TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Income

For Three Months Ended

June 30,

(Millions of dollars, except share and per-share amounts)

2021

2020

Revenue

$

4,580

$

3,239

Cost of revenue (COR)

1,503

1,157

Gross profit

3,077

2,082

Research and development (R&D)

391

379

Selling, general and administrative (SG&A)

425

401

Acquisition charges

48

50

Restructuring charges/other

—

24

Operating profit

2,213

1,228

Other income (expense), net (OI&E)

73

99

Interest and debt expense

44

48

Income before income taxes

2,242

1,279

Provision for income taxes

311

(101)

Net income

$

1,931

$

1,380

Diluted earnings per common share

$

2.05

$

1.48

Average shares outstanding (millions):

Basic

923

916

Diluted

937

927

Cash dividends declared per common share

$

1.02

$

.90

Supplemental Information

(Quarterly, except as noted)

Our annual operating tax rate, which does not include discrete tax items, was 14% for the current period and 13% for the year-ago period.

Provision for income taxes is based on the following:

Operating taxes (calculated using the estimated annual effective tax rate)

$

322

$

164

Discrete tax items

(11)

(265)

Provision for income taxes (effective taxes)

$

311

$

(101)

A portion of net income is allocated to unvested restricted stock units (RSUs) on which we pay dividend equivalents. Diluted EPS is calculated using the following:

Net income

$

1,931

$

1,380

Income allocated to RSUs

(7)

(7)

Income allocated to common stock for diluted EPS

$

1,924

$

1,373