UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended October 29, 2022
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-7819
Analog Devices, Inc.
(Exact name of registrant as specified in its charter)
Massachusetts
(State or other jurisdiction of incorporation or organization)
One Analog Way, Wilmington, MA
(Address of principal executive offices)
04-2348234
(I.R.S. Employer Identification No.)
01887
(Zip Code)
(781) 935-5565
(Registrant’s telephone number, including area code)
______________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock $0.16 2/3 par value per share
Trading Symbol(s)
ADI
Name of each exchange on which registered
Nasdaq Global Select Market
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
☑
☐
Accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of
its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report. ☑
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was approximately
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was approximately
$62,631,000,000 based on the last reported sale of the Common Stock on The Nasdaq Global Select Market on April 30, 2022. Shares of
$62,631,000,000 based on the last reported sale of the Common Stock on The Nasdaq Global Select Market on April 30, 2022. Shares of
voting and non-voting stock beneficially owned by executive officers, directors and holders of more than 5% of the outstanding stock have
voting and non-voting stock beneficially owned by executive officers, directors and holders of more than 5% of the outstanding stock have
been excluded from this calculation because such persons or institutions may be deemed affiliates. This determination of affiliate status is not
been excluded from this calculation because such persons or institutions may be deemed affiliates. This determination of affiliate status is not
a conclusive determination for other purposes.
a conclusive determination for other purposes.
As of October 29, 2022, there were 509,295,941 shares of Common Stock, $0.16 2/3 par value per share, outstanding.
As of October 29, 2022, there were 509,295,941 shares of Common Stock, $0.16 2/3 par value per share, outstanding.
Documents Incorporated by Reference
Documents Incorporated by Reference
TABLE OF CONTENTS
TABLE OF CONTENTS
Note about Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Note about Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Document Description
Document Description
Form 10-K Part
Form 10-K Part
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portions of the Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held March 8, 2023
Portions of the Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held March 8, 2023
III
III
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6. Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6. Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . .
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . .
Item 7A. Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7A. Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Shareholders' Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Shareholders' Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . . . . . . .
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . . . . . . .
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters . . . . .
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters . . . . .
Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . . . . . . . . .
Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . . . . . . . . .
Item 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule II - Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule II - Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16. Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16. Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
1
2
2
2
2
11
11
24
24
25
25
26
26
26
26
27
27
27
27
28
28
29
29
41
41
43
43
45
45
45
45
46
46
47
47
48
48
49
49
50
50
85
85
85
85
87
87
87
87
88
88
88
88
88
88
88
88
88
88
88
88
89
89
89
89
96
96
97
97
98
98
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was approximately
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was approximately
$62,631,000,000 based on the last reported sale of the Common Stock on The Nasdaq Global Select Market on April 30, 2022. Shares of
$62,631,000,000 based on the last reported sale of the Common Stock on The Nasdaq Global Select Market on April 30, 2022. Shares of
voting and non-voting stock beneficially owned by executive officers, directors and holders of more than 5% of the outstanding stock have
voting and non-voting stock beneficially owned by executive officers, directors and holders of more than 5% of the outstanding stock have
been excluded from this calculation because such persons or institutions may be deemed affiliates. This determination of affiliate status is not
been excluded from this calculation because such persons or institutions may be deemed affiliates. This determination of affiliate status is not
a conclusive determination for other purposes.
a conclusive determination for other purposes.
As of October 29, 2022, there were 509,295,941 shares of Common Stock, $0.16 2/3 par value per share, outstanding.
As of October 29, 2022, there were 509,295,941 shares of Common Stock, $0.16 2/3 par value per share, outstanding.
Documents Incorporated by Reference
Documents Incorporated by Reference
Document Description
Document Description
Form 10-K Part
Form 10-K Part
Portions of the Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held March 8, 2023
Portions of the Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held March 8, 2023
III
III
TABLE OF CONTENTS
TABLE OF CONTENTS
Note about Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Note about Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6. Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6. Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . .
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . .
Item 7A. Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7A. Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Shareholders' Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Shareholders' Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . . . . . . .
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . . . . . . .
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters . . . . .
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters . . . . .
Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . . . . . . . . .
Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . . . . . . . . .
Item 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule II - Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule II - Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16. Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16. Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Note About Forward-Looking Statements
Note About Forward-Looking Statements
This Annual Report on Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and
This Annual Report on Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and
Results of Operations,” contains forward-looking statements regarding future events and our future results that are subject to the
Results of Operations,” contains forward-looking statements regarding future events and our future results that are subject to the
safe harbor created under the Private Securities Litigation Reform Act of 1995 and other safe harbors under the Securities Act
safe harbor created under the Private Securities Litigation Reform Act of 1995 and other safe harbors under the Securities Act
of 1933 and the Securities Exchange Act of 1934. All statements other than statements of historical fact are statements that
of 1933 and the Securities Exchange Act of 1934. All statements other than statements of historical fact are statements that
could be deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts, and
could be deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts, and
projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as
projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as
“expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,”
“expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,”
“could” and “will,” and variations of such words and similar expressions are intended to identify such forward-looking
“could” and “will,” and variations of such words and similar expressions are intended to identify such forward-looking
statements. In addition, any statements that refer to projections regarding our future financial performance; our anticipated
statements. In addition, any statements that refer to projections regarding our future financial performance; our anticipated
growth and trends in our businesses; new or improved innovative solutions, products, and technologies; the effects of business,
growth and trends in our businesses; new or improved innovative solutions, products, and technologies; the effects of business,
economic, political, legal, and regulatory impacts or conflicts upon our global operations; changes in demand for
economic, political, legal, and regulatory impacts or conflicts upon our global operations; changes in demand for
semiconductors and the related changes in demand and supply for our products; manufacturing, delays, product availability, and
semiconductors and the related changes in demand and supply for our products; manufacturing, delays, product availability, and
supply chain disruptions; our ability to recruit or retain our key personnel; our future liquidity, capital needs and capital
supply chain disruptions; our ability to recruit or retain our key personnel; our future liquidity, capital needs and capital
expenditures; our development of technologies and research and development investments; the impact of the COVID-19
expenditures; our development of technologies and research and development investments; the impact of the COVID-19
pandemic on our business, financial condition and results of operations; our future market position and expected competitive
pandemic on our business, financial condition and results of operations; our future market position and expected competitive
changes in the marketplace for our products; our plans to pay dividends or repurchase stock; servicing our outstanding debt; our
changes in the marketplace for our products; our plans to pay dividends or repurchase stock; servicing our outstanding debt; our
expected tax rate; the effect of changes in or the application of new or revised tax laws; expected cost savings; the effect of new
expected tax rate; the effect of changes in or the application of new or revised tax laws; expected cost savings; the effect of new
accounting pronouncements; plans to integrate or realize the benefits or synergies expected of acquired businesses and
accounting pronouncements; plans to integrate or realize the benefits or synergies expected of acquired businesses and
technologies, including the acquired business, operations and employees of Maxim Integrated Products, Inc.; our continued
technologies, including the acquired business, operations and employees of Maxim Integrated Products, Inc.; our continued
initiatives to consolidate our footprint related to our business units including our manufacturing, engineering, sales, marketing
initiatives to consolidate our footprint related to our business units including our manufacturing, engineering, sales, marketing
and administrative offices; implementation of environment, health and safety standards; environment, social and governance
and administrative offices; implementation of environment, health and safety standards; environment, social and governance
related goals; and other characterizations of future events or circumstances are forward-looking statements. Readers are
related goals; and other characterizations of future events or circumstances are forward-looking statements. Readers are
cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that
cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that
are difficult to predict, including those identified in Part I, Item 1A. "Risk Factors" and elsewhere in this Annual Report on
are difficult to predict, including those identified in Part I, Item 1A. "Risk Factors" and elsewhere in this Annual Report on
Form 10-K. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking
Form 10-K. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking
statements. We undertake no obligation to revise or update any forward-looking statements, including to reflect events or
statements. We undertake no obligation to revise or update any forward-looking statements, including to reflect events or
circumstances occurring after the date of the filing of this report, except to the extent required by law.
circumstances occurring after the date of the filing of this report, except to the extent required by law.
PART I
PART I
ITEM 1. BUSINESS
ITEM 1. BUSINESS
Company Overview, Strategy and Mission
Company Overview, Strategy and Mission
Analog Devices, Inc. (we, Analog Devices or the Company) is a leading semiconductor company dedicated to solving
Analog Devices, Inc. (we, Analog Devices or the Company) is a leading semiconductor company dedicated to solving
our customers' most complex engineering challenges. We deliver innovations that connect technology to human breakthroughs
our customers' most complex engineering challenges. We deliver innovations that connect technology to human breakthroughs
and play a critical role at the intersection of the physical and digital world by providing the building blocks to sense, measure,
and play a critical role at the intersection of the physical and digital world by providing the building blocks to sense, measure,
interpret, connect and power. We design, manufacture, test and market a broad portfolio of solutions, including integrated
interpret, connect and power. We design, manufacture, test and market a broad portfolio of solutions, including integrated
circuits (ICs), software and subsystems that leverage high-performance analog, mixed-signal and digital signal processing
circuits (ICs), software and subsystems that leverage high-performance analog, mixed-signal and digital signal processing
technologies. Our comprehensive product portfolio, deep domain expertise and advanced manufacturing capabilities extend
technologies. Our comprehensive product portfolio, deep domain expertise and advanced manufacturing capabilities extend
across high-performance precision and high-speed mixed-signal, power management and processing technologies – including
across high-performance precision and high-speed mixed-signal, power management and processing technologies – including
data converters, amplifiers, power management, radio frequency (RF) ICs, edge processors and other sensors.
data converters, amplifiers, power management, radio frequency (RF) ICs, edge processors and other sensors.
The Third Wave of Information and Communications Technology, as we refer to it at Analog Devices, is characterized
The Third Wave of Information and Communications Technology, as we refer to it at Analog Devices, is characterized
by ubiquitous sensing, hyper-scale and edge computing and pervasive connectivity. These technological trends are driving a
by ubiquitous sensing, hyper-scale and edge computing and pervasive connectivity. These technological trends are driving a
continuous evolution of new generations of applications that are increasing the demand for Analog Devices’ high-performance
continuous evolution of new generations of applications that are increasing the demand for Analog Devices’ high-performance
analog, mixed-signal, power and RF ICs. We have positioned our business to capitalize on the secular growth opportunities
analog, mixed-signal, power and RF ICs. We have positioned our business to capitalize on the secular growth opportunities
across our markets and to deliver innovative solutions. Central to our strategy is our focus on challenges that our customers
across our markets and to deliver innovative solutions. Central to our strategy is our focus on challenges that our customers
have across the most impactful application areas. That is built around the following three key priorities, which will continue to
have across the most impactful application areas. That is built around the following three key priorities, which will continue to
drive our long-term success:
drive our long-term success:
•
•
Efficient use of capital. Research and development (R&D) is critical to continue our cycle of innovation-driven
Efficient use of capital. Research and development (R&D) is critical to continue our cycle of innovation-driven
success. We target the most attractive opportunities, particularly across our business-to-business (B2B) markets
success. We target the most attractive opportunities, particularly across our business-to-business (B2B) markets
including Industrial, Automotive and Communications. We are also deeply committed to extracting value from our
including Industrial, Automotive and Communications. We are also deeply committed to extracting value from our
recent acquisitions to complement our R&D and drive long-term value creation. Through the development of cutting-
recent acquisitions to complement our R&D and drive long-term value creation. Through the development of cutting-
edge innovations and our ability to solve difficult problems across a broad array of applications, we generate
edge innovations and our ability to solve difficult problems across a broad array of applications, we generate
significant cash flow and are deeply committed to delivering strong shareholder returns.
significant cash flow and are deeply committed to delivering strong shareholder returns.
•
•
Deepening customer-centricity. Close customer relationships influence aspects of our business: from our broad range
Deepening customer-centricity. Close customer relationships influence aspects of our business: from our broad range
of product portfolios and applications expertise to manufacturing capabilities in high-performance power management
of product portfolios and applications expertise to manufacturing capabilities in high-performance power management
and precision and high-speed signal processing technologies. At the same time, our engineering talent continues to be
and precision and high-speed signal processing technologies. At the same time, our engineering talent continues to be
an important competitive differentiator in the semiconductor space. We strive to be the destination for the world's best
an important competitive differentiator in the semiconductor space. We strive to be the destination for the world's best
engineering talent with a team of more than 11,400 engineers. Together, our products and our engineering talent
engineering talent with a team of more than 11,400 engineers. Together, our products and our engineering talent
enable us to partner with our customers, leveraging our analog domain expertise and receiving the full benefit of our
enable us to partner with our customers, leveraging our analog domain expertise and receiving the full benefit of our
technology capabilities to develop complete and innovative solutions.
technology capabilities to develop complete and innovative solutions.
•
•
Capitalizing on secular trends. We are positioned to capitalize on important secular growth trends, including the
Capitalizing on secular trends. We are positioned to capitalize on important secular growth trends, including the
Intelligent Edge, industrial automation, ubiquitous connectivity, electric vehicles, in-cabin experience, digital
Intelligent Edge, industrial automation, ubiquitous connectivity, electric vehicles, in-cabin experience, digital
healthcare and space, as we are well-aligned with the key B2B markets driving this increase in data and we will
healthcare and space, as we are well-aligned with the key B2B markets driving this increase in data and we will
continue to be a critical partner in the collection, creation and communication of our customers’ edge data.
continue to be a critical partner in the collection, creation and communication of our customers’ edge data.
In addition to driving organic growth, our strategy involves expansion through the acquisition of businesses, assets or
In addition to driving organic growth, our strategy involves expansion through the acquisition of businesses, assets or
technologies that allow us to complement our existing product offerings, expand our market coverage, increase our engineering
technologies that allow us to complement our existing product offerings, expand our market coverage, increase our engineering
talent or enhance our technological capabilities. For example, we have executed on this strategy through:
talent or enhance our technological capabilities. For example, we have executed on this strategy through:
•
•
•
•
•
•
the acquisition of Hittite Microwave Corporation in the fiscal year ended November 1, 2014, which strengthened our
the acquisition of Hittite Microwave Corporation in the fiscal year ended November 1, 2014, which strengthened our
market leadership in high-performance RF and broadened our portfolio across the entire frequency spectrum from DC
market leadership in high-performance RF and broadened our portfolio across the entire frequency spectrum from DC
to 100 gigahertz;
to 100 gigahertz;
the acquisition of Linear Technology Corporation (Linear) in the fiscal year ended October 28, 2017, which added
the acquisition of Linear Technology Corporation (Linear) in the fiscal year ended October 28, 2017, which added
high-performance power management and additional precision signal processing to our portfolio, expanding and
high-performance power management and additional precision signal processing to our portfolio, expanding and
diversifying our offerings to deliver more complete solutions; and
diversifying our offerings to deliver more complete solutions; and
the acquisition of Maxim Integrated Products, Inc. (Maxim) in the fiscal year ended October 30, 2021 (fiscal 2021),
the acquisition of Maxim Integrated Products, Inc. (Maxim) in the fiscal year ended October 30, 2021 (fiscal 2021),
which strengthens our position as a high-performance analog semiconductor company.
which strengthens our position as a high-performance analog semiconductor company.
We were incorporated in Massachusetts in 1965 with our corporate headquarters near Boston in Wilmington,
We were incorporated in Massachusetts in 1965 with our corporate headquarters near Boston in Wilmington,
Massachusetts. We have manufacturing facilities primarily in the United States, Ireland and Southeast Asia. Our common
Massachusetts. We have manufacturing facilities primarily in the United States, Ireland and Southeast Asia. Our common
stock is listed on the Nasdaq Global Select Market under the symbol ADI and is included in the Standard & Poor’s 500 Index.
stock is listed on the Nasdaq Global Select Market under the symbol ADI and is included in the Standard & Poor’s 500 Index.
1
1
2
2
Note About Forward-Looking Statements
Note About Forward-Looking Statements
This Annual Report on Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and
This Annual Report on Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and
Results of Operations,” contains forward-looking statements regarding future events and our future results that are subject to the
Results of Operations,” contains forward-looking statements regarding future events and our future results that are subject to the
safe harbor created under the Private Securities Litigation Reform Act of 1995 and other safe harbors under the Securities Act
safe harbor created under the Private Securities Litigation Reform Act of 1995 and other safe harbors under the Securities Act
of 1933 and the Securities Exchange Act of 1934. All statements other than statements of historical fact are statements that
of 1933 and the Securities Exchange Act of 1934. All statements other than statements of historical fact are statements that
could be deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts, and
could be deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts, and
projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as
projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as
“expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,”
“expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,”
“could” and “will,” and variations of such words and similar expressions are intended to identify such forward-looking
“could” and “will,” and variations of such words and similar expressions are intended to identify such forward-looking
statements. In addition, any statements that refer to projections regarding our future financial performance; our anticipated
statements. In addition, any statements that refer to projections regarding our future financial performance; our anticipated
growth and trends in our businesses; new or improved innovative solutions, products, and technologies; the effects of business,
growth and trends in our businesses; new or improved innovative solutions, products, and technologies; the effects of business,
economic, political, legal, and regulatory impacts or conflicts upon our global operations; changes in demand for
economic, political, legal, and regulatory impacts or conflicts upon our global operations; changes in demand for
semiconductors and the related changes in demand and supply for our products; manufacturing, delays, product availability, and
semiconductors and the related changes in demand and supply for our products; manufacturing, delays, product availability, and
supply chain disruptions; our ability to recruit or retain our key personnel; our future liquidity, capital needs and capital
supply chain disruptions; our ability to recruit or retain our key personnel; our future liquidity, capital needs and capital
expenditures; our development of technologies and research and development investments; the impact of the COVID-19
expenditures; our development of technologies and research and development investments; the impact of the COVID-19
pandemic on our business, financial condition and results of operations; our future market position and expected competitive
pandemic on our business, financial condition and results of operations; our future market position and expected competitive
changes in the marketplace for our products; our plans to pay dividends or repurchase stock; servicing our outstanding debt; our
changes in the marketplace for our products; our plans to pay dividends or repurchase stock; servicing our outstanding debt; our
expected tax rate; the effect of changes in or the application of new or revised tax laws; expected cost savings; the effect of new
expected tax rate; the effect of changes in or the application of new or revised tax laws; expected cost savings; the effect of new
accounting pronouncements; plans to integrate or realize the benefits or synergies expected of acquired businesses and
accounting pronouncements; plans to integrate or realize the benefits or synergies expected of acquired businesses and
technologies, including the acquired business, operations and employees of Maxim Integrated Products, Inc.; our continued
technologies, including the acquired business, operations and employees of Maxim Integrated Products, Inc.; our continued
initiatives to consolidate our footprint related to our business units including our manufacturing, engineering, sales, marketing
initiatives to consolidate our footprint related to our business units including our manufacturing, engineering, sales, marketing
and administrative offices; implementation of environment, health and safety standards; environment, social and governance
and administrative offices; implementation of environment, health and safety standards; environment, social and governance
related goals; and other characterizations of future events or circumstances are forward-looking statements. Readers are
related goals; and other characterizations of future events or circumstances are forward-looking statements. Readers are
cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that
cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that
are difficult to predict, including those identified in Part I, Item 1A. "Risk Factors" and elsewhere in this Annual Report on
are difficult to predict, including those identified in Part I, Item 1A. "Risk Factors" and elsewhere in this Annual Report on
Form 10-K. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking
Form 10-K. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking
statements. We undertake no obligation to revise or update any forward-looking statements, including to reflect events or
statements. We undertake no obligation to revise or update any forward-looking statements, including to reflect events or
circumstances occurring after the date of the filing of this report, except to the extent required by law.
circumstances occurring after the date of the filing of this report, except to the extent required by law.
PART I
PART I
ITEM 1. BUSINESS
ITEM 1. BUSINESS
Company Overview, Strategy and Mission
Company Overview, Strategy and Mission
Analog Devices, Inc. (we, Analog Devices or the Company) is a leading semiconductor company dedicated to solving
Analog Devices, Inc. (we, Analog Devices or the Company) is a leading semiconductor company dedicated to solving
our customers' most complex engineering challenges. We deliver innovations that connect technology to human breakthroughs
our customers' most complex engineering challenges. We deliver innovations that connect technology to human breakthroughs
and play a critical role at the intersection of the physical and digital world by providing the building blocks to sense, measure,
and play a critical role at the intersection of the physical and digital world by providing the building blocks to sense, measure,
interpret, connect and power. We design, manufacture, test and market a broad portfolio of solutions, including integrated
interpret, connect and power. We design, manufacture, test and market a broad portfolio of solutions, including integrated
circuits (ICs), software and subsystems that leverage high-performance analog, mixed-signal and digital signal processing
circuits (ICs), software and subsystems that leverage high-performance analog, mixed-signal and digital signal processing
technologies. Our comprehensive product portfolio, deep domain expertise and advanced manufacturing capabilities extend
technologies. Our comprehensive product portfolio, deep domain expertise and advanced manufacturing capabilities extend
across high-performance precision and high-speed mixed-signal, power management and processing technologies – including
across high-performance precision and high-speed mixed-signal, power management and processing technologies – including
data converters, amplifiers, power management, radio frequency (RF) ICs, edge processors and other sensors.
data converters, amplifiers, power management, radio frequency (RF) ICs, edge processors and other sensors.
The Third Wave of Information and Communications Technology, as we refer to it at Analog Devices, is characterized
The Third Wave of Information and Communications Technology, as we refer to it at Analog Devices, is characterized
by ubiquitous sensing, hyper-scale and edge computing and pervasive connectivity. These technological trends are driving a
by ubiquitous sensing, hyper-scale and edge computing and pervasive connectivity. These technological trends are driving a
continuous evolution of new generations of applications that are increasing the demand for Analog Devices’ high-performance
continuous evolution of new generations of applications that are increasing the demand for Analog Devices’ high-performance
analog, mixed-signal, power and RF ICs. We have positioned our business to capitalize on the secular growth opportunities
analog, mixed-signal, power and RF ICs. We have positioned our business to capitalize on the secular growth opportunities
across our markets and to deliver innovative solutions. Central to our strategy is our focus on challenges that our customers
across our markets and to deliver innovative solutions. Central to our strategy is our focus on challenges that our customers
have across the most impactful application areas. That is built around the following three key priorities, which will continue to
have across the most impactful application areas. That is built around the following three key priorities, which will continue to
drive our long-term success:
drive our long-term success:
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Efficient use of capital. Research and development (R&D) is critical to continue our cycle of innovation-driven
Efficient use of capital. Research and development (R&D) is critical to continue our cycle of innovation-driven
success. We target the most attractive opportunities, particularly across our business-to-business (B2B) markets
success. We target the most attractive opportunities, particularly across our business-to-business (B2B) markets
including Industrial, Automotive and Communications. We are also deeply committed to extracting value from our
including Industrial, Automotive and Communications. We are also deeply committed to extracting value from our
recent acquisitions to complement our R&D and drive long-term value creation. Through the development of cutting-
recent acquisitions to complement our R&D and drive long-term value creation. Through the development of cutting-
edge innovations and our ability to solve difficult problems across a broad array of applications, we generate
edge innovations and our ability to solve difficult problems across a broad array of applications, we generate
significant cash flow and are deeply committed to delivering strong shareholder returns.
significant cash flow and are deeply committed to delivering strong shareholder returns.
Deepening customer-centricity. Close customer relationships influence aspects of our business: from our broad range
Deepening customer-centricity. Close customer relationships influence aspects of our business: from our broad range
of product portfolios and applications expertise to manufacturing capabilities in high-performance power management
of product portfolios and applications expertise to manufacturing capabilities in high-performance power management
and precision and high-speed signal processing technologies. At the same time, our engineering talent continues to be
and precision and high-speed signal processing technologies. At the same time, our engineering talent continues to be
an important competitive differentiator in the semiconductor space. We strive to be the destination for the world's best
an important competitive differentiator in the semiconductor space. We strive to be the destination for the world's best
engineering talent with a team of more than 11,400 engineers. Together, our products and our engineering talent
engineering talent with a team of more than 11,400 engineers. Together, our products and our engineering talent
enable us to partner with our customers, leveraging our analog domain expertise and receiving the full benefit of our
enable us to partner with our customers, leveraging our analog domain expertise and receiving the full benefit of our
technology capabilities to develop complete and innovative solutions.
technology capabilities to develop complete and innovative solutions.
Capitalizing on secular trends. We are positioned to capitalize on important secular growth trends, including the
Capitalizing on secular trends. We are positioned to capitalize on important secular growth trends, including the
Intelligent Edge, industrial automation, ubiquitous connectivity, electric vehicles, in-cabin experience, digital
Intelligent Edge, industrial automation, ubiquitous connectivity, electric vehicles, in-cabin experience, digital
healthcare and space, as we are well-aligned with the key B2B markets driving this increase in data and we will
healthcare and space, as we are well-aligned with the key B2B markets driving this increase in data and we will
continue to be a critical partner in the collection, creation and communication of our customers’ edge data.
continue to be a critical partner in the collection, creation and communication of our customers’ edge data.
In addition to driving organic growth, our strategy involves expansion through the acquisition of businesses, assets or
In addition to driving organic growth, our strategy involves expansion through the acquisition of businesses, assets or
technologies that allow us to complement our existing product offerings, expand our market coverage, increase our engineering
technologies that allow us to complement our existing product offerings, expand our market coverage, increase our engineering
talent or enhance our technological capabilities. For example, we have executed on this strategy through:
talent or enhance our technological capabilities. For example, we have executed on this strategy through:
•
•
•
•
•
•
the acquisition of Hittite Microwave Corporation in the fiscal year ended November 1, 2014, which strengthened our
the acquisition of Hittite Microwave Corporation in the fiscal year ended November 1, 2014, which strengthened our
market leadership in high-performance RF and broadened our portfolio across the entire frequency spectrum from DC
market leadership in high-performance RF and broadened our portfolio across the entire frequency spectrum from DC
to 100 gigahertz;
to 100 gigahertz;
the acquisition of Linear Technology Corporation (Linear) in the fiscal year ended October 28, 2017, which added
the acquisition of Linear Technology Corporation (Linear) in the fiscal year ended October 28, 2017, which added
high-performance power management and additional precision signal processing to our portfolio, expanding and
high-performance power management and additional precision signal processing to our portfolio, expanding and
diversifying our offerings to deliver more complete solutions; and
diversifying our offerings to deliver more complete solutions; and
the acquisition of Maxim Integrated Products, Inc. (Maxim) in the fiscal year ended October 30, 2021 (fiscal 2021),
the acquisition of Maxim Integrated Products, Inc. (Maxim) in the fiscal year ended October 30, 2021 (fiscal 2021),
which strengthens our position as a high-performance analog semiconductor company.
which strengthens our position as a high-performance analog semiconductor company.
We were incorporated in Massachusetts in 1965 with our corporate headquarters near Boston in Wilmington,
We were incorporated in Massachusetts in 1965 with our corporate headquarters near Boston in Wilmington,
Massachusetts. We have manufacturing facilities primarily in the United States, Ireland and Southeast Asia. Our common
Massachusetts. We have manufacturing facilities primarily in the United States, Ireland and Southeast Asia. Our common
stock is listed on the Nasdaq Global Select Market under the symbol ADI and is included in the Standard & Poor’s 500 Index.
stock is listed on the Nasdaq Global Select Market under the symbol ADI and is included in the Standard & Poor’s 500 Index.
1
1
2
2
Acquisition of Maxim Integrated Products, Inc.
Acquisition of Maxim Integrated Products, Inc.
On August 26, 2021 (Acquisition Date), we completed the acquisition of Maxim, an independent manufacturer of
On August 26, 2021 (Acquisition Date), we completed the acquisition of Maxim, an independent manufacturer of
innovative analog and mixed-signal products and technologies. Pursuant to the Agreement and Plan of Merger, dated as of July
innovative analog and mixed-signal products and technologies. Pursuant to the Agreement and Plan of Merger, dated as of July
12, 2020 (the Merger Agreement), Maxim stockholders received, for each outstanding share of Maxim common stock, 0.6300
12, 2020 (the Merger Agreement), Maxim stockholders received, for each outstanding share of Maxim common stock, 0.6300
of a share of the Company’s common stock as of the Acquisition Date, for total consideration of approximately $28.0 billion of
of a share of the Company’s common stock as of the Acquisition Date, for total consideration of approximately $28.0 billion of
our common stock. The acquisition of Maxim is referred to as the Acquisition.
our common stock. The acquisition of Maxim is referred to as the Acquisition.
Available Information
Available Information
We maintain a website with the address www.analog.com. We are not including the information contained on our website
We maintain a website with the address www.analog.com. We are not including the information contained on our website
as a part of, or incorporating it by reference into, this Annual Report on Form 10-K. We make available free of charge through
as a part of, or incorporating it by reference into, this Annual Report on Form 10-K. We make available free of charge through
our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K (including
our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K (including
exhibits), and amendments to these reports, as soon as reasonably practicable after we electronically file such material with, or
exhibits), and amendments to these reports, as soon as reasonably practicable after we electronically file such material with, or
furnish such material to, the Securities and Exchange Commission (SEC). We also make available on our website our by-laws,
furnish such material to, the Securities and Exchange Commission (SEC). We also make available on our website our by-laws,
corporate governance guidelines, the charters for our audit committee, compensation committee, and nominating and corporate
corporate governance guidelines, the charters for our audit committee, compensation committee, and nominating and corporate
governance committee, our equity award granting policies, our code of business conduct and ethics which applies to our
governance committee, our equity award granting policies, our code of business conduct and ethics which applies to our
directors, officers and employees, and our related person transaction policy, and such information is available in print and free
directors, officers and employees, and our related person transaction policy, and such information is available in print and free
of charge to any shareholder of Analog Devices who requests it. In addition, we intend to disclose on our website any
of charge to any shareholder of Analog Devices who requests it. In addition, we intend to disclose on our website any
amendments to, or waivers from, our code of business conduct and ethics that are required to be publicly disclosed pursuant to
amendments to, or waivers from, our code of business conduct and ethics that are required to be publicly disclosed pursuant to
rules of the SEC or Nasdaq.
rules of the SEC or Nasdaq.
Products
Products
Semiconductor components are the building blocks used in electronic systems and equipment. These components are
Semiconductor components are the building blocks used in electronic systems and equipment. These components are
classified as either discrete devices, such as individual transistors, or as ICs, in which a number of transistors and other
classified as either discrete devices, such as individual transistors, or as ICs, in which a number of transistors and other
elements are combined to form a more complicated electronic circuit.
elements are combined to form a more complicated electronic circuit.
Our ICs are designed to address a wide range of real-world signal processing applications. We sell our ICs to customers
Our ICs are designed to address a wide range of real-world signal processing applications. We sell our ICs to customers
worldwide, many of whom use products spanning our core technologies in a wide range of applications. Our IC product
worldwide, many of whom use products spanning our core technologies in a wide range of applications. Our IC product
portfolio includes both general-purpose products used by a broad range of customers and applications, as well as application-
portfolio includes both general-purpose products used by a broad range of customers and applications, as well as application-
specific products designed for specific target markets. By using readily available, high-performance, general-purpose products
specific products designed for specific target markets. By using readily available, high-performance, general-purpose products
in their systems, our customers can reduce the time they need to bring new products to market. Given the high cost of
in their systems, our customers can reduce the time they need to bring new products to market. Given the high cost of
developing more customized ICs, our standard products often provide a cost-effective solution for many low to medium volume
developing more customized ICs, our standard products often provide a cost-effective solution for many low to medium volume
applications. More specifically, our analog ICs monitor, condition, amplify or transform continuous analog signals associated
applications. More specifically, our analog ICs monitor, condition, amplify or transform continuous analog signals associated
with physical properties, such as temperature, pressure, weight, light, sound or motion, and play an important role in bridging
with physical properties, such as temperature, pressure, weight, light, sound or motion, and play an important role in bridging
real world phenomena to a variety of electronic systems. Our analog ICs also provide voltage regulation and power control to
real world phenomena to a variety of electronic systems. Our analog ICs also provide voltage regulation and power control to
electronic systems.
electronic systems.
We also focus on working with leading customers to design application-specific solutions. We begin with our existing
We also focus on working with leading customers to design application-specific solutions. We begin with our existing
core technologies, which leverage our analog and mixed signal, power management, RF and microwave, edge processors and
core technologies, which leverage our analog and mixed signal, power management, RF and microwave, edge processors and
other sensors, and devise solutions that more closely meet the needs of a specific customer or group of customers. Because we
other sensors, and devise solutions that more closely meet the needs of a specific customer or group of customers. Because we
have already developed the core technology platform for our general-purpose products, we can create application-specific
have already developed the core technology platform for our general-purpose products, we can create application-specific
solutions quickly and efficiently.
solutions quickly and efficiently.
Our analog and mixed-signal IC technology has been the foundation of our business for over five decades, and we are one
Our analog and mixed-signal IC technology has been the foundation of our business for over five decades, and we are one
of the world’s largest suppliers of high-performance analog ICs. Our analog signal processing ICs are primarily high-
of the world’s largest suppliers of high-performance analog ICs. Our analog signal processing ICs are primarily high-
performance devices, offering higher dynamic range, greater bandwidth, and other enhanced features. We believe that the
performance devices, offering higher dynamic range, greater bandwidth, and other enhanced features. We believe that the
principal advantages these products have as compared to competitors’ products include higher accuracy, higher speed, lower
principal advantages these products have as compared to competitors’ products include higher accuracy, higher speed, lower
cost per function, smaller size, lower power consumption and fewer components, resulting in improved performance and
cost per function, smaller size, lower power consumption and fewer components, resulting in improved performance and
reliability. Our product portfolio includes several thousand analog ICs, many of which can have several hundred end customers.
reliability. Our product portfolio includes several thousand analog ICs, many of which can have several hundred end customers.
Our analog ICs typically have long product life cycles. Our customers include original equipment manufacturers (OEMs) and
Our analog ICs typically have long product life cycles. Our customers include original equipment manufacturers (OEMs) and
customers who build electronic subsystems for integration into larger systems.
customers who build electronic subsystems for integration into larger systems.
Our product offerings include more than 75,000 stock keeping units (SKUs) that can be aggregated into the following
Our product offerings include more than 75,000 stock keeping units (SKUs) that can be aggregated into the following
general categories:
general categories:
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•
Analog and Mixed Signal—We are a leading supplier of data converter products. Data converters translate real-world
Analog and Mixed Signal—We are a leading supplier of data converter products. Data converters translate real-world
analog signals into digital data and also translate digital data into analog signals. Data converters remain our largest
analog signals into digital data and also translate digital data into analog signals. Data converters remain our largest
and most diverse product family and an area where we are continuously innovating to enable our customers to redefine
and most diverse product family and an area where we are continuously innovating to enable our customers to redefine
and differentiate their products. Our converter products combine sampling rates and accuracy with the low noise,
and differentiate their products. Our converter products combine sampling rates and accuracy with the low noise,
power, price and small package size required by industrial, automotive, consumer, and communications electronics.
power, price and small package size required by industrial, automotive, consumer, and communications electronics.
