SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.
20549
------------
FORM 8-K
------------
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 30, 1998
--------------------------------------------------------------------
TEXAS INSTRUMENTS INCORPORATED
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 1-3761
------------------------ ---------------------
(State of Incorporation) (Commission File No.)
75-0289970
------------------------------------
(I.R.S. Employer Identification No.)
8505 Forest Lane
P. O. Box 660199, Dallas, Texas 75266-0199
----------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 972-995-3773
-----------------------------------------------------------------
ITEM 2. Acquisition or Disposition of Assets.
On June 18, 1998, Texas Instruments Incorporated (the "Registrant")
and Micron Technology, Inc. ("Micron") announced that they had entered into an
agreement for Micron to purchase the assets of Registrant's semiconductor
memory business (the "Memory Business"). The transaction included the purchase
of substantially all of Registrant's memory assets, including its wholly-owned
fabs in Avezzano, Italy and Richardson, Texas, its shares in its DRAM
manufacturing joint ventures in Japan and Singapore, and an assembly and test
operation in Singapore. The closing of the sale was consummated on September
30, 1998. Registrant received approximately 28.9 million shares of Micron
common stock valued at $881 million as of the closing date, $740 million in
6.5% notes convertible into an additional 12 million shares of Micron common
stock, and a $210 million 6.5% subordinated note. The aggregate market value of
the 6.5% convertible notes and the 6.5% subordinated note as of the closing
date was approximately $836 million.
In addition to Registrant's memory assets, Micron received $550 million in
proceeds from financing provided by Registrant to facilitate the deployment of
Micron's technology throughout the acquired business. As part of the
transaction, Micron also received a 10 year royalty free cross license
agreement. Additionally, Registrant agreed to guarantee the payment obligations
of one of its former joint ventures under a newly-syndicated $450 million
principal amount credit facility. At closing, the joint venture had borrowed
$210 million under the facility. As a result of the guarantee, Registrant was
granted a security interest in the joint venture's assets. In addition, the
guarantee is partially offset by certain contingent funding obligations of the
joint venture shareholders. Registrant recognized a before-tax gain of $127
million on the sale, which will be deferred until the repayment of the
Registrant-funded financing to Micron.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(b) Pro Forma Financial Information.
The following unaudited pro forma statements of income for the
year ended December 31, 1997 and for the six months ended June 30, 1998 give
effect to the disposition of the Memory Business as if such transaction had
occurred on January 1, 1997 and on January 1, 1998, respectively. The following
unaudited pro forma balance sheet gives effect to the disposition of the Memory
Business as if such transaction had occurred on June 30, 1998:
TEXAS INSTRUMENTS INCORPORATED
UNAUDITED PRO FORMA STATEMENT OF INCOME
For the Year Ended December 31, 1997 and the Six Months
Ended June 30, 1998 (In millions of dollars except per-share amounts)
(1) Amounts reflect operating results of the Memory Business for the year 1997.
(2) Operating results of Registrant include first quarter charges of $219
million associated with discontinuing the Registrant's U.S. DRAM
manufacturing joint venture with Hitachi, Ltd. and $25 million from the
value of acquired in-process research and development from two business
acquisitions; and a second quarter charge of $233 million for a worldwide
restructuring program and a gain of $83 million from the Registrant's sale
of its shares in the TI-Acer DRAM semiconductor manufacturing joint venture
to Acer Corporation.
(3) Amounts reflect operating results of the Memory Business for the six months
ended June 30, 1998.
(4) Operating results of the Memory Business include a first quarter charge of
$219 million associated with discontinuing Registrant's U.S. DRAM
manufacturing joint venture with Hitachi, Ltd. and a second quarter charge
of $37 million for the closing of Registrant's Richardson, Texas, memory
manufacturing operation.
TEXAS INSTRUMENTS INCORPORATED
UNAUDITED PRO FORMA BALANCE SHEET
June 30, 1998
(In millions of dollars)
(1) Includes cash financing provided by Registrant to Micron at closing ($550
million) and the effect of an estimated future working capital adjustment
payment to be made to Micron ($132 million).
(2) Includes proceeds to Registrant from the sale of the Memory Business: Micron
common stock ($881 million) and Micron convertible and subordinated debt
($836 million).
(3) Includes cash related obligations arising from the sale of the Memory
Business of $118 million for vendor cancellation charges, professional fees
and other transaction costs, net of $138 million Memory Business accounts
payable assumed by Micron.
(c) Exhibits
Designation of
Exhibit in
this Report Description of Exhibit
-------------- ----------------------
2.2 Second Amendment to
Acquisition Agreement
dated as of September
30, 1998 between Texas
Instruments Incorporated
and Micron Technology, Inc.
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TEXAS INSTRUMENTS INCORPORATED
By /s/ William A. Aylesworth
--------------------------
William A. Aylesworth
Senior Vice President, Treasurer
and Chief Financial Officer
Date: October 15, 1998
Exhibit Index
Designation of
Exhibit in
this Report Description of Exhibit
-------------- ----------------------
2.2 Second Amendment to
Acquisition Agreement
dated as of September
30, 1998 between Texas
Instruments Incorporated
and Micron Technology, Inc.
