7/11/2003 - Texas Instruments Incorporated (NYSE: TXN) sold 24.7 million shares of Micron Technology, Inc. (NYSE: MU) common stock. TI will recognize a pre-tax gain in accordance with generally accepted accounting principles of $106 million from this sale, which will be recorded in other income (expense) net (OI&E) in TI's third-quarter results. TI also will recognize a previously reserved tax benefit of $162 million in its third quarter, which is attributable to the realization of a tax loss carryback due to the sale. The combined effect of the gain and the tax benefit will be an increase of $230 million to the company’s net income for the third quarter.
TI carries its public stock holdings at current market value on its balance sheet and records an impairment write-down against earnings if a stock’s value declines below its cost basis and the decline is deemed to be other than temporary. In the fourth quarter of 2002, TI recorded a write-down of its Micron common stock to $9.74 per share but fully reserved the tax benefit associated with the action at that time. The tax benefit was to expire at the end of 2003. The cost basis of the shares that were sold was $28.45 per share for tax purposes.
Prior to today’s transaction, TI held 57 million shares of Micron common stock, acquired in connection with TI's sale of its semiconductor memory business unit to Micron in 1998. The remaining 32.3 million shares that TI continues to hold have a cost basis of $15.22 per share for tax purposes. The company has no specific plans to sell the remaining shares at the current time and has agreed, as part of today’s transaction, not to sell any Micron shares for a 90-day period.
Texas Instruments Incorporated provides innovative DSP and analog technologies to meet our customers’ real world signal processing requirements. In addition to Semiconductor, the company’s businesses include Sensors & Controls, and Educational & Productivity Solutions. TI is headquartered in Dallas, Texas, and has manufacturing, design or sales operations in more than 25 countries.
Texas Instruments is traded on the New York Stock Exchange under the symbol TXN. More information is located on the World Wide Web site at www.ti.com.
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