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Power Management & Reference—Power management and reference products, which include functions such as power
Power Management & Reference—Power management and reference products, which include functions such as power
conversion, driver monitoring, sequencing and energy management, provide efficient solutions for power management
conversion, driver monitoring, sequencing and energy management, provide efficient solutions for power management
and conversion applications in the automotive, communications, industrial and high-end consumer markets. Our high-
and conversion applications in the automotive, communications, industrial and high-end consumer markets. Our high-
performance power ICs include powerful performance, integration and software design simulation tools to provide fast
performance power ICs include powerful performance, integration and software design simulation tools to provide fast
and accurate power supply designs.
and accurate power supply designs.
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Amplifiers/RF and Microwave—We are also a leading supplier of high-performance amplifiers which are used to
Amplifiers/RF and Microwave—We are also a leading supplier of high-performance amplifiers which are used to
condition analog signals. High performance amplifiers emphasize the performance dimensions of speed and precision.
condition analog signals. High performance amplifiers emphasize the performance dimensions of speed and precision.
Within this product portfolio we provide precision, instrumentation, high speed, intermediate frequency/RF/
Within this product portfolio we provide precision, instrumentation, high speed, intermediate frequency/RF/
microwave, broadband, and other amplifiers. Our analog product line also includes a broad portfolio of high-
microwave, broadband, and other amplifiers. Our analog product line also includes a broad portfolio of high-
performance RF and microwave ICs covering the entire RF signal chain. Our high-performance RF and microwave
performance RF and microwave ICs covering the entire RF signal chain. Our high-performance RF and microwave
ICs support the high-performance requirements of cellular infrastructure and a broad range of applications in our target
ICs support the high-performance requirements of cellular infrastructure and a broad range of applications in our target
markets, including instrumentation, aerospace and automotive.
markets, including instrumentation, aerospace and automotive.
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Sensors & Actuators—Our analog technology portfolio is comprised of sensor and actuator products, including
Sensors & Actuators—Our analog technology portfolio is comprised of sensor and actuator products, including
products based on micro-electro-mechanical systems (MEMS) technology. MEMS technology enables us to build
products based on micro-electro-mechanical systems (MEMS) technology. MEMS technology enables us to build
extremely small sensors that incorporate an electromechanical structure and the supporting analog circuitry for
extremely small sensors that incorporate an electromechanical structure and the supporting analog circuitry for
conditioning signals obtained from the sensing element. Our MEMS product portfolio includes accelerometers used to
conditioning signals obtained from the sensing element. Our MEMS product portfolio includes accelerometers used to
sense acceleration, gyroscopes used to sense rotation, inertial measurement units used to sense multiple degrees of
sense acceleration, gyroscopes used to sense rotation, inertial measurement units used to sense multiple degrees of
freedom combining multiple sensing types along multiple axes, and broadband switches suitable for radio and
freedom combining multiple sensing types along multiple axes, and broadband switches suitable for radio and
instrument systems. We offer other high-performance sensors, from temperature to magnetic fields, that are deployed
instrument systems. We offer other high-performance sensors, from temperature to magnetic fields, that are deployed
in a variety of systems. In addition to sensor products, our other analog product category includes isolators that enable
in a variety of systems. In addition to sensor products, our other analog product category includes isolators that enable
designers to implement isolation in designs without the cost, size, power, performance, and reliability constraints
designers to implement isolation in designs without the cost, size, power, performance, and reliability constraints
found with optocouplers.
found with optocouplers.
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Digital Signal Processing and System Products (DSPs)—DSPs are optimized for high-speed numeric calculations,
Digital Signal Processing and System Products (DSPs)—DSPs are optimized for high-speed numeric calculations,
which are essential for instantaneous, or real-time, processing of digital data generated, in most cases, from analog to
which are essential for instantaneous, or real-time, processing of digital data generated, in most cases, from analog to
digital signal conversion. Our DSPs are designed to be fully programmable and to efficiently execute specialized
digital signal conversion. Our DSPs are designed to be fully programmable and to efficiently execute specialized
software programs, or algorithms, associated with processing digitized real-time, real-world data. Programmable DSPs
software programs, or algorithms, associated with processing digitized real-time, real-world data. Programmable DSPs
are designed to provide the flexibility to modify the device’s function quickly and inexpensively using software. Our
are designed to provide the flexibility to modify the device’s function quickly and inexpensively using software. Our
general-purpose DSP IC customers typically write their own algorithms using software development tools provided by
general-purpose DSP IC customers typically write their own algorithms using software development tools provided by
us and third-party suppliers. Our DSPs are designed in families of products that share common architectures and
us and third-party suppliers. Our DSPs are designed in families of products that share common architectures and
therefore can execute the same software across a range of products.
therefore can execute the same software across a range of products.
Sales Channel
Sales Channel
We sell our products globally through a direct sales force, third-party distributors, independent sales representatives and
We sell our products globally through a direct sales force, third-party distributors, independent sales representatives and
via our website. We have direct sales offices, sales representatives and/or distributors in over 50 countries. We support our
via our website. We have direct sales offices, sales representatives and/or distributors in over 50 countries. We support our
worldwide sales efforts through our website and with extensive promotional programs that include editorial coverage and paid
worldwide sales efforts through our website and with extensive promotional programs that include editorial coverage and paid
advertising in online and printed trade publications, webinars, social media and communities, promotional and training videos,
advertising in online and printed trade publications, webinars, social media and communities, promotional and training videos,
direct mail programs, technical seminars and participation in trade shows. We publish, share and distribute technical content
direct mail programs, technical seminars and participation in trade shows. We publish, share and distribute technical content
such as data sheets, application guides and catalogs. We maintain a staff of field application engineers who aid customers in
such as data sheets, application guides and catalogs. We maintain a staff of field application engineers who aid customers in
incorporating our products into their products. In addition, we offer a variety of web-based tools that ease product selection and
incorporating our products into their products. In addition, we offer a variety of web-based tools that ease product selection and
aid in the design process for our customers.
aid in the design process for our customers.
We believe distributors provide a cost-effective means of reaching a broad range of customers while providing efficient
We believe distributors provide a cost-effective means of reaching a broad range of customers while providing efficient
logistics services. From time to time, we may add or terminate distributors in specific geographies, or move customers to a
logistics services. From time to time, we may add or terminate distributors in specific geographies, or move customers to a
direct support or fulfillment model as we deem appropriate given our strategies, the level of distributor business activity and
direct support or fulfillment model as we deem appropriate given our strategies, the level of distributor business activity and
distributor performance and financial condition.
distributor performance and financial condition.
These distributors typically maintain an inventory of our products. Some of them also sell products that compete with our
These distributors typically maintain an inventory of our products. Some of them also sell products that compete with our
products, including those for which we are an alternate source. We make sales to distributors under agreements that allow
products, including those for which we are an alternate source. We make sales to distributors under agreements that allow
certain distributors to receive price adjustment credits and to return qualifying products for credit, as determined by us, in order
certain distributors to receive price adjustment credits and to return qualifying products for credit, as determined by us, in order
to reduce the amounts of slow-moving, discontinued or obsolete product from their inventory. These agreements limit such
to reduce the amounts of slow-moving, discontinued or obsolete product from their inventory. These agreements limit such
returns to a certain percentage of our shipments to that distributor during the prior quarter. In addition, certain distributors are
returns to a certain percentage of our shipments to that distributor during the prior quarter. In addition, certain distributors are
allowed to return unsold products if we terminate the relationship with the distributor. Additional information relating to our
allowed to return unsold products if we terminate the relationship with the distributor. Additional information relating to our
revenue and customer concentration is set forth in Note 2l, Concentrations of Risk; Note 2n, Revenue Recognition; and Note 4,
revenue and customer concentration is set forth in Note 2l, Concentrations of Risk; Note 2n, Revenue Recognition; and Note 4,
Industry, Segment and Geographic Information, of the Notes to Consolidated Financial Statements contained in Part II, Item 8
Industry, Segment and Geographic Information, of the Notes to Consolidated Financial Statements contained in Part II, Item 8
of this Annual Report on Form 10-K.
of this Annual Report on Form 10-K.
We typically do not have long-term sales contracts with our customers. In some of our markets where end-user demand
We typically do not have long-term sales contracts with our customers. In some of our markets where end-user demand
may be particularly volatile and difficult to predict, some customers place orders that require us to manufacture product and
may be particularly volatile and difficult to predict, some customers place orders that require us to manufacture product and
3
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4
Acquisition of Maxim Integrated Products, Inc.
Acquisition of Maxim Integrated Products, Inc.
On August 26, 2021 (Acquisition Date), we completed the acquisition of Maxim, an independent manufacturer of
On August 26, 2021 (Acquisition Date), we completed the acquisition of Maxim, an independent manufacturer of
innovative analog and mixed-signal products and technologies. Pursuant to the Agreement and Plan of Merger, dated as of July
innovative analog and mixed-signal products and technologies. Pursuant to the Agreement and Plan of Merger, dated as of July
12, 2020 (the Merger Agreement), Maxim stockholders received, for each outstanding share of Maxim common stock, 0.6300
12, 2020 (the Merger Agreement), Maxim stockholders received, for each outstanding share of Maxim common stock, 0.6300
of a share of the Company’s common stock as of the Acquisition Date, for total consideration of approximately $28.0 billion of
of a share of the Company’s common stock as of the Acquisition Date, for total consideration of approximately $28.0 billion of
our common stock. The acquisition of Maxim is referred to as the Acquisition.
our common stock. The acquisition of Maxim is referred to as the Acquisition.
Available Information
Available Information
We maintain a website with the address www.analog.com. We are not including the information contained on our website
We maintain a website with the address www.analog.com. We are not including the information contained on our website
as a part of, or incorporating it by reference into, this Annual Report on Form 10-K. We make available free of charge through
as a part of, or incorporating it by reference into, this Annual Report on Form 10-K. We make available free of charge through
our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K (including
our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K (including
exhibits), and amendments to these reports, as soon as reasonably practicable after we electronically file such material with, or
exhibits), and amendments to these reports, as soon as reasonably practicable after we electronically file such material with, or
furnish such material to, the Securities and Exchange Commission (SEC). We also make available on our website our by-laws,
furnish such material to, the Securities and Exchange Commission (SEC). We also make available on our website our by-laws,
corporate governance guidelines, the charters for our audit committee, compensation committee, and nominating and corporate
corporate governance guidelines, the charters for our audit committee, compensation committee, and nominating and corporate
governance committee, our equity award granting policies, our code of business conduct and ethics which applies to our
governance committee, our equity award granting policies, our code of business conduct and ethics which applies to our
directors, officers and employees, and our related person transaction policy, and such information is available in print and free
directors, officers and employees, and our related person transaction policy, and such information is available in print and free
of charge to any shareholder of Analog Devices who requests it. In addition, we intend to disclose on our website any
of charge to any shareholder of Analog Devices who requests it. In addition, we intend to disclose on our website any
amendments to, or waivers from, our code of business conduct and ethics that are required to be publicly disclosed pursuant to
amendments to, or waivers from, our code of business conduct and ethics that are required to be publicly disclosed pursuant to
rules of the SEC or Nasdaq.
rules of the SEC or Nasdaq.
Products
Products
Semiconductor components are the building blocks used in electronic systems and equipment. These components are
Semiconductor components are the building blocks used in electronic systems and equipment. These components are
classified as either discrete devices, such as individual transistors, or as ICs, in which a number of transistors and other
classified as either discrete devices, such as individual transistors, or as ICs, in which a number of transistors and other
elements are combined to form a more complicated electronic circuit.
elements are combined to form a more complicated electronic circuit.
Our ICs are designed to address a wide range of real-world signal processing applications. We sell our ICs to customers
Our ICs are designed to address a wide range of real-world signal processing applications. We sell our ICs to customers
worldwide, many of whom use products spanning our core technologies in a wide range of applications. Our IC product
worldwide, many of whom use products spanning our core technologies in a wide range of applications. Our IC product
portfolio includes both general-purpose products used by a broad range of customers and applications, as well as application-
portfolio includes both general-purpose products used by a broad range of customers and applications, as well as application-
specific products designed for specific target markets. By using readily available, high-performance, general-purpose products
specific products designed for specific target markets. By using readily available, high-performance, general-purpose products
in their systems, our customers can reduce the time they need to bring new products to market. Given the high cost of
in their systems, our customers can reduce the time they need to bring new products to market. Given the high cost of
developing more customized ICs, our standard products often provide a cost-effective solution for many low to medium volume
developing more customized ICs, our standard products often provide a cost-effective solution for many low to medium volume
applications. More specifically, our analog ICs monitor, condition, amplify or transform continuous analog signals associated
applications. More specifically, our analog ICs monitor, condition, amplify or transform continuous analog signals associated
with physical properties, such as temperature, pressure, weight, light, sound or motion, and play an important role in bridging
with physical properties, such as temperature, pressure, weight, light, sound or motion, and play an important role in bridging
real world phenomena to a variety of electronic systems. Our analog ICs also provide voltage regulation and power control to
real world phenomena to a variety of electronic systems. Our analog ICs also provide voltage regulation and power control to
electronic systems.
electronic systems.
We also focus on working with leading customers to design application-specific solutions. We begin with our existing
We also focus on working with leading customers to design application-specific solutions. We begin with our existing
core technologies, which leverage our analog and mixed signal, power management, RF and microwave, edge processors and
core technologies, which leverage our analog and mixed signal, power management, RF and microwave, edge processors and
other sensors, and devise solutions that more closely meet the needs of a specific customer or group of customers. Because we
other sensors, and devise solutions that more closely meet the needs of a specific customer or group of customers. Because we
have already developed the core technology platform for our general-purpose products, we can create application-specific
have already developed the core technology platform for our general-purpose products, we can create application-specific
solutions quickly and efficiently.
solutions quickly and efficiently.
Our analog and mixed-signal IC technology has been the foundation of our business for over five decades, and we are one
Our analog and mixed-signal IC technology has been the foundation of our business for over five decades, and we are one
of the world’s largest suppliers of high-performance analog ICs. Our analog signal processing ICs are primarily high-
of the world’s largest suppliers of high-performance analog ICs. Our analog signal processing ICs are primarily high-
performance devices, offering higher dynamic range, greater bandwidth, and other enhanced features. We believe that the
performance devices, offering higher dynamic range, greater bandwidth, and other enhanced features. We believe that the
principal advantages these products have as compared to competitors’ products include higher accuracy, higher speed, lower
principal advantages these products have as compared to competitors’ products include higher accuracy, higher speed, lower
cost per function, smaller size, lower power consumption and fewer components, resulting in improved performance and
cost per function, smaller size, lower power consumption and fewer components, resulting in improved performance and
reliability. Our product portfolio includes several thousand analog ICs, many of which can have several hundred end customers.
reliability. Our product portfolio includes several thousand analog ICs, many of which can have several hundred end customers.
Our analog ICs typically have long product life cycles. Our customers include original equipment manufacturers (OEMs) and
Our analog ICs typically have long product life cycles. Our customers include original equipment manufacturers (OEMs) and
customers who build electronic subsystems for integration into larger systems.
customers who build electronic subsystems for integration into larger systems.
Our product offerings include more than 75,000 stock keeping units (SKUs) that can be aggregated into the following
Our product offerings include more than 75,000 stock keeping units (SKUs) that can be aggregated into the following
general categories:
general categories:
•
•
Analog and Mixed Signal—We are a leading supplier of data converter products. Data converters translate real-world
Analog and Mixed Signal—We are a leading supplier of data converter products. Data converters translate real-world
analog signals into digital data and also translate digital data into analog signals. Data converters remain our largest
analog signals into digital data and also translate digital data into analog signals. Data converters remain our largest
and most diverse product family and an area where we are continuously innovating to enable our customers to redefine
and most diverse product family and an area where we are continuously innovating to enable our customers to redefine
and differentiate their products. Our converter products combine sampling rates and accuracy with the low noise,
and differentiate their products. Our converter products combine sampling rates and accuracy with the low noise,
power, price and small package size required by industrial, automotive, consumer, and communications electronics.
power, price and small package size required by industrial, automotive, consumer, and communications electronics.
•
•
•
•
•
•
•
•
Power Management & Reference—Power management and reference products, which include functions such as power
Power Management & Reference—Power management and reference products, which include functions such as power
conversion, driver monitoring, sequencing and energy management, provide efficient solutions for power management
conversion, driver monitoring, sequencing and energy management, provide efficient solutions for power management
and conversion applications in the automotive, communications, industrial and high-end consumer markets. Our high-
and conversion applications in the automotive, communications, industrial and high-end consumer markets. Our high-
performance power ICs include powerful performance, integration and software design simulation tools to provide fast
performance power ICs include powerful performance, integration and software design simulation tools to provide fast
and accurate power supply designs.
and accurate power supply designs.
Amplifiers/RF and Microwave—We are also a leading supplier of high-performance amplifiers which are used to
Amplifiers/RF and Microwave—We are also a leading supplier of high-performance amplifiers which are used to
condition analog signals. High performance amplifiers emphasize the performance dimensions of speed and precision.
condition analog signals. High performance amplifiers emphasize the performance dimensions of speed and precision.
Within this product portfolio we provide precision, instrumentation, high speed, intermediate frequency/RF/
Within this product portfolio we provide precision, instrumentation, high speed, intermediate frequency/RF/
microwave, broadband, and other amplifiers. Our analog product line also includes a broad portfolio of high-
microwave, broadband, and other amplifiers. Our analog product line also includes a broad portfolio of high-
performance RF and microwave ICs covering the entire RF signal chain. Our high-performance RF and microwave
performance RF and microwave ICs covering the entire RF signal chain. Our high-performance RF and microwave
ICs support the high-performance requirements of cellular infrastructure and a broad range of applications in our target
ICs support the high-performance requirements of cellular infrastructure and a broad range of applications in our target
markets, including instrumentation, aerospace and automotive.
markets, including instrumentation, aerospace and automotive.
Sensors & Actuators—Our analog technology portfolio is comprised of sensor and actuator products, including
Sensors & Actuators—Our analog technology portfolio is comprised of sensor and actuator products, including
products based on micro-electro-mechanical systems (MEMS) technology. MEMS technology enables us to build
products based on micro-electro-mechanical systems (MEMS) technology. MEMS technology enables us to build
extremely small sensors that incorporate an electromechanical structure and the supporting analog circuitry for
extremely small sensors that incorporate an electromechanical structure and the supporting analog circuitry for
conditioning signals obtained from the sensing element. Our MEMS product portfolio includes accelerometers used to
conditioning signals obtained from the sensing element. Our MEMS product portfolio includes accelerometers used to
sense acceleration, gyroscopes used to sense rotation, inertial measurement units used to sense multiple degrees of
sense acceleration, gyroscopes used to sense rotation, inertial measurement units used to sense multiple degrees of
freedom combining multiple sensing types along multiple axes, and broadband switches suitable for radio and
freedom combining multiple sensing types along multiple axes, and broadband switches suitable for radio and
instrument systems. We offer other high-performance sensors, from temperature to magnetic fields, that are deployed
instrument systems. We offer other high-performance sensors, from temperature to magnetic fields, that are deployed
in a variety of systems. In addition to sensor products, our other analog product category includes isolators that enable
in a variety of systems. In addition to sensor products, our other analog product category includes isolators that enable
designers to implement isolation in designs without the cost, size, power, performance, and reliability constraints
designers to implement isolation in designs without the cost, size, power, performance, and reliability constraints
found with optocouplers.
found with optocouplers.
Digital Signal Processing and System Products (DSPs)—DSPs are optimized for high-speed numeric calculations,
Digital Signal Processing and System Products (DSPs)—DSPs are optimized for high-speed numeric calculations,
which are essential for instantaneous, or real-time, processing of digital data generated, in most cases, from analog to
which are essential for instantaneous, or real-time, processing of digital data generated, in most cases, from analog to
digital signal conversion. Our DSPs are designed to be fully programmable and to efficiently execute specialized
digital signal conversion. Our DSPs are designed to be fully programmable and to efficiently execute specialized
software programs, or algorithms, associated with processing digitized real-time, real-world data. Programmable DSPs
software programs, or algorithms, associated with processing digitized real-time, real-world data. Programmable DSPs
are designed to provide the flexibility to modify the device’s function quickly and inexpensively using software. Our
are designed to provide the flexibility to modify the device’s function quickly and inexpensively using software. Our
general-purpose DSP IC customers typically write their own algorithms using software development tools provided by
general-purpose DSP IC customers typically write their own algorithms using software development tools provided by
us and third-party suppliers. Our DSPs are designed in families of products that share common architectures and
us and third-party suppliers. Our DSPs are designed in families of products that share common architectures and
therefore can execute the same software across a range of products.
therefore can execute the same software across a range of products.
Sales Channel
Sales Channel
We sell our products globally through a direct sales force, third-party distributors, independent sales representatives and
We sell our products globally through a direct sales force, third-party distributors, independent sales representatives and
via our website. We have direct sales offices, sales representatives and/or distributors in over 50 countries. We support our
via our website. We have direct sales offices, sales representatives and/or distributors in over 50 countries. We support our
worldwide sales efforts through our website and with extensive promotional programs that include editorial coverage and paid
worldwide sales efforts through our website and with extensive promotional programs that include editorial coverage and paid
advertising in online and printed trade publications, webinars, social media and communities, promotional and training videos,
advertising in online and printed trade publications, webinars, social media and communities, promotional and training videos,
direct mail programs, technical seminars and participation in trade shows. We publish, share and distribute technical content
direct mail programs, technical seminars and participation in trade shows. We publish, share and distribute technical content
such as data sheets, application guides and catalogs. We maintain a staff of field application engineers who aid customers in
such as data sheets, application guides and catalogs. We maintain a staff of field application engineers who aid customers in
incorporating our products into their products. In addition, we offer a variety of web-based tools that ease product selection and
incorporating our products into their products. In addition, we offer a variety of web-based tools that ease product selection and
aid in the design process for our customers.
aid in the design process for our customers.
We believe distributors provide a cost-effective means of reaching a broad range of customers while providing efficient
We believe distributors provide a cost-effective means of reaching a broad range of customers while providing efficient
logistics services. From time to time, we may add or terminate distributors in specific geographies, or move customers to a
logistics services. From time to time, we may add or terminate distributors in specific geographies, or move customers to a
direct support or fulfillment model as we deem appropriate given our strategies, the level of distributor business activity and
direct support or fulfillment model as we deem appropriate given our strategies, the level of distributor business activity and
distributor performance and financial condition.
distributor performance and financial condition.
These distributors typically maintain an inventory of our products. Some of them also sell products that compete with our
These distributors typically maintain an inventory of our products. Some of them also sell products that compete with our
products, including those for which we are an alternate source. We make sales to distributors under agreements that allow
products, including those for which we are an alternate source. We make sales to distributors under agreements that allow
certain distributors to receive price adjustment credits and to return qualifying products for credit, as determined by us, in order
certain distributors to receive price adjustment credits and to return qualifying products for credit, as determined by us, in order
to reduce the amounts of slow-moving, discontinued or obsolete product from their inventory. These agreements limit such
to reduce the amounts of slow-moving, discontinued or obsolete product from their inventory. These agreements limit such
returns to a certain percentage of our shipments to that distributor during the prior quarter. In addition, certain distributors are
returns to a certain percentage of our shipments to that distributor during the prior quarter. In addition, certain distributors are
allowed to return unsold products if we terminate the relationship with the distributor. Additional information relating to our
allowed to return unsold products if we terminate the relationship with the distributor. Additional information relating to our
revenue and customer concentration is set forth in Note 2l, Concentrations of Risk; Note 2n, Revenue Recognition; and Note 4,
revenue and customer concentration is set forth in Note 2l, Concentrations of Risk; Note 2n, Revenue Recognition; and Note 4,
Industry, Segment and Geographic Information, of the Notes to Consolidated Financial Statements contained in Part II, Item 8
Industry, Segment and Geographic Information, of the Notes to Consolidated Financial Statements contained in Part II, Item 8
of this Annual Report on Form 10-K.
of this Annual Report on Form 10-K.
We typically do not have long-term sales contracts with our customers. In some of our markets where end-user demand
We typically do not have long-term sales contracts with our customers. In some of our markets where end-user demand
may be particularly volatile and difficult to predict, some customers place orders that require us to manufacture product and
may be particularly volatile and difficult to predict, some customers place orders that require us to manufacture product and
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3
4
4
have it available for shipment, even though the customer is unwilling to make a binding commitment to purchase all, or even
have it available for shipment, even though the customer is unwilling to make a binding commitment to purchase all, or even
any, of the product. In other instances, we manufacture product based on forecasts of customer demand. As a result, we may
any, of the product. In other instances, we manufacture product based on forecasts of customer demand. As a result, we may
incur inventory and manufacturing costs in advance of anticipated sales and are subject to the risk of cancellation of orders
incur inventory and manufacturing costs in advance of anticipated sales and are subject to the risk of cancellation of orders
leading to a sharp reduction of sales and backlog. Further, those orders or forecasts may be for products that meet the
leading to a sharp reduction of sales and backlog. Further, those orders or forecasts may be for products that meet the
customer’s unique requirements so that those canceled orders would, in addition, result in an inventory of unsaleable products,
customer’s unique requirements so that those canceled orders would, in addition, result in an inventory of unsaleable products,
resulting in potential inventory write-offs. As a result of lengthy manufacturing cycles for some of our products that are subject
resulting in potential inventory write-offs. As a result of lengthy manufacturing cycles for some of our products that are subject
to these uncertainties, the amount of unsaleable product could be substantial.
to these uncertainties, the amount of unsaleable product could be substantial.
Markets
Markets
The breakdown of our annual revenue by end market is set out in the table below:
The breakdown of our annual revenue by end market is set out in the table below:
End Market*
End Market*
Industrial
Industrial
Automotive
Automotive
Communications
Communications
Consumer
Consumer
Percent of Fiscal
Percent of Fiscal
2022 Revenue
2022 Revenue
Percent of Fiscal
Percent of Fiscal
2021 Revenue
2021 Revenue
Percent of Fiscal
Percent of Fiscal
2020 Revenue
2020 Revenue
51%
51%
21%
21%
16%
16%
13%
13%
55%
55%
17%
17%
16%
16%
11%
11%
54%
54%
14%
14%
21%
21%
11%
11%
*The sum of the individual percentages may not equal 100% due to rounding.
*The sum of the individual percentages may not equal 100% due to rounding.
The following describes some of the characteristics of, and customer products within, our major end markets of
The following describes some of the characteristics of, and customer products within, our major end markets of
Industrial, Automotive, Communications and Consumer:
Industrial, Automotive, Communications and Consumer:
Industrial — Our industrial market includes the following sectors:
Industrial — Our industrial market includes the following sectors:
Industrial Automation — We are a leader in industrial automation because we deliver robust, high performance solutions
Industrial Automation — We are a leader in industrial automation because we deliver robust, high performance solutions
from our deep motion and process control expertise and precision sensing measurement and interpretation to expansive
from our deep motion and process control expertise and precision sensing measurement and interpretation to expansive
connectivity and power capabilities. We take real-world phenomena in the most complex environments on the factory floor and
connectivity and power capabilities. We take real-world phenomena in the most complex environments on the factory floor and
translate it into valuable insights and outcomes. We co-create with customers to architect robotics systems and solutions that
translate it into valuable insights and outcomes. We co-create with customers to architect robotics systems and solutions that
improve dynamic behavior and precision while enhancing worker safety, machine health, and manufacturing flexibility. Our
improve dynamic behavior and precision while enhancing worker safety, machine health, and manufacturing flexibility. Our
industrial automation market includes applications such as:
industrial automation market includes applications such as:
• Condition-based monitoring (CbM)
• Condition-based monitoring (CbM)
• Industrial robotics
• Industrial robotics
• Factory and process control
• Factory and process control
• Industrial power supplies
• Industrial power supplies
• Industrial motion control
• Industrial motion control
Instrumentation & Measurement — Trusted measurement is at the forefront of innovation. With the rapid pace of global
Instrumentation & Measurement — Trusted measurement is at the forefront of innovation. With the rapid pace of global
transformation, from ubiquitous connectivity, to electrification, to artificial intelligence, to human health and environmental
transformation, from ubiquitous connectivity, to electrification, to artificial intelligence, to human health and environmental
sustainability — all these trends require reliable and efficient test solutions from R&D to manufacturing to field deployment.
sustainability — all these trends require reliable and efficient test solutions from R&D to manufacturing to field deployment.
We enable high performance measurement through our components and system solutions. Our RF, high-speed and power
We enable high performance measurement through our components and system solutions. Our RF, high-speed and power
management products are designed to enable solutions for complying with evolving communications standards. Our high-
management products are designed to enable solutions for complying with evolving communications standards. Our high-
voltage, isolation and precision products are a key part of the systems that are designed for safety, longevity and efficiency in
voltage, isolation and precision products are a key part of the systems that are designed for safety, longevity and efficiency in
electric vehicles and renewable energy. Beyond electrical testing, our precision and power technology enable analytical
electric vehicles and renewable energy. Beyond electrical testing, our precision and power technology enable analytical
instruments for drug or vaccine R&D and manufacturing, food safety and quality, and environmental monitoring. Our
instruments for drug or vaccine R&D and manufacturing, food safety and quality, and environmental monitoring. Our
instrumentation and measurement market includes applications such as:
instrumentation and measurement market includes applications such as:
• Automated test equipment
• Automated test equipment
• Electronic test and measurement
• Electronic test and measurement
• Environmental and process analysis
• Environmental and process analysis
• Automotive and energy test
• Automotive and energy test
• Life sciences and drug discovery
• Life sciences and drug discovery
Aerospace/Defense — The defense, commercial avionics and space markets all require high-performance ICs that meet
Aerospace/Defense — The defense, commercial avionics and space markets all require high-performance ICs that meet
rigorous environmental and reliability specifications. Many of our ICs can be supplied in versions that meet these standards. In
rigorous environmental and reliability specifications. Many of our ICs can be supplied in versions that meet these standards. In
addition, many products can be supplied to meet the standards required for broadcast satellites and other commercial space
addition, many products can be supplied to meet the standards required for broadcast satellites and other commercial space
applications. Most of our products sold in this market are specially tested versions of products derived from our standard
applications. Most of our products sold in this market are specially tested versions of products derived from our standard
product offering. As end systems are becoming more complex, many of our customers in this market also look for us to provide
product offering. As end systems are becoming more complex, many of our customers in this market also look for us to provide
higher levels of integration in order to minimize size, weight and power and to improve ease-of-use. As such, we also sell
higher levels of integration in order to minimize size, weight and power and to improve ease-of-use. As such, we also sell
products in the form of SiPs (system in package), printed circuit board assemblies, modules, and subsystems. Customer
products in the form of SiPs (system in package), printed circuit board assemblies, modules, and subsystems. Customer
products include applications such as:
products include applications such as:
• Navigation systems
• Navigation systems
• Space and satellite communications
• Space and satellite communications
• Communication systems
• Communication systems
• Radar systems
• Radar systems
• Security devices
• Security devices
• Electronic surveillance and countermeasures
• Electronic surveillance and countermeasures
Healthcare — The healthcare market is evolving in response to the need for increased access to better and more
Healthcare — The healthcare market is evolving in response to the need for increased access to better and more
affordable care, as well as a growing focus on preventative healthcare and the need to better manage chronic conditions. To
affordable care, as well as a growing focus on preventative healthcare and the need to better manage chronic conditions. To
help achieve this, we are collaborating with customers and partners on innovative solutions that are designed to achieve better
help achieve this, we are collaborating with customers and partners on innovative solutions that are designed to achieve better
outcomes for patients and physicians at reduced costs for all. Our offerings include both standard and application-specific
outcomes for patients and physicians at reduced costs for all. Our offerings include both standard and application-specific
products and are used in applications such as:
products and are used in applications such as:
• Ultrasound systems
• Ultrasound systems
• X-Ray equipment (CT and DR)
• X-Ray equipment (CT and DR)
• Image guided therapy
• Image guided therapy
• Multi-parameter vital signs monitors
• Multi-parameter vital signs monitors
• Remote patient monitoring
• Remote patient monitoring
• Anesthesia equipment
• Anesthesia equipment
• Lab diagnostic equipment
• Lab diagnostic equipment
• Surgical tools and instruments
• Surgical tools and instruments
• Blood analyzers
• Blood analyzers
• Point-of-care diagnostics
• Point-of-care diagnostics
Energy Management — The global drive towards improved energy efficiency, conservation, reliability and cleanliness is
Energy Management — The global drive towards improved energy efficiency, conservation, reliability and cleanliness is
driving investments in electrification across many different application areas, including electric vehicle charging infrastructure,
driving investments in electrification across many different application areas, including electric vehicle charging infrastructure,
renewable energy, power transmission and distribution systems, electric meters and other innovative areas. The common
renewable energy, power transmission and distribution systems, electric meters and other innovative areas. The common
characteristic behind these efforts is the addition of sensing, measurement and communication technologies to electrical
characteristic behind these efforts is the addition of sensing, measurement and communication technologies to electrical
infrastructure. Our offerings include both standard and application-specific products and are used in applications such as:
infrastructure. Our offerings include both standard and application-specific products and are used in applications such as:
• Utility meters
• Utility meters
• Electric vehicle charging infrastructure
• Electric vehicle charging infrastructure
• Wind turbines
• Wind turbines
• Solar inverters
• Solar inverters
• Substation relays and automation equipment
• Substation relays and automation equipment
• Building energy automation/control
• Building energy automation/control
Automotive — We develop differentiated high-performance signal processing solutions, which enable sophisticated
Automotive — We develop differentiated high-performance signal processing solutions, which enable sophisticated
transportation systems that span infotainment, electrification and autonomous applications. Through collaboration with
transportation systems that span infotainment, electrification and autonomous applications. Through collaboration with
manufacturers worldwide, we have developed a broad portfolio of analog, digital, power and sensor ICs that address the
manufacturers worldwide, we have developed a broad portfolio of analog, digital, power and sensor ICs that address the
emerging needs of this evolving industry. Our focus is on audio/video applications that lead to an enriched in-cabin experience,
emerging needs of this evolving industry. Our focus is on audio/video applications that lead to an enriched in-cabin experience,
electrification applications that improve vehicle range and reduce emissions, and mission-critical perception and navigation
electrification applications that improve vehicle range and reduce emissions, and mission-critical perception and navigation
applications that enable vehicles to more clearly sense the external environment. Specifically, we have developed products used
applications that enable vehicles to more clearly sense the external environment. Specifically, we have developed products used
in applications such as:
in applications such as:
• Video processing and connectivity
• Video processing and connectivity
• Car audio, voice processing and connectivity
• Car audio, voice processing and connectivity
• Battery monitoring and management systems
• Battery monitoring and management systems
Communications — The development of broadband, wireless and internet infrastructures around the world has created
Communications — The development of broadband, wireless and internet infrastructures around the world has created
an important market for our communications products. Communications technology involves the processing of signals that are
an important market for our communications products. Communications technology involves the processing of signals that are
converted from analog to digital and digital to analog form during the process of transmitting and receiving data. The need for
converted from analog to digital and digital to analog form during the process of transmitting and receiving data. The need for
higher speed and reduced power consumption, coupled with more reliable, bandwidth-efficient communications, creates
higher speed and reduced power consumption, coupled with more reliable, bandwidth-efficient communications, creates
demand for our products, which are used in the full spectrum of signal processing for data, video, voice and machine-to-
demand for our products, which are used in the full spectrum of signal processing for data, video, voice and machine-to-
machine communications. In wireless and wireline communication applications, our products are incorporated into:
machine communications. In wireless and wireline communication applications, our products are incorporated into:
• Cellular base station equipment
• Cellular base station equipment
• Microwave backhaul systems
• Microwave backhaul systems
• Data centers and data storage
• Data centers and data storage
• Satellite and terrestrial broadband access equipment
• Satellite and terrestrial broadband access equipment
• Optical and cable networking equipment for data center
• Optical and cable networking equipment for data center
and carrier providers
and carrier providers
Consumer — To address the market demand for state of the art personal and professional entertainment systems and the
Consumer — To address the market demand for state of the art personal and professional entertainment systems and the
consumer demand for high quality user interfaces, music, movies and photographs, we have developed analog, digital and
consumer demand for high quality user interfaces, music, movies and photographs, we have developed analog, digital and
mixed-signal and power solutions that meet the rigorous cost and time-to-market requirements of the consumer electronics
mixed-signal and power solutions that meet the rigorous cost and time-to-market requirements of the consumer electronics
market. The emergence of high-performance, feature-rich consumer products has created a market for our high-performance
market. The emergence of high-performance, feature-rich consumer products has created a market for our high-performance
ICs with a high level of specific functionality that enables best in class user experience and battery management. These
ICs with a high level of specific functionality that enables best in class user experience and battery management. These
products include:
products include:
• Portable devices (smart phones, tablets and wearable
• Portable devices (smart phones, tablets and wearable
devices) for media and vital signs monitoring applications
devices) for media and vital signs monitoring applications
• Prosumer audio/video equipment
• Prosumer audio/video equipment
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have it available for shipment, even though the customer is unwilling to make a binding commitment to purchase all, or even
have it available for shipment, even though the customer is unwilling to make a binding commitment to purchase all, or even
any, of the product. In other instances, we manufacture product based on forecasts of customer demand. As a result, we may
any, of the product. In other instances, we manufacture product based on forecasts of customer demand. As a result, we may
incur inventory and manufacturing costs in advance of anticipated sales and are subject to the risk of cancellation of orders
incur inventory and manufacturing costs in advance of anticipated sales and are subject to the risk of cancellation of orders
leading to a sharp reduction of sales and backlog. Further, those orders or forecasts may be for products that meet the
leading to a sharp reduction of sales and backlog. Further, those orders or forecasts may be for products that meet the
customer’s unique requirements so that those canceled orders would, in addition, result in an inventory of unsaleable products,
customer’s unique requirements so that those canceled orders would, in addition, result in an inventory of unsaleable products,
resulting in potential inventory write-offs. As a result of lengthy manufacturing cycles for some of our products that are subject
resulting in potential inventory write-offs. As a result of lengthy manufacturing cycles for some of our products that are subject
to these uncertainties, the amount of unsaleable product could be substantial.
to these uncertainties, the amount of unsaleable product could be substantial.
