable to estimate the range of any reasonably possible increase or decrease in uncertain tax positions that may occur
within the next 12 months resulting from the eventual outcome of the years currently under audit or appeal. However, we do not anticipate any such outcome will result in a material change to our financial condition or results of operations. U.S. federal tax returns for recently acquired National are currently under audit for tax years through 2009. It is possible that issues that are the subject of that audit could be resolved in the next 12 months and result in a material change in our estimate of uncertain tax positions.
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Financial instruments and risk concentration
12 Months Ended
Dec. 31, 2011
Risks and Uncertainties [Abstract]
Financial instruments and risk concentration
Financial instruments and risk concentration
Financial instruments
We hold derivative financial instruments such as forward foreign currency exchange contracts, interest rate swaps and forward purchase contracts, the fair value of which is not material at December 31, 2011. Our forward foreign currency exchange contracts outstanding at December 31, 2011, had a notional value of $516 million to hedge our non-U.S. dollar net balance sheet exposures (including $253 million to sell Japanese yen, $105 million to sell euros and $39 million to sell British pound sterling).

Our investments in cash equivalents, short-term investments and certain long-term investments, as well as our postretirement plan assets, contingent consideration and deferred compensation liabilities are carried at fair value, which is described in Note 9. The carrying values for other current financial assets and liabilities, such as accounts receivable and accounts payable, approximate fair value due to the short maturity of such instruments. The carrying value of our long-term debt approximates the fair value.

Risk concentration
Financial instruments that could subject us to concentrations of credit risk are primarily cash, cash equivalents, short-term investments and accounts receivable. In order to manage our credit risk exposure, we place cash investments in investment-grade debt securities and limit the amount of credit exposure to any one issuer. We also limit counterparties on forward foreign currency exchange contracts to financial institutions rated no lower than A3/A-.

Concentrations of credit risk with respect to accounts receivable are limited due to our large number of customers and their dispersion across different industries and geographic areas. We maintain an allowance for losses based on the expected collectability of accounts receivable. These allowances are deducted from accounts receivable on our Consolidated balance sheets.

Details of these allowances are as follows:
Accounts receivable allowances
 
Balance at
Beginning of Year
 
Additions Charged
(Credited) to
Operating Results
 
Recoveries and
Write-offs, Net
 
Balance at
End of Year
2011
 
$
18

 
$
1

 
$

 
$
19

2010
 
23

 
(4
)
 
(1
)
 
18

2009
 
30

 
1

 
(8
)
 
23

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Valuation of debt and equity investments and certain liabilities
12 Months Ended
Dec. 31, 2011
Valuation of debt and equity investments and certain liabilities [Abstract]
Valuation of debt and equity investments and certain liabilities
Valuation of debt and equity investments and certain liabilities
Debt and equity investments
We classify our investments as available for sale, trading, equity method or cost method. Most of our investments are classified as available for sale.

    Available-for-sale and trading securities are stated at fair value, which is generally based on market prices, broker quotes or, when necessary, financial models (see fair-value discussion below). Unrealized gains and losses on available-for-sale securities are recorded as an increase or decrease, net of taxes, in AOCI on our Consolidated balance sheets. We record other-than-temporary losses (impairments) on available-for-sale securities in OI&E in our Consolidated statements of income.

We classify certain mutual funds as trading securities. These mutual funds hold a variety of debt and equity investments intended to generate returns that offset changes in certain deferred compensation liabilities. We record changes in the fair value of these mutual funds and the related deferred compensation liabilities in SG&A. Changes in the fair value of debt securities classified as trading securities are recorded in OI&E.

Our other investments are not measured at fair value but are accounted for using either the equity method or cost method. These investments consist of interests in venture capital funds and other non-marketable equity securities. Gains and losses from equity method investments are reflected in OI&E based on our ownership share of the investee’s financial results. Gains and losses on cost method investments are recorded in OI&E when realized or when an impairment of the investment’s value is warranted based on our assessment of the recoverability of each investment.

Details of our investments and related unrealized gains and losses included in AOCI are as follows:
 
 
December 31, 2011
 
December 31, 2010
 
 
Cash and Cash
Equivalents
 
Short-term
Investments
 
Long-term
Investments
 
Cash and Cash
Equivalents
 
Short-term
Investments
 
Long-term
Investments
Measured at fair value:
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale securities
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
 
$
55

 
$

 
$

 
$
167

 
$

 
$

Corporate obligations
 
135

 
159

 

 
44

 
649

 

U.S. Government agency and Treasury securities
 
430

 
1,691

 

 
855

 
1,081

 

Auction-rate securities
 

 

 
41

 

 
23

 
257

 
 
 
 
 
 
 
 
 
 
 
 
 
Trading securities
 
 

 
 

 
 

 
 

 
 

 
 

Auction-rate securities
 

 
93

 

 

 

 

Mutual funds
 

 

 
169

 

 

 
139

Total
 
620

 
1,943

 
210

 
1,066

 
1,753

 
396

 
 
 
 
 
 
 
 
 
 
 
 
 
Other measurement basis:
 
 

 
 

 
 

 
 

 
 

 
 

Equity-method investments
 

 

 
32

 

 

 
36

Cost-method investments
 

 

 
23

 

 

 
21

Cash on hand
 
372

 

 

 
253

 

 

Total
 
$
992

 
$
1,943

 
$
265

 
$
1,319

 
$
1,753

 
$
453

 
 
 
 
 
 
 
 
 
 
 
 
 
Amounts included in AOCI from available-for-sale securities:
 
 

 
 

 
 

 
 

 
 

 
 

Unrealized gains (pre-tax)
 
$

 
$

 
$

 
$

 
$
1

 
$

Unrealized losses (pre-tax)
 
$

 
$

 
$
5

 
$

 
$
1

 
$
22



As of December 31, 2011 and 2010, the majority of unrealized losses included in AOCI were associated with auction-rate securities classified as securities that are available for sale. We have determined that our available-for-sale investments with unrealized losses are not other-than-temporarily impaired as we expect to recover the entire cost basis of these securities. We do not intend to sell these investments, nor do we expect to be required to sell these investments, before a recovery of the cost basis. In the second quarter of 2011, we recategorized certain auction-rate securities from an available-for-sale classification to a trading classification, as we intend to sell them. For the year ended December 31, 2011, we did not recognize in earnings any credit losses related to these investments.

Proceeds from sales, redemptions and maturities of short-term available-for-sale securities, excluding cash equivalents, were $3.55 billion, $2.56 billion and $2.03 billion in 2011, 2010 and 2009, respectively. Gross realized gains and losses from these sales were not significant.
 
The following table presents the aggregate maturities of investments in debt securities classified as available for sale at
December 31, 2011:
Due
Fair Value
One year or less
$
1,902

One to three years
568

Greater than three years (auction-rate securities)
41


Gross realized gains and losses from sales of long-term investments were not significant for 2011, 2010 or 2009. Other-than-temporary declines and impairments in the values of these investments recognized in OI&E were $2 million, $1 million and $14 million in 2011, 2010 and 2009, respectively.

Fair-value considerations
We measure and report certain financial assets and liabilities at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

The three-level hierarchy discussed below indicates the extent and level of judgment used to estimate fair-value measurements.
Level 1 –
Uses unadjusted quoted prices that are available in active markets for identical assets or liabilities as of the reporting date.
Level 2 –
Uses inputs other than Level 1 that are either directly or indirectly observable as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data. Our Level 2 assets consist of corporate obligations, some U.S. government agency securities and auction-rate securities that have been called for redemption. We utilize a third-party data service to provide Level 2 valuations, verifying these valuations for reasonableness relative to unadjusted quotes obtained from brokers or dealers based on observable prices for similar assets in active markets.
Level 3 –
Uses inputs that are unobservable, supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models that utilize management estimates of market participant assumptions.

Our auction-rate securities are primarily classified as Level 3 assets. Auction-rate securities are debt instruments with variable interest rates that historically would periodically reset through an auction process. These auctions have not functioned since 2008. There is no active secondary market for these securities, although limited observable transactions do occasionally occur. As a result, we use a discounted cash flow model to determine the estimated fair value of these investments as of each quarter end. The assumptions used in preparing the discounted cash flow model include estimates for the amount and timing of future interest and principal payments and the rate of return required by investors to own these securities in the current environment. In making these assumptions, we consider relevant factors including: the formula for each security that defines the interest rate paid to investors in the event of a failed auction; forward projections of the interest rate benchmarks specified in such formulas; the likely timing of principal repayments; the probability of full repayment considering the guarantees by the U.S. Department of Education of the underlying student loans and additional credit enhancements provided through other means; and, publicly available pricing data for student loan asset-backed securities that are not subject to auctions. Our estimate of the rate of return required by investors to own these securities also considers the reduced liquidity for auction-rate securities. To date, we have collected all interest on all of our auction-rate securities when due and expect to continue to do so in the future.

The following are our assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2011 and 2010. These tables do not include cash on hand, assets held by our postretirement plans, or assets and liabilities that are measured at historical cost or any basis other than fair value.
 
 
Fair Value
December 31, 2011
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
 
Money market funds
 
$
55

 
$
55

 
$

 
$

Corporate obligations
 
294

 

 
294

 

U.S. Government agency and Treasury securities
 
2,121

 
606

 
1,515

 

Auction-rate securities
 
134

 

 

 
134

Mutual funds
 
169

 
169

 

 

Total assets
 
$
2,773

 
$
830

 
$
1,809

 
$
134

 
 
 
 
 
 
 
 
 
Liabilities
 
 

 
 

 
 

 
 

Deferred compensation
 
$
191

 
$
191

 
$

 
$

Total liabilities
 
$
191

 
$
191

 
$

 
$

 
 
 
Fair Value
December 31, 2010
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
 
Money market funds
 
$
167

 
$
167

 
$

 
$

Corporate obligations
 
693

 

 
693

 

U.S. Government agency and Treasury securities
 
1,936

 
1,120

 
816

 

Auction-rate securities
 
280

 

 
23

 
257

Mutual funds
 
139

 
139

 

 

Total assets
 
$
3,215

 
$
1,426

 
$
1,532

 
$
257

 
 
 
 
 
 
 
 
 
Liabilities
 
 

 
 

 
 

 
 

Contingent consideration
 
$
8

 
$

 
$

 
$
8

Deferred compensation
 
159

 
159

 

 

Total liabilities
 
$
167

 
$
159

 
$

 
$
8


The following table summarizes the change in the fair values for Level 3 assets and liabilities for the years ended December 31, 2011 and 2010. The transfer of auction-rate securities into Level 2 was the result of these securities being called for redemption and all were subsequently redeemed.
 
 
Level 3
 
 
Auction-rate
Securities
 
Contingent
Consideration
Balance, December 31, 2009
 
$
458

 
$
18

Change in fair value of contingent consideration – included in operating profit
 

 
(10
)
Change in unrealized loss – included in AOCI
 
10

 

Redemptions and sales
 
(188
)
 

Transfers into Level 2
 
(23
)
 

Balance, December 31, 2010
 
257

 
8

 
 
 
 
 
Change in fair value of contingent consideration – included in operating profit
 

 
(8
)
Change in unrealized loss – included in AOCI
 
(1
)
 

Redemptions and sales
 
(122
)
 

Balance, December 31, 2011
 
$
134

 
$

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Acquisitions and divestitures other than National (Acquisitions and divestitures other than National [Member])
12 Months Ended
Dec. 31, 2011
Acquisitions and divestitures other than National [Member]
Business Acquisitions and Divestitures [Line Items]
Acquisitions and divestitures
Acquisitions and divestitures other than National
Acquisitions
In October 2010, we acquired our first semiconductor manufacturing site in China, located in the Chengdu High-tech Zone. This included a fully equipped and operational 200-millimeter wafer fabrication facility (fab), as well as a non-operating fab that is being held for future capacity expansion. Additionally, we offered employment to the majority of existing employees at the Chengdu site. We provided transitional supply services through the middle of 2011, while also installing our analog production processes. This acquisition, which was recorded as a business combination, used net cash of $140 million. As contractually agreed, we made an additional payment to the seller in October 2011.We recorded $158 million of property, plant and equipment, $5 million of inventory, $4 million of other assets and $8 million of expenses. Operating results for the transitional supply services are included in Other. Additionally, we incurred acquisition costs of $2 million.

In August 2010, we completed the acquisition of two wafer fabs and equipment in Aizu-Wakamatsu, Japan, for net cash of $130 million. The terms of the acquisition included an operational 200-millimeter fab as well as a non-operating fab capable of either 200- or 300-millimeter production that is being held for future capacity expansion. Additionally, we offered employment to the existing employees at the Aizu site. We provided transitional supply services through 2011, while also installing our analog production processes.

The acquisition of the two Aizu wafer fabs and related 200-millimeter equipment was recorded as a business combination for net cash of $59 million. We recorded $42 million of property, plant and equipment, $9 million of inventory and $8 million of expenses, which were charged to COR. Operating results for the transitional supply services are included in Other. In connection with the Aizu acquisition, we also settled a contractual arrangement with a third party for our benefit for net cash of $12 million, which was recorded as a charge in COR in Other. Additionally, we incurred acquisition-related costs of $1 million, which were recorded in SG&A. The Aizu acquisition also included 300-millimeter production tools, which we recorded as a capital purchase for net cash of $58 million.

In 2009, we acquired Luminary Micro for net cash of $51 million and other consideration of $7 million. These operations were integrated into our Embedded Processing segment. We also acquired CICLON Semiconductor Device Corporation for net cash of $104 million and other consideration of $7 million. These operations were integrated into our Analog segment.  

The results of operations for these acquisitions have been included in our financial statements from their respective acquisition dates. Pro forma financial information would not be materially different from amounts reported.

Divestitures
In November 2010, we divested a product line previously included in Other for $148 million and recognized a gain in operating profit of $144 million. This appears in the Consolidated statements of income on the Acquisition charges/divestiture (gain) line for 2010.
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Goodwill and acquisition-related intangibles
12 Months Ended
Dec. 31, 2011
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and acquisition-related intangibles
Goodwill and acquisition-related intangibles
The following table summarizes the changes in goodwill by segment for the years ended December 31, 2011 and 2010:
 
 
Analog
 
Embedded
Processing
 
Wireless
 
Other
 
Total
Goodwill, December 31, 2009
 
$
638

 
$
172

 
$
82

 
$
34

 
$
926

Adjustments
 
(8
)
 

 
8

 
(2
)
 
(2
)
Goodwill, December 31, 2010
 
630

 
172

 
90

 
32

 
924

 
 
 
 
 
 
 
 
 
 
 
Additions from acquisitions
 
3,528

 

 

 

 
3,528

Goodwill, December 31, 2011
 
$
4,158

 
$
172

 
$
90

 
$
32

 
$
4,452



There was no impairment of goodwill during 2011 or 2010. In the first quarter of 2010, we transferred a low-power wireless product line, including the associated goodwill, from the Analog segment to the Wireless segment. We reduced goodwill in Other by $2 million, which was related to the divestiture noted in Note 10. The addition to Analog goodwill was from the National acquisition.

In 2011, we recognized intangible assets associated with the National acquisition of $2.96 billion, primarily for developed technology and customer relationships. In 2010, we had no additional intangible assets from an acquisition.

The following table shows the components of acquisition-related intangible assets as of December 31, 2011 and 2010:
 
 
 
 
December 31, 2011
 
December 31, 2010
 
 
Amortization
Period
(Years)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Acquisition-related intangibles:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Developed technology
 
4 - 10
 
$
2,089

 
$
91

 
$
1,998

 
$
155

 
$
100

 
$
55

Customer relationships
 
5 - 8
 
822

 
34

 
788

 
26

 
18

 
8

Other intangibles
 
2 - 10
 
50

 
29

 
21

 
34

 
21

 
13

In-process R&D
 
(a)
 
93

 

 
93

 

 

 

Total
 
 
 
$
3,054

 
$
154

 
$
2,900

 
$
215

 
$
139

 
$
76

(a) In-process R&D is not amortized until the associated project has been completed. Alternatively, if the associated project is
determined not to be viable, it will be expensed.

Amortization of acquisition-related intangibles was $111 million, $48 million and $48 million for 2011, 2010 and 2009, respectively, primarily related to developed technology.
 
The following table sets forth the estimated amortization of acquisition-related intangibles for the years ended December 31:
2012
$
342

2013
335

2014
321

2015
319

2016
318

Thereafter
1,265

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Postretirement benefit plans
12 Months Ended
Dec. 31, 2011
Compensation and Retirement Disclosure [Abstract]
Postretirement benefit plans
Postretirement benefit plans
Plan descriptions
We have various employee retirement plans including defined benefit, defined contribution and retiree health care benefit plans. For qualifying employees, we offer deferred compensation arrangements. As a part of the National acquisition, we assumed the assets and liabilities of its defined benefit plans, primarily those associated with the United Kingdom and Germany.

U.S. retirement plans:
Principal retirement plans in the U.S. are qualified and non-qualified defined benefit pension plans (all of which were closed to new participants after November 1997), a defined contribution plan and an enhanced defined contribution plan. The defined benefit pension plans include employees still accruing benefits as well as employees and participants who no longer accrue service-related benefits, but instead, may participate in the enhanced defined contribution plan.

Both defined contribution plans offer an employer-matching savings option that allows employees to make pre-tax contributions to various investment choices, including a TI common stock fund. Employees who elected to continue accruing a benefit in the qualified defined benefit pension plans may also participate in the defined contribution plan, where employer-matching contributions are provided for up to 2 percent of the employee’s annual eligible earnings. Employees who elected not to continue accruing a benefit in the defined benefit pension plans, and employees hired after November 1997 and through December 31, 2003, may participate in the enhanced defined contribution plan. This plan provides for a fixed employer contribution of 2 percent of the employee’s annual eligible earnings, plus an employer-matching contribution of up to 4 percent of the employee’s annual eligible earnings. Employees hired after December 31, 2003, do not receive the fixed employer contribution of 2 percent of the employee’s annual eligible earnings.

At December 31, 2011 and 2010, as a result of employees’ elections, TI’s U.S. defined contribution plans held shares of TI common stock totaling 22 million shares and 24 million shares valued at $639 million and $792 million, respectively. Dividends paid on these shares for 2011 and 2010 were $13 million for each year.

Our aggregate expense for the U.S. defined contribution plans was $55 million in 2011, $50 million in 2010 and $51 million in 2009.

Benefits under the qualified defined benefit pension plan are determined using a formula based upon years of service and the highest five consecutive years of compensation. We intend to contribute amounts to this plan to meet the minimum funding requirements of applicable local laws and regulations, plus such additional amounts as we deem appropriate. The non-qualified defined benefit plans are unfunded and closed to new participants.
 
U.S. retiree health care benefit plan:
U.S. employees who meet eligibility requirements are offered medical coverage during retirement. We make a contribution toward the cost of those retiree medical benefits for certain retirees and their dependents. The contribution rates are based upon various factors, the most important of which are an employee’s date of hire, date of retirement, years of service and eligibility for Medicare benefits. The balance of the cost is borne by the plan’s participants. Employees hired after January 1, 2001, are responsible for the full cost of their medical benefits during retirement.

Non-U.S. retirement plans:
We provide retirement coverage for non-U.S. employees, as required by local laws or to the extent we deem appropriate, through a number of defined benefit and defined contribution plans. Retirement benefits are generally based on an employee’s years of service and compensation. Funding requirements are determined on an individual country and plan basis and are subject to local country practices and market circumstances.

As of December 31, 2011 and 2010, as a result of employees’ elections, TI’s non-U.S. defined contribution plans held TI common stock valued at $12 million and $14 million, respectively. Dividends paid on these shares of TI common stock for 2011 and 2010 were not material.
 
Effect on the statements of income and balance sheets
Expense related to defined benefit and retiree health care benefit plans was as follows:
 
 
U.S. Defined Benefit
 
U.S. Retiree Health Care
 
Non-U.S. Defined Benefit
 
 
2011
 
2010
 
2009
 
2011
 
2010
 
2009
 
2011
 
2010
 
2009
Service cost
 
$
22

 
$
20

 
$
20

 
$
4

 
$
4

 
$
4

 
$
41

 
$
37

 
$
40

Interest cost
 
46

 
45

 
49

 
25

 
26

 
26

 
69

 
62

 
62

Expected return on plan assets
 
(45
)
 
(49
)
 
(49
)
 
(21
)
 
(23
)
 
(28
)
 
(83
)
 
(73
)
 
(69
)
Amortization of prior service cost (credit)
 
1

 
1

 
1

 
2

 
2

 
2

 
(4
)
 
(3
)
 
(3
)
Recognized net actuarial loss
 
23

 
22

 
18

 
13

 
12

 
8

 
40

 
30

 
34

Net periodic benefit cost
 
47

 
39

 
39

 
23

 
21

 
12

 
63

 
53

 
64

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Settlement charges (a)
 

 
37

 
13

 

 

 

 

 

 
15

Curtailment charges (credits)
 

 

 

 
5

 

 
2

 
2

 

 
(9
)
Special termination benefit charges
 
4

 

 
6

 

 

 

 

 

 
3

Total, including charges
 
$
51

 
$
76

 
$
58

 
$
28

 
$
21

 
$
14

 
$
65

 
$
53

 
$
73

(a) Includes restructuring and non-restructuring related settlement charges.
 
Expenses associated with National’s plans for the period from the acquisition date to December 31, 2011, were $2 million for non-U.S. defined benefit plans. National had no defined benefit plans in the U.S.

For the U.S. qualified pension and retiree health care plans, the expected return on the plan assets component of net periodic benefit cost is based upon a market-related value of assets. In accordance with U.S. GAAP, the market-related value of assets generally utilizes a smoothing technique whereby certain gains and losses are phased in over a period of three years.
 
