Analysis of Debt
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- Income Statement
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- Analysis of Reportable Segments
- Analysis of Geographic Areas
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Operating Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Return on Assets (ROA) since 2005
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Total Debt (Carrying Amount)
Texas Instruments Inc., balance sheet: debt
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The carrying amount of total long-term debt exhibited a consistent upward trend over the five-year period from 2021 to 2025. Both the current portion of long-term debt and the long-term debt excluding the current portion contributed to this overall increase, though at differing rates.
- Total Long-Term Debt
- The total long-term debt, inclusive of the current portion, increased from US$7,741 million in 2021 to US$14,048 million in 2025. This represents an approximately 81.4% increase over the period. The most substantial year-over-year increase occurred between 2022 and 2023, with an increase of US$2,488 million. Growth continued, though at a slightly slower pace, between 2023 and 2024, and again between 2024 and 2025.
- Current Portion of Long-Term Debt
- The current portion of long-term debt remained stable at US$500 million for 2021 and 2022. An increase to US$599 million was observed in 2023, followed by a further increase to US$750 million in 2024. However, this value decreased to US$500 million in 2025, returning to the level observed in the initial years of the period.
- Long-Term Debt (Excluding Current Portion)
- Long-term debt, excluding the current portion, demonstrated a steady and significant increase throughout the period. It rose from US$7,241 million in 2021 to US$13,548 million in 2025, representing a growth of approximately 87.1%. The largest absolute increase in this component occurred between 2022 and 2023, with an increase of US$2,389 million. The rate of increase slowed slightly in the subsequent two years, but remained positive.
The observed trend suggests a deliberate strategy of increasing long-term financing. The fluctuations in the current portion of long-term debt may reflect scheduled debt maturities and refinancing activities. The consistent growth in the long-term debt excluding the current portion indicates a reliance on longer-term funding sources.
Total Debt (Fair Value)
| Dec 31, 2025 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Total long-term debt, including current portion (fair value) | |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | |
Based on: 10-K (reporting date: 2025-12-31).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on long-term debt:
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| Total | |||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ in millions
2 Weighted-average interest rate = 100 × ÷ =
Interest Costs Incurred
Texas Instruments Inc., interest costs incurred
US$ in millions
| 12 months ended: | Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest and debt expense | |||||||||||
| Capitalized interest | |||||||||||
| Interest costs incurred |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
Interest and debt expense, capitalized interest, and total interest costs incurred all demonstrate an increasing trend over the five-year period. The rate of increase in interest costs accelerated between 2021 and 2023, before moderating slightly in the subsequent two years.
- Overall Interest Costs
- Interest costs incurred rose from US$192 million in 2021 to US$555 million in 2025, representing a cumulative increase of approximately 189%. The most substantial year-over-year increase occurred between 2022 and 2023, with a rise of US$144 million. Growth slowed in 2024 and 2025, increasing by US$120 million and US$27 million respectively.
- Interest and Debt Expense
- Interest and debt expense, the primary component of total interest costs, followed a similar pattern, increasing from US$184 million in 2021 to US$508 million in 2024, and US$543 million in 2025. This indicates a direct correlation between the level of debt and the associated interest obligations.
- Capitalized Interest
- Capitalized interest, while smaller in magnitude than total interest expense, also exhibited an upward trend, increasing from US$8 million in 2021 to US$20 million in 2024 before decreasing to US$12 million in 2025. This suggests fluctuations in projects qualifying for interest capitalization, or changes in capitalization policies.
The consistent rise in interest costs incurred suggests increasing debt levels or higher interest rates, or a combination of both. The moderation in the growth rate of interest costs in the later years may indicate a stabilization of debt or successful debt management strategies, although further investigation into the company’s debt structure and interest rate exposure would be necessary to confirm this.
Adjusted Interest Coverage Ratio
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
2025 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest and debt expense
= ÷ =
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= ÷ =
The interest coverage ratios demonstrate a significant decline over the observed period. Both the interest coverage ratio (without capitalized interest) and the adjusted interest coverage ratio (with capitalized interest) exhibit a consistent downward trend from 2021 through 2025.
- Interest Coverage Ratio (without capitalized interest)
- In 2021, the interest coverage ratio stood at 49.47. It decreased to 47.88 in 2022, representing a modest decline. However, a more substantial reduction occurred in 2023, falling to 22.01. This downward trajectory continued in subsequent years, reaching 11.73 in 2024 and remaining relatively stable at 11.52 in 2025. The ratio’s decline suggests a weakening ability to meet interest obligations from earnings before interest and taxes.
- Adjusted Interest Coverage Ratio (with capitalized interest)
- The adjusted interest coverage ratio mirrored the trend of the unadjusted ratio. Starting at 47.41 in 2021, it decreased to 46.57 in 2022. A considerable drop was observed in 2023, with the ratio falling to 21.35. The decline persisted, reaching 11.29 in 2024 and stabilizing at 11.27 in 2025. The inclusion of capitalized interest does not materially alter the overall trend, indicating that the decline in earnings is the primary driver of the reduced coverage.
- Overall Trend
- The consistent decline in both ratios from 2021 to 2025 indicates a diminishing capacity to cover interest expenses. While both ratios remain above 1.0, suggesting the company can currently meet its interest obligations, the substantial reduction warrants further investigation into the underlying causes, such as changes in profitability, increased debt levels, or shifts in capital expenditure policies. The stabilization of the ratios in 2024 and 2025 may indicate the end of a period of rapid decline, but continued monitoring is crucial.