The breakdown of our annual revenue by end market is set out in the table below:
The breakdown of our annual revenue by end market is set out in the table below:
products include applications such as:
products include applications such as:
• Navigation systems
• Navigation systems
• Space and satellite communications
• Space and satellite communications
• Communication systems
• Communication systems
• Radar systems
• Radar systems
• Security devices
• Security devices
• Electronic surveillance and countermeasures
• Electronic surveillance and countermeasures
Healthcare — The healthcare market is evolving in response to the need for increased access to better and more
Healthcare — The healthcare market is evolving in response to the need for increased access to better and more
affordable care, as well as a growing focus on preventative healthcare and the need to better manage chronic conditions. To
affordable care, as well as a growing focus on preventative healthcare and the need to better manage chronic conditions. To
help achieve this, we are collaborating with customers and partners on innovative solutions that are designed to achieve better
help achieve this, we are collaborating with customers and partners on innovative solutions that are designed to achieve better
outcomes for patients and physicians at reduced costs for all. Our offerings include both standard and application-specific
outcomes for patients and physicians at reduced costs for all. Our offerings include both standard and application-specific
products and are used in applications such as:
products and are used in applications such as:
Percent of Fiscal
Percent of Fiscal
2022 Revenue
2022 Revenue
Percent of Fiscal
Percent of Fiscal
2021 Revenue
2021 Revenue
Percent of Fiscal
Percent of Fiscal
2020 Revenue
2020 Revenue
51%
51%
21%
21%
16%
16%
13%
13%
55%
55%
17%
17%
16%
16%
11%
11%
54%
54%
14%
14%
21%
21%
11%
11%
• Ultrasound systems
• Ultrasound systems
• X-Ray equipment (CT and DR)
• X-Ray equipment (CT and DR)
• Image guided therapy
• Image guided therapy
• Multi-parameter vital signs monitors
• Multi-parameter vital signs monitors
• Remote patient monitoring
• Remote patient monitoring
• Anesthesia equipment
• Anesthesia equipment
• Lab diagnostic equipment
• Lab diagnostic equipment
• Surgical tools and instruments
• Surgical tools and instruments
• Blood analyzers
• Blood analyzers
• Point-of-care diagnostics
• Point-of-care diagnostics
Markets
Markets
End Market*
End Market*
Industrial
Industrial
Automotive
Automotive
Communications
Communications
Consumer
Consumer
*The sum of the individual percentages may not equal 100% due to rounding.
*The sum of the individual percentages may not equal 100% due to rounding.
The following describes some of the characteristics of, and customer products within, our major end markets of
The following describes some of the characteristics of, and customer products within, our major end markets of
Industrial, Automotive, Communications and Consumer:
Industrial, Automotive, Communications and Consumer:
Industrial — Our industrial market includes the following sectors:
Industrial — Our industrial market includes the following sectors:
Industrial Automation — We are a leader in industrial automation because we deliver robust, high performance solutions
Industrial Automation — We are a leader in industrial automation because we deliver robust, high performance solutions
from our deep motion and process control expertise and precision sensing measurement and interpretation to expansive
from our deep motion and process control expertise and precision sensing measurement and interpretation to expansive
connectivity and power capabilities. We take real-world phenomena in the most complex environments on the factory floor and
connectivity and power capabilities. We take real-world phenomena in the most complex environments on the factory floor and
translate it into valuable insights and outcomes. We co-create with customers to architect robotics systems and solutions that
translate it into valuable insights and outcomes. We co-create with customers to architect robotics systems and solutions that
improve dynamic behavior and precision while enhancing worker safety, machine health, and manufacturing flexibility. Our
improve dynamic behavior and precision while enhancing worker safety, machine health, and manufacturing flexibility. Our
industrial automation market includes applications such as:
industrial automation market includes applications such as:
• Condition-based monitoring (CbM)
• Condition-based monitoring (CbM)
• Industrial robotics
• Industrial robotics
• Factory and process control
• Factory and process control
• Industrial power supplies
• Industrial power supplies
• Industrial motion control
• Industrial motion control
Instrumentation & Measurement — Trusted measurement is at the forefront of innovation. With the rapid pace of global
Instrumentation & Measurement — Trusted measurement is at the forefront of innovation. With the rapid pace of global
transformation, from ubiquitous connectivity, to electrification, to artificial intelligence, to human health and environmental
transformation, from ubiquitous connectivity, to electrification, to artificial intelligence, to human health and environmental
sustainability — all these trends require reliable and efficient test solutions from R&D to manufacturing to field deployment.
sustainability — all these trends require reliable and efficient test solutions from R&D to manufacturing to field deployment.
We enable high performance measurement through our components and system solutions. Our RF, high-speed and power
We enable high performance measurement through our components and system solutions. Our RF, high-speed and power
management products are designed to enable solutions for complying with evolving communications standards. Our high-
management products are designed to enable solutions for complying with evolving communications standards. Our high-
voltage, isolation and precision products are a key part of the systems that are designed for safety, longevity and efficiency in
voltage, isolation and precision products are a key part of the systems that are designed for safety, longevity and efficiency in
electric vehicles and renewable energy. Beyond electrical testing, our precision and power technology enable analytical
electric vehicles and renewable energy. Beyond electrical testing, our precision and power technology enable analytical
instruments for drug or vaccine R&D and manufacturing, food safety and quality, and environmental monitoring. Our
instruments for drug or vaccine R&D and manufacturing, food safety and quality, and environmental monitoring. Our
instrumentation and measurement market includes applications such as:
instrumentation and measurement market includes applications such as:
• Automated test equipment
• Automated test equipment
• Electronic test and measurement
• Electronic test and measurement
• Environmental and process analysis
• Environmental and process analysis
• Automotive and energy test
• Automotive and energy test
• Life sciences and drug discovery
• Life sciences and drug discovery
Aerospace/Defense — The defense, commercial avionics and space markets all require high-performance ICs that meet
Aerospace/Defense — The defense, commercial avionics and space markets all require high-performance ICs that meet
rigorous environmental and reliability specifications. Many of our ICs can be supplied in versions that meet these standards. In
rigorous environmental and reliability specifications. Many of our ICs can be supplied in versions that meet these standards. In
addition, many products can be supplied to meet the standards required for broadcast satellites and other commercial space
addition, many products can be supplied to meet the standards required for broadcast satellites and other commercial space
applications. Most of our products sold in this market are specially tested versions of products derived from our standard
applications. Most of our products sold in this market are specially tested versions of products derived from our standard
product offering. As end systems are becoming more complex, many of our customers in this market also look for us to provide
product offering. As end systems are becoming more complex, many of our customers in this market also look for us to provide
higher levels of integration in order to minimize size, weight and power and to improve ease-of-use. As such, we also sell
higher levels of integration in order to minimize size, weight and power and to improve ease-of-use. As such, we also sell
products in the form of SiPs (system in package), printed circuit board assemblies, modules, and subsystems. Customer
products in the form of SiPs (system in package), printed circuit board assemblies, modules, and subsystems. Customer
Energy Management — The global drive towards improved energy efficiency, conservation, reliability and cleanliness is
Energy Management — The global drive towards improved energy efficiency, conservation, reliability and cleanliness is
driving investments in electrification across many different application areas, including electric vehicle charging infrastructure,
driving investments in electrification across many different application areas, including electric vehicle charging infrastructure,
renewable energy, power transmission and distribution systems, electric meters and other innovative areas. The common
renewable energy, power transmission and distribution systems, electric meters and other innovative areas. The common
characteristic behind these efforts is the addition of sensing, measurement and communication technologies to electrical
characteristic behind these efforts is the addition of sensing, measurement and communication technologies to electrical
infrastructure. Our offerings include both standard and application-specific products and are used in applications such as:
infrastructure. Our offerings include both standard and application-specific products and are used in applications such as:
• Utility meters
• Utility meters
• Electric vehicle charging infrastructure
• Electric vehicle charging infrastructure
• Substation relays and automation equipment
• Substation relays and automation equipment
• Wind turbines
• Wind turbines
• Solar inverters
• Solar inverters
• Building energy automation/control
• Building energy automation/control
Automotive — We develop differentiated high-performance signal processing solutions, which enable sophisticated
Automotive — We develop differentiated high-performance signal processing solutions, which enable sophisticated
transportation systems that span infotainment, electrification and autonomous applications. Through collaboration with
transportation systems that span infotainment, electrification and autonomous applications. Through collaboration with
manufacturers worldwide, we have developed a broad portfolio of analog, digital, power and sensor ICs that address the
manufacturers worldwide, we have developed a broad portfolio of analog, digital, power and sensor ICs that address the
emerging needs of this evolving industry. Our focus is on audio/video applications that lead to an enriched in-cabin experience,
emerging needs of this evolving industry. Our focus is on audio/video applications that lead to an enriched in-cabin experience,
electrification applications that improve vehicle range and reduce emissions, and mission-critical perception and navigation
electrification applications that improve vehicle range and reduce emissions, and mission-critical perception and navigation
applications that enable vehicles to more clearly sense the external environment. Specifically, we have developed products used
applications that enable vehicles to more clearly sense the external environment. Specifically, we have developed products used
in applications such as:
in applications such as:
• Car audio, voice processing and connectivity
• Car audio, voice processing and connectivity
• Video processing and connectivity
• Video processing and connectivity
• Battery monitoring and management systems
• Battery monitoring and management systems
Communications — The development of broadband, wireless and internet infrastructures around the world has created
Communications — The development of broadband, wireless and internet infrastructures around the world has created
an important market for our communications products. Communications technology involves the processing of signals that are
an important market for our communications products. Communications technology involves the processing of signals that are
converted from analog to digital and digital to analog form during the process of transmitting and receiving data. The need for
converted from analog to digital and digital to analog form during the process of transmitting and receiving data. The need for
higher speed and reduced power consumption, coupled with more reliable, bandwidth-efficient communications, creates
higher speed and reduced power consumption, coupled with more reliable, bandwidth-efficient communications, creates
demand for our products, which are used in the full spectrum of signal processing for data, video, voice and machine-to-
demand for our products, which are used in the full spectrum of signal processing for data, video, voice and machine-to-
machine communications. In wireless and wireline communication applications, our products are incorporated into:
machine communications. In wireless and wireline communication applications, our products are incorporated into:
• Cellular base station equipment
• Cellular base station equipment
• Microwave backhaul systems
• Microwave backhaul systems
• Data centers and data storage
• Data centers and data storage
• Satellite and terrestrial broadband access equipment
• Satellite and terrestrial broadband access equipment
• Optical and cable networking equipment for data center
• Optical and cable networking equipment for data center
and carrier providers
and carrier providers
Consumer — To address the market demand for state of the art personal and professional entertainment systems and the
Consumer — To address the market demand for state of the art personal and professional entertainment systems and the
consumer demand for high quality user interfaces, music, movies and photographs, we have developed analog, digital and
consumer demand for high quality user interfaces, music, movies and photographs, we have developed analog, digital and
mixed-signal and power solutions that meet the rigorous cost and time-to-market requirements of the consumer electronics
mixed-signal and power solutions that meet the rigorous cost and time-to-market requirements of the consumer electronics
market. The emergence of high-performance, feature-rich consumer products has created a market for our high-performance
market. The emergence of high-performance, feature-rich consumer products has created a market for our high-performance
ICs with a high level of specific functionality that enables best in class user experience and battery management. These
ICs with a high level of specific functionality that enables best in class user experience and battery management. These
products include:
products include:
• Portable devices (smart phones, tablets and wearable
• Portable devices (smart phones, tablets and wearable
devices) for media and vital signs monitoring applications
devices) for media and vital signs monitoring applications
• Prosumer audio/video equipment
• Prosumer audio/video equipment
5
5
6
6
See Note 4, Industry, Segment and Geographic Information, of the Notes to Consolidated Financial Statements contained
See Note 4, Industry, Segment and Geographic Information, of the Notes to Consolidated Financial Statements contained
product development and shipment of product to our customers. Although we have experienced shortages of components,
product development and shipment of product to our customers. Although we have experienced shortages of components,
in Part II, Item 8 of this Annual Report on Form 10-K for further information about our products by end market.
in Part II, Item 8 of this Annual Report on Form 10-K for further information about our products by end market.
materials and external foundry services from time to time, we are working to balance these constraints as we shift our global
materials and external foundry services from time to time, we are working to balance these constraints as we shift our global
Competition
Competition
We believe that competitive performance in the marketplace for signal processing products depends upon multiple
We believe that competitive performance in the marketplace for signal processing products depends upon multiple
factors, including technological innovation, strength of brand, diversity of product portfolio, product performance, technical
factors, including technological innovation, strength of brand, diversity of product portfolio, product performance, technical
support, delivery capabilities, customer service quality, reliability and price, with the relative importance of these factors
support, delivery capabilities, customer service quality, reliability and price, with the relative importance of these factors
varying among products, markets, and customers. We compete with a number of semiconductor companies in markets that are
varying among products, markets, and customers. We compete with a number of semiconductor companies in markets that are
highly competitive. Many companies have sufficient financial, manufacturing, technical, sales and marketing resources to
highly competitive. Many companies have sufficient financial, manufacturing, technical, sales and marketing resources to
develop and market products that compete with our products. Some of our competitors may have more advantageous supply or
develop and market products that compete with our products. Some of our competitors may have more advantageous supply or
development relationships with our current and potential customers or suppliers. Our competitors also include both emerging
development relationships with our current and potential customers or suppliers. Our competitors also include both emerging
companies selling specialized products in markets we serve and companies outside of the U.S., including entities associated
companies selling specialized products in markets we serve and companies outside of the U.S., including entities associated
with well-funded efforts by foreign governments to create indigenous semiconductor industries.
with well-funded efforts by foreign governments to create indigenous semiconductor industries.
We believe that our technical innovation emphasizing product performance and reliability, supported by our commitment
We believe that our technical innovation emphasizing product performance and reliability, supported by our commitment
to strong customer service and technical support, enables us to make a fundamental difference to our customers’
to strong customer service and technical support, enables us to make a fundamental difference to our customers’
competitiveness in our chosen markets.
competitiveness in our chosen markets.
Seasonality
Seasonality
Our sales are subject to a varying degree of seasonality. Historically, sales to customers during our first fiscal quarter
Our sales are subject to a varying degree of seasonality. Historically, sales to customers during our first fiscal quarter
may be lower than other quarters due to plant shutdowns at some of our customers during the holiday season. In general, the
may be lower than other quarters due to plant shutdowns at some of our customers during the holiday season. In general, the
seasonality for any specific period of time has not had a material impact on our results of operations. In addition, as explained
seasonality for any specific period of time has not had a material impact on our results of operations. In addition, as explained
in our risk factors contained in Item 1A of this Annual Report on Form 10-K, our revenue is more likely to be influenced on a
in our risk factors contained in Item 1A of this Annual Report on Form 10-K, our revenue is more likely to be influenced on a
quarter to quarter basis by cyclicality in the semiconductor industry.
quarter to quarter basis by cyclicality in the semiconductor industry.
We believe that a number of factors should be used to assess future customer demand, including backlog, macroeconomic
We believe that a number of factors should be used to assess future customer demand, including backlog, macroeconomic
trends, customer insights and current customer bookings as compared to billings (book-to-bill) ratio. We define backlog to
trends, customer insights and current customer bookings as compared to billings (book-to-bill) ratio. We define backlog to
mean firm orders from a customer or distributor with a requested delivery date within thirteen weeks. However, backlog may be
mean firm orders from a customer or distributor with a requested delivery date within thirteen weeks. However, backlog may be
impacted by the tendency of customers to rely on shorter lead times available from suppliers, including us, in periods of
impacted by the tendency of customers to rely on shorter lead times available from suppliers, including us, in periods of
depressed demand. In periods of increased demand, there is a tendency towards longer lead times that has the effect of
depressed demand. In periods of increased demand, there is a tendency towards longer lead times that has the effect of
increasing backlog and, in some instances, we may not have manufacturing capacity sufficient to fulfill all orders. We have
increasing backlog and, in some instances, we may not have manufacturing capacity sufficient to fulfill all orders. We have
experienced increased demand over the past two years leading to a constrained supply environment. In response, we have added
experienced increased demand over the past two years leading to a constrained supply environment. In response, we have added
manufacturing capacity to address some of the increased demand. As is customary in the semiconductor industry, we allow
manufacturing capacity to address some of the increased demand. As is customary in the semiconductor industry, we allow
most orders to be canceled within a reasonable notification period or deliveries to be delayed by customers without significant
most orders to be canceled within a reasonable notification period or deliveries to be delayed by customers without significant
penalty, while also allowing certain distributors to receive price adjustment credits and to return qualifying products for credit,
penalty, while also allowing certain distributors to receive price adjustment credits and to return qualifying products for credit,
as determined by us, in order to reduce the amounts of slow-moving, discontinued or obsolete product from their inventory.
as determined by us, in order to reduce the amounts of slow-moving, discontinued or obsolete product from their inventory.
Production Resources
Production Resources
Monolithic IC components are manufactured in a sequence of semiconductor production steps that include wafer
Monolithic IC components are manufactured in a sequence of semiconductor production steps that include wafer
fabrication, wafer testing, dicing the wafer into individual “chips,” or dice, assembly of the dice into packages and electrical
fabrication, wafer testing, dicing the wafer into individual “chips,” or dice, assembly of the dice into packages and electrical
testing of the devices in final packaged form. The raw materials used to manufacture these devices include silicon wafers,
testing of the devices in final packaged form. The raw materials used to manufacture these devices include silicon wafers,
processing chemicals (including liquefied gases), precious metals laminates, ceramic and plastic used for packaging. We
processing chemicals (including liquefied gases), precious metals laminates, ceramic and plastic used for packaging. We
utilize, develop and employ a wide variety of manufacturing processes, primarily based on bipolar and complementary metal-
utilize, develop and employ a wide variety of manufacturing processes, primarily based on bipolar and complementary metal-
oxide semiconductor (CMOS) transistors, which are specifically tailored for use in fabricating high-performance analog, DSP
oxide semiconductor (CMOS) transistors, which are specifically tailored for use in fabricating high-performance analog, DSP
and mixed-signal ICs. Devices such as MEMS, iCoupler® isolators and various sensors are fabricated using specialized
and mixed-signal ICs. Devices such as MEMS, iCoupler® isolators and various sensors are fabricated using specialized
processes, which typically use substantially similar equipment as bipolar and CMOS processes.
processes, which typically use substantially similar equipment as bipolar and CMOS processes.
Our IC products are fabricated on proprietary processes at our internal production facilities in Wilmington,
Our IC products are fabricated on proprietary processes at our internal production facilities in Wilmington,
Massachusetts; Camas, Washington; Beaverton, Oregon; and Limerick, Ireland and also on a mix of proprietary and non-
Massachusetts; Camas, Washington; Beaverton, Oregon; and Limerick, Ireland and also on a mix of proprietary and non-
proprietary processes at third-party wafer fabricators. We currently source more than half of our wafer requirements annually
proprietary processes at third-party wafer fabricators. We currently source more than half of our wafer requirements annually
from third-party wafer fabrication foundries, such as Taiwan Semiconductor Manufacturing Company (TSMC) and others, and
from third-party wafer fabrication foundries, such as Taiwan Semiconductor Manufacturing Company (TSMC) and others, and
the remainder is sourced internally. In addition, we operate an assembly, wafer sort and testing facility in Penang, Malaysia,
the remainder is sourced internally. In addition, we operate an assembly, wafer sort and testing facility in Penang, Malaysia,
and test facilities in the Philippines and Thailand. We also make extensive use of third-party subcontractors for the assembly
and test facilities in the Philippines and Thailand. We also make extensive use of third-party subcontractors for the assembly
and testing of our products.
and testing of our products.
Our products require a wide variety of components, raw materials and external foundry services, most of which we
Our products require a wide variety of components, raw materials and external foundry services, most of which we
purchase from third-party suppliers. We have multiple sources for many of the components and materials that we purchase and
purchase from third-party suppliers. We have multiple sources for many of the components and materials that we purchase and
incorporate into our products. If any of our key suppliers are unable or unwilling to manufacture and deliver sufficient
incorporate into our products. If any of our key suppliers are unable or unwilling to manufacture and deliver sufficient
quantities of components to us on the time schedule and of the quality that we require, we may be forced to seek to engage
quantities of components to us on the time schedule and of the quality that we require, we may be forced to seek to engage
additional or replacement suppliers, which could result in significant expenses and disruptions or delays in manufacturing,
additional or replacement suppliers, which could result in significant expenses and disruptions or delays in manufacturing,
resources and change capacity where appropriate.
resources and change capacity where appropriate.
Patents and Intellectual Property Rights
Patents and Intellectual Property Rights
We seek to establish and maintain our proprietary rights in our technology and products through the use of patents,
We seek to establish and maintain our proprietary rights in our technology and products through the use of patents,
copyrights, mask works, trademarks and trade secrets. We have a program to file applications for and obtain patents,
copyrights, mask works, trademarks and trade secrets. We have a program to file applications for and obtain patents,
copyrights, mask works and trademarks in the United States and in selected foreign countries where we believe filing for such
copyrights, mask works and trademarks in the United States and in selected foreign countries where we believe filing for such
protection is appropriate. We also seek to maintain our trade secrets and confidential information by nondisclosure policies and
protection is appropriate. We also seek to maintain our trade secrets and confidential information by nondisclosure policies and
through the use of appropriate confidentiality agreements. We have obtained a substantial number of patents and trademarks in
through the use of appropriate confidentiality agreements. We have obtained a substantial number of patents and trademarks in
the United States and in other countries. As of October 29, 2022, we held approximately 4,800 U.S. patents and approximately
the United States and in other countries. As of October 29, 2022, we held approximately 4,800 U.S. patents and approximately
440 published pending U.S. patent applications. There can be no assurance, however, that the rights obtained can be
440 published pending U.S. patent applications. There can be no assurance, however, that the rights obtained can be
successfully enforced against infringing products in every jurisdiction. While our patents, copyrights, mask works, trademarks
successfully enforced against infringing products in every jurisdiction. While our patents, copyrights, mask works, trademarks
and trade secrets provide some advantage and protection, we believe our competitive position and future success is largely
and trade secrets provide some advantage and protection, we believe our competitive position and future success is largely
determined by such factors as the system and application knowledge, innovative skills, technological expertise and management
determined by such factors as the system and application knowledge, innovative skills, technological expertise and management
ability and experience of our personnel; the range and success of new products being developed by us; our market brand
ability and experience of our personnel; the range and success of new products being developed by us; our market brand
recognition and ongoing marketing efforts; and customer service and technical support. It is generally our policy to seek patent
recognition and ongoing marketing efforts; and customer service and technical support. It is generally our policy to seek patent
protection for significant inventions that may be patented, though we may elect, in certain cases, not to seek patent protection
protection for significant inventions that may be patented, though we may elect, in certain cases, not to seek patent protection
even for significant inventions, if we determine other protection, such as maintaining the invention as a trade secret, to be more
even for significant inventions, if we determine other protection, such as maintaining the invention as a trade secret, to be more
advantageous. We also have trademarks that are used in the conduct of our business to distinguish genuine Analog Devices
advantageous. We also have trademarks that are used in the conduct of our business to distinguish genuine Analog Devices
products, and we maintain cooperative advertising programs to promote our brands and identify products containing genuine
products, and we maintain cooperative advertising programs to promote our brands and identify products containing genuine
Analog Devices components.
Analog Devices components.
Environment, Health and Safety Compliance
Environment, Health and Safety Compliance
We are committed to protecting the environment and the health and safety of our employees, customers and the public.
We are committed to protecting the environment and the health and safety of our employees, customers and the public.
We endeavor to adhere to applicable environment, health and safety (EHS) regulatory and industry standards across all of our
We endeavor to adhere to applicable environment, health and safety (EHS) regulatory and industry standards across all of our
facilities, and to encourage pollution prevention, reduce our water and energy consumption, manage waste streams to divert
facilities, and to encourage pollution prevention, reduce our water and energy consumption, manage waste streams to divert
from landfills, and strive towards continual improvement. We strive to achieve excellence in EHS management practices as an
from landfills, and strive towards continual improvement. We strive to achieve excellence in EHS management practices as an
integral part of our total quality management system.
integral part of our total quality management system.
Our EHS management systems in all of our manufacturing facilities are certified to ISO 14001:2015 for environmental
Our EHS management systems in all of our manufacturing facilities are certified to ISO 14001:2015 for environmental
management. In addition, our legacy Analog Devices facilities are certified to ISO 45001 for occupational health and safety,
management. In addition, our legacy Analog Devices facilities are certified to ISO 45001 for occupational health and safety,
and as part of our integration efforts, we are developing a path to certification for our legacy Maxim sites as well. Our industrial
and as part of our integration efforts, we are developing a path to certification for our legacy Maxim sites as well. Our industrial
hygiene surveillance program minimizes and prevents exposures in the workplace. We use two industry standard metrics to
hygiene surveillance program minimizes and prevents exposures in the workplace. We use two industry standard metrics to
assess injury performance and trends worldwide. In fiscal 2021 and the fiscal year ended October 29, 2022 (fiscal 2022), our
assess injury performance and trends worldwide. In fiscal 2021 and the fiscal year ended October 29, 2022 (fiscal 2022), our
global injury rates were lower than the U.S. semiconductor industry benchmark.
global injury rates were lower than the U.S. semiconductor industry benchmark.
Our manufacturing facilities are subject to numerous and increasingly strict federal, state, local and foreign EHS laws and
Our manufacturing facilities are subject to numerous and increasingly strict federal, state, local and foreign EHS laws and
regulations, particularly with respect to the transportation, storage, handling, use, emission, discharge and disposal of certain
regulations, particularly with respect to the transportation, storage, handling, use, emission, discharge and disposal of certain
chemicals used or produced in the semiconductor manufacturing process. Our products are subject to increasingly stringent
chemicals used or produced in the semiconductor manufacturing process. Our products are subject to increasingly stringent
regulations regarding substance content in jurisdictions where we sell products. Contracts with many of our customers reflect
regulations regarding substance content in jurisdictions where we sell products. Contracts with many of our customers reflect
these and additional EHS compliance standards. Substance content of our products includes materials that are subject to conflict
these and additional EHS compliance standards. Substance content of our products includes materials that are subject to conflict
mineral reporting requirements. Compliance with these laws and regulations has not had a material impact on our capital
mineral reporting requirements. Compliance with these laws and regulations has not had a material impact on our capital
expenditures, earnings, financial condition or competitive position. There can be no assurance, however, that current or future
expenditures, earnings, financial condition or competitive position. There can be no assurance, however, that current or future
environmental laws and regulations will not impose costly requirements upon us. Any failure by us to comply with applicable
environmental laws and regulations will not impose costly requirements upon us. Any failure by us to comply with applicable
environmental laws, regulations and contractual obligations could result in fines, suspension of production, the need to alter
environmental laws, regulations and contractual obligations could result in fines, suspension of production, the need to alter
manufacturing processes and legal liability.
manufacturing processes and legal liability.
We are a member of the Responsible Business Alliance, which was formerly known as the Electronic Industry
We are a member of the Responsible Business Alliance, which was formerly known as the Electronic Industry
Citizenship Coalition, as well as a signatory to the United Nations Global Compact and the Business Ambition for 1.5°C
Citizenship Coalition, as well as a signatory to the United Nations Global Compact and the Business Ambition for 1.5°C
campaign. Our 2021 Environment, Social and Governance (ESG) Report states our goals to be carbon neutral by calendar year
campaign. Our 2021 Environment, Social and Governance (ESG) Report states our goals to be carbon neutral by calendar year
2030, to achieve net zero emissions by calendar year 2050 or sooner, to achieve a water recycling rate of at least 50% in
2030, to achieve net zero emissions by calendar year 2050 or sooner, to achieve a water recycling rate of at least 50% in
manufacturing facilities by 2025, to comply with our code of business conduct and ethics and to apply fair labor standards. The
manufacturing facilities by 2025, to comply with our code of business conduct and ethics and to apply fair labor standards. The
ESG Report is available on our website at www.analog.com/sustainability. The contents of our website and the information
ESG Report is available on our website at www.analog.com/sustainability. The contents of our website and the information
contained in our ESG Report are not incorporated by reference into this Annual Report on Form 10-K.
contained in our ESG Report are not incorporated by reference into this Annual Report on Form 10-K.
To support our commitment to ESG, we have implemented an oversight structure which includes a quarterly reporting
To support our commitment to ESG, we have implemented an oversight structure which includes a quarterly reporting
cadence both to senior management and the Nominating and Corporate Governance Committee of the Board of Directors.
cadence both to senior management and the Nominating and Corporate Governance Committee of the Board of Directors.
These quarterly reports include updates on progress against goals, assessment of regulatory preparedness, stakeholder
These quarterly reports include updates on progress against goals, assessment of regulatory preparedness, stakeholder
engagement feedback, and programmatic progress and challenges.
engagement feedback, and programmatic progress and challenges.
7
7
8
8
See Note 4, Industry, Segment and Geographic Information, of the Notes to Consolidated Financial Statements contained
See Note 4, Industry, Segment and Geographic Information, of the Notes to Consolidated Financial Statements contained
in Part II, Item 8 of this Annual Report on Form 10-K for further information about our products by end market.
in Part II, Item 8 of this Annual Report on Form 10-K for further information about our products by end market.
Competition
Competition
We believe that competitive performance in the marketplace for signal processing products depends upon multiple
We believe that competitive performance in the marketplace for signal processing products depends upon multiple
factors, including technological innovation, strength of brand, diversity of product portfolio, product performance, technical
factors, including technological innovation, strength of brand, diversity of product portfolio, product performance, technical
support, delivery capabilities, customer service quality, reliability and price, with the relative importance of these factors
support, delivery capabilities, customer service quality, reliability and price, with the relative importance of these factors
varying among products, markets, and customers. We compete with a number of semiconductor companies in markets that are
varying among products, markets, and customers. We compete with a number of semiconductor companies in markets that are
highly competitive. Many companies have sufficient financial, manufacturing, technical, sales and marketing resources to
highly competitive. Many companies have sufficient financial, manufacturing, technical, sales and marketing resources to
develop and market products that compete with our products. Some of our competitors may have more advantageous supply or
develop and market products that compete with our products. Some of our competitors may have more advantageous supply or
development relationships with our current and potential customers or suppliers. Our competitors also include both emerging
development relationships with our current and potential customers or suppliers. Our competitors also include both emerging
companies selling specialized products in markets we serve and companies outside of the U.S., including entities associated
companies selling specialized products in markets we serve and companies outside of the U.S., including entities associated
with well-funded efforts by foreign governments to create indigenous semiconductor industries.
with well-funded efforts by foreign governments to create indigenous semiconductor industries.
We believe that our technical innovation emphasizing product performance and reliability, supported by our commitment
We believe that our technical innovation emphasizing product performance and reliability, supported by our commitment
to strong customer service and technical support, enables us to make a fundamental difference to our customers’
to strong customer service and technical support, enables us to make a fundamental difference to our customers’
competitiveness in our chosen markets.
competitiveness in our chosen markets.
Seasonality
Seasonality
Our sales are subject to a varying degree of seasonality. Historically, sales to customers during our first fiscal quarter
Our sales are subject to a varying degree of seasonality. Historically, sales to customers during our first fiscal quarter
may be lower than other quarters due to plant shutdowns at some of our customers during the holiday season. In general, the
may be lower than other quarters due to plant shutdowns at some of our customers during the holiday season. In general, the
seasonality for any specific period of time has not had a material impact on our results of operations. In addition, as explained
seasonality for any specific period of time has not had a material impact on our results of operations. In addition, as explained
in our risk factors contained in Item 1A of this Annual Report on Form 10-K, our revenue is more likely to be influenced on a
in our risk factors contained in Item 1A of this Annual Report on Form 10-K, our revenue is more likely to be influenced on a
quarter to quarter basis by cyclicality in the semiconductor industry.
quarter to quarter basis by cyclicality in the semiconductor industry.