Changes in the benefit obligations and plan assets for the defined benefit and retiree health care benefit plans were as follows:
 
 
U.S. Defined Benefit
 
U.S. Retiree
Health Care
 
Non-U.S.
Defined Benefit
 
 
2011
 
2010
 
2011
 
2010
 
2011
 
2010
Change in plan benefit obligation:
 
 
 
 
 
 
 
 
 
 
 
 
Benefit obligation at beginning of year
 
$
880

 
$
860

 
$
473

 
$
472

 
$
2,217

 
$
1,945

Service cost
 
22

 
20

 
4

 
4

 
41

 
37

Interest cost
 
46

 
45

 
25

 
26

 
69

 
62

Participant contributions
 

 

 
18

 
17

 
1

 
3

Benefits paid
 
(52
)
 
(6
)
 
(43
)
 
(45
)
 
(72
)
 
(70
)
Medicare subsidy
 

 

 
4

 
3

 

 

Actuarial (gain) loss
 
61

 
92

 
19

 
(4
)
 
91

 
132

Settlements
 

 
(131
)
 

 

 
(1
)
 

Curtailments
 
(2
)
 

 
4

 

 
(3
)
 

Assumed with National acquisition
 

 

 

 

 
301

 

Special termination benefits
 
4

 

 

 

 

 

Plan amendments
 

 

 
17

 

 

 
(1
)
Effects of exchange rate changes
 

 

 

 

 
104

 
109

Benefit obligation at end of year (BO)
 
$
959

 
$
880

 
$
521

 
$
473

 
$
2,748

 
$
2,217

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in plan assets:
 
 
 
 

 
 
 
 

 
 
 
 

Fair value of plan assets at beginning of year
 
$
833

 
$
859

 
$
404

 
$
374

 
$
1,835

 
$
1,672

Actual return on plan assets
 
106

 
76

 
6

 
25

 
53

 
95

Employer contributions (funding of qualified plans)
 
25

 
30

 
46

 
33

 
72

 
53

Employer contributions (payments for non-qualified plans)
 
2

 
5

 

 

 

 

Participant contributions
 

 

 
18

 
17

 
1

 
3

Assumed with National acquisition
 

 

 

 

 
235

 

Benefits paid
 
(52
)
 
(6
)
 
(43
)
 
(45
)
 
(72
)
 
(70
)
Settlements
 

 
(131
)
 

 

 
(1
)
 

Effects of exchange rate changes
 

 

 

 

 
88

 
82

Fair value of plan assets at end of year (FVPA)
 
$
914

 
$
833

 
$
431

 
$
404

 
$
2,211

 
$
1,835

Funded status (FVPA – BO) at end of year
 
$
(45
)
 
$
(47
)
 
$
(90
)
 
$
(69
)
 
$
(537
)
 
$
(382
)

Amounts recognized on the balance sheet as of December 31, 2011, were as follows:
 
 
U.S. Defined
Benefit
 
U.S. Retiree
Health Care
 
Non-U.S.
Defined Benefit
 
Total
Overfunded retirement plans
 
$
11

 
$

 
$
29

 
$
40

Accrued expenses and other liabilities
 
(2
)
 

 
(9
)
 
(11
)
Underfunded retirement plans
 
(54
)
 
(90
)
 
(557
)
 
(701
)
Funded status (FVPA – BO) at end of year
 
$
(45
)
 
$
(90
)
 
$
(537
)
 
$
(672
)

Amounts recognized on the balance sheet as of December 31, 2010, were as follows:
 
 
U.S. Defined
Benefit
 
U.S. Retiree
Health Care
 
Non-U.S.
Defined Benefit
 
Total
Overfunded retirement plans
 
$
1

 
$

 
$
30

 
$
31

Accrued expenses and other liabilities
 
(3
)
 

 
(7
)
 
(10
)
Underfunded retirement plans
 
(45
)
 
(69
)
 
(405
)
 
(519
)
Funded status (FVPA – BO) at end of year
 
$
(47
)
 
$
(69
)
 
$
(382
)
 
$
(498
)

Accumulated benefit obligations, which represent the benefit obligations excluding the impact of future salary increases, were $875 million and $813 million at year-end 2011 and 2010, respectively, for the U.S. defined benefit plans, and $2.54 billion and $2.02 billion at year-end 2011 and 2010, respectively, for the non-U.S. defined benefit plans.

The amounts recorded in AOCI for the years ended December 31, 2011 and 2010, are detailed below by plan type:
 
 
U.S. Defined Benefit
 
U.S. Retiree
Health Care
 
Non-U.S.
Defined Benefit
 
Total
 
 
Net
Actuarial
Loss
 
Prior
Service
Cost
 
Net
Actuarial
Loss
 
Prior
Service
Cost
 
Net
Actuarial
Loss
 
Prior
Service
Cost
 
Net
Actuarial
Loss
 
Prior
Service
Cost
AOCI balance, December 31, 2010 (net of tax)
 
$
157

 
$
1

 
$
126

 
$
6

 
$
421

 
$
(23
)
 
$
704

 
$
(16
)
Changes in AOCI by category in 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 

Annual adjustments
 
(3
)
 

 
34

 
17

 
158

 
(3
)
 
189

 
14

Reclassification of recognized transactions
 
(23
)
 
(1
)
 
(12
)
 
(4
)
 
(40
)
 
3

 
(75
)
 
(2
)
Less tax expense (benefit)
 
9

 

 
(8
)
 
(5
)
 
(39
)
 

 
(38
)
 
(5
)
Total change to AOCI in 2011
 
(17
)
 
(1
)
 
14

 
8

 
79

 

 
76

 
7

AOCI balance, December 31, 2011 (net of tax)
 
$
140

 
$

 
$
140

 
$
14

 
$
500

 
$
(23
)
 
$
780

 
$
(9
)

The estimated amounts of net actuarial loss and unrecognized prior service cost (credit) included in AOCI as of December 31, 2011, that are expected to be amortized into net periodic benefit cost over the next fiscal year are: $16 million and $1 million for the U.S. defined benefit plans; $13 million and $4 million for the U.S. retiree health care plan; and $48 million and ($4) million for the non-U.S. defined benefit plans.

Information on plan assets
We report and measure the plan assets of our defined benefit pension and other postretirement plans at fair value. The tables below set forth the fair value of our plan assets as of December 31, 2011 and 2010, using the same three-level hierarchy of fair-value inputs described in Note 9.
 
 
Fair Value at
December 31, 2011
 
Level 1
 
Level 2
 
Level 3
Assets of U.S. defined benefit plan
 
 
 
 
 
 
 
 
Money market funds
 
$
23

 
$

 
$
23

 
$

U.S. Government agency and Treasury securities
 
266

 
244

 
22

 

U.S. bond funds
 
309

 

 
309

 

U.S. equity funds and option collars
 
229

 

 
229

 

International equity funds
 
52

 

 
52

 

Limited partnerships
 
35

 

 

 
35

Total
 
$
914

 
$
244

 
$
635

 
$
35

 
 
 
 
 
 
 
 
 
Assets of U.S. retiree health care plan
 
 

 
 
 
 
 
 
Money market funds
 
$
50

 
$

 
$
50

 
$

U.S. bond funds
 
175

 
175

 

 

U.S. equity funds and option collars
 
159

 
40

 
119

 

International equity funds
 
47

 

 
47

 

Total
 
$
431

 
$
215

 
$
216

 
$

 
 
 
 
 
 
 
 
 
Assets of non-U.S. defined benefit plans
 
 

 
 
 
 
 
 
Money market funds
 
$
50

 
$
41

 
$
9

 
$

Local market bond funds
 
1,129

 
209

 
920

 

International/global bond funds
 
335

 
3

 
332

 

Local market equity funds
 
133

 
13

 
120

 

International/global equity funds
 
521

 
136

 
385

 

Other investments
 
43

 

 
25

 
18

Total
 
$
2,211

 
$
402

 
$
1,791

 
$
18



 
 
Fair Value at
December 31, 2010
 
Level 1
 
Level 2
 
Level 3
Assets of U.S. defined benefit plan
 
 
 
 
 
 
 
 
Money market funds
 
$
43

 
$

 
$
43

 
$

U.S. Government agency and Treasury securities
 
220

 
196

 
24

 

U.S. bond funds
 
281

 

 
281

 

U.S. equity funds and option collars
 
195

 

 
195

 

International equity funds
 
60

 

 
60

 

Limited partnerships
 
34

 

 

 
34

Total
 
$
833

 
$
196

 
$
603

 
$
34

 
 
 
 
 
 
 
 
 
Assets of U.S. retiree health care plan
 
 

 
 

 
 

 
 

Money market funds
 
$
41

 
$

 
$
41

 
$

U.S. bond funds
 
165

 
165

 

 

U.S. equity funds and option collars
 
144

 
41

 
103

 

International equity funds
 
54

 

 
54

 

Total
 
$
404

 
$
206

 
$
198

 
$

 
 
 
 
 
 
 
 
 
Assets of non-U.S. defined benefit plans
 
 

 
 

 
 

 
 

Money market funds
 
$
19

 
$

 
$
19

 
$

Local market bond funds
 
669

 

 
669

 

International/global bond funds
 
211

 

 
211

 

Local market equity funds
 
300

 
42

 
258

 

International/global equity funds
 
555

 

 
555

 

Other investments
 
81

 

 
30

 
51

Total
 
$
1,835

 
$
42

 
$
1,742

 
$
51


The investments in our major benefit plans largely consist of low-cost, broad-market index funds to mitigate risks of concentration within market sectors. In recent years, our investment policy has shifted toward a closer matching of the interest rate sensitivity of the plan assets and liabilities. The appropriate mix of equity and bond investments is determined primarily through the use of detailed asset-liability modeling studies that look to balance the impact of changes in the discount rate against the need to provide asset growth to cover future service cost. Most of our plans around the world have added a greater proportion of fixed income securities with return characteristics that are more closely aligned with changes in the liabilities caused by discount rate volatility. For the U.S. plans, we utilize an option collar strategy to reduce the volatility of returns on investments in U.S. equity funds.

The only Level 3 assets in our worldwide benefit plans are certain private equity limited partnerships in our U.S. pension plan and diversified hedge and property funds in a non-U.S. pension plan. These investments are valued using inputs from the fund managers and internal models.

The following table summarizes the change in the fair values for Level 3 plan assets for the years ending December 31, 2011 and 2010:
 
 
Level 3 Plan Assets
 
 
U.S.
Defined
Benefit
 
Non-U.S.
Defined
Benefit
Balance, December 31, 2009
 
$
34

 
$
49

Redemptions
 

 
(4
)
Unrealized gain
 

 
6

Balance, December 31, 2010
 
34

 
51

Redemptions
 

 
(51
)
Unrealized gain
 
1

 

Assumed with National acquisition
 

 
18

Balance, December 31, 2011
 
$
35

 
$
18

 
Assumptions and investment policies
 
 
Defined Benefit
 
U.S. Retiree
Health Care
 
 
2011
 
2010
 
2011
 
2010
Weighted average assumptions used to determine benefit obligations:
 
 
 
 
 
 
 
 
U.S. discount rate
 
4.92%
 
5.58%
 
4.89%
 
5.48%
Non-U.S. discount rate
 
2.89%
 
2.79%
 

 

 
 
 
 
 
 
 
 
 
U.S. average long-term pay progression
 
3.50%
 
3.40%
 

 

Non-U.S. average long-term pay progression
 
3.18%
 
3.24%
 

 

 
 
 
 
 
 
 
 
 
Weighted average assumptions used to determine net periodic benefit cost:
 
 
 
 
 
 
 
 
U.S. discount rate
 
5.58%
 
5.61%
 
5.48%
 
5.54%
Non-U.S. discount rate
 
2.79%
 
3.23%
 

 

 
 
 
 
 
 
 
 
 
U.S. long-term rate of return on plan assets
 
6.25%
 
6.50%
 
5.50%
 
6.00%
Non-U.S. long-term rate of return on plan assets
 
4.17%
 
4.23%
 

 

 
 
 
 
 
 
 
 
 
U.S. average long-term pay progression
 
3.40%
 
3.00%
 

 

Non-U.S. average long-term pay progression
 
3.24%
 
3.06%
 

 


We utilize a variety of methods to select an appropriate discount rate depending on the depth of the corporate bond market in the country in which the benefit plan operates. In the U.S., we use a settlement approach whereby a portfolio of bonds is selected from the universe of actively traded high-quality U.S. corporate bonds. The selected portfolio is designed to provide cash flows sufficient to pay the plan’s expected benefit payments when due. The resulting discount rate reflects the rate of return of the selected portfolio of bonds. For our non-U.S. locations with a sufficient number of actively traded high-quality bonds, an analysis is performed in which the projected cash flows from the defined benefit plans are discounted against a yield curve constructed with an appropriate universe of high-quality corporate bonds available in each country. In this manner, a present value is developed. The discount rate selected is the single equivalent rate that produces the same present value. Both the settlement approach and the yield curve approach produce a discount rate that recognizes each plan’s distinct liability characteristics. For countries that lack a sufficient corporate bond market, a government bond index adjusted for an appropriate risk premium is used to establish the discount rate.

Assumptions for the expected long-term rate of return on plan assets are based on future expectations for returns for each asset class and the effect of periodic target asset allocation rebalancing. We adjust the results for the payment of reasonable expenses of the plan from plan assets. We believe our assumptions are appropriate based on the investment mix and long-term nature of the plans’ investments.

Assumptions used for the non-U.S. defined benefit plans reflect the different economic environments within the various countries.

The table below shows target allocation ranges for the plans that hold a substantial majority of the defined benefit assets.
Asset category
 
U.S. Defined
Benefit
 
U.S. Retiree
Health Care
 
Non-U.S. Defined
Benefit
Equity securities
 
35%
 
50%
 
25% - 60%
Fixed income securities and cash equivalents
 
65%
 
50%
 
40% - 75%

We intend to rebalance the plans’ investments when they are not within the target allocation ranges. Additional contributions are invested consistent with the target ranges and may be used to rebalance the portfolio. The investment allocations and individual investments are chosen with regard to the duration of the obligations of each plan. Most of the assets in the retiree health care benefit plan are invested in a series of Voluntary Employee Benefit Association (VEBA) trusts.

Weighted average asset allocations at December 31, are as follows:
 
 
U.S. Defined
Benefit
 
U.S. Retiree
Health Care
 
Non-U.S. Defined
Benefit
Asset category
 
2011
 
2010
 
2011
 
2010
 
2011
 
2010
Equity securities
 
35%
 
35%
 
48%
 
49%
 
32%
 
49%
Fixed income securities
 
63%
 
60%
 
41%
 
41%
 
66%
 
50%
Cash equivalents
 
2%
 
5%
 
11%
 
10%
 
2%
 
1%

None of the plan assets related to the defined benefit pension plans and retiree health care benefit plan are directly invested in TI common stock. As of December 31, 2011, we do not expect to return any of the plans’ assets to TI in the next 12 months.

Contributions to the plans meet or exceed all minimum funding requirements. We expect to contribute about $120 million to our retirement benefit plans in 2012.

The following table shows the benefits we expect to pay to participants from the plans in the next ten years. Almost all of the payments will be made from plan assets and not from company assets.
 
 
U.S. Defined
Benefit
 
U.S. Retiree
Health Care
 
Medicare
Subsidy
 
Non-U.S.
Defined Benefit
2012
 
$
160

 
$
35

 
$
(4
)
 
$
77

2013
 
92

 
37

 
(4
)
 
80

2014
 
91

 
39

 
(4
)
 
82

2015
 
94

 
41

 
(2
)
 
89

2016
 
95

 
43

 
(2
)
 
92

2017–2021
 
451

 
213

 
(10
)
 
525


Assumed health care cost trend rates for the U.S. retiree health care plan at December 31 are as follows:
 
 
2011
 
2010
Assumed health care cost trend rate for next year
 
9.0%
 
9.0%
Ultimate trend rate
 
5.0%
 
5.0%
Year in which ultimate trend rate is reached
 
2017
 
2016

Increasing or decreasing health care cost trend rates by one percentage point would have increased or decreased the accumulated postretirement benefit obligation for the U.S. retiree health care plan at December 31, 2011, by $28 million or $24 million and increased or decreased the service cost and interest cost components of 2011 plan expense by $1 million.
 

Deferred compensation arrangements
We have a deferred compensation plan, which allows U.S. employees whose base salary and management responsibility exceed a certain level to defer receipt of a portion of their cash compensation. Payments under this plan are made based on the participant’s distribution election and plan balance. Participants can earn a return on their deferred compensation based on notional investments in the same investment funds that are offered in our defined contribution plans.

As of December 31, 2011, our liability to participants of the deferred compensation plan was $150 million and is recorded in Deferred credits and other liabilities on our Consolidated balance sheets. This amount reflects the accumulated participant deferrals and earnings thereon as of that date. No assets are held in trust for the deferred compensation plan and so we remain liable to the participants. To serve as an economic hedge against changes in fair values of this liability, we invest in similar mutual funds that are recorded in Long-term investments. We record changes in the fair value of the liability and the related investment in SG&A (see Note 9).

In connection with the National acquisition, we assumed its deferred compensation plan. As of December 31, 2011, this consisted of $41 million of obligations and matching assets held in a Rabbi trust. No further contributions will be made into this plan.
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Debt and lines of credit
12 Months Ended
Dec. 31, 2011
Long-term Debt, Unclassified [Abstract]
Debt and lines of credit
Debt and lines of credit
Debt balances include amounts assumed related to the National acquisition measured at fair value as of the acquisition date.

Short-term borrowings
We maintain lines of credit to support commercial paper borrowings, if any, and to provide additional liquidity through bank loans. As of December 31, 2011, we had a variable-rate revolving credit facility that allows us to borrow up to $920 million through August 2012. We have a second variable-rate revolving credit facility that allows us to borrow an additional $1 billion until July 2012. These facilities carry a variable rate of interest indexed to the London Interbank Offered Rate (LIBOR).

On July 14, 2011, for general corporate purposes and to maintain cash balances at desired levels, we issued an aggregate of $1.2 billion of commercial paper, which was supported by these existing revolving credit facilities. During the fourth quarter, we repaid $200 million of those borrowings. As of December 31, 2011, the balance of commercial paper outstanding was $1.0 billion. The weighted-borrowing rate for the commercial paper outstanding as of December 31, 2011, was 0.25 percent.

Long-term debt
On May 23, 2011, we issued fixed- and floating-rate long-term debt to help fund the National acquisition. The proceeds of the offering were $3.497 billion, net of the original issuance discount. We also incurred $12 million of issuance costs that are included in Other assets and will be amortized to Interest and debt expense over the term of the debt.

In connection with this issuance, we also entered into an interest rate swap transaction related to the $1.0 billion floating-rate debt due 2013. Under this swap agreement, we will receive variable payments based on three-month LIBOR rates and pay a fixed rate through May 15, 2013. Changes in the cash flows of the interest rate swap are expected to exactly offset the changes in cash flows attributable to fluctuations in the three-month LIBOR-based interest payments. We have designated this interest rate swap as a cash flow hedge and record changes in its fair value in AOCI. The net effect of this swap is to convert the $1.0 billion floating-rate debt to a fixed-rate obligation bearing a rate of 0.922 percent.

At the acquisition date, we assumed $1.0 billion of outstanding National debt with a fair value of $1.105 billion. The excess of the fair value over the stated value will be amortized as a reduction of interest and debt expense over the term of the related debt.

The following table summarizes the total long-term debt outstanding as of December 31, 2011:
Notes due 2012 at 6.15% (assumed with National acquisition)
 
$
375

Floating-rate notes due 2013 (swapped to a 0.922% fixed rate)
 
1,000

Notes due 2013 at 0.875%
 
500

Notes due 2014 at 1.375%
 
1,000

Notes due 2015 at 3.95% (assumed with National acquisition)
 
250

Notes due 2016 at 2.375%
 
1,000

Notes due 2017 at 6.60% (assumed with National acquisition)
 
375

 
 
4,500

Add net unamortized premium (assumed with National acquisition)
 
93

Less current portion of long-term debt
 
(382
)
Total long-term debt
 
$
4,211



As of December 31, 2010, we had no outstanding debt. Interest incurred on debt and amortization of debt expense was $42 million in 2011. Interest incurred in 2010 and 2009 was not material. Cash payments for interest on long-term debt were $54 million in 2011.
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Commitments and contingencies
12 Months Ended
Dec. 31, 2011
Commitments and Contingencies Disclosure [Abstract]
Commitments and contingencies
Commitments and contingencies
Operating leases
We conduct certain operations in leased facilities and also lease a portion of our data processing and other equipment. In addition, certain long-term supply agreements to purchase industrial gases are accounted for as operating leases. Lease agreements frequently include purchase and renewal provisions and require us to pay taxes, insurance and maintenance costs. Rental and lease expense incurred was $109 million, $100 million and $114 million in 2011, 2010 and 2009, respectively.

Capitalized software licenses
We have licenses for certain internal-use electronic design automation software that we account for as capital leases. The related liabilities are apportioned between Accounts payable and Deferred credits and other liabilities on our Consolidated balance sheets, depending on the contractual timing of the payment.
 
Purchase commitments
Some of our purchase commitments entered in the ordinary course of business provide for minimum payments. At December 31, 2011, we had committed to make the following minimum payments under our non-cancellable operating leases, capitalized software licenses and purchase commitments:
 
 
Operating
Leases
 
Capitalized
Software
Licenses
 
Purchase
Commitments
2012
 
$
102

 
$
73

 
$
215

2013
 
77

 
35

 
97

2014
 
55

 
31

 
20

2015
 
48

 
12

 
4

2016
 
36

 

 
2

Thereafter
 
118

 

 
10



Indemnification guarantees
We routinely sell products with an intellectual property indemnification included in the terms of sale. Historically, we have had only minimal, infrequent losses associated with these indemnities. Consequently, we cannot reasonably estimate or accrue for any future liabilities that may result.
 
Warranty costs/product liabilities
We accrue for known product-related claims if a loss is probable and can be reasonably estimated. During the periods presented, there have been no material accruals or payments regarding product warranty or product liability. Historically, we have experienced a low rate of payments on product claims. Although we cannot predict the likelihood or amount of any future claims, we do not believe they will have a material adverse effect on our financial condition, results of operations or liquidity. Consistent with general industry practice, we enter into formal contracts with certain customers that include negotiated warranty remedies. Typically, under these agreements our warranty for semiconductor products includes: three years coverage; an obligation to repair, replace or refund; and a maximum payment obligation tied to the price paid for our products. In some cases, product claims may exceed the price of our products.

General
We are subject to various legal and administrative proceedings. Although it is not possible to predict the outcome of these matters, we believe that the results of these proceedings will not have a material adverse effect on our financial condition, results of operations or liquidity. From time to time, we also negotiate contingent consideration payment arrangements associated with certain acquisitions, which are recorded at fair value.

Discontinued operations indemnity
In connection with the 2006 sale of the former Sensors & Controls (S&C) business, we have agreed to indemnify Sensata Technologies, Inc., for specified litigation matters and certain liabilities, including environmental liabilities. In a settlement with a third party, we have agreed to indemnify that party for certain events relating to S&C products, which events we consider remote. We believe our total remaining potential exposure from both of these indemnities will not exceed $200 million. As of December 31, 2011, we believe future payments related to these indemnity obligations will not have a material effect on our financial condition, results of operations or liquidity.
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Stockholders' equity
12 Months Ended
Dec. 31, 2011
Notes to Financial Statements [Abstract]
Stockholders' equity
Stockholders’ equity
We are authorized to issue 10,000,000 shares of preferred stock. No preferred stock is currently outstanding.

