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TXN (Texas Instruments) Free Cash Flow : $1,468 Mil (TTM As of Sep. 2024)


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What is Texas Instruments Free Cash Flow?

Texas Instruments's total free cash flow for the months ended in Sep. 2024 was $416 Mil. Its total free cash flow for the trailing twelve months (TTM) ended in Sep. 2024 was $1,468 Mil.

Texas Instruments's Free Cash Flow per Share for the months ended in Sep. 2024 was $0.45. Its free cash flow per share for the trailing twelve months (TTM) ended in Sep. 2024 was $1.60.

During the past 12 months, the average Free Cash Flow per Share Growth Rate of Texas Instruments was -11.10% per year. During the past 3 years, the average Free Cash Flow per Share Growth Rate was -37.00% per year. During the past 5 years, the average Free Cash Flow per Share Growth Rate was -17.80% per year. During the past 10 years, the average Free Cash Flow per Share Growth Rate was 2.20% per year. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Free Cash Flow Growth Rate using Free Cash Flow per Share data.

During the past 13 years, Texas Instruments's highest 3-Year average Free Cash Flow per Share Growth Rate was 297.40% per year. The lowest was -54.50% per year. And the median was 8.50% per year.


Texas Instruments Free Cash Flow Historical Data

The historical data trend for Texas Instruments's Free Cash Flow can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Texas Instruments Free Cash Flow Chart

Texas Instruments Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Free Cash Flow
Get a 7-Day Free Trial Premium Member Only Premium Member Only 5,802.00 5,490.00 6,294.00 5,923.00 1,349.00

Texas Instruments Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
Free Cash Flow Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 442.00 776.00 -231.00 507.00 416.00

Texas Instruments Free Cash Flow Calculation

Free Cash Flow is considered one of the most important parameters to measure a company's earnings power by value investors because it is not subject to estimates of Depreciation, Depletion and Amortization (DDA). However, when we look at the Free Cash Flow, we should look from a long term perspective, because any year's Free Cash Flow can be drastically affected by the spending on Property, Plant, & Equipment (PPE) of the business in that year. Over the long term, Free Cash Flow should give pretty good picture on the real earnings power of the company.

Texas Instruments's Free Cash Flow for the fiscal year that ended in Dec. 2023 is calculated as

Free Cash Flow (A: Dec. 2023 )=Cash Flow from Operations+Capital Expenditure
=6420+-5071
=1,349

Texas Instruments's Free Cash Flow for the quarter that ended in Sep. 2024 is calculated as

Free Cash Flow (Q: Sep. 2024 )=Cash Flow from Operations+Capital Expenditure
=1732+-1316
=416

Free Cash Flow for the trailing twelve months (TTM) ended in Sep. 2024 adds up the quarterly data reported by the company within the most recent 12 months, which was $1,468 Mil.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Texas Instruments  (NAS:TXN) Free Cash Flow Explanation

Free Cash Flow is very close to Warren Buffett's definition of Owner's Earnings, except that in Warren Buffett's Owner's Earnings, the spending for Property, Plant, and Equipment is only for maintenance (replacement), while in the Free Cash Flow calculation, the cost of new Property, Plant, and Equipment due to business expansion is also deducted. There, Free Cash Flow is more conservative than Owner's Earnings.

In Don Yacktman's calculation of forward rate of return, he uses Free Cash Flow for the calculation. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation.

This is what Yacktman said in his March 2012 interview - when the S&P 500 was at 1400:

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over seven years. The reason we use seven years is because research shows that seven years is the length of the typical business cycle.

Therefore, as of Sep24, Texas Instruments's Forward Rate of Return (Yacktman) % is

Forward Rate of Return (Yacktman) % (Sep24)=Normalized Free Cash Flow/Price+5-Year EBITDA Growth Rate
=4.73390476/206.57+0.073
=9.59 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Free Cash Flow within a report period can be affected by management's decisions of capital spending. Therefore, it is important to look at long term when it comes to Free Cash Flow.


Texas Instruments Free Cash Flow Related Terms

Thank you for viewing the detailed overview of Texas Instruments's Free Cash Flow provided by GuruFocus.com. Please click on the following links to see related term pages.


Texas Instruments Business Description

Address
12500 TI Boulevard, Dallas, TX, USA, 75243
Dallas-based Texas Instruments generates over 95% of its revenue from semiconductors and the remainder from its well-known calculators. Texas Instruments is the world's largest maker of analog chips, which are used to process real-world signals such as sound and power. Texas Instruments also has a leading market share position in processors and microcontrollers used in a wide variety of electronics applications.
Executives
Ronald Kirk director TEXAS INSTRUMENTS INCORPORATED, 12500 TI BOULEVARD MS 3999, DALLAS TX 75243
Haviv Ilan officer: Sr. Vice President 12500 TI BOULEVARD, DALLAS TX 75243
Mark Gary officer: Sr. Vice President 12500 TI BOULEVARD, DALLAS TX 75243
Ahmad Bahai officer: Sr. Vice President 2900 SEMICONDUCTOR DRIVE, M/S G1-1160, SANTA CLARA CA 95051
Rafael R Lizardi officer: Sr. Vice President & CFO 12500 TI BOULEVARD, DALLAS TX 75243
Christine Witzsche officer: Sr. Vice President 12500 TI BOULEVARD, DALLAS TX 75243
Robert E Sanchez director 11690 N.W. 105TH STREET, MIAMI FL 33178
Amichai Ron officer: Sr. Vice President 12500 TI BOULEVARD, DALLAS TX 75243
Pamela H Patsley director 53 SOUTH AVENUE, BULINGTON MA 01803
Mark T. Roberts officer: Sr. Vice President 12500 TI BOULEVARD, DALLAS TX 75243
Shanon J Leonard officer: Sr. Vice President 12500 TI BOULEVARD, DALLAS TX 75243
Julie C. Knecht officer: VP & Chief Accounting Officer 12500 TI BOULEVARD, DALLAS TX 75243
Jean M. Hobby director 10000 WEHRLE DRIVE, CLARENCE NY 14031
Richard K Templeton director, officer: President & CEO 12500 TI BOULEVARD, DALLAS TX 75243
Mark A Blinn director 5215 N. O'CONNOR BLVD., SUITE 2300, IRVING TX 75039