We believe that a number of factors should be used to assess future customer demand, including backlog, macroeconomic
We believe that a number of factors should be used to assess future customer demand, including backlog, macroeconomic
trends, customer insights and current customer bookings as compared to billings (book-to-bill) ratio. We define backlog to
trends, customer insights and current customer bookings as compared to billings (book-to-bill) ratio. We define backlog to
mean firm orders from a customer or distributor with a requested delivery date within thirteen weeks. However, backlog may be
mean firm orders from a customer or distributor with a requested delivery date within thirteen weeks. However, backlog may be
impacted by the tendency of customers to rely on shorter lead times available from suppliers, including us, in periods of
impacted by the tendency of customers to rely on shorter lead times available from suppliers, including us, in periods of
depressed demand. In periods of increased demand, there is a tendency towards longer lead times that has the effect of
depressed demand. In periods of increased demand, there is a tendency towards longer lead times that has the effect of
increasing backlog and, in some instances, we may not have manufacturing capacity sufficient to fulfill all orders. We have
increasing backlog and, in some instances, we may not have manufacturing capacity sufficient to fulfill all orders. We have
experienced increased demand over the past two years leading to a constrained supply environment. In response, we have added
experienced increased demand over the past two years leading to a constrained supply environment. In response, we have added
manufacturing capacity to address some of the increased demand. As is customary in the semiconductor industry, we allow
manufacturing capacity to address some of the increased demand. As is customary in the semiconductor industry, we allow
most orders to be canceled within a reasonable notification period or deliveries to be delayed by customers without significant
most orders to be canceled within a reasonable notification period or deliveries to be delayed by customers without significant
penalty, while also allowing certain distributors to receive price adjustment credits and to return qualifying products for credit,
penalty, while also allowing certain distributors to receive price adjustment credits and to return qualifying products for credit,
as determined by us, in order to reduce the amounts of slow-moving, discontinued or obsolete product from their inventory.
as determined by us, in order to reduce the amounts of slow-moving, discontinued or obsolete product from their inventory.
Production Resources
Production Resources
Monolithic IC components are manufactured in a sequence of semiconductor production steps that include wafer
Monolithic IC components are manufactured in a sequence of semiconductor production steps that include wafer
fabrication, wafer testing, dicing the wafer into individual “chips,” or dice, assembly of the dice into packages and electrical
fabrication, wafer testing, dicing the wafer into individual “chips,” or dice, assembly of the dice into packages and electrical
testing of the devices in final packaged form. The raw materials used to manufacture these devices include silicon wafers,
testing of the devices in final packaged form. The raw materials used to manufacture these devices include silicon wafers,
processing chemicals (including liquefied gases), precious metals laminates, ceramic and plastic used for packaging. We
processing chemicals (including liquefied gases), precious metals laminates, ceramic and plastic used for packaging. We
utilize, develop and employ a wide variety of manufacturing processes, primarily based on bipolar and complementary metal-
utilize, develop and employ a wide variety of manufacturing processes, primarily based on bipolar and complementary metal-
oxide semiconductor (CMOS) transistors, which are specifically tailored for use in fabricating high-performance analog, DSP
oxide semiconductor (CMOS) transistors, which are specifically tailored for use in fabricating high-performance analog, DSP
and mixed-signal ICs. Devices such as MEMS, iCoupler® isolators and various sensors are fabricated using specialized
and mixed-signal ICs. Devices such as MEMS, iCoupler® isolators and various sensors are fabricated using specialized
processes, which typically use substantially similar equipment as bipolar and CMOS processes.
processes, which typically use substantially similar equipment as bipolar and CMOS processes.
Our IC products are fabricated on proprietary processes at our internal production facilities in Wilmington,
Our IC products are fabricated on proprietary processes at our internal production facilities in Wilmington,
Massachusetts; Camas, Washington; Beaverton, Oregon; and Limerick, Ireland and also on a mix of proprietary and non-
Massachusetts; Camas, Washington; Beaverton, Oregon; and Limerick, Ireland and also on a mix of proprietary and non-
proprietary processes at third-party wafer fabricators. We currently source more than half of our wafer requirements annually
proprietary processes at third-party wafer fabricators. We currently source more than half of our wafer requirements annually
from third-party wafer fabrication foundries, such as Taiwan Semiconductor Manufacturing Company (TSMC) and others, and
from third-party wafer fabrication foundries, such as Taiwan Semiconductor Manufacturing Company (TSMC) and others, and
the remainder is sourced internally. In addition, we operate an assembly, wafer sort and testing facility in Penang, Malaysia,
the remainder is sourced internally. In addition, we operate an assembly, wafer sort and testing facility in Penang, Malaysia,
and test facilities in the Philippines and Thailand. We also make extensive use of third-party subcontractors for the assembly
and test facilities in the Philippines and Thailand. We also make extensive use of third-party subcontractors for the assembly
and testing of our products.
and testing of our products.
Our products require a wide variety of components, raw materials and external foundry services, most of which we
Our products require a wide variety of components, raw materials and external foundry services, most of which we
purchase from third-party suppliers. We have multiple sources for many of the components and materials that we purchase and
purchase from third-party suppliers. We have multiple sources for many of the components and materials that we purchase and
incorporate into our products. If any of our key suppliers are unable or unwilling to manufacture and deliver sufficient
incorporate into our products. If any of our key suppliers are unable or unwilling to manufacture and deliver sufficient
quantities of components to us on the time schedule and of the quality that we require, we may be forced to seek to engage
quantities of components to us on the time schedule and of the quality that we require, we may be forced to seek to engage
additional or replacement suppliers, which could result in significant expenses and disruptions or delays in manufacturing,
additional or replacement suppliers, which could result in significant expenses and disruptions or delays in manufacturing,
product development and shipment of product to our customers. Although we have experienced shortages of components,
product development and shipment of product to our customers. Although we have experienced shortages of components,
materials and external foundry services from time to time, we are working to balance these constraints as we shift our global
materials and external foundry services from time to time, we are working to balance these constraints as we shift our global
resources and change capacity where appropriate.
resources and change capacity where appropriate.
Patents and Intellectual Property Rights
Patents and Intellectual Property Rights
We seek to establish and maintain our proprietary rights in our technology and products through the use of patents,
We seek to establish and maintain our proprietary rights in our technology and products through the use of patents,
copyrights, mask works, trademarks and trade secrets. We have a program to file applications for and obtain patents,
copyrights, mask works, trademarks and trade secrets. We have a program to file applications for and obtain patents,
copyrights, mask works and trademarks in the United States and in selected foreign countries where we believe filing for such
copyrights, mask works and trademarks in the United States and in selected foreign countries where we believe filing for such
protection is appropriate. We also seek to maintain our trade secrets and confidential information by nondisclosure policies and
protection is appropriate. We also seek to maintain our trade secrets and confidential information by nondisclosure policies and
through the use of appropriate confidentiality agreements. We have obtained a substantial number of patents and trademarks in
through the use of appropriate confidentiality agreements. We have obtained a substantial number of patents and trademarks in
the United States and in other countries. As of October 29, 2022, we held approximately 4,800 U.S. patents and approximately
the United States and in other countries. As of October 29, 2022, we held approximately 4,800 U.S. patents and approximately
440 published pending U.S. patent applications. There can be no assurance, however, that the rights obtained can be
440 published pending U.S. patent applications. There can be no assurance, however, that the rights obtained can be
successfully enforced against infringing products in every jurisdiction. While our patents, copyrights, mask works, trademarks
successfully enforced against infringing products in every jurisdiction. While our patents, copyrights, mask works, trademarks
and trade secrets provide some advantage and protection, we believe our competitive position and future success is largely
and trade secrets provide some advantage and protection, we believe our competitive position and future success is largely
determined by such factors as the system and application knowledge, innovative skills, technological expertise and management
determined by such factors as the system and application knowledge, innovative skills, technological expertise and management
ability and experience of our personnel; the range and success of new products being developed by us; our market brand
ability and experience of our personnel; the range and success of new products being developed by us; our market brand
recognition and ongoing marketing efforts; and customer service and technical support. It is generally our policy to seek patent
recognition and ongoing marketing efforts; and customer service and technical support. It is generally our policy to seek patent
protection for significant inventions that may be patented, though we may elect, in certain cases, not to seek patent protection
protection for significant inventions that may be patented, though we may elect, in certain cases, not to seek patent protection
even for significant inventions, if we determine other protection, such as maintaining the invention as a trade secret, to be more
even for significant inventions, if we determine other protection, such as maintaining the invention as a trade secret, to be more
advantageous. We also have trademarks that are used in the conduct of our business to distinguish genuine Analog Devices
advantageous. We also have trademarks that are used in the conduct of our business to distinguish genuine Analog Devices
products, and we maintain cooperative advertising programs to promote our brands and identify products containing genuine
products, and we maintain cooperative advertising programs to promote our brands and identify products containing genuine
Analog Devices components.
Analog Devices components.
Environment, Health and Safety Compliance
Environment, Health and Safety Compliance
We are committed to protecting the environment and the health and safety of our employees, customers and the public.
We are committed to protecting the environment and the health and safety of our employees, customers and the public.
We endeavor to adhere to applicable environment, health and safety (EHS) regulatory and industry standards across all of our
We endeavor to adhere to applicable environment, health and safety (EHS) regulatory and industry standards across all of our
facilities, and to encourage pollution prevention, reduce our water and energy consumption, manage waste streams to divert
facilities, and to encourage pollution prevention, reduce our water and energy consumption, manage waste streams to divert
from landfills, and strive towards continual improvement. We strive to achieve excellence in EHS management practices as an
from landfills, and strive towards continual improvement. We strive to achieve excellence in EHS management practices as an
integral part of our total quality management system.
integral part of our total quality management system.
Our EHS management systems in all of our manufacturing facilities are certified to ISO 14001:2015 for environmental
Our EHS management systems in all of our manufacturing facilities are certified to ISO 14001:2015 for environmental
management. In addition, our legacy Analog Devices facilities are certified to ISO 45001 for occupational health and safety,
management. In addition, our legacy Analog Devices facilities are certified to ISO 45001 for occupational health and safety,
and as part of our integration efforts, we are developing a path to certification for our legacy Maxim sites as well. Our industrial
and as part of our integration efforts, we are developing a path to certification for our legacy Maxim sites as well. Our industrial
hygiene surveillance program minimizes and prevents exposures in the workplace. We use two industry standard metrics to
hygiene surveillance program minimizes and prevents exposures in the workplace. We use two industry standard metrics to
assess injury performance and trends worldwide. In fiscal 2021 and the fiscal year ended October 29, 2022 (fiscal 2022), our
assess injury performance and trends worldwide. In fiscal 2021 and the fiscal year ended October 29, 2022 (fiscal 2022), our
global injury rates were lower than the U.S. semiconductor industry benchmark.
global injury rates were lower than the U.S. semiconductor industry benchmark.
Our manufacturing facilities are subject to numerous and increasingly strict federal, state, local and foreign EHS laws and
Our manufacturing facilities are subject to numerous and increasingly strict federal, state, local and foreign EHS laws and
regulations, particularly with respect to the transportation, storage, handling, use, emission, discharge and disposal of certain
regulations, particularly with respect to the transportation, storage, handling, use, emission, discharge and disposal of certain
chemicals used or produced in the semiconductor manufacturing process. Our products are subject to increasingly stringent
chemicals used or produced in the semiconductor manufacturing process. Our products are subject to increasingly stringent
regulations regarding substance content in jurisdictions where we sell products. Contracts with many of our customers reflect
regulations regarding substance content in jurisdictions where we sell products. Contracts with many of our customers reflect
these and additional EHS compliance standards. Substance content of our products includes materials that are subject to conflict
these and additional EHS compliance standards. Substance content of our products includes materials that are subject to conflict
mineral reporting requirements. Compliance with these laws and regulations has not had a material impact on our capital
mineral reporting requirements. Compliance with these laws and regulations has not had a material impact on our capital
expenditures, earnings, financial condition or competitive position. There can be no assurance, however, that current or future
expenditures, earnings, financial condition or competitive position. There can be no assurance, however, that current or future
environmental laws and regulations will not impose costly requirements upon us. Any failure by us to comply with applicable
environmental laws and regulations will not impose costly requirements upon us. Any failure by us to comply with applicable
environmental laws, regulations and contractual obligations could result in fines, suspension of production, the need to alter
environmental laws, regulations and contractual obligations could result in fines, suspension of production, the need to alter
manufacturing processes and legal liability.
manufacturing processes and legal liability.
We are a member of the Responsible Business Alliance, which was formerly known as the Electronic Industry
We are a member of the Responsible Business Alliance, which was formerly known as the Electronic Industry
Citizenship Coalition, as well as a signatory to the United Nations Global Compact and the Business Ambition for 1.5°C
Citizenship Coalition, as well as a signatory to the United Nations Global Compact and the Business Ambition for 1.5°C
campaign. Our 2021 Environment, Social and Governance (ESG) Report states our goals to be carbon neutral by calendar year
campaign. Our 2021 Environment, Social and Governance (ESG) Report states our goals to be carbon neutral by calendar year
2030, to achieve net zero emissions by calendar year 2050 or sooner, to achieve a water recycling rate of at least 50% in
2030, to achieve net zero emissions by calendar year 2050 or sooner, to achieve a water recycling rate of at least 50% in
manufacturing facilities by 2025, to comply with our code of business conduct and ethics and to apply fair labor standards. The
manufacturing facilities by 2025, to comply with our code of business conduct and ethics and to apply fair labor standards. The
ESG Report is available on our website at www.analog.com/sustainability. The contents of our website and the information
ESG Report is available on our website at www.analog.com/sustainability. The contents of our website and the information
contained in our ESG Report are not incorporated by reference into this Annual Report on Form 10-K.
contained in our ESG Report are not incorporated by reference into this Annual Report on Form 10-K.
To support our commitment to ESG, we have implemented an oversight structure which includes a quarterly reporting
To support our commitment to ESG, we have implemented an oversight structure which includes a quarterly reporting
cadence both to senior management and the Nominating and Corporate Governance Committee of the Board of Directors.
cadence both to senior management and the Nominating and Corporate Governance Committee of the Board of Directors.
These quarterly reports include updates on progress against goals, assessment of regulatory preparedness, stakeholder
These quarterly reports include updates on progress against goals, assessment of regulatory preparedness, stakeholder
engagement feedback, and programmatic progress and challenges.
engagement feedback, and programmatic progress and challenges.
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assistance; backup child and adult care; adoption support; and family college planning. For further information concerning our
assistance; backup child and adult care; adoption support; and family college planning. For further information concerning our
equity incentive plans, see Note 3, Stock-based Compensation and Shareholders' Equity, of the Notes to Consolidated Financial
equity incentive plans, see Note 3, Stock-based Compensation and Shareholders' Equity, of the Notes to Consolidated Financial
Statements contained in Part II, Item 8 of this Annual Report on Form 10-K.
Statements contained in Part II, Item 8 of this Annual Report on Form 10-K.
In order to ensure that we are meeting our human capital objectives we frequently utilize employee surveys to understand
In order to ensure that we are meeting our human capital objectives we frequently utilize employee surveys to understand
the effectiveness of our employee and compensation programs and where we can improve across the company. Our latest
the effectiveness of our employee and compensation programs and where we can improve across the company. Our latest
survey, which was completed in fiscal 2021 prior to the Acquisition, had a participation rate of over 83% of legacy employees
survey, which was completed in fiscal 2021 prior to the Acquisition, had a participation rate of over 83% of legacy employees
of Analog Devices. The survey results indicated that we excel in areas including purpose, respectful treatment, commitment to
of Analog Devices. The survey results indicated that we excel in areas including purpose, respectful treatment, commitment to
diversity/inclusion and accountability. Our dual focus of being a great place to work and providing industry-leading benefits
diversity/inclusion and accountability. Our dual focus of being a great place to work and providing industry-leading benefits
and work culture has led to strong employee satisfaction and pride that has been recognized across the globe, as evidenced with
and work culture has led to strong employee satisfaction and pride that has been recognized across the globe, as evidenced with
the following awards: Forbes World's Top Female Friendly Companies (2022, 2021), Forbes World’s Best Employer List
the following awards: Forbes World's Top Female Friendly Companies (2022, 2021), Forbes World’s Best Employer List
(2020) and The Boston Globe’s Top Places to Work (2021, 2020).
(2020) and The Boston Globe’s Top Places to Work (2021, 2020).
Cybersecurity and Information Security Risk Oversight
Cybersecurity and Information Security Risk Oversight
We regularly perform risk assessments relating to cybersecurity and technology risks. Our enterprise security program
We regularly perform risk assessments relating to cybersecurity and technology risks. Our enterprise security program
has been developed based on industry standards, including those published by the International Organization for
has been developed based on industry standards, including those published by the International Organization for
Standardization (ISO) and the National Institute of Standards and Technology. Highlights of the program include:
Standardization (ISO) and the National Institute of Standards and Technology. Highlights of the program include:
• A comprehensive set of enterprise security policies and procedures that guide our protection strategy.
• A comprehensive set of enterprise security policies and procedures that guide our protection strategy.
• Protecting against threats through use of the following measures: identifying critical assets and high-risk threats;
• Protecting against threats through use of the following measures: identifying critical assets and high-risk threats;
implementing cybersecurity detection, controls and remediation practices; implementing a third-party risk
implementing cybersecurity detection, controls and remediation practices; implementing a third-party risk
management program to evaluate our critical partners’ cyber posture; and evaluating our program effectiveness by
management program to evaluate our critical partners’ cyber posture; and evaluating our program effectiveness by
performing internal and external audits.
performing internal and external audits.
Risks identified by our cybersecurity program are analyzed to determine the potential impact on us and the likelihood of
Risks identified by our cybersecurity program are analyzed to determine the potential impact on us and the likelihood of
occurrence. Such risks are continuously monitored to ensure that the circumstances and severity of such risks have not changed.
occurrence. Such risks are continuously monitored to ensure that the circumstances and severity of such risks have not changed.
Senior leadership and our internal audit team regularly provide the Audit Committee of the Board of Directors with updates on
Senior leadership and our internal audit team regularly provide the Audit Committee of the Board of Directors with updates on
the performance of our program. At least annually, the Chief Information Officer updates the full Board of Directors on
the performance of our program. At least annually, the Chief Information Officer updates the full Board of Directors on
information security matters and risk, including cybersecurity.
information security matters and risk, including cybersecurity.
We conduct regular workforce training to instruct employees to identify cybersecurity concerns and take the appropriate
We conduct regular workforce training to instruct employees to identify cybersecurity concerns and take the appropriate
action. We install and regularly update antivirus software on all company managed systems and workstations to detect and
action. We install and regularly update antivirus software on all company managed systems and workstations to detect and
prevent malicious code from impacting our systems. In addition, we have a product security team focused on integrating risk
prevent malicious code from impacting our systems. In addition, we have a product security team focused on integrating risk
and security best practices into our product development life cycle. Periodically, we are audited by an independent information
and security best practices into our product development life cycle. Periodically, we are audited by an independent information
systems expert to determine both the adequacy of, and compliance with, controls and standards.
systems expert to determine both the adequacy of, and compliance with, controls and standards.
We have determined that an information security risk insurance policy would not be effective, and that we should
We have determined that an information security risk insurance policy would not be effective, and that we should
continue to self-insure for cybersecurity risks. We have not experienced a material security breach in the last three years, and as
continue to self-insure for cybersecurity risks. We have not experienced a material security breach in the last three years, and as
a result, we have not incurred any net expenses from such a breach. Furthermore, we have not been penalized or paid any
a result, we have not incurred any net expenses from such a breach. Furthermore, we have not been penalized or paid any
amount under an information security breach settlement over the last three years.
amount under an information security breach settlement over the last three years.
Human Capital and Empowerment
Human Capital and Empowerment
Our company was founded on the principle that people are our greatest asset. Our future success depends in large part on
Our company was founded on the principle that people are our greatest asset. Our future success depends in large part on
the continued service of our key technical and senior management personnel, and on our ability to continue to attract, retain and
the continued service of our key technical and senior management personnel, and on our ability to continue to attract, retain and
motivate qualified employees, particularly highly-skilled engineers involved in the design, development, support and
motivate qualified employees, particularly highly-skilled engineers involved in the design, development, support and
manufacture of new and existing products and processes. In order for us to attract the best talent, we aim to offer challenging
manufacture of new and existing products and processes. In order for us to attract the best talent, we aim to offer challenging
work in an environment that enables our employees to learn, grow and reach their full potential.
work in an environment that enables our employees to learn, grow and reach their full potential.
Core to our empowerment strategy is embracing diversity and building a culture of inclusion across the organization. We
Core to our empowerment strategy is embracing diversity and building a culture of inclusion across the organization. We
are working to achieve this by expanding the diversity of our workforce, creating growth and development opportunities for our
are working to achieve this by expanding the diversity of our workforce, creating growth and development opportunities for our
employees, embracing different perspectives and fostering an inclusive work environment for all. In addition, we encourage
employees, embracing different perspectives and fostering an inclusive work environment for all. In addition, we encourage
employees to organize and develop different employment networks, which contribute to our broader diversity and inclusion
employees to organize and develop different employment networks, which contribute to our broader diversity and inclusion
initiatives. Our current employee networks include the Analog Veterans Network, Neurodiversity Network, People of Color and
initiatives. Our current employee networks include the Analog Veterans Network, Neurodiversity Network, People of Color and
Allies Network, Pride Network, Women’s Leadership Network, Young Professionals Network, the Green Team and the
Allies Network, Pride Network, Women’s Leadership Network, Young Professionals Network, the Green Team and the
Communities Activities Board. As noted in "Environment, Health and Safety Compliance" above, we published our 2021 ESG
Communities Activities Board. As noted in "Environment, Health and Safety Compliance" above, we published our 2021 ESG
report which details our sustainability efforts, operations efficiency, employee engagement, and governance, and also provides a
report which details our sustainability efforts, operations efficiency, employee engagement, and governance, and also provides a
look at the state of our organization and an overview of some of the initiatives we have launched to drive continuous
look at the state of our organization and an overview of some of the initiatives we have launched to drive continuous
improvements across diversity and inclusion.
improvements across diversity and inclusion.
As of October 29, 2022, we had approximately 24,450 employees, of whom approximately 11,400 are in engineering
As of October 29, 2022, we had approximately 24,450 employees, of whom approximately 11,400 are in engineering
roles. Approximately 59% of our workforce is male and 41% female. Our senior leadership team is 73% male and 27% female,
roles. Approximately 59% of our workforce is male and 41% female. Our senior leadership team is 73% male and 27% female,
while manager roles are approximately 75% male and 25% female. 30% of the members of our Board of Directors are female.
while manager roles are approximately 75% male and 25% female. 30% of the members of our Board of Directors are female.
For fiscal 2022, our voluntary employee turnover rate was approximately 11.2%.
For fiscal 2022, our voluntary employee turnover rate was approximately 11.2%.
Our human capital resource objectives include identifying, recruiting, retaining, incentivizing and integrating our existing
Our human capital resource objectives include identifying, recruiting, retaining, incentivizing and integrating our existing
and future employees. We strive to attract and retain the most talented employees in the industry and across the globe by
and future employees. We strive to attract and retain the most talented employees in the industry and across the globe by
offering competitive compensation and benefits that support their health, financial and emotional well-being. Our compensation
offering competitive compensation and benefits that support their health, financial and emotional well-being. Our compensation
philosophy is based on rewarding each employee’s individual contributions and striving to achieve equal pay for equal work
philosophy is based on rewarding each employee’s individual contributions and striving to achieve equal pay for equal work
regardless of gender, race or ethnicity. We use a combination of fixed and variable pay including base salary, bonuses,
regardless of gender, race or ethnicity. We use a combination of fixed and variable pay including base salary, bonuses,
performance awards and equity compensation. The principal purposes of our equity incentive plans are to attract, retain and
performance awards and equity compensation. The principal purposes of our equity incentive plans are to attract, retain and
motivate selected employees and directors through the granting of stock-based compensation awards. We offer employees
motivate selected employees and directors through the granting of stock-based compensation awards. We offer employees
benefits that vary by country and are designed to meet or exceed local laws and to be competitive in the marketplace. Examples
benefits that vary by country and are designed to meet or exceed local laws and to be competitive in the marketplace. Examples
of benefits offered in the U.S. include a 401(k) plan with employer contributions; health benefits; life, business travel and
of benefits offered in the U.S. include a 401(k) plan with employer contributions; health benefits; life, business travel and
disability insurance; additional voluntary insurance; paid time off and parental leave; education assistance; paid counseling
disability insurance; additional voluntary insurance; paid time off and parental leave; education assistance; paid counseling
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assistance; backup child and adult care; adoption support; and family college planning. For further information concerning our
assistance; backup child and adult care; adoption support; and family college planning. For further information concerning our
equity incentive plans, see Note 3, Stock-based Compensation and Shareholders' Equity, of the Notes to Consolidated Financial
equity incentive plans, see Note 3, Stock-based Compensation and Shareholders' Equity, of the Notes to Consolidated Financial
Statements contained in Part II, Item 8 of this Annual Report on Form 10-K.
Statements contained in Part II, Item 8 of this Annual Report on Form 10-K.
In order to ensure that we are meeting our human capital objectives we frequently utilize employee surveys to understand
In order to ensure that we are meeting our human capital objectives we frequently utilize employee surveys to understand
the effectiveness of our employee and compensation programs and where we can improve across the company. Our latest
the effectiveness of our employee and compensation programs and where we can improve across the company. Our latest
survey, which was completed in fiscal 2021 prior to the Acquisition, had a participation rate of over 83% of legacy employees
survey, which was completed in fiscal 2021 prior to the Acquisition, had a participation rate of over 83% of legacy employees
of Analog Devices. The survey results indicated that we excel in areas including purpose, respectful treatment, commitment to
of Analog Devices. The survey results indicated that we excel in areas including purpose, respectful treatment, commitment to
diversity/inclusion and accountability. Our dual focus of being a great place to work and providing industry-leading benefits
diversity/inclusion and accountability. Our dual focus of being a great place to work and providing industry-leading benefits
and work culture has led to strong employee satisfaction and pride that has been recognized across the globe, as evidenced with
and work culture has led to strong employee satisfaction and pride that has been recognized across the globe, as evidenced with
the following awards: Forbes World's Top Female Friendly Companies (2022, 2021), Forbes World’s Best Employer List
the following awards: Forbes World's Top Female Friendly Companies (2022, 2021), Forbes World’s Best Employer List
(2020) and The Boston Globe’s Top Places to Work (2021, 2020).
(2020) and The Boston Globe’s Top Places to Work (2021, 2020).
Cybersecurity and Information Security Risk Oversight
Cybersecurity and Information Security Risk Oversight
We regularly perform risk assessments relating to cybersecurity and technology risks. Our enterprise security program
We regularly perform risk assessments relating to cybersecurity and technology risks. Our enterprise security program
has been developed based on industry standards, including those published by the International Organization for
has been developed based on industry standards, including those published by the International Organization for
Standardization (ISO) and the National Institute of Standards and Technology. Highlights of the program include:
Standardization (ISO) and the National Institute of Standards and Technology. Highlights of the program include:
• A comprehensive set of enterprise security policies and procedures that guide our protection strategy.
• A comprehensive set of enterprise security policies and procedures that guide our protection strategy.
• Protecting against threats through use of the following measures: identifying critical assets and high-risk threats;
• Protecting against threats through use of the following measures: identifying critical assets and high-risk threats;
implementing cybersecurity detection, controls and remediation practices; implementing a third-party risk
implementing cybersecurity detection, controls and remediation practices; implementing a third-party risk
management program to evaluate our critical partners’ cyber posture; and evaluating our program effectiveness by
management program to evaluate our critical partners’ cyber posture; and evaluating our program effectiveness by
performing internal and external audits.
performing internal and external audits.
Risks identified by our cybersecurity program are analyzed to determine the potential impact on us and the likelihood of
Risks identified by our cybersecurity program are analyzed to determine the potential impact on us and the likelihood of
occurrence. Such risks are continuously monitored to ensure that the circumstances and severity of such risks have not changed.
occurrence. Such risks are continuously monitored to ensure that the circumstances and severity of such risks have not changed.
Senior leadership and our internal audit team regularly provide the Audit Committee of the Board of Directors with updates on
Senior leadership and our internal audit team regularly provide the Audit Committee of the Board of Directors with updates on
the performance of our program. At least annually, the Chief Information Officer updates the full Board of Directors on
the performance of our program. At least annually, the Chief Information Officer updates the full Board of Directors on
information security matters and risk, including cybersecurity.
information security matters and risk, including cybersecurity.
We conduct regular workforce training to instruct employees to identify cybersecurity concerns and take the appropriate
We conduct regular workforce training to instruct employees to identify cybersecurity concerns and take the appropriate
action. We install and regularly update antivirus software on all company managed systems and workstations to detect and
action. We install and regularly update antivirus software on all company managed systems and workstations to detect and
prevent malicious code from impacting our systems. In addition, we have a product security team focused on integrating risk
prevent malicious code from impacting our systems. In addition, we have a product security team focused on integrating risk
and security best practices into our product development life cycle. Periodically, we are audited by an independent information
and security best practices into our product development life cycle. Periodically, we are audited by an independent information
systems expert to determine both the adequacy of, and compliance with, controls and standards.
systems expert to determine both the adequacy of, and compliance with, controls and standards.
We have determined that an information security risk insurance policy would not be effective, and that we should
We have determined that an information security risk insurance policy would not be effective, and that we should
continue to self-insure for cybersecurity risks. We have not experienced a material security breach in the last three years, and as
continue to self-insure for cybersecurity risks. We have not experienced a material security breach in the last three years, and as
a result, we have not incurred any net expenses from such a breach. Furthermore, we have not been penalized or paid any
a result, we have not incurred any net expenses from such a breach. Furthermore, we have not been penalized or paid any
amount under an information security breach settlement over the last three years.
amount under an information security breach settlement over the last three years.
Human Capital and Empowerment
Human Capital and Empowerment
Our company was founded on the principle that people are our greatest asset. Our future success depends in large part on
Our company was founded on the principle that people are our greatest asset. Our future success depends in large part on
the continued service of our key technical and senior management personnel, and on our ability to continue to attract, retain and
the continued service of our key technical and senior management personnel, and on our ability to continue to attract, retain and
motivate qualified employees, particularly highly-skilled engineers involved in the design, development, support and
motivate qualified employees, particularly highly-skilled engineers involved in the design, development, support and
manufacture of new and existing products and processes. In order for us to attract the best talent, we aim to offer challenging
manufacture of new and existing products and processes. In order for us to attract the best talent, we aim to offer challenging
work in an environment that enables our employees to learn, grow and reach their full potential.
work in an environment that enables our employees to learn, grow and reach their full potential.
Core to our empowerment strategy is embracing diversity and building a culture of inclusion across the organization. We
Core to our empowerment strategy is embracing diversity and building a culture of inclusion across the organization. We
are working to achieve this by expanding the diversity of our workforce, creating growth and development opportunities for our
are working to achieve this by expanding the diversity of our workforce, creating growth and development opportunities for our
employees, embracing different perspectives and fostering an inclusive work environment for all. In addition, we encourage
employees, embracing different perspectives and fostering an inclusive work environment for all. In addition, we encourage
employees to organize and develop different employment networks, which contribute to our broader diversity and inclusion
employees to organize and develop different employment networks, which contribute to our broader diversity and inclusion
initiatives. Our current employee networks include the Analog Veterans Network, Neurodiversity Network, People of Color and
initiatives. Our current employee networks include the Analog Veterans Network, Neurodiversity Network, People of Color and
Allies Network, Pride Network, Women’s Leadership Network, Young Professionals Network, the Green Team and the
Allies Network, Pride Network, Women’s Leadership Network, Young Professionals Network, the Green Team and the
Communities Activities Board. As noted in "Environment, Health and Safety Compliance" above, we published our 2021 ESG
Communities Activities Board. As noted in "Environment, Health and Safety Compliance" above, we published our 2021 ESG
report which details our sustainability efforts, operations efficiency, employee engagement, and governance, and also provides a
report which details our sustainability efforts, operations efficiency, employee engagement, and governance, and also provides a
look at the state of our organization and an overview of some of the initiatives we have launched to drive continuous
look at the state of our organization and an overview of some of the initiatives we have launched to drive continuous
improvements across diversity and inclusion.
improvements across diversity and inclusion.
As of October 29, 2022, we had approximately 24,450 employees, of whom approximately 11,400 are in engineering
As of October 29, 2022, we had approximately 24,450 employees, of whom approximately 11,400 are in engineering
roles. Approximately 59% of our workforce is male and 41% female. Our senior leadership team is 73% male and 27% female,
roles. Approximately 59% of our workforce is male and 41% female. Our senior leadership team is 73% male and 27% female,
while manager roles are approximately 75% male and 25% female. 30% of the members of our Board of Directors are female.
while manager roles are approximately 75% male and 25% female. 30% of the members of our Board of Directors are female.
For fiscal 2022, our voluntary employee turnover rate was approximately 11.2%.
For fiscal 2022, our voluntary employee turnover rate was approximately 11.2%.
Our human capital resource objectives include identifying, recruiting, retaining, incentivizing and integrating our existing
Our human capital resource objectives include identifying, recruiting, retaining, incentivizing and integrating our existing
and future employees. We strive to attract and retain the most talented employees in the industry and across the globe by
and future employees. We strive to attract and retain the most talented employees in the industry and across the globe by
offering competitive compensation and benefits that support their health, financial and emotional well-being. Our compensation
offering competitive compensation and benefits that support their health, financial and emotional well-being. Our compensation
philosophy is based on rewarding each employee’s individual contributions and striving to achieve equal pay for equal work
philosophy is based on rewarding each employee’s individual contributions and striving to achieve equal pay for equal work
regardless of gender, race or ethnicity. We use a combination of fixed and variable pay including base salary, bonuses,
regardless of gender, race or ethnicity. We use a combination of fixed and variable pay including base salary, bonuses,
performance awards and equity compensation. The principal purposes of our equity incentive plans are to attract, retain and
performance awards and equity compensation. The principal purposes of our equity incentive plans are to attract, retain and
motivate selected employees and directors through the granting of stock-based compensation awards. We offer employees
motivate selected employees and directors through the granting of stock-based compensation awards. We offer employees
benefits that vary by country and are designed to meet or exceed local laws and to be competitive in the marketplace. Examples
benefits that vary by country and are designed to meet or exceed local laws and to be competitive in the marketplace. Examples
of benefits offered in the U.S. include a 401(k) plan with employer contributions; health benefits; life, business travel and
of benefits offered in the U.S. include a 401(k) plan with employer contributions; health benefits; life, business travel and
disability insurance; additional voluntary insurance; paid time off and parental leave; education assistance; paid counseling
disability insurance; additional voluntary insurance; paid time off and parental leave; education assistance; paid counseling
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ITEM 1A. RISK FACTORS
ITEM 1A. RISK FACTORS
Set forth below and elsewhere in this report and in other documents we file with the Securities and Exchange
Set forth below and elsewhere in this report and in other documents we file with the Securities and Exchange
Commission (SEC) are descriptions of certain risks and uncertainties that could cause our actual results to differ materially
Commission (SEC) are descriptions of certain risks and uncertainties that could cause our actual results to differ materially
from the results contemplated by the forward-looking statements in this report. Additional risks and uncertainties not presently
from the results contemplated by the forward-looking statements in this report. Additional risks and uncertainties not presently
known to us or that we presently deem less significant may also adversely affect our business.
known to us or that we presently deem less significant may also adversely affect our business.