Treasury shares acquired in connection with the board-authorized stock repurchase program in 2011, 2010 and 2009 were 59,466,168 shares, 93,522,896 shares and 45,544,800 shares, respectively. As of December 31, 2011, $5.7 billion of stock repurchase authorizations remain, and no expiration date has been specified.
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Supplemental financial information
12 Months Ended
Dec. 31, 2011
Notes to Financial Statements [Abstract]
Supplemental financial information
Supplemental financial information
Other income (expense) net
 
2011
 
2010
 
2009
Interest income
 
$
11

 
$
13

 
$
24

Other (a)
 
(6
)
 
24

 
2

Total
 
$
5

 
$
37

 
$
26

(a) Includes lease income of approximately $20 million per year, primarily from the purchaser of a former business. As of December 31, 2011, the aggregate amount of non-cancellable future lease payments to be received from these leases is $84 million. These leases contain renewal options. Other also includes miscellaneous non-operational items such as: interest income and expense related to non-investment items such as taxes; gains and losses from our equity method investments; realized gains and losses associated with former equity investments; gains and losses related to former businesses; gains and losses from currency exchange rate changes; and gains and losses from our derivative financial instruments, primarily forward foreign currency exchange contracts. 2011 also includes an expense associated with a settlement related to a divested business.
 
 
Depreciable Lives
 
December 31,
Property, plant and equipment at cost
 
(Years)
 
2011
 
2010
Land
 
 
$
188

 
$
92

Buildings and improvements
 
5-40
 
2,998

 
2,815

Machinery and equipment
 
3-10
 
3,947

 
4,000

Total
 
 
 
$
7,133

 
$
6,907



Authorizations for property, plant and equipment expenditures in future years were $249 million at December 31, 2011.
 
 
December 31,
Accrued expenses and other liabilities
 
2011
 
2010
Customer incentive programs and allowances
 
$
190

 
$
118

Severance and related expenses
 
140

 
19

Property and other non-income taxes
 
98

 
108

Other
 
367

 
377

Total
 
$
795

 
$
622



 
 
December 31,
Accumulated other comprehensive income (loss), net of taxes
 
2011
 
2010
Unrealized losses on available-for-sale investments
 
$
(3
)
 
$
(13
)
Postretirement benefit plans:
 
 
 
 

Net actuarial loss
 
(780
)
 
(704
)
Net prior service credit
 
9

 
16

Cash flow hedge derivative
 
(2
)
 

Total
 
$
(776
)
 
$
(701
)
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Segment and geographic area data
12 Months Ended
Dec. 31, 2011
Segment Reporting [Abstract]
Segment and geograhic area data
Segment and geographic area data
Reportable segments
Our financial reporting structure comprises three reportable segments. These reportable segments, which are established along major categories of products having unique design and development requirements, are as follows:
Analog – Analog semiconductors change real-world signals – such as sound, temperature, pressure or images – by conditioning them, amplifying them and often converting them to a stream of digital data that can be processed by other semiconductors, such as digital signal processors (DSPs). Analog semiconductors are also used to manage power distribution and consumption.  Analog includes the following major product lines: HVAL, Power, HPA and SVA.

Embedded Processing – Our Embedded Processing products include our DSPs and microcontrollers. DSPs perform mathematical computations almost instantaneously to process or improve digital data. Microcontrollers are designed to control a set of specific tasks for electronic equipment. We make and sell catalog Embedded Processing products used in many different applications and custom Embedded Processing products used in specific applications, such as communications infrastructure equipment and automotive.
Wireless – Growth in the wireless market is being driven by the demand for smartphones, tablet computers and other emerging portable devices. Many of today’s smartphones and tablets use an applications processor to run the device’s software operating system and enable expanded functionality. Many wireless devices also use other semiconductors to enable wireless connectivity using technologies such as Bluetooth®, WiFi networks, GPS, and Near Field Communications. Our OMAP applications processors and connectivity products enable us to take advantage of the increasing demand for more powerful and more functional mobile devices. We design, make and sell products to satisfy each of these requirements.Wireless products are typically sold in high volumes. Our Wireless portfolio includes both catalog products and custom products. Wireless also includes baseband products, which allow a cell phone to connect to the cellular network. We are no longer investing in the development of baseband products, and almost all of our current baseband products are sold to a single customer.

Other
In addition to our reportable segments, we also have Other. Other includes other operating segments that neither meet the quantitative thresholds for individually reportable segments nor are they aggregated with other operating segments. These operating segments primarily include our smaller semiconductor product lines such as DLP® products (primarily used in projectors to create high-definition images), custom semiconductors known as ASICs, and our handheld graphing and scientific calculators.

Other also includes royalties received for our patented technology that we license to other electronics companies and revenue from transitional supply agreements that we may enter into in connection with acquisitions and divestitures. Other may also include certain unallocated income and expenses such as gains and losses on sales of assets; sales tax refunds; and certain litigation costs, settlements or reserves. Except for these few unallocated items, we allocate all of our expenses associated with corporate activities to our operating segments based on specific methodologies, such as percentage of operating expenses or headcount.  

Acquisition charges related to National are also recorded in Other in 2011, as detailed in Note 2. The expenses associated with the recognition of fair-value write-up of both inventory and property, plant and equipment are recorded in Other as well. Inventory-related expense was classified in COR as the inventory was sold. The property, plant and equipment-related expense is primarily recognized in COR.

Losses associated with the earthquake in Japan and Restructuring charges related to the 2011 announced actions in Hiji, Japan, and Houston, Texas, are also included in Other. See Notes 3 and 4 for additional information.

With the exception of goodwill, we do not identify or allocate assets by operating segment, nor does the chief operating decision maker evaluate operating segments using discrete asset information. There was no significant intersegment revenue. The accounting policies of the segments are the same as those described in the summary of significant accounting policies.
Segment information
 
 
Analog
 
Embedded
Processing
 
Wireless
 
Other
 
Total
Revenue
 
 
 
 
 
 
 
 
 
 
2011
 
$
6,375

 
$
2,110

 
$
2,518

 
$
2,732

 
$
13,735

2010
 
5,979

 
2,073

 
2,978

 
2,936

 
13,966

2009
 
4,202

 
1,471

 
2,626

 
2,128

 
10,427

Operating profit
 
 

 
 

 
 

 
 

 
 

2011
 
$
1,693

 
$
368

 
$
412

 
$
519

 
$
2,992

2010
 
1,876

 
491

 
683

 
1,464

 
4,514

2009
 
770

 
194

 
315

 
712

 
1,991



Geographic area information
The following geographic area data include revenue, based on product shipment destination and royalty payor location, and property, plant and equipment, based on physical location:
 
 
U.S.
 
Asia
 
Europe
 
Japan
 
Rest of
World
 
Total
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
2011
 
$
1,468

 
$
8,619

 
$
1,822

 
$
1,462

 
$
364

 
$
13,735

2010
 
1,539

 
8,903

 
1,760

 
1,366

 
398

 
13,966

2009
 
1,140

 
6,575

 
1,408

 
976

 
328

 
10,427


Property, plant and equipment, net
 
 
 
 
 
 
 
 
 
 
 
 
2011
 
$
2,159

 
$
1,739

 
$
276

 
$
228

 
$
26

 
$
4,428

2010
 
1,694

 
1,575

 
139

 
249

 
23

 
3,680

2009
 
1,727

 
1,013

 
161

 
244

 
13

 
3,158



Major customer
Sales to the Nokia group of companies, including sales to indirect contract manufacturers, accounted for 13 percent, 19 percent and 24 percent of our 2011, 2010 and 2009 revenue, respectively. Revenue from sales to Nokia is reflected primarily in our Wireless segment.
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Description of business and significant accounting policies and practices (Policies)
12 Months Ended
Dec. 31, 2011
Description of business and significant accounting policies and practices [Abstract]
Basis of presentation
Basis of presentation
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP). The basis of these financial statements is comparable for all periods presented herein.

The consolidated financial statements include the accounts of all subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. All dollar amounts in the financial statements and tables in these notes, except per-share amounts, are stated in millions of U.S. dollars unless otherwise indicated. We have reclassified certain amounts in the prior periods’ financial statements to conform to the 2011 presentation. The preparation of financial statements requires the use of estimates from which final results may vary.
Revenue recognition
Revenue recognition
We recognize revenue from direct sales of our products to our customers, including shipping fees, when title passes to the customer, which usually occurs upon shipment or delivery, depending upon the terms of the sales order; when persuasive evidence of an arrangement exists; when sales amounts are fixed or determinable; and when collectability is reasonably assured. Revenue from sales of our products that are subject to inventory consignment agreements is recognized when the customer pulls product from consignment inventory that we store at designated locations. Estimates of product returns for quality reasons and of price allowances (based on historical experience, product shipment analysis and customer contractual arrangements) are recorded when revenue is recognized. Allowances include volume-based incentives and special pricing arrangements. In addition, we record allowances for accounts receivable that we estimate may not be collected.

We recognize revenue from direct sales of our products to our distributors, net of allowances, consistent with the principles discussed above. Title transfers to the distributors at delivery or when the products are pulled from consignment inventory, and payment is due on our standard commercial terms; payment terms are not contingent upon resale of the products. We also grant discounts to some distributors for prompt payments. We calculate credit allowances based on historical data, current economic conditions and contractual terms. For instance, we sell to distributors at standard published prices, but we may grant them price adjustment credits in response to individual competitive opportunities they may have. To estimate allowances, we use statistical percentages of revenue, determined quarterly, based upon recent historical adjustment trends.

We also provide distributors an allowance to scrap certain slow-moving or obsolete products in their inventory, estimated as a negotiated fixed percentage of each distributor’s purchases from us. In addition, if we publish a new price for a product that is lower than that paid by distributors for the same product still remaining in each distributor’s on-hand inventory, we may credit them for the difference between those prices. The allowance for this type of credit is based on the identified product price difference applied to our estimate of each distributor’s on-hand inventory of that product. We believe we can reasonably and reliably estimate allowances for credits to distributors in a timely manner.
We determine the amount and timing of royalty revenue based on our contractual agreements with intellectual property licensees. We recognize royalty revenue when earned under the terms of the agreements and when we consider realization of payment to be probable. Where royalties are based on a percentage of licensee sales of royalty-bearing products, we recognize royalty revenue by applying this percentage to our estimate of applicable licensee sales. We base this estimate on historical experience and an analysis of each licensee’s sales results. Where royalties are based on fixed payment amounts, we recognize royalty revenue ratably over the term of the royalty agreement. Where warranted, revenue from licensees may be recognized on a cash basis.

We include shipping and handling costs in COR.

Advertising costs
Advertising costs
We expense advertising and other promotional costs as incurred.
Income taxes
Income taxes
We account for income taxes using an asset and liability approach. We record the amount of taxes payable or refundable for the current year and the deferred tax assets and liabilities for future tax consequences of events that have been recognized in the financial statements or tax returns. We record a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Other assessed taxes
Other assessed taxes
Some transactions require us to collect taxes such as sales, value-added and excise taxes from our customers. These transactions are presented in our statements of income on a net (excluded from revenue) basis.

Earnings per share
Earnings per share (EPS)
Unvested awards of share-based payments with rights to receive dividends or dividend equivalents, such as our restricted stock units (RSUs), are considered to be participating securities and the two-class method is used for purposes of calculating EPS. Under the two-class method, a portion of net income is allocated to these participating securities and, therefore, is excluded from the calculation of EPS allocated to common stock, as shown in the table below. 

Investments
Investments
We present investments on our balance sheets as cash equivalents, short-term investments or long-term investments. Specific details are as follows:

Cash equivalents and short-term investments: We consider investments in debt securities with maturities of three months or less from the date of our investment to be cash equivalents. We consider investments in debt securities with maturities beyond three months from the date of our investment as being available for use in current operations and include these investments in short-term investments. The primary objectives of our cash equivalent and short-term investment activities are to preserve capital and maintain liquidity while generating appropriate returns.
Long-term investments: Long-term investments consist of mutual funds, auction-rate securities, venture capital funds and non-marketable equity securities.
Classification of investments: Depending on our reasons for holding the investment and our ownership percentage, we classify investments in securities as available for sale, trading, equity-method or cost-method investments, which are more fully described in Note 9. We determine cost or amortized cost, as appropriate, on a specific identification basis.

We classify our investments as available for sale, trading, equity method or cost method. Most of our investments are classified as available for sale.

    Available-for-sale and trading securities are stated at fair value, which is generally based on market prices, broker quotes or, when necessary, financial models (see fair-value discussion below). Unrealized gains and losses on available-for-sale securities are recorded as an increase or decrease, net of taxes, in AOCI on our Consolidated balance sheets. We record other-than-temporary losses (impairments) on available-for-sale securities in OI&E in our Consolidated statements of income.

We classify certain mutual funds as trading securities. These mutual funds hold a variety of debt and equity investments intended to generate returns that offset changes in certain deferred compensation liabilities. We record changes in the fair value of these mutual funds and the related deferred compensation liabilities in SG&A. Changes in the fair value of debt securities classified as trading securities are recorded in OI&E.

Our other investments are not measured at fair value but are accounted for using either the equity method or cost method. These investments consist of interests in venture capital funds and other non-marketable equity securities. Gains and losses from equity method investments are reflected in OI&E based on our ownership share of the investee’s financial results. Gains and losses on cost method investments are recorded in OI&E when realized or when an impairment of the investment’s value is warranted based on our assessment of the recoverability of each investment.
Inventories
Inventories
Inventories are stated at the lower of cost or estimated net realizable value. Cost is generally computed on a currently adjusted standard cost basis, which approximates cost on a first-in first-out basis. Standard cost is based on the normal utilization of installed factory capacity. Cost associated with underutilization of capacity is expensed as incurred. Inventory held at consignment locations is included in our finished goods inventory. Consigned inventory was $129 million and $130 million as of December 31, 2011 and 2010, respectively.

We review inventory quarterly for salability and obsolescence. A specific allowance is provided for inventory considered unlikely to be sold. Remaining inventory includes a salability and obsolescence allowance based on an analysis of historical disposal activity. We write off inventory in the period in which disposal occurs.

Property, plant and equipment; acquisition-related intangibles and other capitalized costs
Property, plant and equipment; acquisition-related intangibles and other capitalized costs
Property, plant and equipment are stated at cost and depreciated over their estimated useful lives using the straight-line method. Our cost basis includes certain assets acquired in business combinations that were initially recorded at fair value as of the date of acquisition. Leasehold improvements are amortized using the straight-line method over the shorter of the remaining lease term or the estimated useful lives of the improvements. We amortize acquisition-related intangibles on a straight-line basis over the estimated economic life of the assets. Capitalized software licenses generally are amortized on a straight-line basis over the term of the license. Fully depreciated or amortized assets are written off against accumulated depreciation or amortization.
Impairments of long-lived assets
Impairments of long-lived assets
We regularly review whether facts or circumstances exist that indicate the carrying values of property, plant and equipment or other long-lived assets, including intangible assets, are impaired. We assess the recoverability of assets by comparing the projected undiscounted net cash flows associated with those assets to their respective carrying amounts. Any impairment charge is based on the excess of the carrying amount over the fair value of those assets. Fair value is determined by available market valuations, if applicable, or by discounted cash flows.
Goodwill and indefinite-lived intangibles
Goodwill and indefinite-lived intangibles
Goodwill is not amortized but is reviewed for impairment annually or more frequently if certain impairment indicators arise. We complete our annual goodwill impairment tests as of October 1 for our reporting units. The test compares the fair value for each reporting unit to its associated carrying value including goodwill. We have had no impairment of goodwill for 2011 or 2010.
Foreign currency
Foreign currency
The functional currency for our non-U.S. subsidiaries is the U.S. dollar. Accounts recorded in currencies other than the U.S. dollar are remeasured into the functional currency. Current assets (except inventories), deferred income taxes, other assets, current liabilities and long-term liabilities are remeasured at exchange rates in effect at the end of each reporting period. Property, plant and equipment with associated depreciation and inventories are remeasured at historic exchange rates. Revenue and expense accounts other than depreciation for each month are remeasured at the appropriate daily rate of exchange. Currency exchange gains and losses from remeasurement are credited or charged to OI&E.

Derivatives and hedging
Derivatives and hedging
In connection with the issuance of variable-rate long-term debt in May 2011, as more fully described in Note 13, we entered into an interest rate swap designated as a hedge of the variability of cash flows related to interest payments. Gains and losses from changes in the fair value of the interest rate swap are credited or charged to Accumulated other comprehensive income (loss), net of taxes (AOCI).

We also use derivative financial instruments to manage exposure to foreign exchange risk. These instruments are primarily forward foreign currency exchange contracts that are used as economic hedges to reduce the earnings impact exchange rate fluctuations may have on our non-U.S. dollar net balance sheet exposures or for specified non-U.S. dollar forecasted transactions. Gains and losses from changes in the fair value of these forward foreign currency exchange contracts are credited or charged to OI&E. We do not apply hedge accounting to our foreign currency derivative instruments.

We do not use derivatives for speculative or trading purposes.

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Restructuring charges (Policies)
12 Months Ended
Dec. 31, 2011
Restructuring and Related Activities [Abstract]
Restructuring policy
Restructuring charges may consist of voluntary or involuntary severance-related charges, asset-related charges and other costs to exit activities. We recognize voluntary termination benefits when the employee accepts the offered benefit arrangement. We recognize involuntary severance-related charges depending on whether the termination benefits are provided under an ongoing benefit arrangement or under a one-time benefit arrangement. If the former, we recognize the charges once they are probable and the amounts are estimable. If the latter, we recognize the charges once the benefits have been communicated to employees.

Restructuring activities associated with assets would be recorded as an adjustment to the basis of the asset, not as a liability. When we commit to a plan to abandon a long-lived asset before the end of its previously estimated useful life, we accelerate the recognition of depreciation to reflect the use of the asset over its shortened useful life. When an asset is held to be sold, we write down the carrying value to its net realizable value and cease depreciation.

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Stock-based compensation (Policies)
12 Months Ended
Dec. 31, 2011
Share-based Compensation [Abstract]
Share-based compensation policy
We determine expected volatility on all options granted after July 1, 2005, using available implied volatility rates. We believe that market-based measures of implied volatility are currently the best available indicators of the expected volatility used in these estimates.

We determine expected lives of options based on the historical option exercise experience of our optionees using a rolling ten-year average. We believe the historical experience method is the best estimate of future exercise patterns currently available.

Risk-free interest rates are determined using the implied yield currently available for zero-coupon U.S. government issues with a remaining term equal to the expected life of the options.

Expected dividend yields are based on the approved annual dividend rate in effect and the current market price of our common stock at the time of grant. No assumption for a future dividend rate change is included unless there is an approved plan to change the dividend in the near term.

The fair value per share of RSUs that we grant is determined based on the closing price of our common stock on the date of grant.

Our employee stock purchase plan is a discount-purchase plan and consequently the Black-Scholes option-pricing model is not used to determine the fair value per share of these awards. The fair value per share under this plan equals the amount of the discount.
We issue awards of non-qualified stock options generally with graded vesting provisions (e.g., 25 percent per year for four years). We recognize the related compensation cost on a straight-line basis over the minimum service period required for vesting of the award. For awards to employees who are retirement eligible or nearing retirement eligibility, we recognize compensation cost on a straight-line basis over the longer of the service period required to be performed by the employee in order to earn the award, or a six-month period.

Our RSUs generally vest four years after the date of grant. We recognize the related compensation costs on a straight-line basis over the vesting period.
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Valuation of debt and equity investments and certain liabilities (Policies)
12 Months Ended
Dec. 31, 2011
Valuation of debt and equity investments and certain liabilities [Abstract]
Investment policy
Investments
We present investments on our balance sheets as cash equivalents, short-term investments or long-term investments. Specific details are as follows:

Cash equivalents and short-term investments: We consider investments in debt securities with maturities of three months or less from the date of our investment to be cash equivalents. We consider investments in debt securities with maturities beyond three months from the date of our investment as being available for use in current operations and include these investments in short-term investments. The primary objectives of our cash equivalent and short-term investment activities are to preserve capital and maintain liquidity while generating appropriate returns.
Long-term investments: Long-term investments consist of mutual funds, auction-rate securities, venture capital funds and non-marketable equity securities.
Classification of investments: Depending on our reasons for holding the investment and our ownership percentage, we classify investments in securities as available for sale, trading, equity-method or cost-method investments, which are more fully described in Note 9. We determine cost or amortized cost, as appropriate, on a specific identification basis.

We classify our investments as available for sale, trading, equity method or cost method. Most of our investments are classified as available for sale.

    Available-for-sale and trading securities are stated at fair value, which is generally based on market prices, broker quotes or, when necessary, financial models (see fair-value discussion below). Unrealized gains and losses on available-for-sale securities are recorded as an increase or decrease, net of taxes, in AOCI on our Consolidated balance sheets. We record other-than-temporary losses (impairments) on available-for-sale securities in OI&E in our Consolidated statements of income.

We classify certain mutual funds as trading securities. These mutual funds hold a variety of debt and equity investments intended to generate returns that offset changes in certain deferred compensation liabilities. We record changes in the fair value of these mutual funds and the related deferred compensation liabilities in SG&A. Changes in the fair value of debt securities classified as trading securities are recorded in OI&E.

Our other investments are not measured at fair value but are accounted for using either the equity method or cost method. These investments consist of interests in venture capital funds and other non-marketable equity securities. Gains and losses from equity method investments are reflected in OI&E based on our ownership share of the investee’s financial results. Gains and losses on cost method investments are recorded in OI&E when realized or when an impairment of the investment’s value is warranted based on our assessment of the recoverability of each investment.
Fair value
Fair-value considerations
We measure and report certain financial assets and liabilities at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

The three-level hierarchy discussed below indicates the extent and level of judgment used to estimate fair-value measurements.
Level 1 –
Uses unadjusted quoted prices that are available in active markets for identical assets or liabilities as of the reporting date.
Level 2 –
Uses inputs other than Level 1 that are either directly or indirectly observable as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data. Our Level 2 assets consist of corporate obligations, some U.S. government agency securities and auction-rate securities that have been called for redemption. We utilize a third-party data service to provide Level 2 valuations, verifying these valuations for reasonableness relative to unadjusted quotes obtained from brokers or dealers based on observable prices for similar assets in active markets.
Level 3 –
Uses inputs that are unobservable, supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models that utilize management estimates of market participant assumptions.

Our auction-rate securities are primarily classified as Level 3 assets. Auction-rate securities are debt instruments with variable interest rates that historically would periodically reset through an auction process. These auctions have not functioned since 2008. There is no active secondary market for these securities, although limited observable transactions do occasionally occur. As a result, we use a discounted cash flow model to determine the estimated fair value of these investments as of each quarter end. The assumptions used in preparing the discounted cash flow model include estimates for the amount and timing of future interest and principal payments and the rate of return required by investors to own these securities in the current environment. In making these assumptions, we consider relevant factors including: the formula for each security that defines the interest rate paid to investors in the event of a failed auction; forward projections of the interest rate benchmarks specified in such formulas; the likely timing of principal repayments; the probability of full repayment considering the guarantees by the U.S. Department of Education of the underlying student loans and additional credit enhancements provided through other means; and, publicly available pricing data for student loan asset-backed securities that are not subject to auctions. Our estimate of the rate of return required by investors to own these securities also considers the reduced liquidity for auction-rate securities. To date, we have collected all interest on all of our auction-rate securities when due and expect to continue to do so in the future.
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Commitments and contingencies (Policies)
12 Months Ended
Dec. 31, 2011
Commitments and Contingencies Disclosure [Abstract]
Warranty costs and product liabilities policy
Indemnification guarantees
We routinely sell products with an intellectual property indemnification included in the terms of sale. Historically, we have had only minimal, infrequent losses associated with these indemnities. Consequently, we cannot reasonably estimate or accrue for any future liabilities that may result.
 
