Texas Instruments Incorporated (TXN)’s Fourth Quarter and Year-End 2014 Earnings Call Transcript

Dave Pahl VP, Head of Investor Relations

Okay, Craig. Thanks for that question and we go to the next caller please.

Operator

We’ll go next with Mark Lipacis with Jefferies

Mark Lipacis, Jefferies

Thanks for taking my question. Kevin, as you go on to your capital management conference call next week, could you just remind us what your historical philosophy has been on levering the balance sheet to drive shareholder value?

Kevin March, SVP & Chief Financial Officer

Well Mark, what we’ve talked about on debt — we have debt on the balance sheet today. It will be there until 2023 because that is when the last of the current outstanding balance matures. And our attitude towards debt is that it will continue to be part of the balance sheet when the economics makes sense. And for us that economics making sense means that if we can borrow at interest rates that we pursued to be below what we expect the inflation rates to be, or correspondingly, at less than our dividend yields, then we think that is probably a pretty good deal on behalf of our shareholders. And so that will be the kind of parameters that we look at as we continue to decide how much debt we carry in the balance sheet and as bonds mature going forward. We do actually have a $1 billion of debt maturing in 2015. We have $250 million maturing in April and $750 million maturing in August of 2015.

Dave Pahl VP, Head of Investor Relations

Do you have follow on Mark?

Mark Lipacis, Jefferies

Yes thank you for that color. So the analog business operating margins are but 2,000 basis points higher than the embedded as we think about the potential profitability of the embedded business. Are there structural reasons why embedded profitability could not equal the analog profitability longer term? Thank you.

Kevin March, SVP & Chief Financial Officer

Mark, I think the simple answer in my mind is difficult for us to find evidence of somebody in the market place outside TI who is able to perform on those kind of levels. I think the economics as such would be very attractive and a very great place for us to be in. But probably get up to par on what you see in analog. I think analog is quite unique in what it can produced for companies and for shareholders who own those companies like we do.

Dave Pahl VP, Head of Investor Relations

Thanks Mark and we go to the next caller please.