Risks Related to our Business, Operations, Industry and Partners
Risks Related to our Business, Operations, Industry and Partners
Global political and economic uncertainty and adverse conditions related to our international operations could materially and
Global political and economic uncertainty and adverse conditions related to our international operations could materially and
adversely affect our business, financial condition and results of operations.
adversely affect our business, financial condition and results of operations.
We have significant operations and manufacturing facilities outside the United States, including in Ireland, the
We have significant operations and manufacturing facilities outside the United States, including in Ireland, the
Philippines, Thailand, and Malaysia. A significant portion of our revenue is derived from customers in international markets,
Philippines, Thailand, and Malaysia. A significant portion of our revenue is derived from customers in international markets,
and we expect that international sales will continue to account for a significant portion of our revenue in the future. As a result
and we expect that international sales will continue to account for a significant portion of our revenue in the future. As a result
of our international operations, our business, financial condition and results of operations could be negatively impacted by the
of our international operations, our business, financial condition and results of operations could be negatively impacted by the
following:
following:
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political, legal and economic changes, crises or instability and civil unrest in markets in which we do business, such as
political, legal and economic changes, crises or instability and civil unrest in markets in which we do business, such as
potential macroeconomic weakness related to trade and political disputes between the United States and China,
potential macroeconomic weakness related to trade and political disputes between the United States and China,
changes in China-Taiwan relations that may adversely affect our operations in Taiwan, our customers, and the
changes in China-Taiwan relations that may adversely affect our operations in Taiwan, our customers, and the
technology industry supply chain, the United Kingdom's withdrawal from the European Union, the implementation of
technology industry supply chain, the United Kingdom's withdrawal from the European Union, the implementation of
the United States-Mexico-Canada Agreement and the ongoing conflict between Russia and Ukraine;
the United States-Mexico-Canada Agreement and the ongoing conflict between Russia and Ukraine;
compliance requirements of U.S. customs and export regulations, including the Export Administration Regulations and
compliance requirements of U.S. customs and export regulations, including the Export Administration Regulations and
the International Traffic and Arms Regulations;
the International Traffic and Arms Regulations;
currency conversion risks and exchange rate and interest rate fluctuations, including the potential impact of the
currency conversion risks and exchange rate and interest rate fluctuations, including the potential impact of the
transition from LIBOR and the current increasing interest rate environment;
transition from LIBOR and the current increasing interest rate environment;
instability of global credit and financial markets due to adverse macroeconomic conditions such as rising inflation,
instability of global credit and financial markets due to adverse macroeconomic conditions such as rising inflation,
increasing interest rates and slower economic growth or recession that could, among other impacts, affect our ability to
increasing interest rates and slower economic growth or recession that could, among other impacts, affect our ability to
access external financing sources on acceptable terms or lead to financial difficulties or uncertainty of our customers,
access external financing sources on acceptable terms or lead to financial difficulties or uncertainty of our customers,
suppliers and distributors exposing us to late payments, cancelled orders and inventory challenges, among others;
suppliers and distributors exposing us to late payments, cancelled orders and inventory challenges, among others;
trade policy, commercial, travel, export or taxation disputes or restrictions, import or export tariffs, changes to export
trade policy, commercial, travel, export or taxation disputes or restrictions, import or export tariffs, changes to export
classifications or other restrictions imposed by the U.S. government or by the governments of the countries in which
classifications or other restrictions imposed by the U.S. government or by the governments of the countries in which
we do business, particularly in China;
we do business, particularly in China;
sanctions imposed by governments in countries in which we do business, including those imposed on Russia by,
sanctions imposed by governments in countries in which we do business, including those imposed on Russia by,
among others, the European Union, the U.S. and the United Kingdom in response to the ongoing conflict between
among others, the European Union, the U.S. and the United Kingdom in response to the ongoing conflict between
Russia and Ukraine, which sanctions restrict a wide range of trade and financial dealings with Russian and Russian
Russia and Ukraine, which sanctions restrict a wide range of trade and financial dealings with Russian and Russian
persons, as well as certain regions in Ukraine;
persons, as well as certain regions in Ukraine;
complex, varying and changing government regulations and legal standards and requirements, particularly with respect
complex, varying and changing government regulations and legal standards and requirements, particularly with respect
to tax regulations, price protection, competition practices, export control regulations and restrictions, customs and tax
to tax regulations, price protection, competition practices, export control regulations and restrictions, customs and tax
requirements, immigration, anti-boycott regulations, data privacy, cyber security, sustainability and climate-related
requirements, immigration, anti-boycott regulations, data privacy, cyber security, sustainability and climate-related
regulations, intellectual property, anti-corruption and environmental compliance, including the Foreign Corrupt
regulations, intellectual property, anti-corruption and environmental compliance, including the Foreign Corrupt
Practices Act;
Practices Act;
economic disruption from terrorism and threats of terrorism and the response to them by the U.S. and its allies;
economic disruption from terrorism and threats of terrorism and the response to them by the U.S. and its allies;
increased managerial complexities, including different employment practices and labor issues;
increased managerial complexities, including different employment practices and labor issues;
changes in immigration laws, regulations and procedures and enforcement practices of various government agencies;
changes in immigration laws, regulations and procedures and enforcement practices of various government agencies;
greater difficulty enforcing intellectual property rights and weaker laws protecting such rights;
greater difficulty enforcing intellectual property rights and weaker laws protecting such rights;
natural disasters or public health emergencies, such as the current COVID-19 pandemic;
natural disasters or public health emergencies, such as the current COVID-19 pandemic;
transportation disruptions and delays and increases in labor and transportation costs;
transportation disruptions and delays and increases in labor and transportation costs;
changes to foreign taxes, tariffs and freight rates;
changes to foreign taxes, tariffs and freight rates;
fluctuations in raw material costs and energy costs due to general market factors and conditions such as inflation and
fluctuations in raw material costs and energy costs due to general market factors and conditions such as inflation and
supply chain constraints;
supply chain constraints;
greater difficulty in accounts receivable collections and longer collection periods; and
greater difficulty in accounts receivable collections and longer collection periods; and
increased costs associated with our foreign defined benefit pension plans.
increased costs associated with our foreign defined benefit pension plans.
Many of these factors and risks are present within our business operations in China. For example, changes in U.S.-China
Many of these factors and risks are present within our business operations in China. For example, changes in U.S.-China
relations, the political environment or international trade policies and relations could result in further revisions to laws or
relations, the political environment or international trade policies and relations could result in further revisions to laws or
regulations or their interpretation and enforcement, increased taxation, trade sanctions, the imposition of import or export duties
regulations or their interpretation and enforcement, increased taxation, trade sanctions, the imposition of import or export duties
and tariffs, restrictions on imports or exports, currency revaluations, or retaliatory actions, which have had and may continue to
and tariffs, restrictions on imports or exports, currency revaluations, or retaliatory actions, which have had and may continue to
have an adverse effect on our business plans and operating results. In addition, expanded export restrictions limit our ability to
have an adverse effect on our business plans and operating results. In addition, expanded export restrictions limit our ability to
sell to certain Chinese companies and to third parties that do business with those companies. These restrictions have created and
sell to certain Chinese companies and to third parties that do business with those companies. These restrictions have created and
may continue to create uncertainty and caution with our current or prospective customers and may cause them to amass large
may continue to create uncertainty and caution with our current or prospective customers and may cause them to amass large
inventories of our products, replace our products with products from another supplier that is not subject to the export
inventories of our products, replace our products with products from another supplier that is not subject to the export
restrictions, or focus on building indigenous semiconductor capacity to reduce reliance on U.S. suppliers. Furthermore, if these
restrictions, or focus on building indigenous semiconductor capacity to reduce reliance on U.S. suppliers. Furthermore, if these
export restrictions cause our current or potential customers to view U.S. companies as unreliable, we could suffer reputational
export restrictions cause our current or potential customers to view U.S. companies as unreliable, we could suffer reputational
damage or lose business to foreign competitors who are not subject to such export restrictions, and our business could be
damage or lose business to foreign competitors who are not subject to such export restrictions, and our business could be
materially harmed. We are continuing to evaluate the impact of these restrictions on our business, but these actions may have
materially harmed. We are continuing to evaluate the impact of these restrictions on our business, but these actions may have
direct and indirect adverse impacts on our revenues and results of operations in China and elsewhere. In addition, our success in
direct and indirect adverse impacts on our revenues and results of operations in China and elsewhere. In addition, our success in
the Chinese markets may be adversely affected by China’s continuously evolving policies, laws and regulations, including those
the Chinese markets may be adversely affected by China’s continuously evolving policies, laws and regulations, including those
relating to antitrust, cybersecurity, data protection and data privacy, the environment, indigenous innovation and the promotion
relating to antitrust, cybersecurity, data protection and data privacy, the environment, indigenous innovation and the promotion
of a domestic semiconductor industry, and intellectual property rights and enforcement and protection of those rights.
of a domestic semiconductor industry, and intellectual property rights and enforcement and protection of those rights.
We rely on third parties for supply of raw materials and parts, semiconductor wafer foundry services, assembly and test
We rely on third parties for supply of raw materials and parts, semiconductor wafer foundry services, assembly and test
services, and transportation, among other things, and we generally cannot control their availability or conditions of supply or
services, and transportation, among other things, and we generally cannot control their availability or conditions of supply or
services.
services.
We rely, and plan to continue to rely, on third-party suppliers and service providers, including raw material and
We rely, and plan to continue to rely, on third-party suppliers and service providers, including raw material and
components suppliers, semiconductor wafer foundries, assembly and test contractors, and freight carriers (collectively, vendors)
components suppliers, semiconductor wafer foundries, assembly and test contractors, and freight carriers (collectively, vendors)
in manufacturing our products. This reliance involves several risks, including reduced control over availability, capacity
in manufacturing our products. This reliance involves several risks, including reduced control over availability, capacity
utilization, delivery schedules, manufacturing yields, costs, and supply chain allocations. We currently source more than half of
utilization, delivery schedules, manufacturing yields, costs, and supply chain allocations. We currently source more than half of
our wafer requirements annually from third-party wafer foundries, including Taiwan Semiconductor Manufacturing Company
our wafer requirements annually from third-party wafer foundries, including Taiwan Semiconductor Manufacturing Company
(TSMC) and others. These foundries often provide wafer foundry services to our competitors and therefore periods of increased
(TSMC) and others. These foundries often provide wafer foundry services to our competitors and therefore periods of increased
industry demand may result in capacity constraints. With respect to TSMC in particular, geopolitical changes in China-Taiwan
industry demand may result in capacity constraints. With respect to TSMC in particular, geopolitical changes in China-Taiwan
relations could disrupt TSMC’s operations, which would adversely affect our ability to manufacture certain products and as a
relations could disrupt TSMC’s operations, which would adversely affect our ability to manufacture certain products and as a
result, could adversely affect our business and results of operations.
result, could adversely affect our business and results of operations.
Our manufacturing processes require availability of certain raw materials and supplies. Limited or delayed access to
Our manufacturing processes require availability of certain raw materials and supplies. Limited or delayed access to
these items could adversely affect our results of operations. In certain instances, one of our vendors may be the sole source of
these items could adversely affect our results of operations. In certain instances, one of our vendors may be the sole source of
highly specialized processing services or materials. If such vendor is unable or unwilling to manufacture and deliver
highly specialized processing services or materials. If such vendor is unable or unwilling to manufacture and deliver
components to us on the time schedule and of the quality or quantity that we require, we may be forced to seek to engage an
components to us on the time schedule and of the quality or quantity that we require, we may be forced to seek to engage an
additional or replacement vendor, which could result in additional expenses and delays in product development or shipment of
additional or replacement vendor, which could result in additional expenses and delays in product development or shipment of
product to our customers. If additional or replacement vendors are not available, we may also experience delays in product
product to our customers. If additional or replacement vendors are not available, we may also experience delays in product
development or shipment which could, in turn, result in the temporary or permanent loss of customers and as a result could
development or shipment which could, in turn, result in the temporary or permanent loss of customers and as a result could
adversely affect our business and results of operations.
adversely affect our business and results of operations.
The markets for semiconductor products are cyclical, and increased production may lead to overcapacity and lower prices, and
The markets for semiconductor products are cyclical, and increased production may lead to overcapacity and lower prices, and
conversely, we may not be able to satisfy unexpected demand for our products.
conversely, we may not be able to satisfy unexpected demand for our products.
The cyclical nature of the semiconductor industry has resulted in periods when demand for our products has increased or
The cyclical nature of the semiconductor industry has resulted in periods when demand for our products has increased or
decreased rapidly. The demand for our products is subject to the strength of our four major end markets of Industrial,
decreased rapidly. The demand for our products is subject to the strength of our four major end markets of Industrial,
Automotive, Communications, and Consumer. If we expand our operations and workforce too rapidly or procure excessive
Automotive, Communications, and Consumer. If we expand our operations and workforce too rapidly or procure excessive
resources in anticipation of increased demand for our products, and that demand does not materialize at the pace at which we
resources in anticipation of increased demand for our products, and that demand does not materialize at the pace at which we
expect, or declines, or if we overbuild inventory in a period of decreased demand, our operating results may be adversely
expect, or declines, or if we overbuild inventory in a period of decreased demand, our operating results may be adversely
affected as a result of increased operating expenses, reduced margins, underutilization of capacity or asset impairment charges.
affected as a result of increased operating expenses, reduced margins, underutilization of capacity or asset impairment charges.
These capacity expansions by us and other semiconductor manufacturers could also lead to overcapacity in our target markets
These capacity expansions by us and other semiconductor manufacturers could also lead to overcapacity in our target markets
which could lead to price erosion that could adversely impact our operating results. Conversely, during periods of rapid
which could lead to price erosion that could adversely impact our operating results. Conversely, during periods of rapid
increases in demand, our available capacity may not be sufficient to satisfy the demand. In addition, we may not be able to
increases in demand, our available capacity may not be sufficient to satisfy the demand. In addition, we may not be able to
expand our workforce and operations in a sufficiently timely manner, procure adequate resources and raw materials, locate
expand our workforce and operations in a sufficiently timely manner, procure adequate resources and raw materials, locate
suitable third-party suppliers, or respond effectively to changes in demand for our existing products or to demand for new
suitable third-party suppliers, or respond effectively to changes in demand for our existing products or to demand for new
products requested by our customers, and our current or future business could be materially and adversely affected.
products requested by our customers, and our current or future business could be materially and adversely affected.
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ITEM 1A. RISK FACTORS
ITEM 1A. RISK FACTORS
Set forth below and elsewhere in this report and in other documents we file with the Securities and Exchange
Set forth below and elsewhere in this report and in other documents we file with the Securities and Exchange
Commission (SEC) are descriptions of certain risks and uncertainties that could cause our actual results to differ materially
Commission (SEC) are descriptions of certain risks and uncertainties that could cause our actual results to differ materially
from the results contemplated by the forward-looking statements in this report. Additional risks and uncertainties not presently
from the results contemplated by the forward-looking statements in this report. Additional risks and uncertainties not presently
known to us or that we presently deem less significant may also adversely affect our business.
known to us or that we presently deem less significant may also adversely affect our business.
Risks Related to our Business, Operations, Industry and Partners
Risks Related to our Business, Operations, Industry and Partners
Global political and economic uncertainty and adverse conditions related to our international operations could materially and
Global political and economic uncertainty and adverse conditions related to our international operations could materially and
adversely affect our business, financial condition and results of operations.
adversely affect our business, financial condition and results of operations.
We have significant operations and manufacturing facilities outside the United States, including in Ireland, the
We have significant operations and manufacturing facilities outside the United States, including in Ireland, the
Philippines, Thailand, and Malaysia. A significant portion of our revenue is derived from customers in international markets,
Philippines, Thailand, and Malaysia. A significant portion of our revenue is derived from customers in international markets,
and we expect that international sales will continue to account for a significant portion of our revenue in the future. As a result
and we expect that international sales will continue to account for a significant portion of our revenue in the future. As a result
of our international operations, our business, financial condition and results of operations could be negatively impacted by the
of our international operations, our business, financial condition and results of operations could be negatively impacted by the
following:
following:
•
•
political, legal and economic changes, crises or instability and civil unrest in markets in which we do business, such as
political, legal and economic changes, crises or instability and civil unrest in markets in which we do business, such as
potential macroeconomic weakness related to trade and political disputes between the United States and China,
potential macroeconomic weakness related to trade and political disputes between the United States and China,
changes in China-Taiwan relations that may adversely affect our operations in Taiwan, our customers, and the
changes in China-Taiwan relations that may adversely affect our operations in Taiwan, our customers, and the
technology industry supply chain, the United Kingdom's withdrawal from the European Union, the implementation of
technology industry supply chain, the United Kingdom's withdrawal from the European Union, the implementation of
the United States-Mexico-Canada Agreement and the ongoing conflict between Russia and Ukraine;
the United States-Mexico-Canada Agreement and the ongoing conflict between Russia and Ukraine;
compliance requirements of U.S. customs and export regulations, including the Export Administration Regulations and
compliance requirements of U.S. customs and export regulations, including the Export Administration Regulations and
the International Traffic and Arms Regulations;
the International Traffic and Arms Regulations;
currency conversion risks and exchange rate and interest rate fluctuations, including the potential impact of the
currency conversion risks and exchange rate and interest rate fluctuations, including the potential impact of the
transition from LIBOR and the current increasing interest rate environment;
transition from LIBOR and the current increasing interest rate environment;
instability of global credit and financial markets due to adverse macroeconomic conditions such as rising inflation,
instability of global credit and financial markets due to adverse macroeconomic conditions such as rising inflation,
increasing interest rates and slower economic growth or recession that could, among other impacts, affect our ability to
increasing interest rates and slower economic growth or recession that could, among other impacts, affect our ability to
access external financing sources on acceptable terms or lead to financial difficulties or uncertainty of our customers,
access external financing sources on acceptable terms or lead to financial difficulties or uncertainty of our customers,
suppliers and distributors exposing us to late payments, cancelled orders and inventory challenges, among others;
suppliers and distributors exposing us to late payments, cancelled orders and inventory challenges, among others;
trade policy, commercial, travel, export or taxation disputes or restrictions, import or export tariffs, changes to export
trade policy, commercial, travel, export or taxation disputes or restrictions, import or export tariffs, changes to export
classifications or other restrictions imposed by the U.S. government or by the governments of the countries in which
classifications or other restrictions imposed by the U.S. government or by the governments of the countries in which
we do business, particularly in China;
we do business, particularly in China;
sanctions imposed by governments in countries in which we do business, including those imposed on Russia by,
sanctions imposed by governments in countries in which we do business, including those imposed on Russia by,
among others, the European Union, the U.S. and the United Kingdom in response to the ongoing conflict between
among others, the European Union, the U.S. and the United Kingdom in response to the ongoing conflict between
Russia and Ukraine, which sanctions restrict a wide range of trade and financial dealings with Russian and Russian
Russia and Ukraine, which sanctions restrict a wide range of trade and financial dealings with Russian and Russian
persons, as well as certain regions in Ukraine;
persons, as well as certain regions in Ukraine;
•
•
complex, varying and changing government regulations and legal standards and requirements, particularly with respect
complex, varying and changing government regulations and legal standards and requirements, particularly with respect
to tax regulations, price protection, competition practices, export control regulations and restrictions, customs and tax
to tax regulations, price protection, competition practices, export control regulations and restrictions, customs and tax
requirements, immigration, anti-boycott regulations, data privacy, cyber security, sustainability and climate-related
requirements, immigration, anti-boycott regulations, data privacy, cyber security, sustainability and climate-related
regulations, intellectual property, anti-corruption and environmental compliance, including the Foreign Corrupt
regulations, intellectual property, anti-corruption and environmental compliance, including the Foreign Corrupt
Practices Act;
Practices Act;
economic disruption from terrorism and threats of terrorism and the response to them by the U.S. and its allies;
economic disruption from terrorism and threats of terrorism and the response to them by the U.S. and its allies;
increased managerial complexities, including different employment practices and labor issues;
increased managerial complexities, including different employment practices and labor issues;
changes in immigration laws, regulations and procedures and enforcement practices of various government agencies;
changes in immigration laws, regulations and procedures and enforcement practices of various government agencies;
greater difficulty enforcing intellectual property rights and weaker laws protecting such rights;
greater difficulty enforcing intellectual property rights and weaker laws protecting such rights;
natural disasters or public health emergencies, such as the current COVID-19 pandemic;
natural disasters or public health emergencies, such as the current COVID-19 pandemic;
transportation disruptions and delays and increases in labor and transportation costs;
transportation disruptions and delays and increases in labor and transportation costs;
changes to foreign taxes, tariffs and freight rates;
changes to foreign taxes, tariffs and freight rates;
fluctuations in raw material costs and energy costs due to general market factors and conditions such as inflation and
fluctuations in raw material costs and energy costs due to general market factors and conditions such as inflation and
supply chain constraints;
supply chain constraints;
greater difficulty in accounts receivable collections and longer collection periods; and
greater difficulty in accounts receivable collections and longer collection periods; and
increased costs associated with our foreign defined benefit pension plans.
increased costs associated with our foreign defined benefit pension plans.
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Many of these factors and risks are present within our business operations in China. For example, changes in U.S.-China
Many of these factors and risks are present within our business operations in China. For example, changes in U.S.-China
relations, the political environment or international trade policies and relations could result in further revisions to laws or
relations, the political environment or international trade policies and relations could result in further revisions to laws or
regulations or their interpretation and enforcement, increased taxation, trade sanctions, the imposition of import or export duties
regulations or their interpretation and enforcement, increased taxation, trade sanctions, the imposition of import or export duties
and tariffs, restrictions on imports or exports, currency revaluations, or retaliatory actions, which have had and may continue to
and tariffs, restrictions on imports or exports, currency revaluations, or retaliatory actions, which have had and may continue to
have an adverse effect on our business plans and operating results. In addition, expanded export restrictions limit our ability to
have an adverse effect on our business plans and operating results. In addition, expanded export restrictions limit our ability to
sell to certain Chinese companies and to third parties that do business with those companies. These restrictions have created and
sell to certain Chinese companies and to third parties that do business with those companies. These restrictions have created and
may continue to create uncertainty and caution with our current or prospective customers and may cause them to amass large
may continue to create uncertainty and caution with our current or prospective customers and may cause them to amass large
inventories of our products, replace our products with products from another supplier that is not subject to the export
inventories of our products, replace our products with products from another supplier that is not subject to the export
restrictions, or focus on building indigenous semiconductor capacity to reduce reliance on U.S. suppliers. Furthermore, if these
restrictions, or focus on building indigenous semiconductor capacity to reduce reliance on U.S. suppliers. Furthermore, if these
export restrictions cause our current or potential customers to view U.S. companies as unreliable, we could suffer reputational
export restrictions cause our current or potential customers to view U.S. companies as unreliable, we could suffer reputational
damage or lose business to foreign competitors who are not subject to such export restrictions, and our business could be
damage or lose business to foreign competitors who are not subject to such export restrictions, and our business could be
materially harmed. We are continuing to evaluate the impact of these restrictions on our business, but these actions may have
materially harmed. We are continuing to evaluate the impact of these restrictions on our business, but these actions may have
direct and indirect adverse impacts on our revenues and results of operations in China and elsewhere. In addition, our success in
direct and indirect adverse impacts on our revenues and results of operations in China and elsewhere. In addition, our success in
the Chinese markets may be adversely affected by China’s continuously evolving policies, laws and regulations, including those
the Chinese markets may be adversely affected by China’s continuously evolving policies, laws and regulations, including those
relating to antitrust, cybersecurity, data protection and data privacy, the environment, indigenous innovation and the promotion
relating to antitrust, cybersecurity, data protection and data privacy, the environment, indigenous innovation and the promotion
of a domestic semiconductor industry, and intellectual property rights and enforcement and protection of those rights.
of a domestic semiconductor industry, and intellectual property rights and enforcement and protection of those rights.
We rely on third parties for supply of raw materials and parts, semiconductor wafer foundry services, assembly and test
We rely on third parties for supply of raw materials and parts, semiconductor wafer foundry services, assembly and test
services, and transportation, among other things, and we generally cannot control their availability or conditions of supply or
services, and transportation, among other things, and we generally cannot control their availability or conditions of supply or
services.
services.
We rely, and plan to continue to rely, on third-party suppliers and service providers, including raw material and
We rely, and plan to continue to rely, on third-party suppliers and service providers, including raw material and
components suppliers, semiconductor wafer foundries, assembly and test contractors, and freight carriers (collectively, vendors)
components suppliers, semiconductor wafer foundries, assembly and test contractors, and freight carriers (collectively, vendors)
in manufacturing our products. This reliance involves several risks, including reduced control over availability, capacity
in manufacturing our products. This reliance involves several risks, including reduced control over availability, capacity
utilization, delivery schedules, manufacturing yields, costs, and supply chain allocations. We currently source more than half of
utilization, delivery schedules, manufacturing yields, costs, and supply chain allocations. We currently source more than half of
our wafer requirements annually from third-party wafer foundries, including Taiwan Semiconductor Manufacturing Company
our wafer requirements annually from third-party wafer foundries, including Taiwan Semiconductor Manufacturing Company
(TSMC) and others. These foundries often provide wafer foundry services to our competitors and therefore periods of increased
(TSMC) and others. These foundries often provide wafer foundry services to our competitors and therefore periods of increased
industry demand may result in capacity constraints. With respect to TSMC in particular, geopolitical changes in China-Taiwan
industry demand may result in capacity constraints. With respect to TSMC in particular, geopolitical changes in China-Taiwan
relations could disrupt TSMC’s operations, which would adversely affect our ability to manufacture certain products and as a
relations could disrupt TSMC’s operations, which would adversely affect our ability to manufacture certain products and as a
result, could adversely affect our business and results of operations.
result, could adversely affect our business and results of operations.
Our manufacturing processes require availability of certain raw materials and supplies. Limited or delayed access to
Our manufacturing processes require availability of certain raw materials and supplies. Limited or delayed access to
these items could adversely affect our results of operations. In certain instances, one of our vendors may be the sole source of
these items could adversely affect our results of operations. In certain instances, one of our vendors may be the sole source of
highly specialized processing services or materials. If such vendor is unable or unwilling to manufacture and deliver
highly specialized processing services or materials. If such vendor is unable or unwilling to manufacture and deliver
components to us on the time schedule and of the quality or quantity that we require, we may be forced to seek to engage an
components to us on the time schedule and of the quality or quantity that we require, we may be forced to seek to engage an
additional or replacement vendor, which could result in additional expenses and delays in product development or shipment of
additional or replacement vendor, which could result in additional expenses and delays in product development or shipment of
product to our customers. If additional or replacement vendors are not available, we may also experience delays in product
product to our customers. If additional or replacement vendors are not available, we may also experience delays in product
development or shipment which could, in turn, result in the temporary or permanent loss of customers and as a result could
development or shipment which could, in turn, result in the temporary or permanent loss of customers and as a result could
adversely affect our business and results of operations.
adversely affect our business and results of operations.
The markets for semiconductor products are cyclical, and increased production may lead to overcapacity and lower prices, and
The markets for semiconductor products are cyclical, and increased production may lead to overcapacity and lower prices, and
conversely, we may not be able to satisfy unexpected demand for our products.
conversely, we may not be able to satisfy unexpected demand for our products.
The cyclical nature of the semiconductor industry has resulted in periods when demand for our products has increased or
The cyclical nature of the semiconductor industry has resulted in periods when demand for our products has increased or
decreased rapidly. The demand for our products is subject to the strength of our four major end markets of Industrial,
decreased rapidly. The demand for our products is subject to the strength of our four major end markets of Industrial,
Automotive, Communications, and Consumer. If we expand our operations and workforce too rapidly or procure excessive
Automotive, Communications, and Consumer. If we expand our operations and workforce too rapidly or procure excessive
resources in anticipation of increased demand for our products, and that demand does not materialize at the pace at which we
resources in anticipation of increased demand for our products, and that demand does not materialize at the pace at which we
expect, or declines, or if we overbuild inventory in a period of decreased demand, our operating results may be adversely
expect, or declines, or if we overbuild inventory in a period of decreased demand, our operating results may be adversely
affected as a result of increased operating expenses, reduced margins, underutilization of capacity or asset impairment charges.
affected as a result of increased operating expenses, reduced margins, underutilization of capacity or asset impairment charges.
These capacity expansions by us and other semiconductor manufacturers could also lead to overcapacity in our target markets
These capacity expansions by us and other semiconductor manufacturers could also lead to overcapacity in our target markets
which could lead to price erosion that could adversely impact our operating results. Conversely, during periods of rapid
which could lead to price erosion that could adversely impact our operating results. Conversely, during periods of rapid
increases in demand, our available capacity may not be sufficient to satisfy the demand. In addition, we may not be able to
increases in demand, our available capacity may not be sufficient to satisfy the demand. In addition, we may not be able to
expand our workforce and operations in a sufficiently timely manner, procure adequate resources and raw materials, locate
expand our workforce and operations in a sufficiently timely manner, procure adequate resources and raw materials, locate
suitable third-party suppliers, or respond effectively to changes in demand for our existing products or to demand for new
suitable third-party suppliers, or respond effectively to changes in demand for our existing products or to demand for new
products requested by our customers, and our current or future business could be materially and adversely affected.
products requested by our customers, and our current or future business could be materially and adversely affected.
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A prolonged disruption of our internal manufacturing operations could have a material adverse effect on our business,
A prolonged disruption of our internal manufacturing operations could have a material adverse effect on our business,
financial condition and results of operations.
financial condition and results of operations.
In addition to leveraging an outsourcing model for manufacturing operations, we also rely on our internal manufacturing
In addition to leveraging an outsourcing model for manufacturing operations, we also rely on our internal manufacturing
operations located in the United States, Ireland, the Philippines, Thailand and Malaysia. A prolonged disruption at, or inability
operations located in the United States, Ireland, the Philippines, Thailand and Malaysia. A prolonged disruption at, or inability
to utilize, one or more of our manufacturing facilities, loss of raw materials or damage to our manufacturing equipment for any
to utilize, one or more of our manufacturing facilities, loss of raw materials or damage to our manufacturing equipment for any
reason, including due to the COVID-19 pandemic, natural or man-made disasters, civil unrest or other events outside of our
reason, including due to the COVID-19 pandemic, natural or man-made disasters, civil unrest or other events outside of our
control, such as widespread outbreaks of illness, or the failure to maintain our labor force at one or more of these facilities, may
control, such as widespread outbreaks of illness, or the failure to maintain our labor force at one or more of these facilities, may
disrupt our operations, delay production, shipments and revenue and result in us being unable to timely satisfy customer
disrupt our operations, delay production, shipments and revenue and result in us being unable to timely satisfy customer
demand. As a result, we could forgo revenue opportunities, potentially lose market share and damage our customer
demand. As a result, we could forgo revenue opportunities, potentially lose market share and damage our customer
relationships, all of which could materially and adversely affect our business, financial condition and results of operations.
relationships, all of which could materially and adversely affect our business, financial condition and results of operations.
Our future success depends upon our ability to execute our business strategy, continue to innovate, improve our existing
Our future success depends upon our ability to execute our business strategy, continue to innovate, improve our existing
products, design, develop, produce and market new products, and identify and enter new markets.
products, design, develop, produce and market new products, and identify and enter new markets.
Our future success significantly depends on our ability to execute our business strategy, continue to innovate, improve
Our future success significantly depends on our ability to execute our business strategy, continue to innovate, improve
our existing products, and design, develop, produce and market innovative new products and system-level solutions. Product
our existing products, and design, develop, produce and market innovative new products and system-level solutions. Product
design, development, innovation and enhancement is often a complex, time-consuming and costly process involving significant
design, development, innovation and enhancement is often a complex, time-consuming and costly process involving significant
investment in research and development with no assurance of return on investment. There can be no assurance that we will be
investment in research and development with no assurance of return on investment. There can be no assurance that we will be
able to develop and introduce new and improved products in a timely or efficient manner or that new and improved products, if
able to develop and introduce new and improved products in a timely or efficient manner or that new and improved products, if
developed, will achieve market acceptance. Our products generally must conform to various evolving and sometimes competing
developed, will achieve market acceptance. Our products generally must conform to various evolving and sometimes competing
industry standards, which may adversely affect our ability to compete in certain markets or require us to incur significant costs.
industry standards, which may adversely affect our ability to compete in certain markets or require us to incur significant costs.
In addition, our customers generally impose very high quality and reliability standards on our products, which often change and
In addition, our customers generally impose very high quality and reliability standards on our products, which often change and
may be difficult or costly to satisfy. Any inability to satisfy customer quality and reliability standards or comply with industry
may be difficult or costly to satisfy. Any inability to satisfy customer quality and reliability standards or comply with industry
standards and technical requirements may adversely affect demand for our products and our results of operations.
standards and technical requirements may adversely affect demand for our products and our results of operations.
Our growth is also dependent on our ability to identify and penetrate new markets where we have limited experience yet
Our growth is also dependent on our ability to identify and penetrate new markets where we have limited experience yet
require significant investments, resources and technological advancements in order to compete effectively, and there can be no
require significant investments, resources and technological advancements in order to compete effectively, and there can be no
assurance that we will achieve success in these markets. There can be no assurance that the markets we serve and/or target
assurance that we will achieve success in these markets. There can be no assurance that the markets we serve and/or target
based on our business strategy will grow in the future, that our existing and new products will meet the requirements of these
based on our business strategy will grow in the future, that our existing and new products will meet the requirements of these
markets, that our products, or the end-products in which our products are used, will achieve customer acceptance in these
markets, that our products, or the end-products in which our products are used, will achieve customer acceptance in these
markets, that competitors will not force price reductions or take market share from us, or that we can achieve or maintain
markets, that competitors will not force price reductions or take market share from us, or that we can achieve or maintain
adequate gross margins or profits in these markets.
adequate gross margins or profits in these markets.
Our future revenue, gross margins, operating results, net income and earnings per share are difficult to predict and may
Our future revenue, gross margins, operating results, net income and earnings per share are difficult to predict and may
materially fluctuate.
materially fluctuate.