Warranty costs/product liabilities
We accrue for known product-related claims if a loss is probable and can be reasonably estimated. During the periods presented, there have been no material accruals or payments regarding product warranty or product liability. Historically, we have experienced a low rate of payments on product claims. Although we cannot predict the likelihood or amount of any future claims, we do not believe they will have a material adverse effect on our financial condition, results of operations or liquidity. Consistent with general industry practice, we enter into formal contracts with certain customers that include negotiated warranty remedies. Typically, under these agreements our warranty for semiconductor products includes: three years coverage; an obligation to repair, replace or refund; and a maximum payment obligation tied to the price paid for our products. In some cases, product claims may exceed the price of our products.

General
We are subject to various legal and administrative proceedings. Although it is not possible to predict the outcome of these matters, we believe that the results of these proceedings will not have a material adverse effect on our financial condition, results of operations or liquidity. From time to time, we also negotiate contingent consideration payment arrangements associated with certain acquisitions, which are recorded at fair value.
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Description of business and significant accounting policies and practices (Tables)
12 Months Ended
Dec. 31, 2011
Description of business and significant accounting policies and practices [Abstract]
Computation and reconciliation of earnings per common share
Computation and reconciliation of earnings per common share are as follows (shares in millions):
 
 
2011
 
2010
 
2009
 
 
Net Income
 
Shares
 
EPS
 
Net Income
 
Shares
 
EPS
 
Net Income
 
Shares
 
EPS
Basic EPS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
$
2,236

 
 
 
 
 
$
3,228

 
 
 
 
 
$
1,470

 
 
 
 
Less income allocated to RSUs
 
(35
)
 
 
 
 
 
(44
)
 
 
 
 
 
(14
)
 
 
 
 
Income allocated to common stock for basic EPS calculation
 
$
2,201

 
1,151

 
$
1.91

 
$
3,184

 
1,199

 
$
2.66

 
$
1,456

 
1,260

 
$
1.16

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjustment for dilutive shares:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Stock-based compensation plans
 
 

 
20

 
 

 
 

 
14

 
 

 
 

 
9

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted EPS:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Net income
 
$
2,236

 
 

 
 

 
$
3,228

 
 

 
 

 
$
1,470

 
 

 
 

Less income allocated to RSUs
 
(34
)
 
 

 
 

 
(44
)
 
 

 
 

 
(14
)
 
 

 
 

Income allocated to common stock for diluted EPS calculation
 
$
2,202

 
1,171

 
$
1.88

 
$
3,184

 
1,213

 
$
2.62

 
$
1,456

 
1,269

 
$
1.15

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National Semiconductor acquisition (Tables)
12 Months Ended
Dec. 31, 2011
Business Combinations [Abstract]
Fair value of consideration transferred
The acquisition-date fair value of the consideration transferred is as follows:
Cash payments
 
$
6,535

Fair value of vested share-based awards assumed by TI
 
22

Total consideration transferred to National shareholders
 
$
6,557

Fair value estimates of assets acquired and liabilities assumed
The final allocation of fair value by major class of the assets acquired and liabilities assumed as of the acquisition date is as follows:
 
 
At September 23, 2011
Cash and cash equivalents
 
$
1,145

Current assets
 
451

Inventory
 
225

Property, plant and equipment
 
865

Other assets
 
138

Acquired intangible assets (see details below)
 
2,956

Goodwill
 
3,528

Assumed current liabilities
 
(191
)
Assumed long-term debt
 
(1,105
)
Deferred taxes and other assumed non-current liabilities
 
(1,455
)
Total consideration transferred
 
$
6,557

Identifiable intangible assets acquired and their estimated useful lives
Identifiable intangible assets acquired and their estimated useful lives as of the acquisition date are as follows:
 
 
Asset Amount
 
Weighted Average
Useful Life (Years)
Developed technology
 
$
2,025

 
10
Customer relationships
 
810

 
8
Other
 
16

 
3
Identified intangible assets subject to amortization
 
2,851

 
 
In-process R&D
 
105

 
(a)
Total identified intangible assets
 
$
2,956

 
 
(a) In-process R&D is not amortized until the associated project has been completed. Alternatively, if the associated project is determined not to be viable, it will be expensed.
Pro forma summaries
These pro forma summaries are presented for informational purposes only and are not necessarily indicative of what the actual results of operations would have been had the acquisition taken place as of that date, nor are they indicative of future consolidated results of operations.
 
 
For Years Ended
December 31,
 
 
2011
 
2010
 
 
(unaudited)
Revenue
 
$
14,805

 
$
15,529

Net income
 
2,438

 
3,218

Earnings per common share – diluted
 
2.05

 
2.61

Acquisition-related charges
These total acquisition-related charges are as follows:
 
 
For Year Ended December 31, 2011
Inventory related
 
$
96

Property, plant and equipment related
 
15

As recorded in COR
 
111

Amortization of intangible assets
 
87

Severance and other benefits:
 
 
Change of control
 
41

Announced employment reductions
 
29

Stock-based compensation
 
50

Transaction costs
 
48

Retention bonuses
 
46

Other
 
14

As recorded in Acquisition charges/divestiture (gain)
 
315

Total acquisition-related charges
 
$
426

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Restructuring charges (Tables)
12 Months Ended
Dec. 31, 2011
Restructuring and Related Activities [Abstract]
Changes in accrued restructuring balances

The table below reflects the changes in accrued restructuring balances associated with these actions:

 
 
2011 Actions
 
Previous Actions
 
 
 
 
Severance
and Benefits
 
Other
Charges
 
Severance
and Benefits
 
Other
Charges
 
Total
Accrual at December 31, 2009
 
$

 
$

 
$
84

 
$
10

 
$
94

Restructuring charges
 

 

 
33

 

 
33

Non-cash items (a)
 

 

 
(33
)
 

 
(33
)
Payments
 

 

 
(62
)
 
(2
)
 
(64
)
Remaining accrual at December 31, 2010
 

 

 
22

 
8

 
30

 
 
 
 
 
 
 
 
 
 
 
Restructuring charges
 
107

 
5

 

 

 
112

Non-cash items (a)
 
(11
)
 
(5
)
 

 

 
(16
)
Payments
 

 

 
(9
)
 
(1
)
 
(10
)
Remaining accrual at December 31, 2011
 
$
96

 
$

 
$
13

 
$
7

 
$
116


(a) Reflects charges for stock-based compensation, postretirement benefit plan settlement, curtailment, special
termination benefits and accelerated depreciation.

Restructuring charges recognized by segment
Restructuring charges recognized by segment from the actions described above are as follows:
 
 
2011
 
2010
 
2009
Analog
 
$

 
$
13

 
$
84

Embedded Processing
 

 
6

 
43

Wireless
 

 
10

 
62

Other
 
112

 
4

 
23

Total
 
$
112

 
$
33

 
$
212

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Stock-based compensation (Tables)
12 Months Ended
Dec. 31, 2011
Share-based Compensation [Abstract]
Stock option, restricted stock unit and employee stock purchase plan transactions
Shares available for future grant and reserved for issuance are summarized below:
 
 
As of December 31, 2011
Shares
 
Long-term Incentive
and Director
Compensation Plans
 
Employee Stock
Purchase Plan
 
Total
Reserved for issuance (a)
 
224,383,737

 
27,967,317

 
252,351,054

Shares to be issued upon exercise of outstanding options and RSUs
 
(136,755,907
)
 
(580,095
)
 
(137,336,002
)
Available for future grants
 
87,627,830

 
27,387,222

 
115,015,052

Total stock-based compensation expense recognized was as follows:

 
 
2011
 
2010
 
2009
Stock-based compensation expense recognized in:
 
 
 
 
 
 
Cost of revenue (COR)
 
$
40

 
$
36

 
$
35

Research and development (R&D)
 
58

 
53

 
54

Selling, general and administrative (SG&A)
 
121

 
101

 
97

Acquisition charges
 
50

 

 

Total
 
$
269

 
$
190

 
$
186

Employee stock purchase plan transactions during 2011 were as follows:
 
 
Employee Stock
Purchase Plan
(Shares)
 
Exercise Price
Outstanding grants, December 31, 2010
 
487,871

 
$
27.83

Granted
 
2,200,718

 
26.04

Exercised
 
(2,108,494
)
 
26.66

Outstanding grants, December 31, 2011
 
580,095

 
$
25.29

Summarized information as of December 31, 2011, about outstanding stock options that are vested and expected to vest, as well as stock options that are currently exercisable, is as follows:

 
 
Outstanding Stock Options (Fully
Vested and Expected to Vest) (a)
 
Options
Exercisable
Number of outstanding (shares)
 
112,230,358

 
82,234,319

Weighted average remaining contractual life (in years)
 
4.5

 
3.2

Weighted average exercise price per share
 
$
26.03

 
$
25.97

Intrinsic value (millions of dollars)
 
$
539

 
$
370

(a) Includes effects of expected forfeitures of approximately 1 million shares. Excluding the effects of expected forfeitures, the aggregate intrinsic value of stock options outstanding was $543 million.
We estimate the fair values for non-qualified stock options under long-term incentive and director compensation plans using the Black-Scholes option-pricing model with the following weighted average assumptions (these assumptions exclude options assumed in connection with the National acquisition):
 
 
2011
 
2010
 
2009
Weighted average grant date fair value, per share
 
$
10.37

 
$
6.61

 
$
5.43

Weighted average assumptions used:
 
 
 
 

 
 

Expected volatility
 
30
%
 
32
%
 
48
%
Expected lives (in years)
 
6.9

 
6.4

 
5.9  

Risk-free interest rates
 
2.61
%
 
2.83
%
 
2.63
%
Expected dividend yields
 
1.51
%
 
2.08
%
 
2.94
%
Stock option and RSU transactions under our long-term incentive and director compensation plans during 2011, including stock options and RSUs assumed in connection with the National acquisition, were as follows:
 
 
Stock Options
 
RSUs
 
 
Shares
 
Weighted Average
Exercise Price
per Share
 
Shares
 
Weighted Average
Grant-Date Fair
Value per Share
Outstanding grants, December 31, 2010
 
150,135,013

 
$
27.70

 
18,567,365

 
$
23.06

Granted
 
10,310,816

 
34.55

 
5,879,409

 
33.20

Assumed in National acquisition
 
1,316,283

 
15.75

 
4,884,774

 
27.22

Vested RSUs
 

 

 
(5,359,066
)
 
28.96

Expired and forfeited
 
(22,906,524
)
 
42.59

 
(613,636
)
 
24.43

Exercised
 
(25,582,194
)
 
24.91

 

 

Outstanding grants, December 31, 2011
 
113,273,394

 
$
25.79

 
23,358,846

 
$
25.09

Schedule of share-based compensation, Shares outstanding under stock option plans, by exercise price range
Summarized information about stock options outstanding at December 31, 2011, including options assumed in connection with the National acquisition, is as follows:
 
 
 
Stock Options Outstanding
 
Options Exercisable
Range of
Exercise
Prices
 
Number
Outstanding
(Shares)
 
Weighted Average
Remaining Contractual
Life (Years)
 
Weighted Average
Exercise Price per
Share
 
Number
Exercisable
(Shares)
 
Weighted Average
Exercise Price per
Share
$
.26 to 10.00
 
13,813

 
1.1

 
$
6.64

 
13,813

 
$
6.64

 
10.01 to 20.00
 
26,219,258

 
3.8

 
15.66

 
18,859,398

 
15.91

 
20.01 to 30.00
 
44,961,810

 
5.1

 
24.98

 
31,390,099

 
25.38

 
30.01 to 38.40
 
42,078,513

 
4.3

 
32.99

 
31,971,009

 
32.49

$
.26 to 38.40
 
113,273,394

 
4.5

 
$
25.79

 
82,234,319

 
$
25.97

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Income taxes (Tables)
12 Months Ended
Dec. 31, 2011
Income Tax Disclosure [Abstract]
Income before income taxes
Income before income taxes
 
U.S.
 
Non-U.S.
 
Total
2011
 
$
1,791

 
$
1,164

 
$
2,955

2010
 
3,769

 
782

 
4,551

2009
 
1,375

 
642

 
2,017

Provision (benefit) for income taxes
Provision (benefit) for income taxes
 
U.S. Federal
 
Non-U.S.
 
U.S. State
 
Total
2011:
 
 
 
 
 
 
 
 
Current
 
$
692

 
$
138

 
$
8

 
$
838

Deferred
 
(154
)
 
24

 
11

 
(119
)
Total
 
$
538

 
$
162

 
$
19

 
$
719

 
 
 
 
 
 
 
 
 
2010:
 
 

 
 

 
 

 
 

Current
 
$
1,401

 
$
92

 
$
18

 
$
1,511

Deferred
 
(188
)
 
(2
)
 
2

 
(188
)
Total
 
$
1,213

 
$
90

 
$
20

 
$
1,323

 
 
 
 
 
 
 
 
 
2009:
 
 

 
 

 
 

 
 

Current
 
$
318

 
$
79

 
$
4

 
$
401

Deferred
 
124

 
23

 
(1
)
 
146

Total
 
$
442

 
$
102

 
$
3

 
$
547

Principal reconciling items from income tax computed at statutory federal rate
Principal reconciling items from income tax computed at the statutory federal rate follow:
 
 
2011
 
2010
 
2009
Computed tax at statutory rate
 
$
1,034

 
$
1,593

 
$
706

Non-U.S. effective tax rates
 
(245
)
 
(184
)
 
(123
)
U.S. R&D tax credit
 
(58
)
 
(54
)
 
(28
)
U.S. tax benefit for manufacturing
 
(31
)
 
(63
)
 
(21
)
Other
 
19

 
31

 
13

Total provision for income taxes
 
$
719

 
$
1,323

 
$
547

Primary components of deferred income tax assets and liabilities
The primary components of deferred income tax assets and liabilities were as follows:

 
 
December 31,
 
 
2011
 
2010
Deferred income tax assets:
 
 
 
 
Inventories and related reserves
 
$
913

 
$
525

Postretirement benefit costs recognized in AOCI
 
431

 
404

Deferred loss and tax credit carryforwards
 
400

 
220

Stock-based compensation
 
357

 
357

Accrued expenses
 
323

 
251

Other
 
217

 
208

 
 
2,641

 
1,965

Less valuation allowance
 
(178
)
 
(3
)
 
 
2,463

 
1,962

Deferred income tax liabilities:
 
 
 
 

Acquisition-related intangibles and fair-value adjustments
 
(1,096
)
 
(21
)
Accrued retirement costs (defined benefit and retiree health care)
 
(180
)
 
(190
)
Property, plant and equipment
 
(147
)
 
(83
)
International earnings
 
(92
)
 
(26
)
Other
 
(60
)
 
(31
)
 
 
(1,575
)
 
(351
)
Net deferred income tax asset
 
$
888

 
$
1,611

Summary of income tax contingencies
The changes in the total amounts of uncertain tax positions are summarized as follows:
 
 
2011
 
2010
 
2009
Balance, January 1
 
$
103

 
$
56

 
$
148

Additions based on tax positions related to the current year
 
15

 
12

 
10

Additions from the acquisition of National
 
132

 

 

Additions for tax positions of prior years
 
3

 
50

 
6

Reductions for tax positions of prior years
 
(39
)
 
(12
)
 
(18
)
Settlements with tax authorities
 
(4
)
 
(3
)
 
(90
)
Balance, December 31
 
$
210

 
$
103

 
$
56

Interest income (expense) recognized in the year ended December 31
 
$
1

 
$
(2
)
 
$

Accrued interest payable (receivable) as of December 31
 
$
3

 
$
(5
)
 
$
(9
)
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Financial instruments and risk concentration (Tables)
12 Months Ended
Dec. 31, 2011
Risks and Uncertainties [Abstract]
Allowance for losses based on the expected collectability of accounts receivable
Details of these allowances are as follows:
Accounts receivable allowances
 
Balance at
Beginning of Year
 
Additions Charged
(Credited) to
Operating Results
 
Recoveries and
Write-offs, Net
 
Balance at
End of Year
2011
 
$
18

 
$
1

 
$

 
$
19

2010
 
23

 
(4
)
 
(1
)
 
18

2009
 
30

 
1

 
(8
)
 
23

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Valuation of debt and equity investments and certain liabilities (Tables)
12 Months Ended
Dec. 31, 2011
Valuation of debt and equity investments and certain liabilities [Abstract]
Investments and unrealized gains and losses
Details of our investments and related unrealized gains and losses included in AOCI are as follows:
 
 
December 31, 2011
 
December 31, 2010
 
 
Cash and Cash
Equivalents
 
Short-term
Investments
 
Long-term
Investments
 
Cash and Cash
Equivalents
 
Short-term
Investments
 
Long-term
Investments
Measured at fair value:
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale securities
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
 
$
55

 
$

 
$

 
$
167

 
$

 
$

Corporate obligations
 
135

 
159

 

 
44

 
649

 

U.S. Government agency and Treasury securities
 
430

 
1,691

 

 
855

 
1,081

 

Auction-rate securities
 

 

 
41

 

 
23

 
257

 
 
 
 
 
 
 
 
 
 
 
 
 
Trading securities
 
 

 
 

 
 

 
 

 
 

 
 

Auction-rate securities
 

 
93

 

 

 

 

Mutual funds
 

 

 
169

 

 

 
139

Total
 
620

 
1,943

 
210

 
1,066

 
1,753

 
396

 
 
 
 
 
 
 
 
 
 
 
 
 
Other measurement basis:
 
 

 
 

 
 

 
 

 
 

 
 

Equity-method investments
 

 

 
32

 

 

 
36

Cost-method investments
 

 

 
23

 

 

 
21

Cash on hand
 
372

 

 

 
253

 

 

Total
 
$
992

 
$
1,943

 
$
265

 
$
1,319

 
$
1,753

 
$
453

 
 
 
 
 
 
 
 
 
 
 
 
 
Amounts included in AOCI from available-for-sale securities:
 
 

 
 

 
 

 
 

 
 

 
 

Unrealized gains (pre-tax)
 
$

 
$

 
$

 
$

 
$
1

 
$

Unrealized losses (pre-tax)
 
$

 
$

 
$
5

 
$

 
$
1

 
$
22

Aggregate maturities of investments in debt securities classified as available-for-sale
The following table presents the aggregate maturities of investments in debt securities classified as available for sale at
December 31, 2011:
Due
Fair Value
One year or less
$
1,902

One to three years
568

Greater than three years (auction-rate securities)
41

Assets and liabilities accounted for at fair value
The following are our assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2011 and 2010. These tables do not include cash on hand, assets held by our postretirement plans, or assets and liabilities that are measured at historical cost or any basis other than fair value.
 
 
Fair Value
December 31, 2011
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
 
Money market funds
 
$
55

 
$
55

 
$

 
$

Corporate obligations
 
294

 

 
294

 

U.S. Government agency and Treasury securities
 
2,121

 
606

 
1,515

 

Auction-rate securities
 
134

 

 

 
134

Mutual funds
 
169

 
169

 

 

Total assets
 
$
2,773

 
$
830

 
$
1,809

 
$
134

 
 
 
 
 
 
 
 
 
Liabilities
 
 

 
 

 
 

 
 

Deferred compensation
 
$
191

 
$
191

 
$

 
$

Total liabilities
 
$
191

 
$
191

 
$

 
$

 
 
 
Fair Value
December 31, 2010
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
 
Money market funds
 
$
167

 
$
167

 
$

 
$

Corporate obligations
 
693

 

 
693

 

U.S. Government agency and Treasury securities
 
1,936

 
1,120

 
816

 

Auction-rate securities
 
280

 

 
23

 
257

Mutual funds
 
139

 
139

 

 

Total assets
 
$
3,215

 
$
1,426

 
$
1,532

 
$
257

 
 
 
 
 
 
 
 
 
Liabilities
 
 

 
 

 
 

 
 

Contingent consideration
 
$
8

 
$

 
$

 
$
8

Deferred compensation
 
159

 
159

 

 

Total liabilities
 
$
167

 
$
159

 
$

 
$
8


Reconciliation of change in fair value for level 3 assets
The following table summarizes the change in the fair values for Level 3 assets and liabilities for the years ended December 31, 2011 and 2010. The transfer of auction-rate securities into Level 2 was the result of these securities being called for redemption and all were subsequently redeemed.
 
