Financial Analysis

Commitments and contingencies Purchase commitments Our purchase commitments include payments for software licenses and contractual arrangements with suppliers when there is a fixed, noncancelable payment schedule or when minimum payments are due with a reduced delivery schedule. As of December 31, 2025, we had committed to make the following minimum payments under our purchase commitments: 2026 2027 2028 2029 2030 Thereafter Total Purchase commitments $ 440 $ 442 $ 291 $ 151 $ 48 $ 70 $ 1,442 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 any future liabilities that may result. Warranty costs/product liabilities Our stated warranties for semiconductor products obligate us to repair, replace or credit the purchase price of a covered product back to the buyer. Product claim consideration may exceed the price of our products. 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 consolidated financial statements. 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 produc …

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Debt and lines of credit Short-term borrowings We maintain a line of credit to provide additional liquidity through bank loans and, if necessary, to support commercial paper borrowings. As of December 31, 2025, the aforementioned line of credit was a variable-rate, revolving credit facility from a consortium of investment-grade banks that allows us to borrow up to $1 billion until March 2026. The interest rate on borrowings under this credit facility, if drawn, is indexed to the applicable Term Secured Overnight Financing Rate (Term SOFR). As of December 31, 2025, our credit facility was undrawn, and we had no commercial paper outstanding. Long-term debt In March 2025, we retired $750 million of maturing debt. In May 2025, we issued two series of senior unsecured notes for an aggregate principal amount of $1.20 billion, consisting of $550 million of 4.50% notes due in 2030 and $650 million of 5.10% notes due in 2035. We incurred $6 million of issuance and other related costs. The proceeds of the offering were $1.20 billion, net of the original issuance discounts, which will be used for general corporate purposes. In February 2024, we issued five series of senior unsecured notes for an aggregate principal amount of $3.00 billion, consisting of $650 million of 4.60% notes due in 2027, $650 million of 4.60% notes due in 2029, $600 million of 4.85% notes due in 2034, $750 million of 5.15% notes due in 2054 and $350 million of 5.05% notes due in 2063. We incurred $16 million of is …

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Stock compensation We have stock options outstanding to participants under long-term incentive plans. The option price per share may not be less than the fair market value of our common stock on the date of the grant. The options have a 10-year term and generally vest ratably over four years. Options continue to vest after the recipient retires. We also have RSUs outstanding to participants under long-term incentive plans. Each RSU represents the right to receive one share of TI common stock, issued on the vesting date, which is generally four years after the date of grant. RSUs continue to vest after the recipient retires. Holders of RSUs receive an annual cash payment equivalent to the dividends paid on our common stock. The fair value per share of RSUs is determined based on the closing price of our common stock on the date of grant. We have options and RSUs outstanding to non-employee directors under 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 director deferred compensation accounts. We also have an employee stock purchase plan (ESPP) under which options are offered to all eligible employees in amounts based on a percentage of the employees compensation, subject to a cap. Under the plan, the option price per share is 85% of the fair market value on the exercise date. As of …

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Income taxes Income before income taxes is comprised of the following components: For Years Ended December 31, 2025 2024 2023 U.S. $ 4,503 $ 4,438 $ 6,445 Non-U.S. 1,207 1,015 973 Total $ 5,710 $ 5,453 $ 7,418 Provision for income taxes is comprised of the following components: For Years Ended December 31, 2025 2024 2023 Current Deferred Total Current Deferred Total Current Deferred Total U.S. federal $ 466 $ 102 $ 568 $ 605 $ (139) $ 466 $ 943 $ (277) $ 666 Non-U.S. 259 (121) 138 244 (71) 173 240 (22) 218 U.S. state 3 3 15 15 24 24 Total $ 728 $ (19) $ 709 $ 864 $ (210) $ 654 $ 1,207 $ (299) $ 908 Applying the updated requirements in ASU 2023-09 on a prospective basis, the principal reconciling items from the U.S. statutory income tax rate to the effective tax rate (provision for income taxes as a percentage of income before income taxes) are as follows: For Year Ended December 31, 2025 U.S. statutory income tax rate $ 1,199 21.0 % Foreign tax effects: Malaysia: Tax incentives (127) (2.2) Other foreign jurisdictions 16 0.3 Effect of cross-border tax laws: Foreign derived intangible income (231) (4.0) Other (30) (0.6) Tax credits: R&D tax credit (79) (1.4) Nontaxable or nondeductible items: Stock compensation (66) (1.1) Other 9 0.1 Other adjustments 18 0.3 Effective tax rate $ 709 12.4 % For the years ended December 31, 2024, and 2023, prior to the adoption of ASU 2023-09, the principal reconciling items from the U.S. statutory income tax rate to the effective tax rate ar …