Our future revenue, gross margins, operating results, net income and earnings per share are difficult to predict and may
Our future revenue, gross margins, operating results, net income and earnings per share are difficult to predict and may
be materially affected by a number of factors, including:
be materially affected by a number of factors, including:
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the effects of adverse economic conditions in the markets in which we sell our products, including inflationary
the effects of adverse economic conditions in the markets in which we sell our products, including inflationary
pressures, which has resulted, and may continue to result, in increased interest rates, fuel prices, wages, and other
pressures, which has resulted, and may continue to result, in increased interest rates, fuel prices, wages, and other
costs;
costs;
changes in customer demand or order patterns for our products and/or for end products that incorporate our products;
changes in customer demand or order patterns for our products and/or for end products that incorporate our products;
the timing, delay, reduction or cancellation of significant customer orders and our ability to manage inventory;
the timing, delay, reduction or cancellation of significant customer orders and our ability to manage inventory;
our ability to accurately forecast distributor demand for our products;
our ability to accurately forecast distributor demand for our products;
future distributor pricing credits and/or stock rotation rights;
future distributor pricing credits and/or stock rotation rights;
our ability to effectively manage our cost structure in both the short term and over a longer duration;
our ability to effectively manage our cost structure in both the short term and over a longer duration;
changes in geographic, product or customer mix;
changes in geographic, product or customer mix;
the extent of the impact and the duration of the COVID-19 pandemic;
the extent of the impact and the duration of the COVID-19 pandemic;
changes in our effective tax rates or new or revised tax legislation in the United States, Ireland or worldwide;
changes in our effective tax rates or new or revised tax legislation in the United States, Ireland or worldwide;
the effects of issued, threatened or retaliatory government sanctions, trade barriers or economic restrictions; changes in
the effects of issued, threatened or retaliatory government sanctions, trade barriers or economic restrictions; changes in
law, regulations or other restrictions, including executive orders; and changes in import and export regulations,
law, regulations or other restrictions, including executive orders; and changes in import and export regulations,
including restrictions on exports to certain companies or to third parties that do business with such companies, export
including restrictions on exports to certain companies or to third parties that do business with such companies, export
classifications, or duties and tariffs, particularly with respect to China;
classifications, or duties and tariffs, particularly with respect to China;
the timing of new product announcements or introductions by us, our customers or our competitors and the market
the timing of new product announcements or introductions by us, our customers or our competitors and the market
acceptance of such products;
acceptance of such products;
pricing decisions and competitive pricing pressures;
pricing decisions and competitive pricing pressures;
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fluctuations in manufacturing yields, adequate availability of wafers and other raw materials, and manufacturing,
fluctuations in manufacturing yields, adequate availability of wafers and other raw materials, and manufacturing,
assembly and test capacity;
assembly and test capacity;
materials, products and/or components;
materials, products and/or components;
the ability of our third-party suppliers, subcontractors and manufacturers to supply us with sufficient quantities of raw
the ability of our third-party suppliers, subcontractors and manufacturers to supply us with sufficient quantities of raw
a decline in infrastructure spending by foreign governments, including China;
a decline in infrastructure spending by foreign governments, including China;
a decline in the U.S. government defense budget, changes in spending or budgetary priorities, a prolonged U.S.
a decline in the U.S. government defense budget, changes in spending or budgetary priorities, a prolonged U.S.
government shutdown or delays in contract awards;
government shutdown or delays in contract awards;
a decline in our backlog;
a decline in our backlog;
our ability to recruit, hire, retain and motivate adequate numbers of engineers and other qualified employees to meet
our ability to recruit, hire, retain and motivate adequate numbers of engineers and other qualified employees to meet
the demands of our customers;
the demands of our customers;
our ability to generate new design opportunities and win competitive bid selection processes;
our ability to generate new design opportunities and win competitive bid selection processes;
the increasing costs of providing employee benefits worldwide, including health insurance, retirement plan and
the increasing costs of providing employee benefits worldwide, including health insurance, retirement plan and
pension plan contributions and retirement benefits;
pension plan contributions and retirement benefits;
our ability to utilize our manufacturing facilities at efficient levels;
our ability to utilize our manufacturing facilities at efficient levels;
fluctuations in foreign currency exchange rates;
fluctuations in foreign currency exchange rates;
potential litigation-related costs or product liability, warranty and/or indemnity claims, including those not covered by
potential litigation-related costs or product liability, warranty and/or indemnity claims, including those not covered by
our suppliers or insurers;
our suppliers or insurers;
the difficulties inherent in forecasting future operating expense levels, including with respect to costs associated with
the difficulties inherent in forecasting future operating expense levels, including with respect to costs associated with
labor, utilities, transportation and raw materials;
labor, utilities, transportation and raw materials;
the costs related to compliance with increasing worldwide government, environmental and social responsibility
the costs related to compliance with increasing worldwide government, environmental and social responsibility
standards;
standards;
new accounting pronouncements or changes in existing accounting standards and practices; and
new accounting pronouncements or changes in existing accounting standards and practices; and
the effects of public health emergencies, civil unrest, natural disasters, widespread travel disruptions, security risks,
the effects of public health emergencies, civil unrest, natural disasters, widespread travel disruptions, security risks,
terrorist activities, international conflicts and other events beyond our control.
terrorist activities, international conflicts and other events beyond our control.
In addition, the semiconductor market has historically been cyclical and subject to significant economic upturns and
In addition, the semiconductor market has historically been cyclical and subject to significant economic upturns and
downturns. Our business and certain of the end markets we serve are also subject to rapid technological changes and material
downturns. Our business and certain of the end markets we serve are also subject to rapid technological changes and material
fluctuations in demand based on end-user preferences. There can be no assurance (i) that products stocked in our inventory will
fluctuations in demand based on end-user preferences. There can be no assurance (i) that products stocked in our inventory will
not be rendered obsolete before we ship them, or (ii) that we will be able to design, develop and produce products in a timely
not be rendered obsolete before we ship them, or (ii) that we will be able to design, develop and produce products in a timely
fashion to accommodate changing customer demand.
fashion to accommodate changing customer demand.
As a result of these and other factors, we may experience material fluctuations in future revenue, gross margins,
As a result of these and other factors, we may experience material fluctuations in future revenue, gross margins,
operating results, net income and earnings per share on a quarterly or annual basis. Our historical financial performance and
operating results, net income and earnings per share on a quarterly or annual basis. Our historical financial performance and
results of operations should not be relied upon as indicators of future performance or results. In addition, if our revenue, gross
results of operations should not be relied upon as indicators of future performance or results. In addition, if our revenue, gross
margins, operating results, net income and earnings per share results or expectations do not meet the expectations of securities
margins, operating results, net income and earnings per share results or expectations do not meet the expectations of securities
analysts or investors, the market price of our common stock may decline.
analysts or investors, the market price of our common stock may decline.
We may not be able to compete successfully in markets within the semiconductor industry in the future.
We may not be able to compete successfully in markets within the semiconductor industry in the future.
We face intense competition in the semiconductor industry, and we expect this competition to increase in the future,
We face intense competition in the semiconductor industry, and we expect this competition to increase in the future,
including from companies located outside of the United States. Competition is generally based on innovation, design, quality
including from companies located outside of the United States. Competition is generally based on innovation, design, quality
and reliability of products, product performance, features and functionality, product pricing, availability and capacity,
and reliability of products, product performance, features and functionality, product pricing, availability and capacity,
technological service and support, and the availability of integrated system solutions, with the relative importance of these
technological service and support, and the availability of integrated system solutions, with the relative importance of these
factors varying among products, markets and customers. Many companies have sufficient financial, manufacturing, technical,
factors varying among products, markets and customers. Many companies have sufficient financial, manufacturing, technical,
sales and marketing resources to develop and market products that compete with our products. Some of our competitors may
sales and marketing resources to develop and market products that compete with our products. Some of our competitors may
have more advantageous supply or development relationships with our current and potential customers or suppliers. Our
have more advantageous supply or development relationships with our current and potential customers or suppliers. Our
competitors also include both emerging companies selling specialized products in markets we serve and companies outside of
competitors also include both emerging companies selling specialized products in markets we serve and companies outside of
the U.S., including entities associated with well-funded efforts by foreign governments to create indigenous semiconductor
the U.S., including entities associated with well-funded efforts by foreign governments to create indigenous semiconductor
industries. Existing or new competitors may develop products or technologies that more effectively address the demands of our
industries. Existing or new competitors may develop products or technologies that more effectively address the demands of our
customers and markets with enhanced performance, features and functionality, lower power requirements, greater levels of
customers and markets with enhanced performance, features and functionality, lower power requirements, greater levels of
integration or lower cost. In addition, as we seek to expand our business, including the design and production of products and
integration or lower cost. In addition, as we seek to expand our business, including the design and production of products and
services for developing and emerging markets, we may encounter increased competition from our current competitors and/or
services for developing and emerging markets, we may encounter increased competition from our current competitors and/or
new competitors. Increased competition in certain markets has resulted in and may continue to result in declining average
new competitors. Increased competition in certain markets has resulted in and may continue to result in declining average
selling prices, reduced gross margins and loss of market share in those markets. There can be no assurance that we will be able
selling prices, reduced gross margins and loss of market share in those markets. There can be no assurance that we will be able
to compete successfully in the future against existing or new competitors, or that our operating results will not be adversely
to compete successfully in the future against existing or new competitors, or that our operating results will not be adversely
affected by increased competition. In addition, the semiconductor industry has experienced significant consolidation over the
affected by increased competition. In addition, the semiconductor industry has experienced significant consolidation over the
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A prolonged disruption of our internal manufacturing operations could have a material adverse effect on our business,
A prolonged disruption of our internal manufacturing operations could have a material adverse effect on our business,
financial condition and results of operations.
financial condition and results of operations.
In addition to leveraging an outsourcing model for manufacturing operations, we also rely on our internal manufacturing
In addition to leveraging an outsourcing model for manufacturing operations, we also rely on our internal manufacturing
operations located in the United States, Ireland, the Philippines, Thailand and Malaysia. A prolonged disruption at, or inability
operations located in the United States, Ireland, the Philippines, Thailand and Malaysia. A prolonged disruption at, or inability
to utilize, one or more of our manufacturing facilities, loss of raw materials or damage to our manufacturing equipment for any
to utilize, one or more of our manufacturing facilities, loss of raw materials or damage to our manufacturing equipment for any
reason, including due to the COVID-19 pandemic, natural or man-made disasters, civil unrest or other events outside of our
reason, including due to the COVID-19 pandemic, natural or man-made disasters, civil unrest or other events outside of our
control, such as widespread outbreaks of illness, or the failure to maintain our labor force at one or more of these facilities, may
control, such as widespread outbreaks of illness, or the failure to maintain our labor force at one or more of these facilities, may
disrupt our operations, delay production, shipments and revenue and result in us being unable to timely satisfy customer
disrupt our operations, delay production, shipments and revenue and result in us being unable to timely satisfy customer
demand. As a result, we could forgo revenue opportunities, potentially lose market share and damage our customer
demand. As a result, we could forgo revenue opportunities, potentially lose market share and damage our customer
relationships, all of which could materially and adversely affect our business, financial condition and results of operations.
relationships, all of which could materially and adversely affect our business, financial condition and results of operations.
Our future success depends upon our ability to execute our business strategy, continue to innovate, improve our existing
Our future success depends upon our ability to execute our business strategy, continue to innovate, improve our existing
products, design, develop, produce and market new products, and identify and enter new markets.
products, design, develop, produce and market new products, and identify and enter new markets.
Our future success significantly depends on our ability to execute our business strategy, continue to innovate, improve
Our future success significantly depends on our ability to execute our business strategy, continue to innovate, improve
our existing products, and design, develop, produce and market innovative new products and system-level solutions. Product
our existing products, and design, develop, produce and market innovative new products and system-level solutions. Product
design, development, innovation and enhancement is often a complex, time-consuming and costly process involving significant
design, development, innovation and enhancement is often a complex, time-consuming and costly process involving significant
investment in research and development with no assurance of return on investment. There can be no assurance that we will be
investment in research and development with no assurance of return on investment. There can be no assurance that we will be
able to develop and introduce new and improved products in a timely or efficient manner or that new and improved products, if
able to develop and introduce new and improved products in a timely or efficient manner or that new and improved products, if
developed, will achieve market acceptance. Our products generally must conform to various evolving and sometimes competing
developed, will achieve market acceptance. Our products generally must conform to various evolving and sometimes competing
industry standards, which may adversely affect our ability to compete in certain markets or require us to incur significant costs.
industry standards, which may adversely affect our ability to compete in certain markets or require us to incur significant costs.
In addition, our customers generally impose very high quality and reliability standards on our products, which often change and
In addition, our customers generally impose very high quality and reliability standards on our products, which often change and
may be difficult or costly to satisfy. Any inability to satisfy customer quality and reliability standards or comply with industry
may be difficult or costly to satisfy. Any inability to satisfy customer quality and reliability standards or comply with industry
standards and technical requirements may adversely affect demand for our products and our results of operations.
standards and technical requirements may adversely affect demand for our products and our results of operations.
Our growth is also dependent on our ability to identify and penetrate new markets where we have limited experience yet
Our growth is also dependent on our ability to identify and penetrate new markets where we have limited experience yet
require significant investments, resources and technological advancements in order to compete effectively, and there can be no
require significant investments, resources and technological advancements in order to compete effectively, and there can be no
assurance that we will achieve success in these markets. There can be no assurance that the markets we serve and/or target
assurance that we will achieve success in these markets. There can be no assurance that the markets we serve and/or target
based on our business strategy will grow in the future, that our existing and new products will meet the requirements of these
based on our business strategy will grow in the future, that our existing and new products will meet the requirements of these
markets, that our products, or the end-products in which our products are used, will achieve customer acceptance in these
markets, that our products, or the end-products in which our products are used, will achieve customer acceptance in these
markets, that competitors will not force price reductions or take market share from us, or that we can achieve or maintain
markets, that competitors will not force price reductions or take market share from us, or that we can achieve or maintain
adequate gross margins or profits in these markets.
adequate gross margins or profits in these markets.
Our future revenue, gross margins, operating results, net income and earnings per share are difficult to predict and may
Our future revenue, gross margins, operating results, net income and earnings per share are difficult to predict and may
materially fluctuate.
materially fluctuate.
Our future revenue, gross margins, operating results, net income and earnings per share are difficult to predict and may
Our future revenue, gross margins, operating results, net income and earnings per share are difficult to predict and may
be materially affected by a number of factors, including:
be materially affected by a number of factors, including:
the effects of adverse economic conditions in the markets in which we sell our products, including inflationary
the effects of adverse economic conditions in the markets in which we sell our products, including inflationary
pressures, which has resulted, and may continue to result, in increased interest rates, fuel prices, wages, and other
pressures, which has resulted, and may continue to result, in increased interest rates, fuel prices, wages, and other
costs;
costs;
changes in customer demand or order patterns for our products and/or for end products that incorporate our products;
changes in customer demand or order patterns for our products and/or for end products that incorporate our products;
the timing, delay, reduction or cancellation of significant customer orders and our ability to manage inventory;
the timing, delay, reduction or cancellation of significant customer orders and our ability to manage inventory;
our ability to accurately forecast distributor demand for our products;
our ability to accurately forecast distributor demand for our products;
future distributor pricing credits and/or stock rotation rights;
future distributor pricing credits and/or stock rotation rights;
our ability to effectively manage our cost structure in both the short term and over a longer duration;
our ability to effectively manage our cost structure in both the short term and over a longer duration;
changes in geographic, product or customer mix;
changes in geographic, product or customer mix;
the extent of the impact and the duration of the COVID-19 pandemic;
the extent of the impact and the duration of the COVID-19 pandemic;
changes in our effective tax rates or new or revised tax legislation in the United States, Ireland or worldwide;
changes in our effective tax rates or new or revised tax legislation in the United States, Ireland or worldwide;
the effects of issued, threatened or retaliatory government sanctions, trade barriers or economic restrictions; changes in
the effects of issued, threatened or retaliatory government sanctions, trade barriers or economic restrictions; changes in
law, regulations or other restrictions, including executive orders; and changes in import and export regulations,
law, regulations or other restrictions, including executive orders; and changes in import and export regulations,
including restrictions on exports to certain companies or to third parties that do business with such companies, export
including restrictions on exports to certain companies or to third parties that do business with such companies, export
classifications, or duties and tariffs, particularly with respect to China;
classifications, or duties and tariffs, particularly with respect to China;
the timing of new product announcements or introductions by us, our customers or our competitors and the market
the timing of new product announcements or introductions by us, our customers or our competitors and the market
acceptance of such products;
acceptance of such products;
pricing decisions and competitive pricing pressures;
pricing decisions and competitive pricing pressures;
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fluctuations in manufacturing yields, adequate availability of wafers and other raw materials, and manufacturing,
fluctuations in manufacturing yields, adequate availability of wafers and other raw materials, and manufacturing,
assembly and test capacity;
assembly and test capacity;
the ability of our third-party suppliers, subcontractors and manufacturers to supply us with sufficient quantities of raw
the ability of our third-party suppliers, subcontractors and manufacturers to supply us with sufficient quantities of raw
materials, products and/or components;
materials, products and/or components;
a decline in infrastructure spending by foreign governments, including China;
a decline in infrastructure spending by foreign governments, including China;
a decline in the U.S. government defense budget, changes in spending or budgetary priorities, a prolonged U.S.
a decline in the U.S. government defense budget, changes in spending or budgetary priorities, a prolonged U.S.
government shutdown or delays in contract awards;
government shutdown or delays in contract awards;
a decline in our backlog;
a decline in our backlog;
our ability to recruit, hire, retain and motivate adequate numbers of engineers and other qualified employees to meet
our ability to recruit, hire, retain and motivate adequate numbers of engineers and other qualified employees to meet
the demands of our customers;
the demands of our customers;
our ability to generate new design opportunities and win competitive bid selection processes;
our ability to generate new design opportunities and win competitive bid selection processes;
the increasing costs of providing employee benefits worldwide, including health insurance, retirement plan and
the increasing costs of providing employee benefits worldwide, including health insurance, retirement plan and
pension plan contributions and retirement benefits;
pension plan contributions and retirement benefits;
our ability to utilize our manufacturing facilities at efficient levels;
our ability to utilize our manufacturing facilities at efficient levels;
fluctuations in foreign currency exchange rates;
fluctuations in foreign currency exchange rates;
potential litigation-related costs or product liability, warranty and/or indemnity claims, including those not covered by
potential litigation-related costs or product liability, warranty and/or indemnity claims, including those not covered by
our suppliers or insurers;
our suppliers or insurers;
the difficulties inherent in forecasting future operating expense levels, including with respect to costs associated with
the difficulties inherent in forecasting future operating expense levels, including with respect to costs associated with
labor, utilities, transportation and raw materials;
labor, utilities, transportation and raw materials;
the costs related to compliance with increasing worldwide government, environmental and social responsibility
the costs related to compliance with increasing worldwide government, environmental and social responsibility
standards;
standards;
new accounting pronouncements or changes in existing accounting standards and practices; and
new accounting pronouncements or changes in existing accounting standards and practices; and
the effects of public health emergencies, civil unrest, natural disasters, widespread travel disruptions, security risks,
the effects of public health emergencies, civil unrest, natural disasters, widespread travel disruptions, security risks,
terrorist activities, international conflicts and other events beyond our control.
terrorist activities, international conflicts and other events beyond our control.
In addition, the semiconductor market has historically been cyclical and subject to significant economic upturns and
In addition, the semiconductor market has historically been cyclical and subject to significant economic upturns and
downturns. Our business and certain of the end markets we serve are also subject to rapid technological changes and material
downturns. Our business and certain of the end markets we serve are also subject to rapid technological changes and material
fluctuations in demand based on end-user preferences. There can be no assurance (i) that products stocked in our inventory will
fluctuations in demand based on end-user preferences. There can be no assurance (i) that products stocked in our inventory will
not be rendered obsolete before we ship them, or (ii) that we will be able to design, develop and produce products in a timely
not be rendered obsolete before we ship them, or (ii) that we will be able to design, develop and produce products in a timely
fashion to accommodate changing customer demand.
fashion to accommodate changing customer demand.
As a result of these and other factors, we may experience material fluctuations in future revenue, gross margins,
As a result of these and other factors, we may experience material fluctuations in future revenue, gross margins,
operating results, net income and earnings per share on a quarterly or annual basis. Our historical financial performance and
operating results, net income and earnings per share on a quarterly or annual basis. Our historical financial performance and
results of operations should not be relied upon as indicators of future performance or results. In addition, if our revenue, gross
results of operations should not be relied upon as indicators of future performance or results. In addition, if our revenue, gross
margins, operating results, net income and earnings per share results or expectations do not meet the expectations of securities
margins, operating results, net income and earnings per share results or expectations do not meet the expectations of securities
analysts or investors, the market price of our common stock may decline.
analysts or investors, the market price of our common stock may decline.
We may not be able to compete successfully in markets within the semiconductor industry in the future.
We may not be able to compete successfully in markets within the semiconductor industry in the future.
We face intense competition in the semiconductor industry, and we expect this competition to increase in the future,
We face intense competition in the semiconductor industry, and we expect this competition to increase in the future,
including from companies located outside of the United States. Competition is generally based on innovation, design, quality
including from companies located outside of the United States. Competition is generally based on innovation, design, quality
and reliability of products, product performance, features and functionality, product pricing, availability and capacity,
and reliability of products, product performance, features and functionality, product pricing, availability and capacity,
technological service and support, and the availability of integrated system solutions, with the relative importance of these
technological service and support, and the availability of integrated system solutions, with the relative importance of these
factors varying among products, markets and customers. Many companies have sufficient financial, manufacturing, technical,
factors varying among products, markets and customers. Many companies have sufficient financial, manufacturing, technical,
sales and marketing resources to develop and market products that compete with our products. Some of our competitors may
sales and marketing resources to develop and market products that compete with our products. Some of our competitors may
have more advantageous supply or development relationships with our current and potential customers or suppliers. Our
have more advantageous supply or development relationships with our current and potential customers or suppliers. Our
competitors also include both emerging companies selling specialized products in markets we serve and companies outside of
competitors also include both emerging companies selling specialized products in markets we serve and companies outside of
the U.S., including entities associated with well-funded efforts by foreign governments to create indigenous semiconductor
the U.S., including entities associated with well-funded efforts by foreign governments to create indigenous semiconductor
industries. Existing or new competitors may develop products or technologies that more effectively address the demands of our
industries. Existing or new competitors may develop products or technologies that more effectively address the demands of our
customers and markets with enhanced performance, features and functionality, lower power requirements, greater levels of
customers and markets with enhanced performance, features and functionality, lower power requirements, greater levels of
integration or lower cost. In addition, as we seek to expand our business, including the design and production of products and
integration or lower cost. In addition, as we seek to expand our business, including the design and production of products and
services for developing and emerging markets, we may encounter increased competition from our current competitors and/or
services for developing and emerging markets, we may encounter increased competition from our current competitors and/or
new competitors. Increased competition in certain markets has resulted in and may continue to result in declining average
new competitors. Increased competition in certain markets has resulted in and may continue to result in declining average
selling prices, reduced gross margins and loss of market share in those markets. There can be no assurance that we will be able
selling prices, reduced gross margins and loss of market share in those markets. There can be no assurance that we will be able
to compete successfully in the future against existing or new competitors, or that our operating results will not be adversely
to compete successfully in the future against existing or new competitors, or that our operating results will not be adversely
affected by increased competition. In addition, the semiconductor industry has experienced significant consolidation over the
affected by increased competition. In addition, the semiconductor industry has experienced significant consolidation over the
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past several years. Consolidation among our competitors could lead to a changing competitive landscape, which could
past several years. Consolidation among our competitors could lead to a changing competitive landscape, which could
negatively impact our competitive position and market share and harm our results of operations.
negatively impact our competitive position and market share and harm our results of operations.
could result in damage to property or persons. Further, sales through unauthorized channels could result in our products being
could result in damage to property or persons. Further, sales through unauthorized channels could result in our products being
sold at prices that are not our established prices and could result in lost revenue. These situations could have a material adverse
sold at prices that are not our established prices and could result in lost revenue. These situations could have a material adverse
If we are unable to recruit or retain our key personnel, our ability to execute our business strategy will be adversely affected.
If we are unable to recruit or retain our key personnel, our ability to execute our business strategy will be adversely affected.
Our continued success depends to a significant extent upon the recruitment, retention and effective succession of our key
Our continued success depends to a significant extent upon the recruitment, retention and effective succession of our key
personnel, including our leadership team, management and technical personnel, particularly our experienced engineers. The
personnel, including our leadership team, management and technical personnel, particularly our experienced engineers. The
competition for these employees is intense and the labor market is tight. Further, we have recently experienced an increase in
competition for these employees is intense and the labor market is tight. Further, we have recently experienced an increase in
undesired attrition. The loss of key personnel or the inability to attract, timely hire and retain key employees with critical
undesired attrition. The loss of key personnel or the inability to attract, timely hire and retain key employees with critical
technical skills to achieve our strategy, including as a result of changes to immigration policies, could cause business
technical skills to achieve our strategy, including as a result of changes to immigration policies, could cause business
disruptions, increased expenses to address any disruptions, and could have a material adverse effect on our business.
disruptions, increased expenses to address any disruptions, and could have a material adverse effect on our business.
We believe that a critical contributor to our success to date has been our corporate culture, which we have built to foster
We believe that a critical contributor to our success to date has been our corporate culture, which we have built to foster
innovation, teamwork and employee satisfaction. As we grow, including from the integration of employees and businesses
innovation, teamwork and employee satisfaction. As we grow, including from the integration of employees and businesses
acquired in connection with previous or future acquisitions, we may find it difficult to maintain important aspects of our
acquired in connection with previous or future acquisitions, we may find it difficult to maintain important aspects of our
corporate culture, which could negatively affect our ability to retain and recruit personnel who are essential to our future
corporate culture, which could negatively affect our ability to retain and recruit personnel who are essential to our future
success.
success.
We do not maintain any key person life insurance policy on any of our officers or other employees. The loss of one or
We do not maintain any key person life insurance policy on any of our officers or other employees. The loss of one or
more of our key employees, and any failure to have in place and execute an effective succession plan for key executives, could
more of our key employees, and any failure to have in place and execute an effective succession plan for key executives, could
seriously harm our business.
seriously harm our business.
Our customers typically do not make long-term product purchase commitments, and incorrect forecasts or reductions,
Our customers typically do not make long-term product purchase commitments, and incorrect forecasts or reductions,
cancellations or delays in orders for our products could adversely affect our operating results.
cancellations or delays in orders for our products could adversely affect our operating results.
We typically do not have sales contracts with our customers that include long-term product purchase commitments. In
We typically do not have sales contracts with our customers that include long-term product purchase commitments. In
certain markets where end-user demand may be particularly volatile and difficult to predict, some customers place orders that
certain markets where end-user demand may be particularly volatile and difficult to predict, some customers place orders that
require us to manufacture product and have it available for shipment, even though the customer is unwilling to make a binding
require us to manufacture product and have it available for shipment, even though the customer is unwilling to make a binding
commitment to purchase all, or even any, of the product. In other instances, we manufacture product based on non-binding
commitment to purchase all, or even any, of the product. In other instances, we manufacture product based on non-binding
forecasts of customer demands, which may fluctuate significantly on a quarterly or annual basis and at times may prove to be
forecasts of customer demands, which may fluctuate significantly on a quarterly or annual basis and at times may prove to be
inaccurate. Additionally, our U.S. government contracts and subcontracts may be funded in increments over a number of
inaccurate. Additionally, our U.S. government contracts and subcontracts may be funded in increments over a number of
government budget periods and typically can be terminated by the government for its convenience. As a result, we may incur
government budget periods and typically can be terminated by the government for its convenience. As a result, we may incur
inventory and manufacturing costs in advance of anticipated sales, and we are subject to the risk of lower than expected orders
inventory and manufacturing costs in advance of anticipated sales, and we are subject to the risk of lower than expected orders
or cancellations of orders, leading to a sharp reduction of sales and backlog. Further, if orders or forecasts for products that
or cancellations of orders, leading to a sharp reduction of sales and backlog. Further, if orders or forecasts for products that
meet a customer’s unique requirements are canceled or unrealized we may be left with an inventory of unsaleable products,
meet a customer’s unique requirements are canceled or unrealized we may be left with an inventory of unsaleable products,
causing potential inventory write-offs, and hindering our ability to recover our costs. As a result of lengthy manufacturing
causing potential inventory write-offs, and hindering our ability to recover our costs. As a result of lengthy manufacturing
cycles for certain of the products that are subject to these uncertainties, the amount of unsaleable product could be substantial.
cycles for certain of the products that are subject to these uncertainties, the amount of unsaleable product could be substantial.
Incorrect forecasts, or reductions, cancellations or delays in orders for our products could adversely affect our operating results.
Incorrect forecasts, or reductions, cancellations or delays in orders for our products could adversely affect our operating results.
Our operating results are dependent on the performance of independent distributors.
Our operating results are dependent on the performance of independent distributors.
A significant portion of our sales are through independent global and regional distributors that are not under our control.
A significant portion of our sales are through independent global and regional distributors that are not under our control.
These independent distributors generally represent product lines offered by several companies and thus could reduce their sales
These independent distributors generally represent product lines offered by several companies and thus could reduce their sales
efforts for our products or they could terminate their representation of us. We generally do not require letters of credit from our
efforts for our products or they could terminate their representation of us. We generally do not require letters of credit from our
distributors, including our largest distributor, and are not protected against accounts receivable default or declarations of
distributors, including our largest distributor, and are not protected against accounts receivable default or declarations of
bankruptcy by these distributors. Our inability to collect open accounts receivable could adversely affect our operating results.
bankruptcy by these distributors. Our inability to collect open accounts receivable could adversely affect our operating results.
Termination of a significant distributor or a group of distributors, whether at our initiative or the distributor’s initiative or
Termination of a significant distributor or a group of distributors, whether at our initiative or the distributor’s initiative or
through consolidation in the distribution industry, could disrupt our current business, and if we are unable to find suitable
through consolidation in the distribution industry, could disrupt our current business, and if we are unable to find suitable
replacements with the appropriate scale and resources, our operating results could be adversely affected.
replacements with the appropriate scale and resources, our operating results could be adversely affected.
We are required to estimate the effects of returns and allowances provided to distributors and record revenue at the time
We are required to estimate the effects of returns and allowances provided to distributors and record revenue at the time
of sale to the distributor. If our estimates of such credits and rights are materially understated, it could cause subsequent
of sale to the distributor. If our estimates of such credits and rights are materially understated, it could cause subsequent
adjustments that negatively impact our revenues and gross profits in a future period.
adjustments that negatively impact our revenues and gross profits in a future period.
Our industry faces challenges associated with products diverted from authorized distribution channels, which could result in
Our industry faces challenges associated with products diverted from authorized distribution channels, which could result in
reputational harm and have a material adverse effect our business and results of operations.
reputational harm and have a material adverse effect our business and results of operations.
We market and sell our products directly and through third-party distributors. There is a risk that our products may be
We market and sell our products directly and through third-party distributors. There is a risk that our products may be
diverted from our authorized distribution channels and sold on the “gray market” in ways that are not in accordance with our
diverted from our authorized distribution channels and sold on the “gray market” in ways that are not in accordance with our
established agreements, policies and procedures or at our established prices. Customers purchasing our products on the gray
established agreements, policies and procedures or at our established prices. Customers purchasing our products on the gray
market or through other unauthorized channels may use our products for purposes for which they were not intended or that may
market or through other unauthorized channels may use our products for purposes for which they were not intended or that may
be contrary to our ethical, legal and regulatory obligations. Customers may also purchase counterfeit or substandard products,
be contrary to our ethical, legal and regulatory obligations. Customers may also purchase counterfeit or substandard products,
including products that have been altered, mishandled or damaged, or purchase used products presented as new, each of which
including products that have been altered, mishandled or damaged, or purchase used products presented as new, each of which
effect on our business and operating results.
effect on our business and operating results.
The extent to which the novel strain of the coronavirus (COVID-19) pandemic will adversely affect our business, financial
The extent to which the novel strain of the coronavirus (COVID-19) pandemic will adversely affect our business, financial
condition and results of operations is uncertain.
condition and results of operations is uncertain.
The COVID-19 pandemic has created significant worldwide uncertainty, volatility and economic disruption and has
The COVID-19 pandemic has created significant worldwide uncertainty, volatility and economic disruption and has
impacted our workforce and operations, the operations of our customers, those of our respective vendors and suppliers and the
impacted our workforce and operations, the operations of our customers, those of our respective vendors and suppliers and the
global capital markets. During the course of the pandemic, many of the countries in which we operate took and continue to take
global capital markets. During the course of the pandemic, many of the countries in which we operate took and continue to take
measures to address the pandemic, which at times has resulted in disruptions at some of our manufacturing operations and
measures to address the pandemic, which at times has resulted in disruptions at some of our manufacturing operations and
facilities, including restrictions on our access to facilities. We may also continue to take actions as may be required by
facilities, including restrictions on our access to facilities. We may also continue to take actions as may be required by
government authorities or that we determine are in the best interests of our employees, customers, partners, and suppliers,
government authorities or that we determine are in the best interests of our employees, customers, partners, and suppliers,
which may cause disruption to our business. The continued COVID-19 pandemic could also cause further disruption in our
which may cause disruption to our business. The continued COVID-19 pandemic could also cause further disruption in our
supply chain and customer demand, and could adversely affect the ability of our customers to perform, including in making
supply chain and customer demand, and could adversely affect the ability of our customers to perform, including in making
timely payments to us, which could further impact our business, financial condition and results of operations. The ultimate
timely payments to us, which could further impact our business, financial condition and results of operations. The ultimate
impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows continues to be
impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows continues to be
largely dependent on future developments, including the duration, scope and severity of the pandemic, any additional
largely dependent on future developments, including the duration, scope and severity of the pandemic, any additional
resurgences, variants and severity of variants and the ability to effectively and widely manufacture and distribute vaccines,
resurgences, variants and severity of variants and the ability to effectively and widely manufacture and distribute vaccines,
which are not within our control and cannot be accurately predicted and are uncertain. These events could adversely impact our
which are not within our control and cannot be accurately predicted and are uncertain. These events could adversely impact our
business, results of operations, financial condition and cash flows. To the extent the COVID-19 pandemic adversely affects our
business, results of operations, financial condition and cash flows. To the extent the COVID-19 pandemic adversely affects our
business, results of operations, financial condition and cash flows, it may also heighten many of the other risks described in this
business, results of operations, financial condition and cash flows, it may also heighten many of the other risks described in this
“Risk Factors” section.
“Risk Factors” section.
Our semiconductor products are complex and we may be subject to warranty, indemnity and/or product liability claims, which
Our semiconductor products are complex and we may be subject to warranty, indemnity and/or product liability claims, which
could result in significant costs and damage to our reputation and adversely affect customer relationships, the market
could result in significant costs and damage to our reputation and adversely affect customer relationships, the market
acceptance of our products and our operating results.
acceptance of our products and our operating results.