 
Level 3
 
 
Auction-rate
Securities
 
Contingent
Consideration
Balance, December 31, 2009
 
$
458

 
$
18

Change in fair value of contingent consideration – included in operating profit
 

 
(10
)
Change in unrealized loss – included in AOCI
 
10

 

Redemptions and sales
 
(188
)
 

Transfers into Level 2
 
(23
)
 

Balance, December 31, 2010
 
257

 
8

 
 
 
 
 
Change in fair value of contingent consideration – included in operating profit
 

 
(8
)
Change in unrealized loss – included in AOCI
 
(1
)
 

Redemptions and sales
 
(122
)
 

Balance, December 31, 2011
 
$
134

 
$

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Goodwill and acquisition-related intangibles (Tables)
12 Months Ended
Dec. 31, 2011
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of changes in goodwill
The following table summarizes the changes in goodwill by segment for the years ended December 31, 2011 and 2010:
 
 
Analog
 
Embedded
Processing
 
Wireless
 
Other
 
Total
Goodwill, December 31, 2009
 
$
638

 
$
172

 
$
82

 
$
34

 
$
926

Adjustments
 
(8
)
 

 
8

 
(2
)
 
(2
)
Goodwill, December 31, 2010
 
630

 
172

 
90

 
32

 
924

 
 
 
 
 
 
 
 
 
 
 
Additions from acquisitions
 
3,528

 

 

 

 
3,528

Goodwill, December 31, 2011
 
$
4,158

 
$
172

 
$
90

 
$
32

 
$
4,452

Schedule of acquisition-related intangible assets
The following table shows the components of acquisition-related intangible assets as of December 31, 2011 and 2010:
 
 
 
 
December 31, 2011
 
December 31, 2010
 
 
Amortization
Period
(Years)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Acquisition-related intangibles:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Developed technology
 
4 - 10
 
$
2,089

 
$
91

 
$
1,998

 
$
155

 
$
100

 
$
55

Customer relationships
 
5 - 8
 
822

 
34

 
788

 
26

 
18

 
8

Other intangibles
 
2 - 10
 
50

 
29

 
21

 
34

 
21

 
13

In-process R&D
 
(a)
 
93

 

 
93

 

 

 

Total
 
 
 
$
3,054

 
$
154

 
$
2,900

 
$
215

 
$
139

 
$
76

(a) In-process R&D is not amortized until the associated project has been completed. Alternatively, if the associated project is
determined not to be viable, it will be expensed.
Estimated amortization of acquisition-related finite lived intangibles for future years
The following table sets forth the estimated amortization of acquisition-related intangibles for the years ended December 31:
2012
$
342

2013
335

2014
321

2015
319

2016
318

Thereafter
1,265

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Postretirement benefit plans (Tables)
12 Months Ended
Dec. 31, 2011
Compensation and Retirement Disclosure [Abstract]
Schedule of defined benefit plans disclosures
Assumptions and investment policies
 
 
Defined Benefit
 
U.S. Retiree
Health Care
 
 
2011
 
2010
 
2011
 
2010
Weighted average assumptions used to determine benefit obligations:
 
 
 
 
 
 
 
 
U.S. discount rate
 
4.92%
 
5.58%
 
4.89%
 
5.48%
Non-U.S. discount rate
 
2.89%
 
2.79%
 

 

 
 
 
 
 
 
 
 
 
U.S. average long-term pay progression
 
3.50%
 
3.40%
 

 

Non-U.S. average long-term pay progression
 
3.18%
 
3.24%
 

 

 
 
 
 
 
 
 
 
 
Weighted average assumptions used to determine net periodic benefit cost:
 
 
 
 
 
 
 
 
U.S. discount rate
 
5.58%
 
5.61%
 
5.48%
 
5.54%
Non-U.S. discount rate
 
2.79%
 
3.23%
 

 

 
 
 
 
 
 
 
 
 
U.S. long-term rate of return on plan assets
 
6.25%
 
6.50%
 
5.50%
 
6.00%
Non-U.S. long-term rate of return on plan assets
 
4.17%
 
4.23%
 

 

 
 
 
 
 
 
 
 
 
U.S. average long-term pay progression
 
3.40%
 
3.00%
 

 

Non-U.S. average long-term pay progression
 
3.24%
 
3.06%
 

 


Weighted average asset allocations at December 31, are as follows:
 
 
U.S. Defined
Benefit
 
U.S. Retiree
Health Care
 
Non-U.S. Defined
Benefit
Asset category
 
2011
 
2010
 
2011
 
2010
 
2011
 
2010
Equity securities
 
35%
 
35%
 
48%
 
49%
 
32%
 
49%
Fixed income securities
 
63%
 
60%
 
41%
 
41%
 
66%
 
50%
Cash equivalents
 
2%
 
5%
 
11%
 
10%
 
2%
 
1%

None
Changes in the benefit obligations and plan assets for the defined benefit and retiree health care benefit plans were as follows:
 
 
U.S. Defined Benefit
 
U.S. Retiree
Health Care
 
Non-U.S.
Defined Benefit
 
 
2011
 
2010
 
2011
 
2010
 
2011
 
2010
Change in plan benefit obligation:
 
 
 
 
 
 
 
 
 
 
 
 
Benefit obligation at beginning of year
 
$
880

 
$
860

 
$
473

 
$
472

 
$
2,217

 
$
1,945

Service cost
 
22

 
20

 
4

 
4

 
41

 
37

Interest cost
 
46

 
45

 
25

 
26

 
69

 
62

Participant contributions
 

 

 
18

 
17

 
1

 
3

Benefits paid
 
(52
)
 
(6
)
 
(43
)
 
(45
)
 
(72
)
 
(70
)
Medicare subsidy
 

 

 
4

 
3

 

 

Actuarial (gain) loss
 
61

 
92

 
19

 
(4
)
 
91

 
132

Settlements
 

 
(131
)
 

 

 
(1
)
 

Curtailments
 
(2
)
 

 
4

 

 
(3
)
 

Assumed with National acquisition
 

 

 

 

 
301

 

Special termination benefits
 
4

 

 

 

 

 

Plan amendments
 

 

 
17

 

 

 
(1
)
Effects of exchange rate changes
 

 

 

 

 
104

 
109

Benefit obligation at end of year (BO)
 
$
959

 
$
880

 
$
521

 
$
473

 
$
2,748

 
$
2,217

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in plan assets:
 
 
 
 

 
 
 
 

 
 
 
 

Fair value of plan assets at beginning of year
 
$
833

 
$
859

 
$
404

 
$
374

 
$
1,835

 
$
1,672

Actual return on plan assets
 
106

 
76

 
6

 
25

 
53

 
95

Employer contributions (funding of qualified plans)
 
25

 
30

 
46

 
33

 
72

 
53

Employer contributions (payments for non-qualified plans)
 
2

 
5

 

 

 

 

Participant contributions
 

 

 
18

 
17

 
1

 
3

Assumed with National acquisition
 

 

 

 

 
235

 

Benefits paid
 
(52
)
 
(6
)
 
(43
)
 
(45
)
 
(72
)
 
(70
)
Settlements
 

 
(131
)
 

 

 
(1
)
 

Effects of exchange rate changes
 

 

 

 

 
88

 
82

Fair value of plan assets at end of year (FVPA)
 
$
914

 
$
833

 
$
431

 
$
404

 
$
2,211

 
$
1,835

Funded status (FVPA – BO) at end of year
 
$
(45
)
 
$
(47
)
 
$
(90
)
 
$
(69
)
 
$
(537
)
 
$
(382
)

Expense related to defined benefit and retiree health care benefit plans was as follows:
 
 
U.S. Defined Benefit
 
U.S. Retiree Health Care
 
Non-U.S. Defined Benefit
 
 
2011
 
2010
 
2009
 
2011
 
2010
 
2009
 
2011
 
2010
 
2009
Service cost
 
$
22

 
$
20

 
$
20

 
$
4

 
$
4

 
$
4

 
$
41

 
$
37

 
$
40

Interest cost
 
46

 
45

 
49

 
25

 
26

 
26

 
69

 
62

 
62

Expected return on plan assets
 
(45
)
 
(49
)
 
(49
)
 
(21
)
 
(23
)
 
(28
)
 
(83
)
 
(73
)
 
(69
)
Amortization of prior service cost (credit)
 
1

 
1

 
1

 
2

 
2

 
2

 
(4
)
 
(3
)
 
(3
)
Recognized net actuarial loss
 
23

 
22

 
18

 
13

 
12

 
8

 
40

 
30

 
34

Net periodic benefit cost
 
47

 
39

 
39

 
23

 
21

 
12

 
63

 
53

 
64

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Settlement charges (a)
 

 
37

 
13

 

 

 

 

 

 
15

Curtailment charges (credits)
 

 

 

 
5

 

 
2

 
2

 

 
(9
)
Special termination benefit charges
 
4

 

 
6

 

 

 

 

 

 
3

Total, including charges
 
$
51

 
$
76

 
$
58

 
$
28

 
$
21

 
$
14

 
$
65

 
$
53

 
$
73

(a) Includes restructuring and non-restructuring related settlement charges.
The following table summarizes the change in the fair values for Level 3 plan assets for the years ending December 31, 2011 and 2010:
 
 
Level 3 Plan Assets
 
 
U.S.
Defined
Benefit
 
Non-U.S.
Defined
Benefit
Balance, December 31, 2009
 
$
34

 
$
49

Redemptions
 

 
(4
)
Unrealized gain
 

 
6

Balance, December 31, 2010
 
34

 
51

Redemptions
 

 
(51
)
Unrealized gain
 
1

 

Assumed with National acquisition
 

 
18

Balance, December 31, 2011
 
$
35

 
$
18

 
Amounts recognized on the balance sheet as of December 31, 2010, were as follows:
 
 
U.S. Defined
Benefit
 
U.S. Retiree
Health Care
 
Non-U.S.
Defined Benefit
 
Total
Overfunded retirement plans
 
$
1

 
$

 
$
30

 
$
31

Accrued expenses and other liabilities
 
(3
)
 

 
(7
)
 
(10
)
Underfunded retirement plans
 
(45
)
 
(69
)
 
(405
)
 
(519
)
Funded status (FVPA – BO) at end of year
 
$
(47
)
 
$
(69
)
 
$
(382
)
 
$
(498
)

The tables below set forth the fair value of our plan assets as of December 31, 2011 and 2010, using the same three-level hierarchy of fair-value inputs described in Note 9.
 
 
Fair Value at
December 31, 2011
 
Level 1
 
Level 2
 
Level 3
Assets of U.S. defined benefit plan
 
 
 
 
 
 
 
 
Money market funds
 
$
23

 
$

 
$
23

 
$

U.S. Government agency and Treasury securities
 
266

 
244

 
22

 

U.S. bond funds
 
309

 

 
309

 

U.S. equity funds and option collars
 
229

 

 
229

 

International equity funds
 
52

 

 
52

 

Limited partnerships
 
35

 

 

 
35

Total
 
$
914

 
$
244

 
$
635

 
$
35

 
 
 
 
 
 
 
 
 
Assets of U.S. retiree health care plan
 
 

 
 
 
 
 
 
Money market funds
 
$
50

 
$

 
$
50

 
$

U.S. bond funds
 
175

 
175

 

 

U.S. equity funds and option collars
 
159

 
40

 
119

 

International equity funds
 
47

 

 
47

 

Total
 
$
431

 
$
215

 
$
216

 
$

 
 
 
 
 
 
 
 
 
Assets of non-U.S. defined benefit plans
 
 

 
 
 
 
 
 
Money market funds
 
$
50

 
$
41

 
$
9

 
$

Local market bond funds
 
1,129

 
209

 
920

 

International/global bond funds
 
335

 
3

 
332

 

Local market equity funds
 
133

 
13

 
120

 

International/global equity funds
 
521

 
136

 
385

 

Other investments
 
43

 

 
25

 
18

Total
 
$
2,211

 
$
402

 
$
1,791

 
$
18



 
 
Fair Value at
December 31, 2010
 
Level 1
 
Level 2
 
Level 3
Assets of U.S. defined benefit plan
 
 
 
 
 
 
 
 
Money market funds
 
$
43

 
$

 
$
43

 
$

U.S. Government agency and Treasury securities
 
220

 
196

 
24

 

U.S. bond funds
 
281

 

 
281

 

U.S. equity funds and option collars
 
195

 

 
195

 

International equity funds
 
60

 

 
60

 

Limited partnerships
 
34

 

 

 
34

Total
 
$
833

 
$
196

 
$
603

 
$
34

 
 
 
 
 
 
 
 
 
Assets of U.S. retiree health care plan
 
 

 
 

 
 

 
 

Money market funds
 
$
41

 
$

 
$
41

 
$

U.S. bond funds
 
165

 
165

 

 

U.S. equity funds and option collars
 
144

 
41

 
103

 

International equity funds
 
54

 

 
54

 

Total
 
$
404

 
$
206

 
$
198

 
$

 
 
 
 
 
 
 
 
 
Assets of non-U.S. defined benefit plans
 
 

 
 

 
 

 
 

Money market funds
 
$
19

 
$

 
$
19

 
$

Local market bond funds
 
669

 

 
669

 

International/global bond funds
 
211

 

 
211

 

Local market equity funds
 
300

 
42

 
258

 

International/global equity funds
 
555

 

 
555

 

Other investments
 
81

 

 
30

 
51

Total
 
$
1,835

 
$
42

 
$
1,742

 
$
51


Amounts recognized on the balance sheet as of December 31, 2011, were as follows:
 
 
U.S. Defined
Benefit
 
U.S. Retiree
Health Care
 
Non-U.S.
Defined Benefit
 
Total
Overfunded retirement plans
 
$
11

 
$

 
$
29

 
$
40

Accrued expenses and other liabilities
 
(2
)
 

 
(9
)
 
(11
)
Underfunded retirement plans
 
(54
)
 
(90
)
 
(557
)
 
(701
)
Funded status (FVPA – BO) at end of year
 
$
(45
)
 
$
(90
)
 
$
(537
)
 
$
(672
)

Assumed health care cost trend rates for the U.S. retiree health care plan at December 31 are as follows:
 
 
2011
 
2010
Assumed health care cost trend rate for next year
 
9.0%
 
9.0%
Ultimate trend rate
 
5.0%
 
5.0%
Year in which ultimate trend rate is reached
 
2017
 
2016

The table below shows target allocation ranges for the plans that hold a substantial majority of the defined benefit assets.
Asset category
 
U.S. Defined
Benefit
 
U.S. Retiree
Health Care
 
Non-U.S. Defined
Benefit
Equity securities
 
35%
 
50%
 
25% - 60%
Fixed income securities and cash equivalents
 
65%
 
50%
 
40% - 75%

The following table shows the benefits we expect to pay to participants from the plans in the next ten years. Almost all of the payments will be made from plan assets and not from company assets.
 
 
U.S. Defined
Benefit
 
U.S. Retiree
Health Care
 
Medicare
Subsidy
 
Non-U.S.
Defined Benefit
2012
 
$
160

 
$
35

 
$
(4
)
 
$
77

2013
 
92

 
37

 
(4
)
 
80

2014
 
91

 
39

 
(4
)
 
82

2015
 
94

 
41

 
(2
)
 
89

2016
 
95

 
43

 
(2
)
 
92

2017–2021
 
451

 
213

 
(10
)
 
525


The amounts recorded in AOCI for the years ended December 31, 2011 and 2010, are detailed below by plan type:
 
 
U.S. Defined Benefit
 
U.S. Retiree
Health Care
 
Non-U.S.
Defined Benefit
 
Total
 
 
Net
Actuarial
Loss
 
Prior
Service
Cost
 
Net
Actuarial
Loss
 
Prior
Service
Cost
 
Net
Actuarial
Loss
 
Prior
Service
Cost
 
Net
Actuarial
Loss
 
Prior
Service
Cost
AOCI balance, December 31, 2010 (net of tax)
 
$
157

 
$
1

 
$
126

 
$
6

 
$
421

 
$
(23
)
 
$
704

 
$
(16
)
Changes in AOCI by category in 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 

Annual adjustments
 
(3
)
 

 
34

 
17

 
158

 
(3
)
 
189

 
14

Reclassification of recognized transactions
 
(23
)
 
(1
)
 
(12
)
 
(4
)
 
(40
)
 
3

 
(75
)
 
(2
)
Less tax expense (benefit)
 
9

 

 
(8
)
 
(5
)
 
(39
)
 

 
(38
)
 
(5
)
Total change to AOCI in 2011
 
(17
)
 
(1
)
 
14

 
8

 
79

 

 
76

 
7

AOCI balance, December 31, 2011 (net of tax)
 
$
140

 
$

 
$
140

 
$
14

 
$
500

 
$
(23
)
 
$
780

 
$
(9
)

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Debt and lines of credit (Tables)
12 Months Ended
Dec. 31, 2011
Long-term Debt, Unclassified [Abstract]
Schedule of Long-term Debt Instruments
The following table summarizes the total long-term debt outstanding as of December 31, 2011:
Notes due 2012 at 6.15% (assumed with National acquisition)
 
$
375

Floating-rate notes due 2013 (swapped to a 0.922% fixed rate)
 
1,000

Notes due 2013 at 0.875%
 
500

Notes due 2014 at 1.375%
 
1,000

Notes due 2015 at 3.95% (assumed with National acquisition)
 
250

Notes due 2016 at 2.375%
 
1,000

Notes due 2017 at 6.60% (assumed with National acquisition)
 
375

 
 
4,500

Add net unamortized premium (assumed with National acquisition)
 
93

Less current portion of long-term debt
 
(382
)
Total long-term debt
 
$
4,211

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Commitments and contingencies (Tables)
12 Months Ended
Dec. 31, 2011
Commitments and Contingencies Disclosure [Abstract]
Minimum Payments Under Non Cancellable Operating Leases Capitalized Software Licenses And Purchase Commitments Disclosure Text Block
Some of our purchase commitments entered in the ordinary course of business provide for minimum payments. At December 31, 2011, we had committed to make the following minimum payments under our non-cancellable operating leases, capitalized software licenses and purchase commitments:
 
 
Operating
Leases
 
Capitalized
Software
Licenses
 
Purchase
Commitments
2012
 
$
102

 
$
73

 
$
215

2013
 
77

 
35

 
97

2014
 
55

 
31

 
20

2015
 
48

 
12

 
4

2016
 
36

 

 
2

Thereafter
 
118

 

 
10

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Supplemental financial information (Tables)
12 Months Ended
Dec. 31, 2011
Notes to Financial Statements [Abstract]
Other income (expense) net
Other income (expense) net
 
2011
 
2010
 
2009
Interest income
 
$
11

 
$
13

 
$
24

Other (a)
 
(6
)
 
24

 
2

Total
 
$
5

 
$
37

 
$
26

(a) Includes lease income of approximately $20 million per year, primarily from the purchaser of a former business. As of December 31, 2011, the aggregate amount of non-cancellable future lease payments to be received from these leases is $84 million. These leases contain renewal options. Other also includes miscellaneous non-operational items such as: interest income and expense related to non-investment items such as taxes; gains and losses from our equity method investments; realized gains and losses associated with former equity investments; gains and losses related to former businesses; gains and losses from currency exchange rate changes; and gains and losses from our derivative financial instruments, primarily forward foreign currency exchange contracts. 2011 also includes an expense associated with a settlement related to a divested business.
Property, plant and equipment at cost
 
 
Depreciable Lives
 
December 31,
Property, plant and equipment at cost
 
(Years)
 
2011
 
2010
Land
 
 
$
188

 
$
92

Buildings and improvements
 
5-40
 
2,998

 
2,815

Machinery and equipment
 
3-10
 
3,947

 
4,000

Total
 
 
 
$
7,133

 
$
6,907

Accrued expenses and other liabilities
Authorizations for property, plant and equipment expenditures in future years were $249 million at December 31, 2011.
 
 
December 31,
Accrued expenses and other liabilities
 
2011
 
2010
Customer incentive programs and allowances
 
$
190

 
$
118

Severance and related expenses
 
140

 
19

Property and other non-income taxes
 
98

 
108

Other
 
367

 
377

Total
 
$
795

 
$
622

Accumulated other comprehensive income (loss), net of taxes
 
 
December 31,
Accumulated other comprehensive income (loss), net of taxes
 
2011
 
2010
Unrealized losses on available-for-sale investments
 
$
(3
)
 
$
(13
)
Postretirement benefit plans:
 
 
 
 

Net actuarial loss
 
(780
)
 
(704
)
Net prior service credit
 
9

 
16

Cash flow hedge derivative
 
(2
)
 

Total
 
$
(776
)
 
$
(701
)
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Segment and geographic area data (Tables)
12 Months Ended
Dec. 31, 2011
Segment Reporting [Abstract]
Schedule of Segment Reporting Information, by Segment
Segment information
 
 
Analog
 
Embedded
Processing
 
Wireless
 
Other
 
Total
Revenue
 
 
 
 
 
 
 
 
 
 
2011
 
$
6,375

 
$
2,110

 
$
2,518

 
$
2,732

 
$
13,735

2010
 
5,979

 
2,073

 
2,978

 
2,936

 
13,966

2009
 
4,202

 
1,471

 
2,626

 
2,128

 
10,427

Operating profit
 
 

 
 

 
 

 
 

 
 

2011
 
$
1,693

 
$
368

 
$
412

 
$
519

 
$
2,992

2010
 
1,876

 
491

 
683

 
1,464

 
4,514

2009
 
770

 
194

 
315

 
712

 
1,991

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area
Geographic area information
The following geographic area data include revenue, based on product shipment destination and royalty payor location, and property, plant and equipment, based on physical location:
 
 
U.S.
 
Asia
 
Europe
 
Japan
 
Rest of
World
 
Total
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
2011
 
$
1,468

 
$
8,619

 
$
1,822

 
$
1,462

 
$
364

 
$
13,735

2010
 
1,539

 
8,903

 
1,760

 
1,366

 
398

 
13,966

2009
 
1,140

 
6,575

 
1,408

 
976

 
328

 
10,427

Schedule Of Geographic Information Long Lived Assets Text Block
Property, plant and equipment, net
 
 
 
 
 
 
 
 
 
 
 
