Rafael R. Lizardi
Senior Vice President and Chief Financial Officer, Finance and Operations at Texas Instruments
Thanks, Dave, and good afternoon, everyone. As Dave mentioned, third quarter revenue was $4.6 billion, up 22% from a year ago. Gross profit in the quarter was $3.2 billion or 68% of revenue. From a year ago, gross profit margin increased 360 basis points. Operating expenses in the quarter were $800 million, up 1% from a year ago and about as expected. On a trailing 12-month basis, operating expenses were 18% of revenue. Over the last 12 months, we have invested $1.6 billion in R&D. Acquisition charges and non-cash expense were $47 million in the third quarter and will go to zero beginning in fourth quarter of 2021. Operating profit was $2.3 billion in the quarter or 50% of revenue. Operating profit was up 43% from the year ago quarter. Net income in the third quarter was $1.9 billion or $2.07 per share.
Let me now comment on our capital management results, starting with our cash generation. Cash flow from operations was $2.4 billion in the quarter. Capital expenditures were $486 million in the quarter. Free cash flow on a trailing 12-month basis was $7.1 billion. In September, we announced we would increase our dividend by 13% effective this month, marking our 18th consecutive year of dividend increases. In the quarter, we paid $942 million in dividends and repurchased $139 million of our stock. In total, we have returned $4.2 billion in the past 12 months. Over the same period, our dividend represented 53% of free cash flow, underscoring its sustainability.
Our balance sheet remained strong with $9.8 billion of cash and short-term investments at the end of the third quarter. In the quarter, we issued $1.5 billion of debt in three tranches of $500 million each. The first has a coupon of 1.125%, which is due in five years; the second, 1.9% due in 10 years; and the last, a 2.7% due in 30 years. This resulted in total debt of $7.8 billion with a weighted average coupon of 2.6%.
Regarding inventory, TI inventory dollars were up $7 million from the prior quarter and days were 112, up one day sequentially, but still below desired levels. For the fourth quarter, we expect TI revenue in the range of $4.22 billion to $4.58 billion and earnings per share to be in the range of $1.83 to $2.07. The Lehi acquisition closed last Friday, but the costs are not included in our guidance. We will provide those details when we report fourth quarter results. Just as a reminder, the purchase price was about $900 million, and we expect ongoing costs of about $75 million per quarter through 2022.
We continue to expect our annual operating tax rate for 2021 to be about 14% and our effective tax rate to be about 13%. As you are looking at your models for 2022, without any changes to tax law, we would expect our annual operating and effective tax rates to remain about what they are this year, with a similar quarterly profile of discrete tax benefits that are higher in the first quarter compared to the rest of the year.
In closing, we continue to invest to strengthen our competitive advantages and in making our business stronger. Our investments in our long-term roadmap for capacity expansion both in LFAB and RFAB2 are great examples. As a reminder, our capex will be higher on an absolute level as well as a percentage of revenue as we strengthen this advantage. We are working through detailed plans of our long-term roadmap and we'll have specifics of timing and capex spending in our Capital Management call in February. We continue to believe owning and controlling our supply chain will be of growing strategic importance.
With that, let me turn it back to Dave.