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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 renewal provisions and require us to pay real estate taxes, insurance and maintenance costs. Our leases are included as a component of the following balance sheet lines: December 31, 2025 2024 Other long-term assets $ 729 $ 786 Accrued expenses and other liabilities $ 119 $ 118 Other long-term liabilities 612 663 Details of our operating leases are as follows: For Years Ended December 31, 2025 2024 2023 Lease cost related to lease liabilities $ 102 $ 85 $ 73 Variable lease cost 60 64 54 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for lease cost $ 80 $ 65 $ 65 Lease assets obtained in exchange for new lease liabilities $ 26 $ 241 $ 285 As of December 31, 2025, we had committed to make the following minimum payments under our noncancelable operating leases: 2026 2027 2028 2029 2030 Thereafter Total Lease payments $ 122 $ 110 $ 97 $ 85 $ 82 $ 424 $ 920 Imputed lease interest (189) Total lease liabilities $ 731 The weighted average remaining lease term was 10.1 years and 10.8 years as of December 31, 2025 and 2024, respectively. The weighted average discount rate was 4.60% and 4.53% as of December 31, 2025 and 2024, respectively.

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Changes in accounting standards adopted standards for current period We adopted the following Accounting Standards Updates (ASU) during the current period: ASU Description Adopted for Year Ended ASU No. 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures December 31, 2025 Changes in accounting standards standards not yet adopted We are currently evaluating the potential impact of the following ASUs on our financial statements and related disclosures. We plan to adopt these ASUs as of their effective dates. ASU Description Effective for Period Ending ASU No. 2024-03 Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses December 31, 2027 ASU No. 2025-06 Intangibles Goodwill and Other Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software March 31, 2028 ASU No. 2025-10 Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities March 31, 2029 …

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Postretirement benefit plans Plan descriptions We have various employee retirement plans, including defined contribution, defined benefit and retiree health care benefit plans. For qualifying employees, we offer deferred compensation arrangements. U.S. retirement plans Our principal retirement plans in the United States are a defined contribution plan, an enhanced defined contribution plan and qualified and non-qualified defined benefit pension plans. The defined benefit plans were closed to new participants in 1997. Current participants were allowed to make a one-time election to continue accruing a benefit in the plans or to cease accruing a benefit and instead to participate in the enhanced defined contribution plan. Both defined contribution plans offer an employer-matching savings option that allows employees to make pretax and post-tax contributions to various investment choices. 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% of the employees 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% of the employees annual eligible earnings, plus an emplo …

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Subsequent event Acquisition of Silicon Labs As announced on February 4, 2026, we have entered into a definitive agreement to acquire Silicon Labs for $231.00 per share in an all-cash transaction, representing a total enterprise value of approximately $7.5 billion. Under the terms of the agreement, Silicon Labs stockholders will receive $231.00 in cash for each share of Silicon Labs common stock they hold at the time of closing, which is currently expected to close in the first half of 2027, subject to receipt of regulatory approvals and other customary closing conditions, including approval by Silicon Labs stockholders. We expect to fund the transaction with a combination of cash on hand and debt financing to be arranged prior to closing.

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Debt and lines of credit Short-term borrowings We maintain a line of credit to provide additional liquidity through bank loans and, if necessary, to support commercial paper borrowings. As of June 30, 2026, the aforementioned line of credit was a variable-rate, revolving credit facility from a consortium of investment-grade banks that allows us to borrow up to $1 billion until March 2027. The interest rate on borrowings under this credit facility, if drawn, is indexed to the applicable Term Secured Overnight Financing Rate (Term SOFR). As of June 30, 2026, our credit facility was undrawn, and we had no commercial paper outstanding. In June 2026, we entered into a 364-day delayed draw term loan credit facility for borrowings up to $5 billion to support the Silicon Labs acquisition consideration and related transaction expenses. The availability of funding is conditioned on the consummation of the planned acquisition of Silicon Labs. As of June 30, 2026, there were no outstanding borrowings on the delayed draw term loan credit facility. Long-term debt outstanding is as follows: June 30, December 31, 2026 2025 Notes due 2026 at 1.125% $ 500 $ 500 Notes due 2027 at 4.60% 650 650 Notes due 2027 at 2.90% 500 500 Notes due 2028 at 4.60% 700 700 Notes due 2029 at 4.60% 650 650 Notes due 2029 at 2.25% 750 750 Notes due 2030 at 1.75% 750 750 Notes due 2030 at 4.50% 550 550 Notes due 2031 at 1.90% 500 500 Notes due 2032 at 3.65% 400 400 Notes due 2033 at 4.90% 950 950 Notes due 2034 at …