Semiconductor products are highly complex and may contain defects that affect their quality or performance. Failures in
Semiconductor products are highly complex and may contain defects that affect their quality or performance. Failures in
our products and services or in the products of our customers could result in damage to our reputation for reliability and
our products and services or in the products of our customers could result in damage to our reputation for reliability and
increase our legal or financial exposure to third parties. Certain of our products and services could also contain security
increase our legal or financial exposure to third parties. Certain of our products and services could also contain security
vulnerabilities, defects, bugs and errors, which could also result in significant data losses, security breaches and theft of
vulnerabilities, defects, bugs and errors, which could also result in significant data losses, security breaches and theft of
intellectual property. We generally warrant that our products will meet their published specifications, and that we will repair or
intellectual property. We generally warrant that our products will meet their published specifications, and that we will repair or
replace defective products, for one year from the date title passes from us to the customer. We invest significant resources in the
replace defective products, for one year from the date title passes from us to the customer. We invest significant resources in the
testing of our products; however, if any of our products contain defects, we may be required to incur additional development
testing of our products; however, if any of our products contain defects, we may be required to incur additional development
and remediation costs pursuant to warranty and indemnification provisions in our customer contracts and purchase orders.
and remediation costs pursuant to warranty and indemnification provisions in our customer contracts and purchase orders.
These problems may divert our technical and other resources from other product development efforts and could result in claims
These problems may divert our technical and other resources from other product development efforts and could result in claims
against us by our customers or others, including liability for costs and expenses associated with product defects, including
against us by our customers or others, including liability for costs and expenses associated with product defects, including
recalls, which may adversely impact our operating results. We may also be subject to customer intellectual property indemnity
recalls, which may adversely impact our operating results. We may also be subject to customer intellectual property indemnity
claims. Our customers have on occasion been sued, and may be sued in the future, by third parties alleging infringement of
claims. Our customers have on occasion been sued, and may be sued in the future, by third parties alleging infringement of
intellectual property rights, or damages resulting from use of our products. Those customers may seek indemnification from us
intellectual property rights, or damages resulting from use of our products. Those customers may seek indemnification from us
under the terms and conditions of our sales contracts with them. In certain cases, our potential indemnification liability may be
under the terms and conditions of our sales contracts with them. In certain cases, our potential indemnification liability may be
significant.
significant.
Further, we sell to customers in industries such as automotive (including autonomous vehicles), aerospace, defense, and
Further, we sell to customers in industries such as automotive (including autonomous vehicles), aerospace, defense, and
healthcare, where failure of the systems in which our products are integrated could cause damage to property or persons. We
healthcare, where failure of the systems in which our products are integrated could cause damage to property or persons. We
may be subject to product liability claims if our products, or the integration of our products, cause system failures. Any product
may be subject to product liability claims if our products, or the integration of our products, cause system failures. Any product
liability claim, whether or not determined in our favor, could result in significant expense, divert the efforts of our technical and
liability claim, whether or not determined in our favor, could result in significant expense, divert the efforts of our technical and
management personnel, and harm our business. In addition, if any of our products contain defects, or have reliability, quality or
management personnel, and harm our business. In addition, if any of our products contain defects, or have reliability, quality or
compatibility problems not capable of being resolved, our reputation may be damaged, which could make it more difficult for
compatibility problems not capable of being resolved, our reputation may be damaged, which could make it more difficult for
us to sell our products to customers and which could also adversely affect our operating results.
us to sell our products to customers and which could also adversely affect our operating results.
The fabrication of integrated circuits is highly complex and precise, and our manufacturing processes utilize a substantial
The fabrication of integrated circuits is highly complex and precise, and our manufacturing processes utilize a substantial
amount of technology. Minute impurities, contaminants in the manufacturing environment, difficulties in the fabrication
amount of technology. Minute impurities, contaminants in the manufacturing environment, difficulties in the fabrication
process, defects in the masks used in the wafer manufacturing process, manufacturing equipment failures, wafer breakage or
process, defects in the masks used in the wafer manufacturing process, manufacturing equipment failures, wafer breakage or
other factors can cause a substantial percentage of wafers to be rejected or numerous dice on each wafer to be nonfunctional.
other factors can cause a substantial percentage of wafers to be rejected or numerous dice on each wafer to be nonfunctional.
While we have significant expertise in semiconductor manufacturing, it is possible that some processes could become unstable.
While we have significant expertise in semiconductor manufacturing, it is possible that some processes could become unstable.
This instability could result in manufacturing delays and product shortages, which could have a material adverse effect on our
This instability could result in manufacturing delays and product shortages, which could have a material adverse effect on our
operating results.
operating results.
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past several years. Consolidation among our competitors could lead to a changing competitive landscape, which could
past several years. Consolidation among our competitors could lead to a changing competitive landscape, which could
negatively impact our competitive position and market share and harm our results of operations.
negatively impact our competitive position and market share and harm our results of operations.
If we are unable to recruit or retain our key personnel, our ability to execute our business strategy will be adversely affected.
If we are unable to recruit or retain our key personnel, our ability to execute our business strategy will be adversely affected.
Our continued success depends to a significant extent upon the recruitment, retention and effective succession of our key
Our continued success depends to a significant extent upon the recruitment, retention and effective succession of our key
personnel, including our leadership team, management and technical personnel, particularly our experienced engineers. The
personnel, including our leadership team, management and technical personnel, particularly our experienced engineers. The
competition for these employees is intense and the labor market is tight. Further, we have recently experienced an increase in
competition for these employees is intense and the labor market is tight. Further, we have recently experienced an increase in
undesired attrition. The loss of key personnel or the inability to attract, timely hire and retain key employees with critical
undesired attrition. The loss of key personnel or the inability to attract, timely hire and retain key employees with critical
technical skills to achieve our strategy, including as a result of changes to immigration policies, could cause business
technical skills to achieve our strategy, including as a result of changes to immigration policies, could cause business
disruptions, increased expenses to address any disruptions, and could have a material adverse effect on our business.
disruptions, increased expenses to address any disruptions, and could have a material adverse effect on our business.
We believe that a critical contributor to our success to date has been our corporate culture, which we have built to foster
We believe that a critical contributor to our success to date has been our corporate culture, which we have built to foster
innovation, teamwork and employee satisfaction. As we grow, including from the integration of employees and businesses
innovation, teamwork and employee satisfaction. As we grow, including from the integration of employees and businesses
acquired in connection with previous or future acquisitions, we may find it difficult to maintain important aspects of our
acquired in connection with previous or future acquisitions, we may find it difficult to maintain important aspects of our
corporate culture, which could negatively affect our ability to retain and recruit personnel who are essential to our future
corporate culture, which could negatively affect our ability to retain and recruit personnel who are essential to our future
success.
success.
seriously harm our business.
seriously harm our business.
We do not maintain any key person life insurance policy on any of our officers or other employees. The loss of one or
We do not maintain any key person life insurance policy on any of our officers or other employees. The loss of one or
more of our key employees, and any failure to have in place and execute an effective succession plan for key executives, could
more of our key employees, and any failure to have in place and execute an effective succession plan for key executives, could
Our customers typically do not make long-term product purchase commitments, and incorrect forecasts or reductions,
Our customers typically do not make long-term product purchase commitments, and incorrect forecasts or reductions,
cancellations or delays in orders for our products could adversely affect our operating results.
cancellations or delays in orders for our products could adversely affect our operating results.
We typically do not have sales contracts with our customers that include long-term product purchase commitments. In
We typically do not have sales contracts with our customers that include long-term product purchase commitments. In
certain markets where end-user demand may be particularly volatile and difficult to predict, some customers place orders that
certain markets where end-user demand may be particularly volatile and difficult to predict, some customers place orders that
require us to manufacture product and have it available for shipment, even though the customer is unwilling to make a binding
require us to manufacture product and have it available for shipment, even though the customer is unwilling to make a binding
commitment to purchase all, or even any, of the product. In other instances, we manufacture product based on non-binding
commitment to purchase all, or even any, of the product. In other instances, we manufacture product based on non-binding
forecasts of customer demands, which may fluctuate significantly on a quarterly or annual basis and at times may prove to be
forecasts of customer demands, which may fluctuate significantly on a quarterly or annual basis and at times may prove to be
inaccurate. Additionally, our U.S. government contracts and subcontracts may be funded in increments over a number of
inaccurate. Additionally, our U.S. government contracts and subcontracts may be funded in increments over a number of
government budget periods and typically can be terminated by the government for its convenience. As a result, we may incur
government budget periods and typically can be terminated by the government for its convenience. As a result, we may incur
inventory and manufacturing costs in advance of anticipated sales, and we are subject to the risk of lower than expected orders
inventory and manufacturing costs in advance of anticipated sales, and we are subject to the risk of lower than expected orders
or cancellations of orders, leading to a sharp reduction of sales and backlog. Further, if orders or forecasts for products that
or cancellations of orders, leading to a sharp reduction of sales and backlog. Further, if orders or forecasts for products that
meet a customer’s unique requirements are canceled or unrealized we may be left with an inventory of unsaleable products,
meet a customer’s unique requirements are canceled or unrealized we may be left with an inventory of unsaleable products,
causing potential inventory write-offs, and hindering our ability to recover our costs. As a result of lengthy manufacturing
causing potential inventory write-offs, and hindering our ability to recover our costs. As a result of lengthy manufacturing
cycles for certain of the products that are subject to these uncertainties, the amount of unsaleable product could be substantial.
cycles for certain of the products that are subject to these uncertainties, the amount of unsaleable product could be substantial.
Incorrect forecasts, or reductions, cancellations or delays in orders for our products could adversely affect our operating results.
Incorrect forecasts, or reductions, cancellations or delays in orders for our products could adversely affect our operating results.
Our operating results are dependent on the performance of independent distributors.
Our operating results are dependent on the performance of independent distributors.
A significant portion of our sales are through independent global and regional distributors that are not under our control.
A significant portion of our sales are through independent global and regional distributors that are not under our control.
These independent distributors generally represent product lines offered by several companies and thus could reduce their sales
These independent distributors generally represent product lines offered by several companies and thus could reduce their sales
efforts for our products or they could terminate their representation of us. We generally do not require letters of credit from our
efforts for our products or they could terminate their representation of us. We generally do not require letters of credit from our
distributors, including our largest distributor, and are not protected against accounts receivable default or declarations of
distributors, including our largest distributor, and are not protected against accounts receivable default or declarations of
bankruptcy by these distributors. Our inability to collect open accounts receivable could adversely affect our operating results.
bankruptcy by these distributors. Our inability to collect open accounts receivable could adversely affect our operating results.
Termination of a significant distributor or a group of distributors, whether at our initiative or the distributor’s initiative or
Termination of a significant distributor or a group of distributors, whether at our initiative or the distributor’s initiative or
through consolidation in the distribution industry, could disrupt our current business, and if we are unable to find suitable
through consolidation in the distribution industry, could disrupt our current business, and if we are unable to find suitable
replacements with the appropriate scale and resources, our operating results could be adversely affected.
replacements with the appropriate scale and resources, our operating results could be adversely affected.
We are required to estimate the effects of returns and allowances provided to distributors and record revenue at the time
We are required to estimate the effects of returns and allowances provided to distributors and record revenue at the time
of sale to the distributor. If our estimates of such credits and rights are materially understated, it could cause subsequent
of sale to the distributor. If our estimates of such credits and rights are materially understated, it could cause subsequent
adjustments that negatively impact our revenues and gross profits in a future period.
adjustments that negatively impact our revenues and gross profits in a future period.
Our industry faces challenges associated with products diverted from authorized distribution channels, which could result in
Our industry faces challenges associated with products diverted from authorized distribution channels, which could result in
reputational harm and have a material adverse effect our business and results of operations.
reputational harm and have a material adverse effect our business and results of operations.
We market and sell our products directly and through third-party distributors. There is a risk that our products may be
We market and sell our products directly and through third-party distributors. There is a risk that our products may be
diverted from our authorized distribution channels and sold on the “gray market” in ways that are not in accordance with our
diverted from our authorized distribution channels and sold on the “gray market” in ways that are not in accordance with our
established agreements, policies and procedures or at our established prices. Customers purchasing our products on the gray
established agreements, policies and procedures or at our established prices. Customers purchasing our products on the gray
market or through other unauthorized channels may use our products for purposes for which they were not intended or that may
market or through other unauthorized channels may use our products for purposes for which they were not intended or that may
be contrary to our ethical, legal and regulatory obligations. Customers may also purchase counterfeit or substandard products,
be contrary to our ethical, legal and regulatory obligations. Customers may also purchase counterfeit or substandard products,
including products that have been altered, mishandled or damaged, or purchase used products presented as new, each of which
including products that have been altered, mishandled or damaged, or purchase used products presented as new, each of which
could result in damage to property or persons. Further, sales through unauthorized channels could result in our products being
could result in damage to property or persons. Further, sales through unauthorized channels could result in our products being
sold at prices that are not our established prices and could result in lost revenue. These situations could have a material adverse
sold at prices that are not our established prices and could result in lost revenue. These situations could have a material adverse
effect on our business and operating results.
effect on our business and operating results.
The extent to which the novel strain of the coronavirus (COVID-19) pandemic will adversely affect our business, financial
The extent to which the novel strain of the coronavirus (COVID-19) pandemic will adversely affect our business, financial
condition and results of operations is uncertain.
condition and results of operations is uncertain.
The COVID-19 pandemic has created significant worldwide uncertainty, volatility and economic disruption and has
The COVID-19 pandemic has created significant worldwide uncertainty, volatility and economic disruption and has
impacted our workforce and operations, the operations of our customers, those of our respective vendors and suppliers and the
impacted our workforce and operations, the operations of our customers, those of our respective vendors and suppliers and the
global capital markets. During the course of the pandemic, many of the countries in which we operate took and continue to take
global capital markets. During the course of the pandemic, many of the countries in which we operate took and continue to take
measures to address the pandemic, which at times has resulted in disruptions at some of our manufacturing operations and
measures to address the pandemic, which at times has resulted in disruptions at some of our manufacturing operations and
facilities, including restrictions on our access to facilities. We may also continue to take actions as may be required by
facilities, including restrictions on our access to facilities. We may also continue to take actions as may be required by
government authorities or that we determine are in the best interests of our employees, customers, partners, and suppliers,
government authorities or that we determine are in the best interests of our employees, customers, partners, and suppliers,
which may cause disruption to our business. The continued COVID-19 pandemic could also cause further disruption in our
which may cause disruption to our business. The continued COVID-19 pandemic could also cause further disruption in our
supply chain and customer demand, and could adversely affect the ability of our customers to perform, including in making
supply chain and customer demand, and could adversely affect the ability of our customers to perform, including in making
timely payments to us, which could further impact our business, financial condition and results of operations. The ultimate
timely payments to us, which could further impact our business, financial condition and results of operations. The ultimate
impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows continues to be
impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows continues to be
largely dependent on future developments, including the duration, scope and severity of the pandemic, any additional
largely dependent on future developments, including the duration, scope and severity of the pandemic, any additional
resurgences, variants and severity of variants and the ability to effectively and widely manufacture and distribute vaccines,
resurgences, variants and severity of variants and the ability to effectively and widely manufacture and distribute vaccines,
which are not within our control and cannot be accurately predicted and are uncertain. These events could adversely impact our
which are not within our control and cannot be accurately predicted and are uncertain. These events could adversely impact our
business, results of operations, financial condition and cash flows. To the extent the COVID-19 pandemic adversely affects our
business, results of operations, financial condition and cash flows. To the extent the COVID-19 pandemic adversely affects our
business, results of operations, financial condition and cash flows, it may also heighten many of the other risks described in this
business, results of operations, financial condition and cash flows, it may also heighten many of the other risks described in this
“Risk Factors” section.
“Risk Factors” section.
Our semiconductor products are complex and we may be subject to warranty, indemnity and/or product liability claims, which
Our semiconductor products are complex and we may be subject to warranty, indemnity and/or product liability claims, which
could result in significant costs and damage to our reputation and adversely affect customer relationships, the market
could result in significant costs and damage to our reputation and adversely affect customer relationships, the market
acceptance of our products and our operating results.
acceptance of our products and our operating results.
Semiconductor products are highly complex and may contain defects that affect their quality or performance. Failures in
Semiconductor products are highly complex and may contain defects that affect their quality or performance. Failures in
our products and services or in the products of our customers could result in damage to our reputation for reliability and
our products and services or in the products of our customers could result in damage to our reputation for reliability and
increase our legal or financial exposure to third parties. Certain of our products and services could also contain security
increase our legal or financial exposure to third parties. Certain of our products and services could also contain security
vulnerabilities, defects, bugs and errors, which could also result in significant data losses, security breaches and theft of
vulnerabilities, defects, bugs and errors, which could also result in significant data losses, security breaches and theft of
intellectual property. We generally warrant that our products will meet their published specifications, and that we will repair or
intellectual property. We generally warrant that our products will meet their published specifications, and that we will repair or
replace defective products, for one year from the date title passes from us to the customer. We invest significant resources in the
replace defective products, for one year from the date title passes from us to the customer. We invest significant resources in the
testing of our products; however, if any of our products contain defects, we may be required to incur additional development
testing of our products; however, if any of our products contain defects, we may be required to incur additional development
and remediation costs pursuant to warranty and indemnification provisions in our customer contracts and purchase orders.
and remediation costs pursuant to warranty and indemnification provisions in our customer contracts and purchase orders.
These problems may divert our technical and other resources from other product development efforts and could result in claims
These problems may divert our technical and other resources from other product development efforts and could result in claims
against us by our customers or others, including liability for costs and expenses associated with product defects, including
against us by our customers or others, including liability for costs and expenses associated with product defects, including
recalls, which may adversely impact our operating results. We may also be subject to customer intellectual property indemnity
recalls, which may adversely impact our operating results. We may also be subject to customer intellectual property indemnity
claims. Our customers have on occasion been sued, and may be sued in the future, by third parties alleging infringement of
claims. Our customers have on occasion been sued, and may be sued in the future, by third parties alleging infringement of
intellectual property rights, or damages resulting from use of our products. Those customers may seek indemnification from us
intellectual property rights, or damages resulting from use of our products. Those customers may seek indemnification from us
under the terms and conditions of our sales contracts with them. In certain cases, our potential indemnification liability may be
under the terms and conditions of our sales contracts with them. In certain cases, our potential indemnification liability may be
significant.
significant.
Further, we sell to customers in industries such as automotive (including autonomous vehicles), aerospace, defense, and
Further, we sell to customers in industries such as automotive (including autonomous vehicles), aerospace, defense, and
healthcare, where failure of the systems in which our products are integrated could cause damage to property or persons. We
healthcare, where failure of the systems in which our products are integrated could cause damage to property or persons. We
may be subject to product liability claims if our products, or the integration of our products, cause system failures. Any product
may be subject to product liability claims if our products, or the integration of our products, cause system failures. Any product
liability claim, whether or not determined in our favor, could result in significant expense, divert the efforts of our technical and
liability claim, whether or not determined in our favor, could result in significant expense, divert the efforts of our technical and
management personnel, and harm our business. In addition, if any of our products contain defects, or have reliability, quality or
management personnel, and harm our business. In addition, if any of our products contain defects, or have reliability, quality or
compatibility problems not capable of being resolved, our reputation may be damaged, which could make it more difficult for
compatibility problems not capable of being resolved, our reputation may be damaged, which could make it more difficult for
us to sell our products to customers and which could also adversely affect our operating results.
us to sell our products to customers and which could also adversely affect our operating results.
The fabrication of integrated circuits is highly complex and precise, and our manufacturing processes utilize a substantial
The fabrication of integrated circuits is highly complex and precise, and our manufacturing processes utilize a substantial
amount of technology. Minute impurities, contaminants in the manufacturing environment, difficulties in the fabrication
amount of technology. Minute impurities, contaminants in the manufacturing environment, difficulties in the fabrication
process, defects in the masks used in the wafer manufacturing process, manufacturing equipment failures, wafer breakage or
process, defects in the masks used in the wafer manufacturing process, manufacturing equipment failures, wafer breakage or
other factors can cause a substantial percentage of wafers to be rejected or numerous dice on each wafer to be nonfunctional.
other factors can cause a substantial percentage of wafers to be rejected or numerous dice on each wafer to be nonfunctional.
While we have significant expertise in semiconductor manufacturing, it is possible that some processes could become unstable.
While we have significant expertise in semiconductor manufacturing, it is possible that some processes could become unstable.
This instability could result in manufacturing delays and product shortages, which could have a material adverse effect on our
This instability could result in manufacturing delays and product shortages, which could have a material adverse effect on our
operating results.
operating results.
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Risk Related to Acquisitions and Strategic Transactions
Risk Related to Acquisitions and Strategic Transactions
Risks Related to Cyber, IP, Legal and Regulatory
Risks Related to Cyber, IP, Legal and Regulatory
Our acquisition of Maxim involves a number of risks that could adversely affect our business, financial condition and operating
Our acquisition of Maxim involves a number of risks that could adversely affect our business, financial condition and operating
results, and we may not realize the financial and strategic goals we anticipate.
results, and we may not realize the financial and strategic goals we anticipate.
Our computer systems and networks may be subject to attempted security breaches and other cybersecurity incidents and a
Our computer systems and networks may be subject to attempted security breaches and other cybersecurity incidents and a
significant disruption in, or breach in security of, our information technology systems or certain of our products could
significant disruption in, or breach in security of, our information technology systems or certain of our products could
In August 2021, we completed our acquisition of Maxim, which we refer to as the acquisition or the merger. The ultimate
In August 2021, we completed our acquisition of Maxim, which we refer to as the acquisition or the merger. The ultimate
success of the merger will depend on, among other things, the ability to continue to combine the two businesses in a manner
success of the merger will depend on, among other things, the ability to continue to combine the two businesses in a manner
that facilitates growth opportunities. Further, there are a large number of processes, policies, procedures, operations,
that facilitates growth opportunities. Further, there are a large number of processes, policies, procedures, operations,
technologies and systems that must continue to be integrated in connection with the ongoing integration of Maxim’s business.
technologies and systems that must continue to be integrated in connection with the ongoing integration of Maxim’s business.
The combined company has and may continue to incur ongoing restructuring, integration, and other costs associated with
The combined company has and may continue to incur ongoing restructuring, integration, and other costs associated with
combining the operations of the two companies in connection with the merger. It is possible that the ongoing integration
combining the operations of the two companies in connection with the merger. It is possible that the ongoing integration
process could result in the loss of customers, the disruption of ongoing businesses, inconsistencies in standards, controls,
process could result in the loss of customers, the disruption of ongoing businesses, inconsistencies in standards, controls,
procedures and policies, unexpected integration issues, higher than expected integration costs and an overall integration process
procedures and policies, unexpected integration issues, higher than expected integration costs and an overall integration process
that takes longer than originally anticipated and actual growth, if achieved, may be lower than what we expect and may take
that takes longer than originally anticipated and actual growth, if achieved, may be lower than what we expect and may take
longer to achieve than anticipated. There can be no assurances that the two businesses can be integrated successfully in a way
longer to achieve than anticipated. There can be no assurances that the two businesses can be integrated successfully in a way
that maximizes the combined business to the fullest extent. If we are not able to successfully achieve our objectives, the benefits
that maximizes the combined business to the fullest extent. If we are not able to successfully achieve our objectives, the benefits
of the merger may not be fully realized or may take longer to achieve than expected.
of the merger may not be fully realized or may take longer to achieve than expected.
To remain competitive, we may need to invest in or acquire other companies, purchase or license technology from third parties,
To remain competitive, we may need to invest in or acquire other companies, purchase or license technology from third parties,
or enter into other strategic transactions in order to introduce new products or enhance our existing products.
or enter into other strategic transactions in order to introduce new products or enhance our existing products.
An element of our business strategy involves expansion through the acquisitions of businesses, assets, products or
An element of our business strategy involves expansion through the acquisitions of businesses, assets, products or
technologies that allow us to complement our existing product offerings, diversify our product portfolio, expand our market
technologies that allow us to complement our existing product offerings, diversify our product portfolio, expand our market
coverage, increase our engineering workforce, expand our technical skill sets or enhance our technological capabilities. We may
coverage, increase our engineering workforce, expand our technical skill sets or enhance our technological capabilities. We may
not be able to find businesses that have the technology or resources we need and, if we find such businesses, we may not be
not be able to find businesses that have the technology or resources we need and, if we find such businesses, we may not be
able to invest in, purchase or license the technology or resources on commercially favorable terms or at all. Acquisitions,
able to invest in, purchase or license the technology or resources on commercially favorable terms or at all. Acquisitions,
investments and technology licenses are challenging to complete for a number of reasons, including difficulties in identifying
investments and technology licenses are challenging to complete for a number of reasons, including difficulties in identifying
potential targets, the cost of potential transactions, competition among prospective buyers and licensees, the need for regulatory
potential targets, the cost of potential transactions, competition among prospective buyers and licensees, the need for regulatory
approvals, and difficulties related to integration efforts. In addition, investments in companies are subject to a risk of a partial or
approvals, and difficulties related to integration efforts. In addition, investments in companies are subject to a risk of a partial or
total loss of our investment. Both in the U.S. and abroad, governmental regulation of acquisitions, including antitrust and other
total loss of our investment. Both in the U.S. and abroad, governmental regulation of acquisitions, including antitrust and other
regulatory reviews and approvals, has become more complex, increasing the costs and risks of undertaking and consummating
regulatory reviews and approvals, has become more complex, increasing the costs and risks of undertaking and consummating
significant acquisitions. In order to finance a potential transaction, we may need to raise additional funds by issuing securities
significant acquisitions. In order to finance a potential transaction, we may need to raise additional funds by issuing securities
or borrowing money. We may not be able to obtain financing on favorable terms, and the sale of our stock may result in the
or borrowing money. We may not be able to obtain financing on favorable terms, and the sale of our stock may result in the
dilution of our existing shareholders or the issuance of securities with rights that are superior to the rights of our common
dilution of our existing shareholders or the issuance of securities with rights that are superior to the rights of our common
shareholders.
shareholders.
Acquisitions also involve a number of challenges and risks, including:
Acquisitions also involve a number of challenges and risks, including:
diversion of management’s attention in connection with both negotiating the transaction and integrating the acquired
diversion of management’s attention in connection with both negotiating the transaction and integrating the acquired
assets and businesses;
assets and businesses;
difficulty or delay integrating acquired technologies, operations, systems and infrastructure, and personnel with our
difficulty or delay integrating acquired technologies, operations, systems and infrastructure, and personnel with our
existing businesses;
existing businesses;
strain on managerial and operational resources as management tries to oversee larger or more complex operations;
strain on managerial and operational resources as management tries to oversee larger or more complex operations;
the future funding requirements for acquired companies, including research and development costs, employee
the future funding requirements for acquired companies, including research and development costs, employee
compensation and benefits, and operating expenses, which may be significant;
compensation and benefits, and operating expenses, which may be significant;
servicing significant debt that may be incurred in connection with acquisitions;
servicing significant debt that may be incurred in connection with acquisitions;
potential loss of key employees;
potential loss of key employees;
exposure to unforeseen liabilities or regulatory compliance issues of acquired companies;
exposure to unforeseen liabilities or regulatory compliance issues of acquired companies;
higher than expected or unexpected costs relating to or associated with an acquisition and related integration of assets
higher than expected or unexpected costs relating to or associated with an acquisition and related integration of assets
and businesses;
and businesses;
difficulty realizing expected cost savings, operating synergies and growth prospects of an acquisition in a timely
difficulty realizing expected cost savings, operating synergies and growth prospects of an acquisition in a timely
manner or at all; and
manner or at all; and
increased risk of costly and time-consuming legal proceedings.
increased risk of costly and time-consuming legal proceedings.
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If we are unable to successfully address these risks, we may not realize some or all of the expected benefits of our acquisitions,
If we are unable to successfully address these risks, we may not realize some or all of the expected benefits of our acquisitions,
which may have an adverse effect on our business strategy, plans and operating results.
which may have an adverse effect on our business strategy, plans and operating results.
materially and adversely affect our business or reputation.
materially and adversely affect our business or reputation.
We rely on information technology systems throughout our company to keep financial records and customer data,
We rely on information technology systems throughout our company to keep financial records and customer data,
process orders, manage inventory, coordinate shipments to customers, maintain confidential and proprietary information, assist
process orders, manage inventory, coordinate shipments to customers, maintain confidential and proprietary information, assist
in semiconductor engineering and other technical activities and operate other critical functions such as Internet connectivity,
in semiconductor engineering and other technical activities and operate other critical functions such as Internet connectivity,
network communications and email. Our information technology systems may be susceptible to damage, disruptions or
network communications and email. Our information technology systems may be susceptible to damage, disruptions or
shutdowns due to power outages, hardware failures, telecommunication failures, employee malfeasance, user errors,
shutdowns due to power outages, hardware failures, telecommunication failures, employee malfeasance, user errors,
catastrophes or other unforeseen events. Since the beginning of the COVID-19 pandemic, some of our employees have been
catastrophes or other unforeseen events. Since the beginning of the COVID-19 pandemic, some of our employees have been
working remotely, which may pose additional data security risks. We also rely upon external cloud providers for certain
working remotely, which may pose additional data security risks. We also rely upon external cloud providers for certain
infrastructure activities. If we were to experience a prolonged disruption in the information technology systems that involve our
infrastructure activities. If we were to experience a prolonged disruption in the information technology systems that involve our
internal communications or our interactions with customers or suppliers, it could result in the loss of sales and customers and
internal communications or our interactions with customers or suppliers, it could result in the loss of sales and customers and
significant incremental costs, which could adversely affect our business.
significant incremental costs, which could adversely affect our business.
We may also be subject to security breaches of our information technology systems and certain of our products caused
We may also be subject to security breaches of our information technology systems and certain of our products caused
by viruses, illegal break-ins or hacking, sabotage, other cyber attacks, or acts of vandalism by third parties or our employees or
by viruses, illegal break-ins or hacking, sabotage, other cyber attacks, or acts of vandalism by third parties or our employees or
contractors. Further, geopolitical tensions or conflicts, such as the ongoing conflict between Russia and Ukraine, may create a
contractors. Further, geopolitical tensions or conflicts, such as the ongoing conflict between Russia and Ukraine, may create a
heightened risk of cyber attacks, which could result in significant losses and damage and, could damage our reputation with
heightened risk of cyber attacks, which could result in significant losses and damage and, could damage our reputation with
customers and suppliers if the confidential information of our customers, suppliers, employees or contractors is compromised.
customers and suppliers if the confidential information of our customers, suppliers, employees or contractors is compromised.
Our security measures or those of our third-party service providers may not detect or prevent security breaches, cyber attacks,
Our security measures or those of our third-party service providers may not detect or prevent security breaches, cyber attacks,
defects, bugs or errors.
defects, bugs or errors.
In addition, we provide our confidential and proprietary information to our strategic partners in certain cases where doing
In addition, we provide our confidential and proprietary information to our strategic partners in certain cases where doing
so is necessary to conduct our business. Those third parties may be subject to security breaches or otherwise compromise the
so is necessary to conduct our business. Those third parties may be subject to security breaches or otherwise compromise the
protection of such information. Security breaches of our information technology systems or those of our partners could result in
protection of such information. Security breaches of our information technology systems or those of our partners could result in
the misappropriation, loss or unauthorized disclosure of confidential and proprietary information belonging to us or to our
the misappropriation, loss or unauthorized disclosure of confidential and proprietary information belonging to us or to our
employees, contractors, partners, customers, suppliers, or other third parties, system disruptions or denial of service, which
employees, contractors, partners, customers, suppliers, or other third parties, system disruptions or denial of service, which
could result in our suffering significant financial or reputational damage.
could result in our suffering significant financial or reputational damage.
In the event of such breaches, we could be exposed to potential liability, litigation, and regulatory action, as well as the
In the event of such breaches, we could be exposed to potential liability, litigation, and regulatory action, as well as the
loss of existing or potential customers, damage to our reputation, and other financial loss. In addition, the cost and operational
loss of existing or potential customers, damage to our reputation, and other financial loss. In addition, the cost and operational
consequences of responding to breaches and implementing remediation measures could be significant.
consequences of responding to breaches and implementing remediation measures could be significant.
We may be unable to adequately protect our proprietary intellectual property rights, which may limit our ability to compete
We may be unable to adequately protect our proprietary intellectual property rights, which may limit our ability to compete
effectively.
effectively.
Our future success depends, in part, on our ability to protect our intellectual property. We primarily rely on patent, mask
Our future success depends, in part, on our ability to protect our intellectual property. We primarily rely on patent, mask
work, copyright, trademark and trade secret laws, as well as nondisclosure agreements, information security practices, and other
work, copyright, trademark and trade secret laws, as well as nondisclosure agreements, information security practices, and other
methods, to protect our proprietary information, technologies and processes. Despite our efforts to protect our intellectual
methods, to protect our proprietary information, technologies and processes. Despite our efforts to protect our intellectual
property, it is possible that competitors or other unauthorized third parties may obtain or disclose our confidential information,
property, it is possible that competitors or other unauthorized third parties may obtain or disclose our confidential information,
reverse engineer or copy our technologies, products or processes, make unlicensed copies or engage in unapproved distributions
reverse engineer or copy our technologies, products or processes, make unlicensed copies or engage in unapproved distributions
of our technology for unauthorized uses, or otherwise misappropriate our intellectual property. Moreover, the laws of foreign
of our technology for unauthorized uses, or otherwise misappropriate our intellectual property. Moreover, the laws of foreign
countries in which we design, manufacture, market and sell our products may afford little or no effective protection of our
countries in which we design, manufacture, market and sell our products may afford little or no effective protection of our
intellectual property.
intellectual property.
There can be no assurance that the claims allowed in our issued patents will be sufficiently broad to protect our
There can be no assurance that the claims allowed in our issued patents will be sufficiently broad to protect our
technology. In addition, any of our existing or future patents may be challenged, invalidated or circumvented. As such, any
technology. In addition, any of our existing or future patents may be challenged, invalidated or circumvented. As such, any
rights granted under these patents may not prevent others from exploiting our proprietary technology. We may not be able to
rights granted under these patents may not prevent others from exploiting our proprietary technology. We may not be able to
obtain foreign patents or pending applications corresponding to our U.S. patents and applications. Even if patents are granted,
obtain foreign patents or pending applications corresponding to our U.S. patents and applications. Even if patents are granted,
we may not be able to effectively enforce our rights. If our patents and mask works do not adequately protect our technology, or
we may not be able to effectively enforce our rights. If our patents and mask works do not adequately protect our technology, or
if our registrations expire prior to end of life of our products, our competitors may be able to offer products similar to ours. Our
if our registrations expire prior to end of life of our products, our competitors may be able to offer products similar to ours. Our
competitors may also be able to develop similar technology independently or design around our patents.
competitors may also be able to develop similar technology independently or design around our patents.
We generally enter into confidentiality agreements with our employees, consultants and strategic partners. We also try to
We generally enter into confidentiality agreements with our employees, consultants and strategic partners. We also try to
control access to and distribution of our technologies, documentation and other proprietary information. Despite these efforts,
control access to and distribution of our technologies, documentation and other proprietary information. Despite these efforts,
internal or external parties may attempt to copy, disclose, obtain or use our products or technology without our authorization.
internal or external parties may attempt to copy, disclose, obtain or use our products or technology without our authorization.
Also, former employees may seek employment with our business partners, customers or competitors, and may improperly use
Also, former employees may seek employment with our business partners, customers or competitors, and may improperly use
our proprietary information at their employer.
our proprietary information at their employer.