 
2011
 
$
2,159

 
$
1,739

 
$
276

 
$
228

 
$
26

 
$
4,428

2010
 
1,694

 
1,575

 
139

 
249

 
23

 
3,680

2009
 
1,727

 
1,013

 
161

 
244

 
13

 
3,158

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Description of business and significant accounting policies and practices (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Reportable_Segments
Dec. 31, 2010
Dec. 31, 2009
Accounting Policies [Line Items]
Number of reportable segments 3
Advertising expense $ 43 $ 44 $ 42
Consigned inventory 129 130
Maximum length to maturity of a security, from the investment date, where it is classified as cash and cash equivalent (in months) 3 months
Minimum length to maturity of a security, from the investment date, where it is classified as a short-term investment (in months) 3 months
Net income 2,236 3,228 1,470
Basic EPS:
Income allocated to common stock for basic EPS calculation 2,201 3,184 1,456
Weighted average number of shares outstanding, basic (in shares) 1,151 1,199 1,260
Basic EPS (in dollars per share) $ 1.91 $ 2.66 $ 1.16
Adjustment for dilutive shares:
Stock-based compensation plans (in shares) 20 14 9
Diluted EPS:
Income allocated to common stock for diluted EPS calculation 2,202 3,184 1,456
Weighted average number of shares outstanding, diluted (in shares) 1,171 1,213 1,269
Diluted EPS (in dollars per share) $ 1.88 $ 2.62 $ 1.15
Anti-dilutive shares, stock-based compensation (in shares) 41 88 135
Basic EPS [Member] | Less income allocated to RSUs [Member]
Accounting Policies [Line Items]
Net income (35) (44) (14)
Diluted EPS [Member] | Less income allocated to RSUs [Member]
Accounting Policies [Line Items]
Net income $ (34) $ (44) $ (14)
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National Semiconductor acquisition (Purchase price allocation) (Details) (USD $)
12 Months Ended 3 Months Ended 12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Sep. 23, 2011
Aug. 31, 2010
Dec. 31, 2011
National [Member]
Dec. 31, 2011
National [Member]
Dec. 31, 2011
National [Member]
Sep. 23, 2011
National [Member]
Business Acquisition, Cost of Acquired Entity, Purchase Price [Abstract]
Cash payments $ 6,535,000,000
Fair value of vested share-based awards assumed by TI 22,000,000
Total consideration transferred to National shareholders 130,000,000 6,557,000,000
Business Acquisition, Purchase Price Allocation [Abstract]
Cash and cash equivalents 1,145,000,000
Current assets 451,000,000
Inventory 225,000,000
Property, plant and equipment 865,000,000
Other assets 138,000,000
Acquired intangible assets 2,960,000,000 0 2,956,000,000 2,956,000,000 2,956,000,000 2,956,000,000
Goodwill 3,528,000,000
Assumed current liabilities (191,000,000)
Assumed long-term debt (1,105,000,000)
Deferred taxes and other assumed non-current liabilities (1,455,000,000)
Total consideration transferred 6,557,000,000
Amount of revenue of acquiree included in consolidated statement of income since acquisition 312,000,000
The amount of time restructuring charges and retention bonuses incurred after acquisition will not be reflected in the pro forma summaries, minimum (in months) 12 months
Total cash flow impact, business acquisition 5,425,000,000 199,000,000 155,000,000
Amount of goodwill deductible for tax purposes 0 0 0
Goodwill, allocation adjustment 1,000,000
Amortization of debt discount in excess of fair value 9,000,000
Principal amount of debt assumed from acquisition 1,000,000,000
Property, plant, and equipment, fair value write-up 436,000,000 436,000,000 436,000,000
Property, plant, and equipment, depreciation rate per quarter from fair value write-up $ 15,000,000
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National Semiconductor acquisition (Acquired finite-lived intangible assets) (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2011
In-process R&D [Member]
Dec. 31, 2010
In-process R&D [Member]
Dec. 31, 2011
National [Member]
Sep. 23, 2011
National [Member]
Dec. 31, 2011
National [Member]
Developed technology [Member]
years
Dec. 31, 2011
National [Member]
Customer relationships [Member]
years
Dec. 31, 2011
National [Member]
Other [Member]
years
Dec. 31, 2011
National [Member]
In-process R&D [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Identified intangible assets subject to amortization, Asset Amount $ 2,851 $ 2,025 $ 810 $ 16
Acquired intangible assets 2,960 0 93 [1] 0 [1] 2,956 2,956 105 [1]
Total identified intangible assets $ 2,960 $ 0 $ 93 [1] $ 0 [1] $ 2,956 $ 2,956 $ 105 [1]
Identified intangible assets subject to amortization, Weighted Average Useful Life (Years) 10 8 3
[1] In-process R&D is not amortized until the associated project has been completed. Alternatively, if the associated project is determined not to be viable, it will be expensed.
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National Semiconductor acquisition (Pro forma) (Details) (National [Member], USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
National [Member]
Business Acquisition [Line Items]
Revenue $ 14,805 $ 15,529
Net income $ 2,438 $ 3,218
Earnings per common share – diluted $ 2.05 $ 2.61
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National Semiconductor acquisition (Acquisition cost) (Details) (National [Member], USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
positions
Business Acquisition [Line Items]
Acquisition-related costs $ 426
Expected number of jobs to be eliminated 350
Additional restructuring and related charges 20
Minimum [Member]
Business Acquisition [Line Items]
Identified intangible assets subject to amortization, Weighted Average Useful Life (Years) 2
Maximum [Member]
Business Acquisition [Line Items]
Identified intangible assets subject to amortization, Weighted Average Useful Life (Years) 10
Inventory related [Member]
Business Acquisition [Line Items]
Acquisition-related costs 96
Property, plant and equipment related [Member]
Business Acquisition [Line Items]
Acquisition-related costs 15
As recorded in COR [Member]
Business Acquisition [Line Items]
Acquisition-related costs 111
Amortization of intangible assets [Member]
Business Acquisition [Line Items]
Acquisition-related costs 87
Severance and other benefits [Member]
Business Acquisition [Line Items]
Acquisition-related costs 70
Business acquisition, Cost recognized related to severance and other benefits costs 14
Business acquisition, Cost recognized related to severance and other benefits costs, Cost to be paid in next fiscal year 56
Change of control [Member]
Business Acquisition [Line Items]
Acquisition-related costs 41
Announced employment reductions [Member]
Business Acquisition [Line Items]
Acquisition-related costs 29
Stock-based compensation [Member]
Business Acquisition [Line Items]
Acquisition-related costs 50
Transaction costs [Member]
Business Acquisition [Line Items]
Acquisition-related costs 48
Retention bonuses [Member]
Business Acquisition [Line Items]
Acquisition-related costs 46
Other [Member]
Business Acquisition [Line Items]
Acquisition-related costs 14
As recorded in Acquisition charges/divestiture (gain) [Member]
Business Acquisition [Line Items]
Acquisition-related costs $ 315
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Losses associated with the earthquake in Japan (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
facilities
Dec. 31, 2010
Dec. 31, 2009
Semiconductor wafer fab facilities owned in Japan (in number of facilities) 3
Operating income (loss) $ 2,992 $ 4,514 $ 1,991
Revenue 13,735 13,966 10,427
Earthquake in Japan, March 11, 2011 [Member]
Semiconductor wafer fab facilities owned in Japan (in number of facilities) 2
Operating income (loss) (101)
Insurance settlement, property damage claims [Member] | Earthquake in Japan, March 11, 2011 [Member]
Operating income (loss) 23
Insurance settlement, business interruption claims [Member] | Earthquake in Japan, March 11, 2011 [Member]
Revenue $ 38
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Restructuring charges (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2009
Previous Actions [Member]
Jobs
Dec. 31, 2011
Previous Actions [Member]
Employee severance and benefits charges reserves [Member]
Dec. 31, 2010
Previous Actions [Member]
Employee severance and benefits charges reserves [Member]
Dec. 31, 2011
Previous Actions [Member]
Business restructuring impairments and other charges [Member]
Dec. 31, 2010
Previous Actions [Member]
Business restructuring impairments and other charges [Member]
Dec. 31, 2011
Semiconductor manufacturing facilities in Hiji, Japan, and Houston, Texas [Member]
facilities
Employees
Dec. 31, 2011
Semiconductor manufacturing facilities in Hiji, Japan, and Houston, Texas [Member]
facilities
Employees
Dec. 31, 2011
Semiconductor manufacturing facilities in Hiji, Japan, and Houston, Texas [Member]
Employee severance and benefits charges reserves [Member]
Dec. 31, 2010
Semiconductor manufacturing facilities in Hiji, Japan, and Houston, Texas [Member]
Employee severance and benefits charges reserves [Member]
Dec. 31, 2011
Semiconductor manufacturing facilities in Hiji, Japan, and Houston, Texas [Member]
Business restructuring impairments and other charges [Member]
Dec. 31, 2010
Semiconductor manufacturing facilities in Hiji, Japan, and Houston, Texas [Member]
Business restructuring impairments and other charges [Member]
Dec. 31, 2011
Semiconductor manufacturing facilities in Hiji, Japan, and Houston, Texas [Member]
Accelerated depreciation of facility assets [Member]
Dec. 31, 2011
Semiconductor manufacturing facilities in Hiji, Japan, and Houston, Texas [Member]
Other exit costs [Member]
Restructuring and Related Cost [Line Items]
Number of jobs eliminated (in jobs) 3,900
Number of employees employed at each facility (in employees) 500 500
Restructuring completion date (in months) 18 months
Restructuring and related activities, Number of facilities closing 2 2
Additional restructuring and related charges $ 215 $ 135 $ 30 $ 50
Percentage of revenue in current year generated from facilities that will be closed (as a percent) 4.00%
Period over which restructuring charges are expect to be incurred (in months) 21 months
Changes in Accrued Restructuring Reserve [Roll Forward]
Beginning accrual 30 94 22 84 8 10 0 0 0 0
Restructuring charges 112 33 0 33 0 0 112 107 0 5 0
Non-cash items (16) [1] (33) [1] 0 [1] (33) [1] 0 [1] 0 [1] (11) [1] 0 [1] (5) [1] 0 [1]
Payments (10) (64) (9) (62) (1) (2) 0 0 0 0
Remaining accrual 116 30 94 13 22 7 8 96 0 0 0
Restructuring and Related Cost by Segment [Abstract]
Analog 0 13 84
Embedded Processing 0 6 43
Wireless 0 10 62
Other 112 4 23
Total $ 112 $ 33 $ 212
[1] Reflects charges for stock-based compensation, postretirement benefit plan settlement, curtailment, special termination benefits and accelerated depreciation.
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Stock-based compensation (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2011
years
Dec. 31, 2010
years
Dec. 31, 2009
years
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation arrangement by share-based payment award, Fair value assumptions, Method used Black-Scholes option-pricing model
Share-based Compensation, Allocation and Classification in Financial Statements [Abstract]
Share-based compensation expense $ 269 $ 190 $ 186
Weighted average assumptions used [Abstract]
Weighted average grant date fair value, per share (in dollars per share) $ 10.37 $ 6.61 $ 5.43
Expected volatility (in hundredths) 30.00% 32.00% 48.00%
Expected lives (in years) 6.9 6.4 5.9
Risk-free interest rates (in hundredths) 2.61% 2.83% 2.63%
Expected dividend yields (in hundredths) 1.51% 2.08% 2.94%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Weighted-average price, End of period (in dollars per share) $ 25.79
Share-based compensation arrangement by share-based payment award, options, outstanding [Roll Forward]
Options outstanding, Ending balance (in shares) 113,273,394
Shares available for future grant and reserved for issuance [Abstract]
Reserved for issuance (in shares) 252,351,054 [1]
Shares to be issued upon exercise of outstanding options and RSUs (137,336,002)
Available for future grants 115,015,052
Shares credited to directors deferred compensation account 123,667
Future compensation cost not yet recognized in the statements of income 477
Future compensation costs to be recognized in 2012 192
Future compensation costs to be recognized in 2013 153
Future compensation costs to be recognized in 2014 98
Future compensation costs to be recognized in 2015 34
Effects on shares outstanding and treasury shares [Abstract]
Treasury shares issued to settle stock options exercised in period (in shares) 27,308,311 19,077,274 6,695,583
Previously unissued shares issued to settle stock options exercised in period (in shares) 390,438 342,380 93,648
Treasury shares issued to settle RSUs vesting in period (in shares) 3,822,475 1,392,790 977,728
Previously unissued shares issued to settle RSUs vesting in period (in shares) 73,852
Effect on cash flow [Abstract]
Cash received from the exercise of options 690 407 109
Related net tax impact realized from exercise of stock options 45 21 (2)
Excess tax benefits realized from exercise of stock options 31 13 1
Long-term incentive and director compensation plan [Abstract]
Long-term incentive plan RSU conversion to common stock feature Each RSU represents the right to receive one share of TI common stock on the vesting date
Stock options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Weighted-average exercise price per share, Beginning of period (in dollars per share) $ 27.7
Weighted-average exercise price per share, Granted (in dollars per share) $ 34.55
Weighted-average exercise price per share, Expired and forfeited (in dollars per share) $ 42.59
Weighted-average exercise price per share of options, Exercised (in dollars per share) $ 24.91
Weighted-average price, End of period (in dollars per share) $ 25.79
Share-based compensation arrangement by share-based payment award, Award vesting rights (in hundredths) 0.25
Share-based compensation arrangement by share-based payment award, Award vesting period 4 years
Share-based compensation arrangement by share-based payment award, Award vesting period for retirement eligible employees (in months) 6 months
Share-based compensation arrangement by share-based payment award, Look back period to determine option life 10 years
Share-based compensation arrangement by share-based payment award, options, outstanding [Roll Forward]
Options outstanding, Beginning balance (in shares) 150,135,013
Granted (in shares) 10,310,816
Expired and forfeited (in shares) (22,906,524)
Exercised (in shares) (25,582,194)
Options outstanding, Ending balance (in shares) 113,273,394
Share-based compensation arrangement by share-based payment award additional disclosure [Abstract]
Share-based compensation arrangement by share-based payment award, options exercised in period, aggregate Intrinsic value 231 140 21
Share-based compensation arrangement by share-based payment award, options, vested and expected to vest [Abstract]
Number of outstanding shares (in shares) 112,230,358 [2]
Weighted-average remaining contractual life (in years) 4.5 [2]
Weighted-average exercise price per share (in dollars per share) $ 26.03 [2]
Intrinsic value (millions of dollars) 539 [2]
Share-based compensation arrangement by share-based payment award, options, exercisable [Abstract]
Number of options exercisable 82,234,319
Weighted-average remaining contractual life (in years) 3.2
Weighted-average exercise price per share (in dollars per share) $ 25.97
Intrinsic value (millions of dollars) 370
Shares available for future grant and reserved for issuance [Abstract]
Expected forfeitures in period 1,000,000
Future compensation cost not yet recognized in the statements of income 144
Restricted stock units [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Share-based compensation arrangement by share-based payment award, Award vesting period 4 years
Share-based compensation arrangement by share-based payment award, equity instruments other than options, nonvested [Roll Forward]
Awards outstanding other than options, Beginning balance (in shares) 18,567,365
Granted (in shares) 5,879,409
Vested RSUs (in shares) (5,359,066)
Expired and forfeited (in shares) (613,636)
Awards outstanding other than options, Ending balance (in shares) 23,358,846 18,567,365
Share-based compensation arrangement by share-based payment award additional disclosure [Abstract]
Weighted-average grant date fair value per share price, Beginning of period (in dollars per share) $ 23.06
Granted (in dollars per share) $ 33.2 $ 23.47 $ 15.78
Expired and forfeited (in dollars per share) $ 24.43
Vested RSUs (in dollars per share) $ 28.96
Weighted-average grant date fair value per share price, Ending of period (in dollars per share) $ 25.09 $ 23.06
Weighted-average grant-date fair value of RSUs granted during the year (in dollars per share) $ 33.2 $ 23.47 $ 15.78
The total fair value of shares vested from RSU grants 155 51 28
Common shares authorized for issuance pursuant to long term incentive plan 1
Shares available for future grant and reserved for issuance [Abstract]
Aggregate intrinsic value of stock options outstanding, excluding effect of forfeitures 543
Future compensation cost not yet recognized in the statements of income 333
Long-term incentive and director compensation plan [Abstract]
Each RSU represents the right to receive one share of TI common stock on the vesting date, which is generally four years after the date of grant 4 years
TI employees 2005 stock purchase plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Weighted-average exercise price per share, Beginning of period (in dollars per share) $ 27.83
Weighted-average exercise price per share, Granted (in dollars per share) $ 26.04
Weighted-average exercise price per share of options, Exercised (in dollars per share) $ 26.66
Weighted-average price, End of period (in dollars per share) $ 25.29 $ 27.83
Share-based compensation arrangement by share-based payment award, options, outstanding [Roll Forward]
Options outstanding, Beginning balance (in shares) 487,871
Granted (in shares) 2,200,718
Exercised (in shares) (2,108,494)
Options outstanding, Ending balance (in shares) 580,095 487,871
Share-based compensation arrangement by share-based payment award additional disclosure [Abstract]
Weighted-average grant-date fair value of employee stock purchase plan options $ 4.59 $ 3.97 $ 3.13
Share-based compensation arrangement by share-based payment award, options exercised in period, aggregate Intrinsic value 10 9 10
Shares available for future grant and reserved for issuance [Abstract]
Reserved for issuance (in shares) 27,967,317 [1]
Shares to be issued upon exercise of outstanding options and RSUs (580,095)
Available for future grants 27,387,222
Employee stock purchase plan [Abstract]
The percent of the underlying common stock's market price participants pay for options (in hundredths) 85.00%
Option term (in months) 3 months
Long-term incentive and director compensation plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Share-based compensation arrangement by share-based payment award, Award vesting period 4 years
Shares available for future grant and reserved for issuance [Abstract]
Reserved for issuance (in shares) 224,383,737 [1]
Shares to be issued upon exercise of outstanding options and RSUs (136,755,907)
Available for future grants 87,627,830
Long-term incentive and director compensation plan [Abstract]
Long-term incentive and director compensation plans option pricing (in hundredths) 100.00%
Term of the long term incentive stock options 10
Cost of revenue (COR) [Member]
Share-based Compensation, Allocation and Classification in Financial Statements [Abstract]
Share-based compensation expense 40 36 35
Research and development (R&D) [Member]
Share-based Compensation, Allocation and Classification in Financial Statements [Abstract]
Share-based compensation expense 58 53 54
Selling, general and administrative (SG&A) [Member]
Share-based Compensation, Allocation and Classification in Financial Statements [Abstract]
Share-based compensation expense 121 101 97
Acquisition charges [Member]
Share-based Compensation, Allocation and Classification in Financial Statements [Abstract]
Share-based compensation expense 50 0 0
National [Member]
Shares available for future grant and reserved for issuance [Abstract]
Future compensation cost not yet recognized in the statements of income 68
National [Member] | Stock options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Weighted-average exercise price per share, Assumed in National aquisition (in dollars per share) $ 15.75
Share-based compensation arrangement by share-based payment award, options, outstanding [Roll Forward]
Assumued in National acquisition (in shares) 1,316,283
Shares available for future grant and reserved for issuance [Abstract]
Future compensation cost not yet recognized in the statements of income 2
National [Member] | Restricted stock units [Member]
Share-based compensation arrangement by share-based payment award, equity instruments other than options, nonvested [Roll Forward]
Assumed in National acquisition (in shares) 4,884,774
Share-based compensation arrangement by share-based payment award additional disclosure [Abstract]
Assumed in National acquisition (in dollars per share) $ 27.22
Shares available for future grant and reserved for issuance [Abstract]
Future compensation cost not yet recognized in the statements of income $ 66
[1] (a) Includes 123,667 shares credited to directors’ deferred compensation accounts that may settle in shares of TI common stock. These shares are not included as grants outstanding at December 31, 2011.
[2] Includes effects of expected forfeitures of approximately 1 million shares. Excluding the effects of expected forfeitures, the aggregate intrinsic value of stock options outstanding was $543 million.
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Stock-based compensation (National Acquisition-Related Equity Awards) (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2011
Sep. 23, 2011
Business Combinations [Abstract]
Future compensation cost not yet recognized in the statements of income $ 477
National [Member]
Business Combinations [Abstract]
Acquisition-related equity awards, Total estimated fair value 147
Acquisition-related equity awards, Pre-combination vested service provided by employees, included in the total consideration transferred 22
Acquisition-related equity awards, Post-combination stock-based compensation expense recognized as employees provide service over the remaining vesting periods 125
Future compensation cost not yet recognized in the statements of income $ 68
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Stock-based compensation (Range of Exercise Prices) (Details) (USD $)
12 Months Ended
Dec. 31, 2011
years
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Minimum price of options outstanding, End of the period (in dollars per share) $ 0.26
Maximum price of options outstanding, End of the period (in dollars per share) $ 38.4
Options outstanding, Ending balance (in shares) 113,273,394
Options outstanding, Weighted-average remaining contractual life (in years) 4.5
Weighted-average exercise price per share (in dollars per share) $ 25.79
Number exercisable, Ending Balance (in dollars per share) 82,234,319
Options exercisable, Weighted-average exercise price per share $ 25.97
Range Of Exercise Prices $.26 to 10.00
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Minimum price of options outstanding, End of the period (in dollars per share) $ 0.26
Maximum price of options outstanding, End of the period (in dollars per share) $ 10
Options outstanding, Ending balance (in shares) 13,813
Options outstanding, Weighted-average remaining contractual life (in years) 1.1
Weighted-average exercise price per share (in dollars per share) $ 6.64
Number exercisable, Ending Balance (in dollars per share) 13,813
Options exercisable, Weighted-average exercise price per share $ 6.64
Range Of Exercise Prices $10.01 to $20.00
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Minimum price of options outstanding, End of the period (in dollars per share) $ 10.01
Maximum price of options outstanding, End of the period (in dollars per share) $ 20
Options outstanding, Ending balance (in shares) 26,219,258
Options outstanding, Weighted-average remaining contractual life (in years) 3.8
Weighted-average exercise price per share (in dollars per share) $ 15.66
Number exercisable, Ending Balance (in dollars per share) 18,859,398
Options exercisable, Weighted-average exercise price per share $ 15.91
Range Of Exercise Prices $20.01 to 30.00
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Minimum price of options outstanding, End of the period (in dollars per share) $ 20.01
Maximum price of options outstanding, End of the period (in dollars per share) $ 30
Options outstanding, Ending balance (in shares) 44,961,810
Options outstanding, Weighted-average remaining contractual life (in years) 5.1
Weighted-average exercise price per share (in dollars per share) $ 24.98
Number exercisable, Ending Balance (in dollars per share) 31,390,099
Options exercisable, Weighted-average exercise price per share $ 25.38
Range Of Exercise Prices $30.01 to 38.40
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Minimum price of options outstanding, End of the period (in dollars per share) $ 30.01
Maximum price of options outstanding, End of the period (in dollars per share) $ 38.4
Options outstanding, Ending balance (in shares) 42,078,513
Options outstanding, Weighted-average remaining contractual life (in years) 4.3
Weighted-average exercise price per share (in dollars per share) $ 32.99
Number exercisable, Ending Balance (in dollars per share) 31,971,009
Options exercisable, Weighted-average exercise price per share $ 32.49
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Profit sharing plans (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Profit sharing plans [Abstract]
Minimum percentage amount of operating margin the company must attain for full calendar year for any profit sharing per individual to be paid (in hundredths) 10.00%
Maximum amount of gross compensation eligible for profit sharing deferral per individual in calendar year when minimum operating margin is attained by company (in hundredths) 2.00%
Maximum amount of gross compensation eligible for profit sharing per individual in calendar year when 35% operating margin is attained by company (in hundredths) 20.00%
Percentage of operating margin the company must attain for full calendar year for maximum amount of profit sharing per individual to be paid (in hundredths) 35.00%
Profit sharing expense per period under profit sharing plan $ 143 $ 279 $ 102
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Income taxes (Details) (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Income before income taxes [Abstract]
Income before income taxes - U.S. $ 1,791,000,000 $ 3,769,000,000 $ 1,375,000,000
Income before income taxes - Non-U.S. 1,164,000,000 782,000,000 642,000,000
Income before income taxes 2,955,000,000 4,551,000,000 2,017,000,000
Provision (benefit) for income taxes [Abstract]
U.S. Federal - Current 692,000,000 1,401,000,000 318,000,000
U.S. Federal - Deferred (154,000,000) (188,000,000) 124,000,000
Total U.S. Federal income taxes 538,000,000 1,213,000,000 442,000,000
Non-U.S. - Current 138,000,000 92,000,000 79,000,000
Non-U.S. - Deferred 24,000,000 (2,000,000) 23,000,000
Total Non-U.S. income taxes 162,000,000 90,000,000 102,000,000
U.S. State - Current 8,000,000 18,000,000 4,000,000
