View:
November
12, 2007
Via
Federal Express
Mr.
Tim
Buchmiller
Senior
Attorney, Division of Corporation Finance
U.S.
Securities and Exchange Commission
100
F
Street, NE
Washington,
DC 20549
Re:
Texas
Instruments Incorporated
Annual
Report for the Fiscal Year Ended
December 31, 2006 on Form 10-K File No. 001-3761
Dear
Mr.
Buchmiller:
I
am
writing in response to your letter dated October 30, 2007 to Texas Instruments
Incorporated containing comments on our Form 10-K for the year ended December
31, 2006. As you will note below, we have addressed your comments in
our Form 10-Q for the quarter ended September 30, 2007, and will do so in our
Form 10-K for the year ended December 31, 2007, as appropriate. We
intend to include similar disclosures, revised as appropriate, in our filings
for relevant subsequent periods.
Management’s
Discussion and Analysis
Financial
Condition; and Liquidity and Capital Resources
COMMENT: It
appears
from footnote 3 to your financial statements for the fiscal year ended December
31, 2006 that a significant portion of your cash equivalents and short-term
investments were held in “asset-backed fixed income securities.” In
future filings, please clearly discuss the nature of the material components
of
those assets as necessary to provide your investors with information necessary
for a clear understanding of your financial condition. Also, if these
securities are reasonably likely to affect your financial condition in a
material way, please expand your discussion and analysis in applicable future
filings to provide your investors with information necessary for a clear
understanding of the trend or uncertainty. Refer to Item 303(a) of
Regulation S-K. For example, as appropriate, identify the percentage
and nature of any mortgage-backed securities you hold, indicate what factors
may
affect the value of those securities and disclose any material
risks. Also add any appropriate disclosure required by Item 305 of
Regulation S-K.
RESPONSE: We
responded
to this comment in our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2007, which we filed on November 1, 2007. Specifically
in the Financial Condition section we disclosed:
Total
cash (cash and cash equivalents plus short-term investments) decreased $48
million from year-end 2006 to $3.67 billion at the end of the third
quarter. Total cash includes $926 million of asset-backed fixed
income securities, divided about equally between mortgage-backed securities
secured by non-subprime-mortgage pools and non-mortgage-related asset-backed
commercial paper. These asset-backed fixed income securities continue
to be rated either AAA, A-1 or P-1. To date, we have collected all
principal and interest payable on these securities and expect to continue to
do
so as they mature.
We
intend
to revise our disclosures in the notes to our financial statements and in our
Quantitative and Qualitative Disclosures about Market Risk (Regulation S-K
Item
305) as requested in future filings.
In
addition, please note the effect of changes in interest rates on the fair value
of our asset-backed fixed income securities has not been material since we
filed
our 2006 Form 10-K, and is not expected to be material for the foreseeable
future, due to the quality and duration of our investments. In
addition, our sensitivity analysis indicated that a 1% general change in the
applicable interest rates associated with these investments as of the end of
the
third quarter of 2007 would not have resulted in a material change in the
securities’ fair value, thus obviating the need to update the year end
disclosure on Quantitative and Qualitative Disclosures about Market
Risk.
As
we
have previously disclosed in our notes to financial statements, we consider
our
investment in these securities to be held available for sale, therefore under
Statement of Financial Accounting Standards No. 115, Accounting for Certain
Investments in Debt and Equity Securities, any changes in the fair value of
these investments would be reflected as a component of other comprehensive
income for the period and not as a direct entry to the income
statement. Such changes have not been material and are not expected
to be material in the foreseeable future.
In
connection with this response to your comment regarding our Form 10-K for the
year ended December 31, 2006, we acknowledge that:
|
·
|
We
are responsible for the adequacy and accuracy of the disclosure in
the
filing;
|
|
·
|
Staff
comments or changes to our disclosures in response to staff comments
do
not foreclose the Commission from taking any action with respect
to the
filing; and
|
|
·
|
We
may not assert staff comments as a defense in any proceeding initiated
by
the Commission or any person under the federal securities laws of
the
United States.
|
We
trust
that the above information will be sufficient for your purposes. If you
have any questions, please call Charlie Miller of Texas Instruments at
214-480-6707.
Very
truly yours,
/s/
Kevin P.
March
Kevin
P.
March
Senior
Vice President and
Chief
Financial Officer