Washington, D. C.
20549
------------
FORM 8-K
------------
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 30, 1998
--------------------------------------------------------------------
TEXAS INSTRUMENTS INCORPORATED
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 1-3761
------------------------ ---------------------
(State of Incorporation) (Commission File No.)
75-0289970
------------------------------------
(I.R.S. Employer Identification No.)
8505 Forest Lane
P. O. Box 660199, Dallas, Texas 75266-0199
----------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 972-995-3773
-----------------------------------------------------------------
ITEM 2. Acquisition or Disposition of Assets.
On June 18, 1998, Texas Instruments Incorporated (the "Registrant")
and Micron Technology, Inc. ("Micron") announced that they had entered into an
agreement for Micron to purchase the assets of Registrant's semiconductor
memory business (the "Memory Business"). The transaction included the purchase
of substantially all of Registrant's memory assets, including its wholly-owned
fabs in Avezzano, Italy and Richardson, Texas, its shares in its DRAM
manufacturing joint ventures in Japan and Singapore, and an assembly and test
operation in Singapore. The closing of the sale was consummated on September
30, 1998. Registrant received approximately 28.9 million shares of Micron
common stock valued at $881 million as of the closing date, $740 million in
6.5% notes convertible into an additional 12 million shares of Micron common
stock, and a $210 million 6.5% subordinated note. The aggregate market value of
the 6.5% convertible notes and the 6.5% subordinated note as of the closing
date was approximately $836 million.
In addition to Registrant's memory assets, Micron received $550 million in
proceeds from financing provided by Registrant to facilitate the deployment of
Micron's technology throughout the acquired business. As part of the
transaction, Micron also received a 10 year royalty free cross license
agreement. Additionally, Registrant agreed to guarantee the payment obligations
of one of its former joint ventures under a newly-syndicated $450 million
principal amount credit facility. At closing, the joint venture had borrowed
$210 million under the facility. As a result of the guarantee, Registrant was
granted a security interest in the joint venture's assets. In addition, the
guarantee is partially offset by certain contingent funding obligations of the
joint venture shareholders. Registrant recognized a before-tax gain of $127
million on the sale, which will be deferred until the repayment of the
Registrant-funded financing to Micron.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(b) Pro Forma Financial Information.
The following unaudited pro forma statements of income for the
year ended December 31, 1997 and for the six months ended June 30, 1998 give
effect to the disposition of the Memory Business as if such transaction had
occurred on January 1, 1997 and on January 1, 1998, respectively. The following
unaudited pro forma balance sheet gives effect to the disposition of the Memory
Business as if such transaction had occurred on June 30, 1998:
TEXAS INSTRUMENTS INCORPORATED
UNAUDITED PRO FORMA STATEMENT OF INCOME
For the Year Ended December 31, 1997 and the Six Months
Ended June 30, 1998 (In millions of dollars except per-share amounts)
(1) Amounts reflect operating results of the Memory Business for the year 1997.
(2) Operating results of Registrant include first quarter charges of $219
million associated with discontinuing the Registrant's U.S. DRAM
manufacturing joint venture with Hitachi, Ltd. and $25 million from the
value of acquired in-process research and development from two business
acquisitions; and a second quarter charge of $233 million for a worldwide
restructuring program and a gain of $83 million from the Registrant's sale
of its shares in the TI-Acer DRAM semiconductor manufacturing joint venture
to Acer Corporation.
(3) Amounts reflect operating results of the Memory Business for the six months
ended June 30, 1998.
(4) Operating results of the Memory Business include a first quarter charge of
$219 million associated with discontinuing Registrant's U.S. DRAM
manufacturing joint venture with Hitachi, Ltd. and a second quarter charge
of $37 million for the closing of Registrant's Richardson, Texas, memory
manufacturing operation.
TEXAS INSTRUMENTS INCORPORATED
UNAUDITED PRO FORMA BALANCE SHEET
June 30, 1998
(In millions of dollars)
(1) Includes cash financing provided by Registrant to Micron at closing ($550
million) and the effect of an estimated future working capital adjustment
payment to be made to Micron ($132 million).
(2) Includes proceeds to Registrant from the sale of the Memory Business: Micron
common stock ($881 million) and Micron convertible and subordinated debt
($836 million).
(3) Includes cash related obligations arising from the sale of the Memory
Business of $118 million for vendor cancellation charges, professional fees
and other transaction costs, net of $138 million Memory Business accounts
payable assumed by Micron.
(c) Exhibits
Designation of
Exhibit in
this Report Description of Exhibit
-------------- ----------------------
2.2 Second Amendment to
Acquisition Agreement
dated as of September
30, 1998 between Texas
Instruments Incorporated
and Micron Technology, Inc.
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TEXAS INSTRUMENTS INCORPORATED
By /s/ William A. Aylesworth
--------------------------
William A. Aylesworth
Senior Vice President, Treasurer
and Chief Financial Officer
Date: October 15, 1998
Exhibit Index
Designation of
Exhibit in
this Report Description of Exhibit
-------------- ----------------------
2.2 Second Amendment to
Acquisition Agreement
dated as of September
30, 1998 between Texas
Instruments Incorporated
and Micron Technology, Inc.