U.S. State - Deferred 11,000,000 2,000,000 (1,000,000)
Total U.S. State income taxes 19,000,000 20,000,000 3,000,000
Total current income tax expense (benefit) 838,000,000 1,511,000,000 401,000,000
Total deferred income tax expense (benefit) (119,000,000) (188,000,000) 146,000,000
Total income tax expense (benefit) 719,000,000 1,323,000,000 547,000,000
Principal reconciling items from income tax computed at statutory federal rate
Computed tax at statutory rate 1,034,000,000 1,593,000,000 706,000,000
Non-U.S. effective tax rates (245,000,000) (184,000,000) (123,000,000)
U.S. R&D tax credit (58,000,000) (54,000,000) (28,000,000)
U.S. tax benefit for manufacturing (31,000,000) (63,000,000) (21,000,000)
Other 19,000,000 31,000,000 13,000,000
Total provision for income taxes 719,000,000 1,323,000,000 547,000,000
Deferred income tax assets [Abstract]
Inventories and related reserves 913,000,000 525,000,000
Postretirement benefit costs recognized in AOCI 431,000,000 404,000,000
Deferred loss and tax credit carryforwards 400,000,000 220,000,000
Stock-based compensation 357,000,000 357,000,000
Accrued expenses 323,000,000 251,000,000
Other 217,000,000 208,000,000
Subtotal 2,641,000,000 1,965,000,000
Less valuation allowance (178,000,000) (3,000,000)
Total deferred income tax assets 2,463,000,000 1,962,000,000
Deferred income tax liabilities [Abstract]
Acquisition-related intangibles and fair-value adjustments (1,096,000,000) (21,000,000)
Accrued retirement costs (defined benefit and retire health care) (180,000,000) (190,000,000)
Property, plant and equipment (147,000,000) (83,000,000)
International earnings (92,000,000) (26,000,000)
Other (60,000,000) (31,000,000)
Total deferred income tax liabilities (1,575,000,000) (351,000,000)
Net deferred income tax asset 888,000,000 1,611,000,000
Deferred income tax assets based on tax jurisdiction 1,500,000,000 1,700,000,000
Deferred income tax liabilities based on tax jurisdiction 607,000,000 86,000,000
Deferred tax liability related to acquisition 881,000,000
Total deferred income tax expense (benefit) (119,000,000) (188,000,000) 146,000,000
Deferred tax asset, change in amount related to unutilized tax credits associated with acquisition of National 175,000,000
Tax loss carryforward, US and non-US 202,000,000
Tax loss carryforward, US and non-US, set to expire 124,000,000
Amount of undistributed foreign earnings 4,120,000,000
Cash payments for income taxes 902,000,000 1,470,000,000 331,000,000
Changes in total amounts of uncertain tax positions [Roll Forward]
Beginning balance 103,000,000 56,000,000 148,000,000
Additions based on tax positions related to current year 15,000,000 12,000,000 10,000,000
Additions from the acquisition of National 132,000,000 0 0
Additions for tax positions of prior years 3,000,000 50,000,000 6,000,000
Reductions for tax positions of prior years (39,000,000) (12,000,000) (18,000,000)
Settlements with tax authorities (4,000,000) (3,000,000) (90,000,000)
Interest income (expense) recognized in the year ended December 31 1,000,000 (2,000,000) 0
Accrued interest payable (receivable) as of December 31 3,000,000 (5,000,000) (9,000,000)
Ending balance 210,000,000 103,000,000 56,000,000
Unrecognized tax benefits 210,000,000 103,000,000 56,000,000
The amount of uncertain tax positions that would impact the effective tax rate if realized 233,000,000 136,000,000
Amount of deferred tax assets possibly to be realized $ 83,000,000 $ 101,000,000
Significant change in unrecognized tax benefits is reasonably possible, estimated range not possible 12
National [Member]
Changes in total amounts of uncertain tax positions [Roll Forward]
Significant change in unrecognized tax benefits is reasonably possible, estimated range not possible 12
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Financial instruments and risk concentration (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Accounts receivable allowances [Roll Forward]
Notional amount of foreign currency derivatives $ 516
Notional amount of foreign currency derivative contract to sell Japanese yen 253
Notional amount of foreign currency derivative contract to sell euros 105
Notional amount of foreign currency derivative contract to sell British pound sterling 39
Allowance for doubtful accounts, current [Member]
Accounts receivable allowances [Roll Forward]
Balance at beginning of year 18 23 30
Additions charged (credited) to operating results 1 (4) 1
Recoveries and write-offs, net 0 (1) (8)
Balance at end of year $ 19 $ 18 $ 23
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Valuation of debt and equity investments and certain liabilities (Investments at fair value) (Details) (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short-term investments $ 1,943,000,000 $ 1,753,000,000
Long-term investments 265,000,000 453,000,000
Amounts included in AOCI from available for sale securities: [Abstract]
Proceeds from sales, redemptions and maturities of short-term available-for-sale securities 3,550,000,000 2,560,000,000 2,030,000,000
Aggregate maturities of investments in money market funds and other debt securities classified as available for sale [Abstract]
One year or less 1,902,000,000
One to three years 568,000,000
Greater than three years (auction-rate securities) 41,000,000
Other than temporary declines and impairments in investments recognized in other income and expense 2,000,000 1,000,000 14,000,000
Cash and cash equivalent [Member]
Amounts included in AOCI from available for sale securities: [Abstract]
Unrealized gains (pre-tax) 0 0
Unrealized losses (pre-tax) 0 0
Short-term investments [Member]
Amounts included in AOCI from available for sale securities: [Abstract]
Unrealized gains (pre-tax) 0 1,000,000
Unrealized losses (pre-tax) 0 1,000,000
Long-term investments [Member]
Amounts included in AOCI from available for sale securities: [Abstract]
Unrealized gains (pre-tax) 0 0
Unrealized losses (pre-tax) 5,000,000 22,000,000
Measured at fair value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents 620,000,000 1,066,000,000
Short-term investments 1,943,000,000 1,753,000,000
Long-term investments 210,000,000 396,000,000
Measured at fair value [Member] | Available-for-sale [Member] | Money market funds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents 55,000,000 167,000,000
Short-term investments 0 0
Long-term investments 0 0
Measured at fair value [Member] | Available-for-sale [Member] | Corporate obligations [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents 135,000,000 44,000,000
Short-term investments 159,000,000 649,000,000
Long-term investments 0 0
Measured at fair value [Member] | Available-for-sale [Member] | U.S. Government agency and Treasury securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents 430,000,000 855,000,000
Short-term investments 1,691,000,000 1,081,000,000
Long-term investments 0 0
Measured at fair value [Member] | Available-for-sale [Member] | Auction-rate securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents 0 0
Short-term investments 0 23,000,000
Long-term investments 41,000,000 257,000,000
Measured at fair value [Member] | Trading [Member] | Auction-rate securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents 0 0
Short-term investments 93,000,000 0
Long-term investments 0 0
Measured at fair value [Member] | Trading [Member] | Mutual funds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents 0 0
Short-term investments 0 0
Long-term investments 169,000,000 139,000,000
Other measurement basis [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents 992,000,000 1,319,000,000
Short-term investments 1,943,000,000 1,753,000,000
Long-term investments 265,000,000 453,000,000
Other measurement basis [Member] | Equity-method investments [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents 0 0
Short-term investments 0 0
Long-term investments 32,000,000 36,000,000
Other measurement basis [Member] | Cost-method investments [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents 0 0
Short-term investments 0 0
Long-term investments 23,000,000 21,000,000
Other measurement basis [Member] | Cash on hand [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents 372,000,000 253,000,000
Short-term investments 0 0
Long-term investments $ 0 $ 0
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Valuation of debt and equity investments and certain liabilities (Fair value assets and liabilities measured on recurring basis) (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Fair Value, Assets Measured on Recurring Basis, Financial Statement Captions [Line Items]
Money market funds $ 55 $ 167
Corporate obligations 294 693
U.S. government agency and Treasury securities 2,121 1,936
Auction-rate securities 134 280
Mutual funds 169 139
Total assets 2,773 3,215
Contingent consideration 8
Deferred compensation 191 159
Total liabilities 191 167
Level 1 [Member]
Fair Value, Assets Measured on Recurring Basis, Financial Statement Captions [Line Items]
Money market funds 55 167
Corporate obligations 0 0
U.S. government agency and Treasury securities 606 1,120
Auction-rate securities 0 0
Mutual funds 169 139
Total assets 830 1,426
Contingent consideration 0
Deferred compensation 191 159
Total liabilities 191 159
Level 2 [Member]
Fair Value, Assets Measured on Recurring Basis, Financial Statement Captions [Line Items]
Money market funds 0 0
Corporate obligations 294 693
U.S. government agency and Treasury securities 1,515 816
Auction-rate securities 0 23
Mutual funds 0 0
Total assets 1,809 1,532
Contingent consideration 0
Deferred compensation 0 0
Total liabilities 0 0
Level 3 [Member]
Fair Value, Assets Measured on Recurring Basis, Financial Statement Captions [Line Items]
Money market funds 0 0
Corporate obligations 0 0
U.S. government agency and Treasury securities 0 0
Auction-rate securities 134 257
Mutual funds 0 0
Total assets 134 257
Contingent consideration 8
Deferred compensation 0 0
Total liabilities $ 0 $ 8
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Valuation of debt and equity investments and certain liabilities (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Auction Rate Securities Assets [Member]
Changes in fair value during the period pre tax [Abstract]
Beginning balance $ 257 $ 458
Change in fair value of contingent consideration - included in operating profit 0 0
Change in unrealized loss – included in AOCI (1) 10
Redemptions and sales (122) (188)
Transfers into Level 2 (23)
Ending balance 134 257
Contingent Consideration [Member]
Changes in fair value during the period pre tax [Abstract]
Beginning balance 8 18
Change in fair value of contingent consideration - included in operating profit (8) (10)
Change in unrealized loss – included in AOCI 0 0
Redemptions and sales 0 0
Transfers into Level 2 0
Ending balance $ 0 $ 8
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Acquisitions and divestitures other than National (Details) (USD $)
In Millions, unless otherwise specified
1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended
Nov. 30, 2010
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Oct. 31, 2010
mm
Aug. 31, 2010
mm
facilities
Oct. 31, 2010
Acquisition of semiconductor manufacturing site and 200-millimeter wafer fabrication facility [Member]
Aug. 31, 2010
Acquisition of wafer fabrication facilities and 200-millimeter equipment [Member]
Aug. 31, 2010
Acquisition of 300-millimeter production tools accounted for as a capital purchase [Member]
Dec. 31, 2009
Acquisition of luminary micro [Member]
Dec. 31, 2009
Acquisition of CICLON Semiconductor Device Corporation [Member]
Aug. 31, 2010
Minimum [Member]
mm
Aug. 31, 2010
Maximum [Member]
mm
Business Acquisition [Line Items]
Wafer fabrication facility, fully equipped and operational, millimeter 200
Cash paid in business acquisition $ 5,425 $ 199 $ 155 $ 140 $ 59 $ 51 $ 104
Portion of acquisition allocated to property, plant and equipment 158 42
Portion of acquisition allocated to inventory 5 9
Portion of acquisition allocated to other net assets and liabilities 4
Portion of acquisition allocated to expenses recorded in costs of revenues 8 8
Acquisition-related costs recorded to selling, general and administrative 2 1
Contractual agreement settlement recorded as cost of revenues 12
Cash paid in acquisition recorded as a capital purchase 58
Other consideration in business acquisition 7 7
Proceeds from divested product line 148
Recognized gain on sale of product line 144
Total consideration given for acquisition of two wafer fabrication facilities and equipment in Aizu-Wakamatsu, Japan under a court-approved plan of reorganization $ 130
Wafer fabrication facility, operational, millimeter 200
Wafer fabrication facility, non-operational, held for future capacity expansion, millimeter 200 300
Number of wafer fabrication facilities acquired in Aizu-Wakamatsu 2
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Goodwill and acquisition-related intangibles (Goodwill) (Details) (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Goodwill [Roll Forward]
Goodwill, beginning balance $ 924,000,000 $ 926,000,000
Adjustments (2,000,000)
Additions from acquisitions 3,528,000,000
Goodwill, ending balance 4,452,000,000 924,000,000
Impairment of goodwill 0 0
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract]
2012 342,000,000
2013 335,000,000
2014 321,000,000
2015 319,000,000
2016 318,000,000
Thereafter 1,265,000,000
Analog [Member]
Goodwill [Roll Forward]
Goodwill, beginning balance 630,000,000 638,000,000
Adjustments (8,000,000)
Additions from acquisitions 3,528,000,000
Goodwill, ending balance 4,158,000,000 630,000,000
Embedded Processing [Member]
Goodwill [Roll Forward]
Goodwill, beginning balance 172,000,000 172,000,000
Adjustments 0
Additions from acquisitions 0
Goodwill, ending balance 172,000,000 172,000,000
Wireless [Member]
Goodwill [Roll Forward]
Goodwill, beginning balance 90,000,000 82,000,000
Adjustments 8,000,000
Additions from acquisitions 0
Goodwill, ending balance 90,000,000 90,000,000
Other [Member]
Goodwill [Roll Forward]
Goodwill, beginning balance 32,000,000 34,000,000
Adjustments (2,000,000)
Additions from acquisitions 0
Goodwill, ending balance $ 32,000,000 $ 32,000,000
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Goodwill and acquisition-related intangibles (Other acquisition-related intangibles) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Finite-Lived Intangible Assets, Net [Abstract]
Acquisition-related intangibles, gross carrying amount $ 3,054 $ 215
Acquisition-related intangibles, accumulated amortization 154 139
Acquisition-related intangibles, net 2,900 76
Acquired Finite-lived Intangible Asset, Amount 2,960 0
Amortization of acquisition-related intangibles 111 48 48
Developed technology [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Acquisition-related intangibles, amortization period, minimum 4
Acquisition-related intangibles, amortization period, maximum 10
Acquisition-related intangibles, gross carrying amount 2,089 155
Acquisition-related intangibles, accumulated amortization 91 100
Acquisition-related intangibles, net 1,998 55
Customer relationships [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Acquisition-related intangibles, amortization period, minimum 5
Acquisition-related intangibles, amortization period, maximum 8
Acquisition-related intangibles, gross carrying amount 822 26
Acquisition-related intangibles, accumulated amortization 34 18
Acquisition-related intangibles, net 788 8
Other intangibles [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Acquisition-related intangibles, amortization period, minimum 2
Acquisition-related intangibles, amortization period, maximum 10
Acquisition-related intangibles, gross carrying amount 50 34
Acquisition-related intangibles, accumulated amortization 29 21
Acquisition-related intangibles, net 21 13
In-process R&D [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Acquired Finite-lived Intangible Asset, Amount $ 93 [1] $ 0 [1]
[1] In-process R&D is not amortized until the associated project has been completed. Alternatively, if the associated project is determined not to be viable, it will be expensed.
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Postretirement benefit plans (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Defined Benefit Plan Disclosure [Line Items]
Description of employer contributions to the U.S. retirement plans (in hundredths) Both defined contribution plans offer an employer-matching savings option that allows employees to make pre-tax contributions to various investment choices, including a TI common stock fund. Employees who elected to continue accruing a benefit in the qualified defined benefit pension plans may also participate in the defined contribution plan, where employer-matching contributions are provided for up to 2 percent of the employee’s annual eligible earnings. Employees who elected not to continue accruing a benefit in the defined benefit pension plans, and employees hired after November 1997 and through December 31, 2003, may participate in the enhanced defined contribution plan. This plan provides for a fixed employer contribution of 2 percent of the employee’s annual eligible earnings, plus an employer-matching contribution of up to 4 percent of the employee’s annual eligible earnings. Employees hired after December 31, 2003, do not receive the fixed employer contribution of 2 percent of the employee’s annual eligible earnings.
Number of company shares held by the U.S. defined contribution plans at year-end (in shares) 22 24
Value of the company shares held by the U.S. defined contribution plans at year-end $ 639 $ 792
Dividends paid on the company shares held by the U.S. defined contribution plans at year-end 13 13
Aggregate expense for the U.S. defined contribution plans 55 50 51
Defined benefit pension plan formula, highest consecutive years of compensation (in years) 5 years
Length of time certain gains and losses are considered when determining the market-related value of assets related to the United States pension and retiree health care plans (in years) 3 years
Value of the company shares held by the non-U.S. retirement plans at year-end 12 14
Liability to participants of the deferred compensation plan 150
Deferred compensation arrangement, recorded liability 41
Expected contribution to retirement benefit plans in 2012 120
Funded status at end of year [Abstract]
Funded status at end of year (672) (498)
Amounts recognized in the consolidated balance sheets [Abstract]
Overfunded retirement plans 40 31
Accrued expenses and other liabilities (11) (10)
Underfunded retirement plans (701) (519)
Funded status at end of year (672) (498)
Net actuarial loss amounts recorded in accumulated other comprehensive income [Roll Forward]
AOCI balance, net actuarial loss portion (net of tax) 704
Annual adjustment, net actuarial loss 189
Reclassification of recognized transactions, net actuarial loss (75)
Less tax (benefit) expense, net actuarial loss (38)
Total net actuarial loss change to AOCI 76
AOCI balance, net actuarial loss portion (net of tax) 780 704
Prior service cost amounts recorded in accumulated other comprehensive income [Roll Forward]
AOCI balance, prior service cost portion (net of tax) (16)
Annual adjustment, prior service cost 14
Reclassification of recognized transactions, prior service cost (2)
Less tax expense (benefit), prior service cost (5)
Total prior service cost change to AOCI 7
AOCI balance, prior service cost portion (net of tax) (9) (16)
Benefits expected to pay to participants over the next ten years [Abstract]
2012 subsidy (4)
2013 subsidy (4)
2014 subsidy (4)
2015 subsidy (2)
2016 subsidy (2)
2017 - 2021 subsidy (10)
U.S. defined benefit plan [Member]
Components of net periodic benefit cost [Abstract]
Service cost 22 20 20
Interest cost 46 45 49
Expected return on plan assets (45) (49) (49)
Amortization of prior service cost (credit) 1 1 1
Recognized net actuarial loss 23 22 18
Net periodic benefit cost 47 39 39
Settlement charges 0 [1] 37 [1] 13 [1]
Curtailment charges (credits) 0 0 0
Special termination benefit charges 4 0 6
Total, including charges 51 76 58
Change in benefit obligation [Roll Forward]
Benefit obligation at beginning of year 880 860
Service cost 22 20 20
Interest cost 46 45 49
Participant contributions 0 0
Benefits paid (52) (6)
Medicare subsidy 0 0
Actuarial (gain) loss 61 92
Settlements 0 (131)
Curtailments (2) 0
Assumed with National acquisition 0 0
Special termination benefit charges 4 0 6
Plan amendments 0 0
Effects of exchange rate changes 0 0
Benefit obligation at end of year 959 880 860
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at beginning of year 833 859
Actual return on plan assets 106 76
Employer contributions (funding of qualified plans) 25 30
Employer contributions (payments for non-qualified plans) 2 5
Participant contributions 0 0
Assumed with National acquisition 0 0
Benefits paid (52) (6)
Settlements 0 (131)
Effects of exchange rate changes 0 0
Fair value of plan assets at end of year (FVPA) 914 833 859
Funded status at end of year [Abstract]
Funded status at end of year (45) (47)
Amounts recognized in the consolidated balance sheets [Abstract]
Overfunded retirement plans 11 1
Accrued expenses and other liabilities (2) (3)
Underfunded retirement plans (54) (45)
Funded status at end of year (45) (47)
Accumulated benefit obligation 875 813
Net actuarial loss amounts recorded in accumulated other comprehensive income [Roll Forward]
AOCI balance, net actuarial loss portion (net of tax) 157
Annual adjustment, net actuarial loss (3)
Reclassification of recognized transactions, net actuarial loss (23)
Less tax (benefit) expense, net actuarial loss 9
Total net actuarial loss change to AOCI (17)
AOCI balance, net actuarial loss portion (net of tax) 140 157
Prior service cost amounts recorded in accumulated other comprehensive income [Roll Forward]
AOCI balance, prior service cost portion (net of tax) 1
Annual adjustment, prior service cost 0
Reclassification of recognized transactions, prior service cost (1)
Less tax expense (benefit), prior service cost 0
Total prior service cost change to AOCI (1)
AOCI balance, prior service cost portion (net of tax) 0 1
Estimated amounts included in accumulated other comprehensive income that are expected to be amortized into net periodic benefit cost over the next fiscal year [Abstract]
Net actuarial loss 16
Unrecognized prior service cost 1
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 914 833 859
Assumed with National acquisition 0 0
Weighted average assumptions used to determine benefit obligations [Abstract]
Discount rate (in hundredths) 4.92% 5.58%
Long-term pay progression (in hundredths) 3.50% 3.40%
Weighted average assumptions used to determine net periodic benefit costs [Abstract]
Discount rate (in hundredths) 5.58% 5.61%
Rate of return on plan assets (in hundredths) 6.25% 6.50%
Long-term pay progression (in hundredths) 3.40% 3.00%
Weighted average target allocation [Abstract]
Equity securities (in hundredths) 35.00%
Fixed income securities and cash equivalents (in hundredths) 65.00%
Weighted average asset allocations [Abstract}
Equity securities (in hundredths) 35.00% 35.00%
Fixed income securities (in hundredths) 63.00% 60.00%
Cash equivalents (in hundredths) 2.00% 5.00%
Benefits expected to pay to participants over the next ten years [Abstract]
2012 payment 160
2013 payment 92
2014 payment 91
2015 payment 94
2016 payment 95
2017 - 2021 payment 451
U.S. defined benefit plan [Member] | Level 1 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 244 196
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 244 196
U.S. defined benefit plan [Member] | Fair value, inputs, Level 2 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 635 603
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 635 603
U.S. defined benefit plan [Member] | Fair value, inputs, Level 3 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at beginning of year 34 34
Assumed with National acquisition 0
Fair value of plan assets at end of year (FVPA) 35 34
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 35 34
Redemptions 0 0
Unrealized gain 1 0
Assumed with National acquisition 0
U.S. defined benefit plan [Member] | Money market funds [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 23 43
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 23 43
U.S. defined benefit plan [Member] | Money market funds [Member] | Level 1 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
U.S. defined benefit plan [Member] | Money market funds [Member] | Fair value, inputs, Level 2 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 23 43
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 23 43
U.S. defined benefit plan [Member] | Money market funds [Member] | Fair value, inputs, Level 3 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
U.S. defined benefit plan [Member] | U.S. Government agency and Treasury securities [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 266 220
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 266 220
U.S. defined benefit plan [Member] | U.S. Government agency and Treasury securities [Member] | Level 1 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 244 196
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 244 196
U.S. defined benefit plan [Member] | U.S. Government agency and Treasury securities [Member] | Fair value, inputs, Level 2 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 22 24
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 22 24
U.S. defined benefit plan [Member] | U.S. Government agency and Treasury securities [Member] | Fair value, inputs, Level 3 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
U.S. defined benefit plan [Member] | U.S. bond funds [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 309 281
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 309 281
U.S. defined benefit plan [Member] | U.S. bond funds [Member] | Level 1 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
U.S. defined benefit plan [Member] | U.S. bond funds [Member] | Fair value, inputs, Level 2 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 309 281
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 309 281
U.S. defined benefit plan [Member] | U.S. bond funds [Member] | Fair value, inputs, Level 3 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
U.S. defined benefit plan [Member] | U.S. equity funds and option collars [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 229 195
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 229 195
U.S. defined benefit plan [Member] | U.S. equity funds and option collars [Member] | Level 1 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
U.S. defined benefit plan [Member] | U.S. equity funds and option collars [Member] | Fair value, inputs, Level 2 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 229 195
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 229 195
U.S. defined benefit plan [Member] | U.S. equity funds and option collars [Member] | Fair value, inputs, Level 3 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
U.S. defined benefit plan [Member] | International equity funds [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 52 60
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 52 60
U.S. defined benefit plan [Member] | International equity funds [Member] | Level 1 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
U.S. defined benefit plan [Member] | International equity funds [Member] | Fair value, inputs, Level 2 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 52 60
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 52 60
