Compared with the prior year:

Analog: 

• Revenue increased due to Power and Signal Chain, partially offset by declines in High Volume.
• Operating profit increased due to higher revenue and associated gross profit.

Embedded Processing: 

• Revenue increased due to Connected Microcontrollers. Processors was about even.
• Operating profit increased primarily due to higher gross profit.

Other: 

• Revenue decreased by $134 million, and operating profit decreased by $73 million.

Non-GAAP financial information

This release includes references to free cash flow and ratios based on that measure. These are financial measures that were not prepared in accordance with GAAP. Free cash flow was calculated by subtracting capital expenditures from the most directly comparable GAAP measure, cash flows from operating activities (also referred to as cash flow from operations).

We believe that free cash flow and the associated ratios provide insight into our liquidity, our cash-generating capability and the amount of cash potentially available to return to shareholders, as well as insight into our financial performance. These non-GAAP measures are supplemental to the comparable GAAP measures.

Reconciliation to the most directly comparable GAAP measures is provided in the table below.

Amounts are in millions of dollars.

This release also includes references to an annual operating tax rate, a non-GAAP term we use to describe the estimated annual effective tax rate, a GAAP measure that by definition does not include discrete tax items. We believe the term annual operating tax rate more clearly communicates that discrete tax items are excluded from such rate. The term also helps differentiate from the effective tax rate, which includes discrete tax items. No adjustments are made to the estimated annual effective tax rate when using the term annual operating tax rate. 

Notice regarding forward-looking statements

This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as TI or its management "believes," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar import. Similarly, statements herein that describe TI's business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements. 

We urge you to carefully consider the following important factors that could cause actual results to differ materially from the expectations of TI or our management:

• Market demand for semiconductors, particularly in our end markets;
• Our ability to compete in products and prices in an intensely competitive industry;
• Customer demand that differs from forecasts and the financial impact of inadequate or excess company inventory that results from demand that differs from projections;
• Economic, social and political conditions in the countries in which we, our customers or our suppliers operate, including security risks; global trade policies; political and social instability; health conditions; possible disruptions in transportation, communications and information technology networks; and fluctuations in foreign currency exchange rates;
• Evolving cybersecurity threats to our information technology systems or those of our customers or suppliers;
• Natural events such as severe weather, geological events or health epidemics in the locations in which we, our customers or our suppliers operate;
• Our ability to develop, manufacture and market innovative products in a rapidly changing technological environment;
• Timely implementation of new manufacturing technologies and installation of manufacturing equipment, and the ability to obtain needed third-party foundry and assembly/test subcontract services;
• Availability and cost of raw materials, utilities, manufacturing equipment, third-party manufacturing services and manufacturing technology;
• Compliance with or changes in the complex laws, rules and regulations to which we are or may become subject, or actions of enforcement authorities, that restrict our ability to manufacture or ship our products or operate our business, or subject us to fines, penalties or other legal liability;
• Product liability or warranty claims, claims based on epidemic or delivery failure, or other claims relating to our products, manufacturing, services, design or communications, or recalls by our customers for a product containing one of our parts;
• Changes in tax law and accounting standards that can impact the tax rate applicable to us, the jurisdictions in which profits are determined to be earned and taxed, adverse resolution of tax audits, increases in tariff rates, and the ability to realize deferred tax assets;
• A loss suffered by one of our customers or distributors with respect to TI-consigned inventory;
• Financial difficulties of our distributors or their promotion of competing product lines to our detriment, or the loss of a significant number of distributors;
• Losses or curtailments of purchases from key customers or the timing and amount of distributor and other customer inventory adjustments;
• Our ability to maintain or improve profit margins, including our ability to utilize our manufacturing facilities at sufficient levels to cover our fixed operating costs, in an intensely competitive and cyclical industry and despite changes in the regulatory environment;
• Our ability to maintain and enforce a strong intellectual property portfolio and maintain freedom of operation in all jurisdictions where we conduct business; or our exposure to infringement claims;
• Instability in the global credit and financial markets that affects our ability to fund our daily operations, invest in the business, make strategic acquisitions, or make principal and interest payments on our debt;
• Increases in health care and pension benefit costs;
• Our ability to recruit and retain skilled engineering, management and technical personnel;
• Our ability to successfully integrate and realize opportunities for growth from acquisitions, or our ability to realize our expectations regarding the amount and timing of restructuring charges and associated cost savings; and
• Impairments of our non-financial assets.