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Income taxes Provision for income taxes is based on the following: For Three Months Ended For Six Months Ended June 30, June 30, 2026 2025 2026 2025 Taxes calculated using the estimated annual effective tax rate $ 309 $ 199 $ 538 $ 365 Discrete tax items (51) (16) (111) (85) Provision for income taxes $ 258 $ 183 $ 427 $ 280 Effective tax rate 12 % 12 % 11 % 10 % The effective tax rate differs from the 21% U.S. statutory corporate tax rate due to the effect of U.S. tax benefits.

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Changes in accounting standards standards not yet adopted We are currently evaluating the potential impact of the following Accounting Standards Updates (ASU) on our financial statements and related disclosures. We plan to adopt these ASUs as of their effective dates. ASU Description Effective for Period Ending ASU No. 2024-03 Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses December 31, 2027 ASU No. 2025-06 Intangibles Goodwill and Other Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software March 31, 2028 ASU No. 2025-10 Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities March 31, 2029 …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Postretirement benefit plans Expenses related to defined benefit and retiree health care benefit plans are as follows: U.S. Defined Benefit U.S. Retiree Health Care Non-U.S. Defined Benefit For Three Months Ended June 30, 2026 2025 2026 2025 2026 2025 Service cost $ 1 $ 2 $ $ 1 $ 4 $ 3 Interest cost 5 7 3 3 17 15 Expected return on plan assets (4) (6) (2) (3) (20) (17) Recognized net actuarial losses (gains) 1 2 (1) (1) 1 Amortization of prior service cost (credit) 1 Net periodic benefit costs (credits) 3 5 1 1 2 Settlement losses (gains) 2 3 (1) Total, including other postretirement losses (gains) $ 5 $ 8 $ 1 $ $ $ 2 U.S. Defined Benefit U.S. Retiree Health Care Non-U.S. Defined Benefit For Six Months Ended June 30, 2026 2025 2026 2025 2026 2025 Service cost $ 3 $ 4 $ $ 1 $ 8 $ 7 Interest cost 11 13 6 6 33 29 Expected return on plan assets (10) (10) (5) (6) (39) (35) Recognized net actuarial losses (gains) 2 4 (1) (2) 2 Amortization of prior service cost (credit) 2 Net periodic benefit costs (credits) 6 11 1 2 3 Settlement losses (gains) 2 3 (1) Total, including other postretirement losses (gains) $ 8 $ 14 $ 1 $ $ 1 $ 3 …

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Stockholders equity Changes in equity are as follows: Common Stock Paid-in Capital Retained Earnings Treasury Common Stock AOCI Balance, December 31, 2025 $ 1,741 $ 4,511 $ 52,236 $ (42,130) $ (85) 2026 Net income 1,545 Dividends declared and paid ($1.42 per share) (1,291) Common stock issued for stock-based awards 105 204 Stock repurchases (158) Stock compensation 109 Other comprehensive income (loss), net of taxes 1 Dividend equivalents on RSUs (8) Other (3) 1 Balance, March 31, 2026 1,741 4,722 52,483 (42,084) (84) Net income 1,980 Dividends declared and paid ($1.42 per share) (1,295) Common stock issued for stock-based awards 279 166 Stock repurchases (23) Stock compensation 127 Other comprehensive income (loss), net of taxes 1 Dividend equivalents on RSUs (7) Other 1 Balance, June 30, 2026 $ 1,741 $ 5,129 $ 53,161 $ (41,941) $ (83) Common Stock Paid-in Capital Retained Earnings Treasury Common Stock AOCI Balance, December 31, 2024 $ 1,741 $ 3,935 $ 52,262 $ (40,895) $ (140) 2025 Net income 1,179 Dividends declared and paid ($1.36 per share) (1,238) Common stock issued for stock-based awards 8 110 Stock repurchases (657) Stock compensation 116 Other comprehensive income (loss), net of taxes (7) Dividend equivalents on RSUs (7) Other (1) Balance, March 31, 2025 1,741 4,058 52,196 (41,442) (147) Net income 1,295 Dividends declared and paid ($1.36 per share) (1,235) Common stock issued for stock-based awards 59 56 Stock repurchases (290) Stock compensation 129 Other comprehe …

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