U.S. defined benefit plan [Member] | International equity funds [Member] | Fair value, inputs, Level 3 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
U.S. defined benefit plan [Member] | Limited partnerships [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 35 34
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 35 34
U.S. defined benefit plan [Member] | Limited partnerships [Member] | Level 1 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
U.S. defined benefit plan [Member] | Limited partnerships [Member] | Fair value, inputs, Level 2 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
U.S. defined benefit plan [Member] | Limited partnerships [Member] | Fair value, inputs, Level 3 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 35 34
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 35 34
U.S. retiree health care plan [Member]
Components of net periodic benefit cost [Abstract]
Service cost 4 4 4
Interest cost 25 26 26
Expected return on plan assets (21) (23) (28)
Amortization of prior service cost (credit) 2 2 2
Recognized net actuarial loss 13 12 8
Net periodic benefit cost 23 21 12
Settlement charges 0 [1] 0 [1] 0 [1]
Curtailment charges (credits) 5 0 2
Special termination benefit charges 0 0 0
Total, including charges 28 21 14
Change in benefit obligation [Roll Forward]
Benefit obligation at beginning of year 473 472
Service cost 4 4 4
Interest cost 25 26 26
Participant contributions 18 17
Benefits paid (43) (45)
Medicare subsidy 4 3
Actuarial (gain) loss 19 (4)
Settlements 0 0
Curtailments 4 0
Assumed with National acquisition 0 0
Special termination benefit charges 0 0 0
Plan amendments 17 0
Effects of exchange rate changes 0 0
Benefit obligation at end of year 521 473 472
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at beginning of year 404 374
Actual return on plan assets 6 25
Employer contributions (funding of qualified plans) 46 33
Employer contributions (payments for non-qualified plans) 0 0
Participant contributions 18 17
Assumed with National acquisition 0 0
Benefits paid (43) (45)
Settlements 0 0
Effects of exchange rate changes 0 0
Fair value of plan assets at end of year (FVPA) 431 404 374
Funded status at end of year [Abstract]
Funded status at end of year (90) (69)
Amounts recognized in the consolidated balance sheets [Abstract]
Overfunded retirement plans 0 0
Accrued expenses and other liabilities 0 0
Underfunded retirement plans (90) (69)
Funded status at end of year (90) (69)
Net actuarial loss amounts recorded in accumulated other comprehensive income [Roll Forward]
AOCI balance, net actuarial loss portion (net of tax) 126
Annual adjustment, net actuarial loss 34
Reclassification of recognized transactions, net actuarial loss (12)
Less tax (benefit) expense, net actuarial loss (8)
Total net actuarial loss change to AOCI 14
AOCI balance, net actuarial loss portion (net of tax) 140 126
Prior service cost amounts recorded in accumulated other comprehensive income [Roll Forward]
AOCI balance, prior service cost portion (net of tax) 6
Annual adjustment, prior service cost 17
Reclassification of recognized transactions, prior service cost (4)
Less tax expense (benefit), prior service cost (5)
Total prior service cost change to AOCI 8
AOCI balance, prior service cost portion (net of tax) 14 6
Estimated amounts included in accumulated other comprehensive income that are expected to be amortized into net periodic benefit cost over the next fiscal year [Abstract]
Net actuarial loss 13
Unrecognized prior service cost 4
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 431 404 374
Assumed with National acquisition 0 0
Weighted average assumptions used to determine benefit obligations [Abstract]
Discount rate (in hundredths) 4.89% 5.48%
Weighted average assumptions used to determine net periodic benefit costs [Abstract]
Discount rate (in hundredths) 5.48% 5.54%
Rate of return on plan assets (in hundredths) 5.50% 6.00%
Weighted average target allocation [Abstract]
Equity securities (in hundredths) 50.00%
Fixed income securities and cash equivalents (in hundredths) 50.00%
Weighted average asset allocations [Abstract}
Equity securities (in hundredths) 48.00% 49.00%
Fixed income securities (in hundredths) 41.00% 41.00%
Cash equivalents (in hundredths) 11.00% 10.00%
Benefits expected to pay to participants over the next ten years [Abstract]
2012 payment 35
2013 payment 37
2014 payment 39
2015 payment 41
2016 payment 43
2017 - 2021 payment 213
Health care cost trend rates [Abstract]
Assumed health care cost trend rate for next year (in hundredths) 9.00% 9.00%
Ultimate trend rate (in hundredths) 5.00% 5.00%
Year in which ultimate trend rate is reached 2017 2016
Effect of a one-percentage point change in assumed health care cost trend rates [Abstract]
Effect of a one percentage point increase on accumulated postretirement benefit obligation (in hundredths) 28
Effect of a one percentage point decrease on accumulated postretirement benefit obligation (in hundredths) 24
Effect of a one percentage point increase on service and interest cost components (in hundredths) 1
Effect of a one percentage point decrease on service and interest cost components (in hundredths) (1)
U.S. retiree health care plan [Member] | Level 1 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 215 206
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 215 206
U.S. retiree health care plan [Member] | Fair value, inputs, Level 2 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 216 198
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 216 198
U.S. retiree health care plan [Member] | Fair value, inputs, Level 3 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
U.S. retiree health care plan [Member] | Money market funds [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 50 41
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 50 41
U.S. retiree health care plan [Member] | Money market funds [Member] | Level 1 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
U.S. retiree health care plan [Member] | Money market funds [Member] | Fair value, inputs, Level 2 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 50 41
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 50 41
U.S. retiree health care plan [Member] | Money market funds [Member] | Fair value, inputs, Level 3 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
U.S. retiree health care plan [Member] | U.S. bond funds [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 175 165
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 175 165
U.S. retiree health care plan [Member] | U.S. bond funds [Member] | Level 1 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 175 165
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 175 165
U.S. retiree health care plan [Member] | U.S. bond funds [Member] | Fair value, inputs, Level 2 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
U.S. retiree health care plan [Member] | U.S. bond funds [Member] | Fair value, inputs, Level 3 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
U.S. retiree health care plan [Member] | U.S. equity funds and option collars [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 159 144
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 159 144
U.S. retiree health care plan [Member] | U.S. equity funds and option collars [Member] | Level 1 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 40 41
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 40 41
U.S. retiree health care plan [Member] | U.S. equity funds and option collars [Member] | Fair value, inputs, Level 2 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 119 103
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 119 103
U.S. retiree health care plan [Member] | U.S. equity funds and option collars [Member] | Fair value, inputs, Level 3 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
U.S. retiree health care plan [Member] | International equity funds [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 47 54
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 47 54
U.S. retiree health care plan [Member] | International equity funds [Member] | Level 1 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
U.S. retiree health care plan [Member] | International equity funds [Member] | Fair value, inputs, Level 2 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 47 54
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 47 54
U.S. retiree health care plan [Member] | International equity funds [Member] | Fair value, inputs, Level 3 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
Non-U.S. defined benefit plan [Member]
Components of net periodic benefit cost [Abstract]
Service cost 41 37 40
Interest cost 69 62 62
Expected return on plan assets (83) (73) (69)
Amortization of prior service cost (credit) (4) (3) (3)
Recognized net actuarial loss 40 30 34
Net periodic benefit cost 63 53 64
Settlement charges 0 [1] 0 [1] 15 [1]
Curtailment charges (credits) 2 0 (9)
Special termination benefit charges 0 0 3
Total, including charges 65 53 73
Change in benefit obligation [Roll Forward]
Benefit obligation at beginning of year 2,217 1,945
Service cost 41 37 40
Interest cost 69 62 62
Participant contributions 1 3
Benefits paid (72) (70)
Medicare subsidy 0 0
Actuarial (gain) loss 91 132
Settlements (1) 0
Curtailments (3) 0
Assumed with National acquisition 301 0
Special termination benefit charges 0 0 3
Plan amendments 0 (1)
Effects of exchange rate changes 104 109
Benefit obligation at end of year 2,748 2,217 1,945
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at beginning of year 1,835 1,672
Actual return on plan assets 53 95
Employer contributions (funding of qualified plans) 72 53
Employer contributions (payments for non-qualified plans) 0 0
Participant contributions 1 3
Assumed with National acquisition 235 0
Benefits paid (72) (70)
Settlements (1) 0
Effects of exchange rate changes 88 82
Fair value of plan assets at end of year (FVPA) 2,211 1,835 1,672
Funded status at end of year [Abstract]
Funded status at end of year (537) (382)
Amounts recognized in the consolidated balance sheets [Abstract]
Overfunded retirement plans 29 30
Accrued expenses and other liabilities (9) (7)
Underfunded retirement plans (557) (405)
Funded status at end of year (537) (382)
Accumulated benefit obligation 2,540 2,020
Net actuarial loss amounts recorded in accumulated other comprehensive income [Roll Forward]
AOCI balance, net actuarial loss portion (net of tax) 421
Annual adjustment, net actuarial loss 158
Reclassification of recognized transactions, net actuarial loss (40)
Less tax (benefit) expense, net actuarial loss (39)
Total net actuarial loss change to AOCI 79
AOCI balance, net actuarial loss portion (net of tax) 500 421
Prior service cost amounts recorded in accumulated other comprehensive income [Roll Forward]
AOCI balance, prior service cost portion (net of tax) (23)
Annual adjustment, prior service cost (3)
Reclassification of recognized transactions, prior service cost 3
Less tax expense (benefit), prior service cost 0
Total prior service cost change to AOCI 0
AOCI balance, prior service cost portion (net of tax) (23) (23)
Estimated amounts included in accumulated other comprehensive income that are expected to be amortized into net periodic benefit cost over the next fiscal year [Abstract]
Net actuarial loss 48
Unrecognized prior service cost (4)
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 2,211 1,835 1,672
Assumed with National acquisition 235 0
Weighted average assumptions used to determine benefit obligations [Abstract]
Discount rate (in hundredths) 2.89% 2.79%
Long-term pay progression (in hundredths) 3.18% 3.24%
Weighted average assumptions used to determine net periodic benefit costs [Abstract]
Discount rate (in hundredths) 2.79% 3.23%
Rate of return on plan assets (in hundredths) 4.17% 4.23%
Long-term pay progression (in hundredths) 3.24% 3.06%
Weighted average target allocation [Abstract]
Equity securities range minimum (in hundredths) 25.00%
Equity securities range maximum (in hundredths) 60.00%
Fixed income securities and cash equivalents range minimum (in hundredths) 40.00%
Fixed income securities and cash equivalents range maximum (in hundredths) 75.00%
Weighted average asset allocations [Abstract}
Equity securities (in hundredths) 32.00% 49.00%
Fixed income securities (in hundredths) 66.00% 50.00%
Cash equivalents (in hundredths) 2.00% 1.00%
Benefits expected to pay to participants over the next ten years [Abstract]
2012 payment 77
2013 payment 80
2014 payment 82
2015 payment 89
2016 payment 92
2017 - 2021 payment 525
Non-U.S. defined benefit plan [Member] | Level 1 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 402 42
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 402 42
Non-U.S. defined benefit plan [Member] | Fair value, inputs, Level 2 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 1,791 1,742
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 1,791 1,742
Non-U.S. defined benefit plan [Member] | Fair value, inputs, Level 3 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at beginning of year 51 49
Assumed with National acquisition 18
Fair value of plan assets at end of year (FVPA) 18 51
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 18 51
Redemptions (51) (4)
Unrealized gain 0 6
Assumed with National acquisition 18
Non-U.S. defined benefit plan [Member] | Money market funds [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 50 19
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 50 19
Non-U.S. defined benefit plan [Member] | Money market funds [Member] | Level 1 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 41 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 41 0
Non-U.S. defined benefit plan [Member] | Money market funds [Member] | Fair value, inputs, Level 2 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 9 19
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 9 19
Non-U.S. defined benefit plan [Member] | Money market funds [Member] | Fair value, inputs, Level 3 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
Non-U.S. defined benefit plan [Member] | Local market bond funds [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 1,129 669
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 1,129 669
Non-U.S. defined benefit plan [Member] | Local market bond funds [Member] | Level 1 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 209 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 209 0
Non-U.S. defined benefit plan [Member] | Local market bond funds [Member] | Fair value, inputs, Level 2 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 920 669
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 920 669
Non-U.S. defined benefit plan [Member] | Local market bond funds [Member] | Fair value, inputs, Level 3 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
Non-U.S. defined benefit plan [Member] | International/global bond funds [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 335 211
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 335 211
Non-U.S. defined benefit plan [Member] | International/global bond funds [Member] | Level 1 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 3 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 3 0
Non-U.S. defined benefit plan [Member] | International/global bond funds [Member] | Fair value, inputs, Level 2 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 332 211
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 332 211
Non-U.S. defined benefit plan [Member] | International/global bond funds [Member] | Fair value, inputs, Level 3 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
Non-U.S. defined benefit plan [Member] | Local market equity funds [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 133 300
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 133 300
Non-U.S. defined benefit plan [Member] | Local market equity funds [Member] | Level 1 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 13 42
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 13 42
Non-U.S. defined benefit plan [Member] | Local market equity funds [Member] | Fair value, inputs, Level 2 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 120 258
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 120 258
Non-U.S. defined benefit plan [Member] | Local market equity funds [Member] | Fair value, inputs, Level 3 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
Non-U.S. defined benefit plan [Member] | International/global equity funds [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 521 555
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 521 555
Non-U.S. defined benefit plan [Member] | International/global equity funds [Member] | Level 1 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 136 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 136 0
Non-U.S. defined benefit plan [Member] | International/global equity funds [Member] | Fair value, inputs, Level 2 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 385 555
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 385 555
Non-U.S. defined benefit plan [Member] | International/global equity funds [Member] | Fair value, inputs, Level 3 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
Non-U.S. defined benefit plan [Member] | Other investments [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 43 81
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 43 81
Non-U.S. defined benefit plan [Member] | Other investments [Member] | Level 1 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 0 0
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 0 0
Non-U.S. defined benefit plan [Member] | Other investments [Member] | Fair value, inputs, Level 2 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 25 30
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets 25 30
Non-U.S. defined benefit plan [Member] | Other investments [Member] | Fair value, inputs, Level 3 [Member]
Change in fair value of plan assets [Roll Forward]
Fair value of plan assets at end of year (FVPA) 18 51
Defined Benefit Plan, Fair value of plan assets [Abstract]
Fair value of plan assets $ 18 $ 51
November 1997 through December 31, 2003, Defined benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined contribution plan, employer matching contribution (percent) 4.00%
Defined contribution plan, employer fixed matching contribution (percent) 2.00%
After December 31, 2003, Defined benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined contribution plan, employer matching contribution (percent) 4.00%
Defined contribution plan, no employer fixed matching contribution (percent) 2.00%
[1] Includes restructuring and non-restructuring related settlement charges.
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Postretirement benefit plans (Expenses Associated With National Acquisition) (Details) (Non-U.S. defined benefit plan [Member], USD $)
In Millions, unless otherwise specified
12 Months Ended 3 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2011
National [Member]
Defined Benefit Plan Disclosure [Line Items]
Expenses associated with plan for the period $ 65 $ 53 $ 73 $ 2
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Debt and lines of credit (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2011
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Jul. 14, 2011
Debt Instrument
Line of credit facility, maximum borrowing capacity through August 2012 $ 920,000,000 $ 920,000,000
Line of credit facility, maximum borrowing capacity until July 2012 1,000,000,000 1,000,000,000
Short-term Debt
Repayments of commercial paper 200,000,000 200,000,000 0 0
Commercial paper 999,000,000 999,000,000 0 1,200,000,000
Debt, Weighted average interest rate 0.25% 0.25%
Long-term Debt
Long-term debt, gross 4,500,000,000 4,500,000,000
Add net unamortized premium (assumed with National acquisition) 93,000,000 93,000,000
Less current portion of long-term debt (382,000,000) (382,000,000) 0
Total long-term debt 4,211,000,000 4,211,000,000 0
Payments of debt issuance costs 12,000,000 0 0
Interest and debt expense 42,000,000 0 0
Interest paid 54,000,000
Notes payable [Member]
Long-term Debt
Proceeds from issuance of long-term debt 3,497,000,000
Payments of debt issuance costs 12,000,000
Notes payable [Member] | Floating-rate notes due 2013 (swapped to a 0.922% fixed rate)
Long-term Debt
Long-term debt, gross 1,000,000,000 1,000,000,000
Debt instrument, description of variable rate basis (in months) 3
Long-term debt, effective fixed-rate interest rate 0.92% 0.92%
Notes payable [Member] | Floating-rate notes due 2013 (swapped to a 0.922% fixed rate) | Interest rate swap [Member] | Cash flow hedges [Member]
Long-term Debt
Long-term debt, effective fixed-rate interest rate 0.92% 0.92%
Notes payable [Member] | Notes due 2013 at 0.875%
Long-term Debt
Long-term debt, gross 500,000,000 500,000,000
Long-term debt, stated interest rate 0.88% 0.88%
Notes payable [Member] | Notes due 2014 at 1.375%
Long-term Debt
Long-term debt, gross 1,000,000,000 1,000,000,000
Long-term debt, stated interest rate 1.38% 1.38%
Notes payable [Member] | Notes due 2016 at 2.375%
Long-term Debt
Long-term debt, gross 1,000,000,000 1,000,000,000
Long-term debt, stated interest rate 2.38% 2.38%
National [Member] | Notes payable [Member]
Long-term Debt
Long-term debt, gross 1,000,000,000 1,000,000,000
Long-term debt, fair value 1,105,000,000 1,105,000,000
National [Member] | Notes payable [Member] | Notes due 2012 at 6.15% (assumed with National acquisition)
Long-term Debt
Long-term debt, gross 375,000,000 375,000,000
Long-term debt, stated interest rate 6.15% 6.15%
National [Member] | Notes payable [Member] | Notes due 2015 at 3.95% (assumed with National acquisition)
Long-term Debt
Long-term debt, gross 250,000,000 250,000,000
Long-term debt, stated interest rate 3.95% 3.95%
National [Member] | Notes payable [Member] | Notes due 2017 at 6.60% (assumed with National acquisition)
Long-term Debt
Long-term debt, gross $ 375,000,000 $ 375,000,000
Long-term debt, stated interest rate 6.60% 6.60%
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Commitments and contingencies (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Commitments and Contingencies Disclosure [Abstract]
Rental and leases expense incurred $ 109 $ 100 $ 114
Standard product warranty description three years coverage; an obligation to repair, replace or refund; and a maximum payment obligation tied to the price paid for our products
Standard product warranty coverage (in years) 3 years
Operating leases [Abstract]
2012 102
2013 77
2014 55
2015 48
2016 36
Thereafter 118
Capitalized software licenses [Abstract]
2012 73
2013 35
2014 31
2015 12
2016 0
Thereafter 0
Purchase commitments [Abstract]
2012 215
2013 97
2014 20
2015 4
2016 2
Thereafter 10
Discontinued operation - indemnification obligation potential exposure $ 200
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Stockholders' equity (Details) (USD $)
In Billions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Notes to Financial Statements [Abstract]
Authorized preferred stock (in shares) 10,000,000 10,000,000
Treasury shares acquired in connection with the board-authorized stock repurchase program (in shares) 59,466,168 93,522,896 45,544,800
Stock repurchase authorizations remaining, no expiration date specified $ 5.7
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Supplemental financial information (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Other income (expense) net [Abstract]
Interest income $ 11 $ 13 $ 24
Other (6) [1] 24 [1] 2 [1]
Total 5 37 26
Includes lease income primarily from the purchaser of a former business 20
Non-cancellable future lease payments from the purchaser of a former business 84
Property, plant and equipment at cost [Line Items]
Property, plant and equipment at cost 7,133 6,907
Authorizations for property, plant and equipment expenditures in future years 249
Accrued expenses and other liabilities [Abstract]
Customer incentive programs and allowances 190 118
Severance and related expenses 140 19
Property and other non-income taxes 98 108
Other 367 377
Total 795 622
Accumulated other comprehensive income (loss), net of taxes [Abstract]
Unrealized losses on available-for-sale investments (3) (13)
Postretirement benefit plans [Abstract]
Net actuarial loss (780) (704)
Net prior service credit 9 16
Cash flow hedge derivative (2) 0
Total (776) (701)
Land [Member]
Property, plant and equipment at cost [Line Items]
Property, plant and equipment at cost 188 92
Buildings and improvements [Member]
Property, plant and equipment at cost [Line Items]
Property, plant and equipment at cost, depreciable lives, minimum 5
Property, plant and equipment at cost, depreciable lives, maximum 40
Property, plant and equipment at cost 2,998 2,815
Machinery and equipment [Member]
Property, plant and equipment at cost [Line Items]
Property, plant and equipment at cost, depreciable lives, minimum 3
Property, plant and equipment at cost, depreciable lives, maximum 10
Property, plant and equipment at cost $ 3,947 $ 4,000
[1] Includes lease income of approximately $20 million per year, primarily from the purchaser of a former business. As of December 31, 2011, the aggregate amount of non-cancellable future lease payments to be received from these leases is $84 million. These leases contain renewal options. Other also includes miscellaneous non-operational items such as: interest income and expense related to non-investment items such as taxes; gains and losses from our equity method investments; realized gains and losses associated with former equity investments; gains and losses related to former businesses; gains and losses from currency exchange rate changes; and gains and losses from our derivative financial instruments, primarily forward foreign currency exchange contracts. 2011 also includes an expense associated with a settlement related to a divested business.
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Segment and geographic area data (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Segments
Dec. 31, 2010
Dec. 31, 2009
Segment Reporting Information [Line Items]
Number of reportable segments 3
Percentage of revenue plus indirect sales by major customer (in hundredths) 13.00% 19.00% 24.00%
Revenue $ 13,735 $ 13,966 $ 10,427
Operating Profit 2,992 4,514 1,991
Property, plant and equipment, net 4,428 3,680 3,158
Analog [Member]
Segment Reporting Information [Line Items]
Revenue 6,375 5,979 4,202
Operating Profit 1,693 1,876 770
Embedded Processing [Member]
Segment Reporting Information [Line Items]
Revenue 2,110 2,073 1,471
Operating Profit 368 491 194
Wireless [Member]
Segment Reporting Information [Line Items]
Revenue 2,518 2,978 2,626
Operating Profit 412 683 315
Other [Member]
Segment Reporting Information [Line Items]
Revenue 2,732 2,936 2,128
Operating Profit 519 1,464 712
U.S. [Member]
Segment Reporting Information [Line Items]
Revenue 1,468 1,539 1,140
Property, plant and equipment, net 2,159 1,694 1,727
Asia [Member]
Segment Reporting Information [Line Items]
Revenue 8,619 8,903 6,575
Property, plant and equipment, net 1,739 1,575 1,013
Europe [Member]
Segment Reporting Information [Line Items]
Revenue 1,822 1,760 1,408
Property, plant and equipment, net 276 139 161
Japan [Member]
Segment Reporting Information [Line Items]
Revenue 1,462 1,366 976
Property, plant and equipment, net 228 249 244
Rest of World [Member]
Segment Reporting Information [Line Items]
Revenue 364 398 328
Property, plant and equipment, net $ 26 $ 23 $ 13
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