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Risk Related to Acquisitions and Strategic Transactions
Risk Related to Acquisitions and Strategic Transactions
Risks Related to Cyber, IP, Legal and Regulatory
Risks Related to Cyber, IP, Legal and Regulatory
Our acquisition of Maxim involves a number of risks that could adversely affect our business, financial condition and operating
Our acquisition of Maxim involves a number of risks that could adversely affect our business, financial condition and operating
results, and we may not realize the financial and strategic goals we anticipate.
results, and we may not realize the financial and strategic goals we anticipate.
In August 2021, we completed our acquisition of Maxim, which we refer to as the acquisition or the merger. The ultimate
In August 2021, we completed our acquisition of Maxim, which we refer to as the acquisition or the merger. The ultimate
success of the merger will depend on, among other things, the ability to continue to combine the two businesses in a manner
success of the merger will depend on, among other things, the ability to continue to combine the two businesses in a manner
that facilitates growth opportunities. Further, there are a large number of processes, policies, procedures, operations,
that facilitates growth opportunities. Further, there are a large number of processes, policies, procedures, operations,
technologies and systems that must continue to be integrated in connection with the ongoing integration of Maxim’s business.
technologies and systems that must continue to be integrated in connection with the ongoing integration of Maxim’s business.
The combined company has and may continue to incur ongoing restructuring, integration, and other costs associated with
The combined company has and may continue to incur ongoing restructuring, integration, and other costs associated with
combining the operations of the two companies in connection with the merger. It is possible that the ongoing integration
combining the operations of the two companies in connection with the merger. It is possible that the ongoing integration
process could result in the loss of customers, the disruption of ongoing businesses, inconsistencies in standards, controls,
process could result in the loss of customers, the disruption of ongoing businesses, inconsistencies in standards, controls,
procedures and policies, unexpected integration issues, higher than expected integration costs and an overall integration process
procedures and policies, unexpected integration issues, higher than expected integration costs and an overall integration process
that takes longer than originally anticipated and actual growth, if achieved, may be lower than what we expect and may take
that takes longer than originally anticipated and actual growth, if achieved, may be lower than what we expect and may take
longer to achieve than anticipated. There can be no assurances that the two businesses can be integrated successfully in a way
longer to achieve than anticipated. There can be no assurances that the two businesses can be integrated successfully in a way
that maximizes the combined business to the fullest extent. If we are not able to successfully achieve our objectives, the benefits
that maximizes the combined business to the fullest extent. If we are not able to successfully achieve our objectives, the benefits
of the merger may not be fully realized or may take longer to achieve than expected.
of the merger may not be fully realized or may take longer to achieve than expected.
To remain competitive, we may need to invest in or acquire other companies, purchase or license technology from third parties,
To remain competitive, we may need to invest in or acquire other companies, purchase or license technology from third parties,
or enter into other strategic transactions in order to introduce new products or enhance our existing products.
or enter into other strategic transactions in order to introduce new products or enhance our existing products.
An element of our business strategy involves expansion through the acquisitions of businesses, assets, products or
An element of our business strategy involves expansion through the acquisitions of businesses, assets, products or
technologies that allow us to complement our existing product offerings, diversify our product portfolio, expand our market
technologies that allow us to complement our existing product offerings, diversify our product portfolio, expand our market
coverage, increase our engineering workforce, expand our technical skill sets or enhance our technological capabilities. We may
coverage, increase our engineering workforce, expand our technical skill sets or enhance our technological capabilities. We may
not be able to find businesses that have the technology or resources we need and, if we find such businesses, we may not be
not be able to find businesses that have the technology or resources we need and, if we find such businesses, we may not be
able to invest in, purchase or license the technology or resources on commercially favorable terms or at all. Acquisitions,
able to invest in, purchase or license the technology or resources on commercially favorable terms or at all. Acquisitions,
investments and technology licenses are challenging to complete for a number of reasons, including difficulties in identifying
investments and technology licenses are challenging to complete for a number of reasons, including difficulties in identifying
potential targets, the cost of potential transactions, competition among prospective buyers and licensees, the need for regulatory
potential targets, the cost of potential transactions, competition among prospective buyers and licensees, the need for regulatory
approvals, and difficulties related to integration efforts. In addition, investments in companies are subject to a risk of a partial or
approvals, and difficulties related to integration efforts. In addition, investments in companies are subject to a risk of a partial or
total loss of our investment. Both in the U.S. and abroad, governmental regulation of acquisitions, including antitrust and other
total loss of our investment. Both in the U.S. and abroad, governmental regulation of acquisitions, including antitrust and other
regulatory reviews and approvals, has become more complex, increasing the costs and risks of undertaking and consummating
regulatory reviews and approvals, has become more complex, increasing the costs and risks of undertaking and consummating
significant acquisitions. In order to finance a potential transaction, we may need to raise additional funds by issuing securities
significant acquisitions. In order to finance a potential transaction, we may need to raise additional funds by issuing securities
or borrowing money. We may not be able to obtain financing on favorable terms, and the sale of our stock may result in the
or borrowing money. We may not be able to obtain financing on favorable terms, and the sale of our stock may result in the
dilution of our existing shareholders or the issuance of securities with rights that are superior to the rights of our common
dilution of our existing shareholders or the issuance of securities with rights that are superior to the rights of our common
shareholders.
shareholders.
Acquisitions also involve a number of challenges and risks, including:
Acquisitions also involve a number of challenges and risks, including:
diversion of management’s attention in connection with both negotiating the transaction and integrating the acquired
diversion of management’s attention in connection with both negotiating the transaction and integrating the acquired
assets and businesses;
assets and businesses;
existing businesses;
existing businesses;
difficulty or delay integrating acquired technologies, operations, systems and infrastructure, and personnel with our
difficulty or delay integrating acquired technologies, operations, systems and infrastructure, and personnel with our
strain on managerial and operational resources as management tries to oversee larger or more complex operations;
strain on managerial and operational resources as management tries to oversee larger or more complex operations;
the future funding requirements for acquired companies, including research and development costs, employee
the future funding requirements for acquired companies, including research and development costs, employee
compensation and benefits, and operating expenses, which may be significant;
compensation and benefits, and operating expenses, which may be significant;
servicing significant debt that may be incurred in connection with acquisitions;
servicing significant debt that may be incurred in connection with acquisitions;
potential loss of key employees;
potential loss of key employees;
exposure to unforeseen liabilities or regulatory compliance issues of acquired companies;
exposure to unforeseen liabilities or regulatory compliance issues of acquired companies;
higher than expected or unexpected costs relating to or associated with an acquisition and related integration of assets
higher than expected or unexpected costs relating to or associated with an acquisition and related integration of assets
and businesses;
and businesses;
manner or at all; and
manner or at all; and
difficulty realizing expected cost savings, operating synergies and growth prospects of an acquisition in a timely
difficulty realizing expected cost savings, operating synergies and growth prospects of an acquisition in a timely
increased risk of costly and time-consuming legal proceedings.
increased risk of costly and time-consuming legal proceedings.
If we are unable to successfully address these risks, we may not realize some or all of the expected benefits of our acquisitions,
If we are unable to successfully address these risks, we may not realize some or all of the expected benefits of our acquisitions,
which may have an adverse effect on our business strategy, plans and operating results.
which may have an adverse effect on our business strategy, plans and operating results.
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Our computer systems and networks may be subject to attempted security breaches and other cybersecurity incidents and a
Our computer systems and networks may be subject to attempted security breaches and other cybersecurity incidents and a
significant disruption in, or breach in security of, our information technology systems or certain of our products could
significant disruption in, or breach in security of, our information technology systems or certain of our products could
materially and adversely affect our business or reputation.
materially and adversely affect our business or reputation.
We rely on information technology systems throughout our company to keep financial records and customer data,
We rely on information technology systems throughout our company to keep financial records and customer data,
process orders, manage inventory, coordinate shipments to customers, maintain confidential and proprietary information, assist
process orders, manage inventory, coordinate shipments to customers, maintain confidential and proprietary information, assist
in semiconductor engineering and other technical activities and operate other critical functions such as Internet connectivity,
in semiconductor engineering and other technical activities and operate other critical functions such as Internet connectivity,
network communications and email. Our information technology systems may be susceptible to damage, disruptions or
network communications and email. Our information technology systems may be susceptible to damage, disruptions or
shutdowns due to power outages, hardware failures, telecommunication failures, employee malfeasance, user errors,
shutdowns due to power outages, hardware failures, telecommunication failures, employee malfeasance, user errors,
catastrophes or other unforeseen events. Since the beginning of the COVID-19 pandemic, some of our employees have been
catastrophes or other unforeseen events. Since the beginning of the COVID-19 pandemic, some of our employees have been
working remotely, which may pose additional data security risks. We also rely upon external cloud providers for certain
working remotely, which may pose additional data security risks. We also rely upon external cloud providers for certain
infrastructure activities. If we were to experience a prolonged disruption in the information technology systems that involve our
infrastructure activities. If we were to experience a prolonged disruption in the information technology systems that involve our
internal communications or our interactions with customers or suppliers, it could result in the loss of sales and customers and
internal communications or our interactions with customers or suppliers, it could result in the loss of sales and customers and
significant incremental costs, which could adversely affect our business.
significant incremental costs, which could adversely affect our business.
We may also be subject to security breaches of our information technology systems and certain of our products caused
We may also be subject to security breaches of our information technology systems and certain of our products caused
by viruses, illegal break-ins or hacking, sabotage, other cyber attacks, or acts of vandalism by third parties or our employees or
by viruses, illegal break-ins or hacking, sabotage, other cyber attacks, or acts of vandalism by third parties or our employees or
contractors. Further, geopolitical tensions or conflicts, such as the ongoing conflict between Russia and Ukraine, may create a
contractors. Further, geopolitical tensions or conflicts, such as the ongoing conflict between Russia and Ukraine, may create a
heightened risk of cyber attacks, which could result in significant losses and damage and, could damage our reputation with
heightened risk of cyber attacks, which could result in significant losses and damage and, could damage our reputation with
customers and suppliers if the confidential information of our customers, suppliers, employees or contractors is compromised.
customers and suppliers if the confidential information of our customers, suppliers, employees or contractors is compromised.
Our security measures or those of our third-party service providers may not detect or prevent security breaches, cyber attacks,
Our security measures or those of our third-party service providers may not detect or prevent security breaches, cyber attacks,
defects, bugs or errors.
defects, bugs or errors.
In addition, we provide our confidential and proprietary information to our strategic partners in certain cases where doing
In addition, we provide our confidential and proprietary information to our strategic partners in certain cases where doing
so is necessary to conduct our business. Those third parties may be subject to security breaches or otherwise compromise the
so is necessary to conduct our business. Those third parties may be subject to security breaches or otherwise compromise the
protection of such information. Security breaches of our information technology systems or those of our partners could result in
protection of such information. Security breaches of our information technology systems or those of our partners could result in
the misappropriation, loss or unauthorized disclosure of confidential and proprietary information belonging to us or to our
the misappropriation, loss or unauthorized disclosure of confidential and proprietary information belonging to us or to our
employees, contractors, partners, customers, suppliers, or other third parties, system disruptions or denial of service, which
employees, contractors, partners, customers, suppliers, or other third parties, system disruptions or denial of service, which
could result in our suffering significant financial or reputational damage.
could result in our suffering significant financial or reputational damage.
In the event of such breaches, we could be exposed to potential liability, litigation, and regulatory action, as well as the
In the event of such breaches, we could be exposed to potential liability, litigation, and regulatory action, as well as the
loss of existing or potential customers, damage to our reputation, and other financial loss. In addition, the cost and operational
loss of existing or potential customers, damage to our reputation, and other financial loss. In addition, the cost and operational
consequences of responding to breaches and implementing remediation measures could be significant.
consequences of responding to breaches and implementing remediation measures could be significant.
We may be unable to adequately protect our proprietary intellectual property rights, which may limit our ability to compete
We may be unable to adequately protect our proprietary intellectual property rights, which may limit our ability to compete
effectively.
effectively.
Our future success depends, in part, on our ability to protect our intellectual property. We primarily rely on patent, mask
Our future success depends, in part, on our ability to protect our intellectual property. We primarily rely on patent, mask
work, copyright, trademark and trade secret laws, as well as nondisclosure agreements, information security practices, and other
work, copyright, trademark and trade secret laws, as well as nondisclosure agreements, information security practices, and other
methods, to protect our proprietary information, technologies and processes. Despite our efforts to protect our intellectual
methods, to protect our proprietary information, technologies and processes. Despite our efforts to protect our intellectual
property, it is possible that competitors or other unauthorized third parties may obtain or disclose our confidential information,
property, it is possible that competitors or other unauthorized third parties may obtain or disclose our confidential information,
reverse engineer or copy our technologies, products or processes, make unlicensed copies or engage in unapproved distributions
reverse engineer or copy our technologies, products or processes, make unlicensed copies or engage in unapproved distributions
of our technology for unauthorized uses, or otherwise misappropriate our intellectual property. Moreover, the laws of foreign
of our technology for unauthorized uses, or otherwise misappropriate our intellectual property. Moreover, the laws of foreign
countries in which we design, manufacture, market and sell our products may afford little or no effective protection of our
countries in which we design, manufacture, market and sell our products may afford little or no effective protection of our
intellectual property.
intellectual property.
There can be no assurance that the claims allowed in our issued patents will be sufficiently broad to protect our
There can be no assurance that the claims allowed in our issued patents will be sufficiently broad to protect our
technology. In addition, any of our existing or future patents may be challenged, invalidated or circumvented. As such, any
technology. In addition, any of our existing or future patents may be challenged, invalidated or circumvented. As such, any
rights granted under these patents may not prevent others from exploiting our proprietary technology. We may not be able to
rights granted under these patents may not prevent others from exploiting our proprietary technology. We may not be able to
obtain foreign patents or pending applications corresponding to our U.S. patents and applications. Even if patents are granted,
obtain foreign patents or pending applications corresponding to our U.S. patents and applications. Even if patents are granted,
we may not be able to effectively enforce our rights. If our patents and mask works do not adequately protect our technology, or
we may not be able to effectively enforce our rights. If our patents and mask works do not adequately protect our technology, or
if our registrations expire prior to end of life of our products, our competitors may be able to offer products similar to ours. Our
if our registrations expire prior to end of life of our products, our competitors may be able to offer products similar to ours. Our
competitors may also be able to develop similar technology independently or design around our patents.
competitors may also be able to develop similar technology independently or design around our patents.
We generally enter into confidentiality agreements with our employees, consultants and strategic partners. We also try to
We generally enter into confidentiality agreements with our employees, consultants and strategic partners. We also try to
control access to and distribution of our technologies, documentation and other proprietary information. Despite these efforts,
control access to and distribution of our technologies, documentation and other proprietary information. Despite these efforts,
internal or external parties may attempt to copy, disclose, obtain or use our products or technology without our authorization.
internal or external parties may attempt to copy, disclose, obtain or use our products or technology without our authorization.
Also, former employees may seek employment with our business partners, customers or competitors, and may improperly use
Also, former employees may seek employment with our business partners, customers or competitors, and may improperly use
our proprietary information at their employer.
our proprietary information at their employer.
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If we fail to comply with U.S. and foreign laws related to privacy, data security, and data protection, it could adversely affect
If we fail to comply with U.S. and foreign laws related to privacy, data security, and data protection, it could adversely affect
our operating results and financial condition.
our operating results and financial condition.
We are or may become subject to a variety of laws and regulations such as the European Union’s General Data
We are or may become subject to a variety of laws and regulations such as the European Union’s General Data
Protection Regulation (the “GDPR”), China’s Personal Information Protection Law (the “PIPL”), or California’s Consumer
Protection Regulation (the “GDPR”), China’s Personal Information Protection Law (the “PIPL”), or California’s Consumer
Privacy Act (the “CCPA”) regarding privacy, data protection, and data security. These laws and regulations are continuously
Privacy Act (the “CCPA”) regarding privacy, data protection, and data security. These laws and regulations are continuously
evolving and developing. The scope and interpretation of the laws that are or may be applicable to us are often uncertain and
evolving and developing. The scope and interpretation of the laws that are or may be applicable to us are often uncertain and
may be conflicting, particularly with respect to foreign laws.
may be conflicting, particularly with respect to foreign laws.
In particular, there are numerous U.S. federal, state, and local laws and regulations and foreign laws and regulations
In particular, there are numerous U.S. federal, state, and local laws and regulations and foreign laws and regulations
regarding privacy and the collection, sharing, use, processing, disclosure, and protection of personal data. Such laws and
regarding privacy and the collection, sharing, use, processing, disclosure, and protection of personal data. Such laws and
regulations often vary in scope, may be subject to differing interpretations, and may be inconsistent among different
regulations often vary in scope, may be subject to differing interpretations, and may be inconsistent among different
jurisdictions. For example, the GDPR includes operational requirements for companies that receive or process personal data of
jurisdictions. For example, the GDPR includes operational requirements for companies that receive or process personal data of
residents of the European Union that are broader and more stringent than those in many other jurisdictions around the world.
residents of the European Union that are broader and more stringent than those in many other jurisdictions around the world.
The GDPR includes significant penalties for non-compliance, and China’s PIPL imposes additional operational requirements
The GDPR includes significant penalties for non-compliance, and China’s PIPL imposes additional operational requirements
relating to processing personal information and provides compressive penalty and enforcement mechanisms. Most notably, in
relating to processing personal information and provides compressive penalty and enforcement mechanisms. Most notably, in
the United States, California enacted the CCPA that requires covered companies to provide additional disclosures and data
the United States, California enacted the CCPA that requires covered companies to provide additional disclosures and data
rights to data subjects. The CCPA went into effect on January 1, 2020. The California Privacy Rights Act (“CPRA”) passed by
rights to data subjects. The CCPA went into effect on January 1, 2020. The California Privacy Rights Act (“CPRA”) passed by
voters in November 2020 will expand the CCPA when the regulations become fully operative on January 1, 2023. The CPRA
voters in November 2020 will expand the CCPA when the regulations become fully operative on January 1, 2023. The CPRA
establishes the California Privacy Protection Agency to enforce Californians’ privacy rights under the CCPA. Since the CCPA
establishes the California Privacy Protection Agency to enforce Californians’ privacy rights under the CCPA. Since the CCPA
was enacted, other states, including Virginia and Colorado, have enacted comprehensive privacy schemes.
was enacted, other states, including Virginia and Colorado, have enacted comprehensive privacy schemes.
The costs of compliance with, and other burdens imposed by, the GDPR, CCPA, and similar laws may limit the use and
The costs of compliance with, and other burdens imposed by, the GDPR, CCPA, and similar laws may limit the use and
adoption of our products and services and/or require us to incur substantial compliance costs, which could have an adverse
adoption of our products and services and/or require us to incur substantial compliance costs, which could have an adverse
impact on our business. Further, our product offerings in the digital healthcare solutions space which include the collection and
impact on our business. Further, our product offerings in the digital healthcare solutions space which include the collection and
processing of sensitive personal information subject us to heightened requirements under data privacy laws.
processing of sensitive personal information subject us to heightened requirements under data privacy laws.
Given that the scope, interpretation, and application of these laws and regulations are often uncertain and may be in
Given that the scope, interpretation, and application of these laws and regulations are often uncertain and may be in
transportation, emission, discharge, storage and disposal of certain substances and materials used or produced in the
transportation, emission, discharge, storage and disposal of certain substances and materials used or produced in the
conflict across jurisdictions, it is possible that these obligations may be interpreted and applied in a manner that is inconsistent
conflict across jurisdictions, it is possible that these obligations may be interpreted and applied in a manner that is inconsistent
from one jurisdiction to another and may conflict with other rules or our practices. Any failure or perceived failure by us or
from one jurisdiction to another and may conflict with other rules or our practices. Any failure or perceived failure by us or
third party service providers to comply with our privacy or security policies or privacy-related legal obligations, or any
third party service providers to comply with our privacy or security policies or privacy-related legal obligations, or any
compromise of security that results in the unauthorized release or transfer of personal data, may result in governmental
compromise of security that results in the unauthorized release or transfer of personal data, may result in governmental
enforcement actions, litigation, or negative publicity, and could have an adverse effect on our operating results and financial
enforcement actions, litigation, or negative publicity, and could have an adverse effect on our operating results and financial
condition.
condition.
We are occasionally involved in litigation, administrative proceedings, and regulatory proceedings, which could be costly to
We are occasionally involved in litigation, administrative proceedings, and regulatory proceedings, which could be costly to
resolve and could require us to redesign products, pay significant royalties or fines, or refrain from engaging in specific
resolve and could require us to redesign products, pay significant royalties or fines, or refrain from engaging in specific
conduct.
conduct.
From time to time, we are involved in various legal, administrative and regulatory proceedings, claims, demands and
From time to time, we are involved in various legal, administrative and regulatory proceedings, claims, demands and
investigations relating to our business, including inquiries from and discussions with government entities regarding the
investigations relating to our business, including inquiries from and discussions with government entities regarding the
compliance of our contracting and sales practices with laws and regulations which may result in claims with respect to
compliance of our contracting and sales practices with laws and regulations which may result in claims with respect to
commercial, product liability, intellectual property, cybersecurity, privacy, data protection, antitrust, breach of contract,
commercial, product liability, intellectual property, cybersecurity, privacy, data protection, antitrust, breach of contract,
employment, class action, whistleblower, mergers and acquisitions and other matters. We could also be subject to litigation or
employment, class action, whistleblower, mergers and acquisitions and other matters. We could also be subject to litigation or
arbitration disputes arising under our contractual obligations, customer indemnity, warranty or product liability claims, or other
arbitration disputes arising under our contractual obligations, customer indemnity, warranty or product liability claims, or other
matters that could lead to significant costs and expenses as we defend those claims or pay damage awards. For example, in
matters that could lead to significant costs and expenses as we defend those claims or pay damage awards. For example, in
March 2022, a putative class action was filed in the Court of Chancery of the State of Delaware against us and the former
March 2022, a putative class action was filed in the Court of Chancery of the State of Delaware against us and the former
directors of Maxim as described in Part I, Item 3, “Legal Proceedings.”
directors of Maxim as described in Part I, Item 3, “Legal Proceedings.”
Further, the semiconductor industry is characterized by frequent claims and litigation involving patent and other
Further, the semiconductor industry is characterized by frequent claims and litigation involving patent and other
intellectual property rights. Other companies or individuals have obtained patents covering a variety of semiconductor designs
intellectual property rights. Other companies or individuals have obtained patents covering a variety of semiconductor designs
and processes, and we might be required to obtain licenses under some of these patents or be precluded from making and selling
and processes, and we might be required to obtain licenses under some of these patents or be precluded from making and selling
infringing products, if those patents are found to be valid and infringed by us. In the event a third party makes a valid
infringing products, if those patents are found to be valid and infringed by us. In the event a third party makes a valid
intellectual property claim against us and a license is not available to us on commercially reasonable terms, or at all, we could
intellectual property claim against us and a license is not available to us on commercially reasonable terms, or at all, we could
be forced either to redesign or to stop production of products incorporating that intellectual property, and our operating results
be forced either to redesign or to stop production of products incorporating that intellectual property, and our operating results
could be materially and adversely affected. Litigation may be necessary to enforce our patents or other of our intellectual
could be materially and adversely affected. Litigation may be necessary to enforce our patents or other of our intellectual
property rights or to defend us against claims of infringement.
property rights or to defend us against claims of infringement.
These matters can be time-consuming, divert management’s attention and resources and cause us to incur significant
These matters can be time-consuming, divert management’s attention and resources and cause us to incur significant
expenses. Allegations made in the course of regulatory or legal proceedings may also harm our reputation, regardless of
expenses. Allegations made in the course of regulatory or legal proceedings may also harm our reputation, regardless of
whether there is merit to such claims. Because litigation and the outcome of regulatory proceedings are inherently
whether there is merit to such claims. Because litigation and the outcome of regulatory proceedings are inherently
unpredictable, our business, financial condition or operating results could be materially affected by an unfavorable resolution of
unpredictable, our business, financial condition or operating results could be materially affected by an unfavorable resolution of
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one or more of these proceedings, claims, demands or investigations. There can be no assurance that we are adequately insured
one or more of these proceedings, claims, demands or investigations. There can be no assurance that we are adequately insured
to protect against all claims and potential liabilities, and we may elect to self-insure with respect to certain matters. An adverse
to protect against all claims and potential liabilities, and we may elect to self-insure with respect to certain matters. An adverse
outcome in litigation or arbitration could have a material adverse effect on our financial position or on our operating results or
outcome in litigation or arbitration could have a material adverse effect on our financial position or on our operating results or
cash flows in the period in which the dispute is resolved.
cash flows in the period in which the dispute is resolved.
Environmental, social and governance (ESG) matters may have an adverse effect on our business, financial condition and
Environmental, social and governance (ESG) matters may have an adverse effect on our business, financial condition and
results of operations, and damage our brand and reputation.
results of operations, and damage our brand and reputation.
There is an increasing focus from investors, customers, employees and potential talent, as well as other stakeholders
There is an increasing focus from investors, customers, employees and potential talent, as well as other stakeholders
concerning ESG matters, including climate change and sustainability, human rights, support for local communities, Board of
concerning ESG matters, including climate change and sustainability, human rights, support for local communities, Board of
Directors and employee diversity, human capital management, employee health and safety practices, product quality, supply
Directors and employee diversity, human capital management, employee health and safety practices, product quality, supply
chain management, and corporate governance and transparency. Current and prospective investors are increasingly utilizing
chain management, and corporate governance and transparency. Current and prospective investors are increasingly utilizing
ESG data to inform their decisions, including investment and voting, using a multitude of evolving score and rating
ESG data to inform their decisions, including investment and voting, using a multitude of evolving score and rating
frameworks. Further, customers are also utilizing ESG data to inform their purchasing decisions. Additionally, public interest
frameworks. Further, customers are also utilizing ESG data to inform their purchasing decisions. Additionally, public interest
and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet the
and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet the
expectations of investors, customers, employees or other stakeholders’ evolving standards, our reputation, brand and employee
expectations of investors, customers, employees or other stakeholders’ evolving standards, our reputation, brand and employee
retention may be negatively impacted, and our customers and suppliers may be unwilling to continue to do business with us.
retention may be negatively impacted, and our customers and suppliers may be unwilling to continue to do business with us.
Additionally, there is increasing legislation globally which will require us to align programs to their expectations and disclose
Additionally, there is increasing legislation globally which will require us to align programs to their expectations and disclose
an increasing amount of information and data to illustrate our position and progress. If we do not adapt our strategy or
an increasing amount of information and data to illustrate our position and progress. If we do not adapt our strategy or
execution quickly enough to meet the evolving expectations of our investors, customers, and regulators, or if our ESG data
execution quickly enough to meet the evolving expectations of our investors, customers, and regulators, or if our ESG data
input, processing and reporting are incomplete or inaccurate, our business, financial condition, results of operations, brand and
input, processing and reporting are incomplete or inaccurate, our business, financial condition, results of operations, brand and
reputation could be adversely affected.
reputation could be adversely affected.
We are subject to environment, health and safety (EHS) standards and hazards which have the potential to adversely affect our
We are subject to environment, health and safety (EHS) standards and hazards which have the potential to adversely affect our
business, increase our expenses, and adversely affect our reputation.
business, increase our expenses, and adversely affect our reputation.
Our industry is subject to EHS requirements and laws, particularly those that control and restrict the sourcing, use,
Our industry is subject to EHS requirements and laws, particularly those that control and restrict the sourcing, use,
semiconductor manufacturing process and which help ensure the health and safety of our employees. We are also required to
semiconductor manufacturing process and which help ensure the health and safety of our employees. We are also required to
obtain environmental permits from governmental authorities for certain of our operations. Public attention to environmental
obtain environmental permits from governmental authorities for certain of our operations. Public attention to environmental
sustainability and social responsibility concerns continues to increase, and our customers routinely include stringent
sustainability and social responsibility concerns continues to increase, and our customers routinely include stringent
environmental and other standards in their contracts with us. Changes in EHS laws or regulations may require us to invest in
environmental and other standards in their contracts with us. Changes in EHS laws or regulations may require us to invest in
costly equipment or make manufacturing process changes and may adversely affect the sourcing, supply and pricing of
costly equipment or make manufacturing process changes and may adversely affect the sourcing, supply and pricing of
materials used in our products. In particular, climate change concerns and the potential resulting environmental impact may
materials used in our products. In particular, climate change concerns and the potential resulting environmental impact may
result in new or more stringent EHS laws and regulations that may affect us, our suppliers, and our customers. Such laws or
result in new or more stringent EHS laws and regulations that may affect us, our suppliers, and our customers. Such laws or
regulations could cause us to incur additional direct costs for compliance or costs to control or reduce our environmental impact
regulations could cause us to incur additional direct costs for compliance or costs to control or reduce our environmental impact
through, for example, carbon offsets, as well as increased indirect costs resulting from our customers, suppliers, or both
through, for example, carbon offsets, as well as increased indirect costs resulting from our customers, suppliers, or both
incurring additional compliance costs that are passed on to us. These costs may adversely impact our results of operations and
incurring additional compliance costs that are passed on to us. These costs may adversely impact our results of operations and
financial condition. In addition, we use hazardous and other regulated materials that subject us to risks of strict liability for
financial condition. In addition, we use hazardous and other regulated materials that subject us to risks of strict liability for
damages caused by potential or actual releases of such materials. Any failure to control such materials adequately or to comply
damages caused by potential or actual releases of such materials. Any failure to control such materials adequately or to comply
with existing or future EHS statutory or regulatory standards, requirements or contractual obligations could result in any of the
with existing or future EHS statutory or regulatory standards, requirements or contractual obligations could result in any of the
following, each of which could have a material adverse effect on our business and operating results:
following, each of which could have a material adverse effect on our business and operating results:
liability for damages and remediation;
liability for damages and remediation;
the imposition of regulatory penalties and civil and criminal fines;
the imposition of regulatory penalties and civil and criminal fines;
the suspension or termination of the development, manufacture, sale, or use of certain of our products;
the suspension or termination of the development, manufacture, sale, or use of certain of our products;
changes to our manufacturing processes or a need to substitute materials that may cost more or be less available;
changes to our manufacturing processes or a need to substitute materials that may cost more or be less available;
damage to our reputation; and/or
damage to our reputation; and/or
increased expenses associated with compliance.
increased expenses associated with compliance.
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If we fail to comply with government contracting regulations, we could suffer a loss of revenue or incur price adjustments or
If we fail to comply with government contracting regulations, we could suffer a loss of revenue or incur price adjustments or
other penalties.
other penalties.
Some of our revenue is derived from contracts with agencies of the United States government and subcontracts with its
Some of our revenue is derived from contracts with agencies of the United States government and subcontracts with its
prime contractors. As a United States government contractor or subcontractor, we are subject to federal contracting regulations,
prime contractors. As a United States government contractor or subcontractor, we are subject to federal contracting regulations,
including the Federal Acquisition Regulations, which govern the allowability of costs incurred by us in the performance of
including the Federal Acquisition Regulations, which govern the allowability of costs incurred by us in the performance of
United States government contracts. Certain contract pricing is based on estimated direct and indirect costs, which are subject to
United States government contracts. Certain contract pricing is based on estimated direct and indirect costs, which are subject to
change. Additionally, the United States government is entitled after final payment on certain negotiated contracts to examine all
change. Additionally, the United States government is entitled after final payment on certain negotiated contracts to examine all
of our cost records with respect to such contracts and to seek a downward adjustment to the price of the contract if it determines
of our cost records with respect to such contracts and to seek a downward adjustment to the price of the contract if it determines
If we fail to comply with U.S. and foreign laws related to privacy, data security, and data protection, it could adversely affect
If we fail to comply with U.S. and foreign laws related to privacy, data security, and data protection, it could adversely affect
our operating results and financial condition.
our operating results and financial condition.
We are or may become subject to a variety of laws and regulations such as the European Union’s General Data
We are or may become subject to a variety of laws and regulations such as the European Union’s General Data
Protection Regulation (the “GDPR”), China’s Personal Information Protection Law (the “PIPL”), or California’s Consumer
Protection Regulation (the “GDPR”), China’s Personal Information Protection Law (the “PIPL”), or California’s Consumer
Privacy Act (the “CCPA”) regarding privacy, data protection, and data security. These laws and regulations are continuously
Privacy Act (the “CCPA”) regarding privacy, data protection, and data security. These laws and regulations are continuously
evolving and developing. The scope and interpretation of the laws that are or may be applicable to us are often uncertain and
evolving and developing. The scope and interpretation of the laws that are or may be applicable to us are often uncertain and
may be conflicting, particularly with respect to foreign laws.
may be conflicting, particularly with respect to foreign laws.
In particular, there are numerous U.S. federal, state, and local laws and regulations and foreign laws and regulations
In particular, there are numerous U.S. federal, state, and local laws and regulations and foreign laws and regulations
regarding privacy and the collection, sharing, use, processing, disclosure, and protection of personal data. Such laws and
regarding privacy and the collection, sharing, use, processing, disclosure, and protection of personal data. Such laws and
regulations often vary in scope, may be subject to differing interpretations, and may be inconsistent among different
regulations often vary in scope, may be subject to differing interpretations, and may be inconsistent among different
jurisdictions. For example, the GDPR includes operational requirements for companies that receive or process personal data of
jurisdictions. For example, the GDPR includes operational requirements for companies that receive or process personal data of
residents of the European Union that are broader and more stringent than those in many other jurisdictions around the world.
residents of the European Union that are broader and more stringent than those in many other jurisdictions around the world.
The GDPR includes significant penalties for non-compliance, and China’s PIPL imposes additional operational requirements
The GDPR includes significant penalties for non-compliance, and China’s PIPL imposes additional operational requirements
relating to processing personal information and provides compressive penalty and enforcement mechanisms. Most notably, in
relating to processing personal information and provides compressive penalty and enforcement mechanisms. Most notably, in
the United States, California enacted the CCPA that requires covered companies to provide additional disclosures and data
the United States, California enacted the CCPA that requires covered companies to provide additional disclosures and data
rights to data subjects. The CCPA went into effect on January 1, 2020. The California Privacy Rights Act (“CPRA”) passed by
rights to data subjects. The CCPA went into effect on January 1, 2020. The California Privacy Rights Act (“CPRA”) passed by
voters in November 2020 will expand the CCPA when the regulations become fully operative on January 1, 2023. The CPRA
voters in November 2020 will expand the CCPA when the regulations become fully operative on January 1, 2023. The CPRA
establishes the California Privacy Protection Agency to enforce Californians’ privacy rights under the CCPA. Since the CCPA
establishes the California Privacy Protection Agency to enforce Californians’ privacy rights under the CCPA. Since the CCPA
was enacted, other states, including Virginia and Colorado, have enacted comprehensive privacy schemes.
was enacted, other states, including Virginia and Colorado, have enacted comprehensive privacy schemes.
The costs of compliance with, and other burdens imposed by, the GDPR, CCPA, and similar laws may limit the use and
The costs of compliance with, and other burdens imposed by, the GDPR, CCPA, and similar laws may limit the use and
adoption of our products and services and/or require us to incur substantial compliance costs, which could have an adverse
adoption of our products and services and/or require us to incur substantial compliance costs, which could have an adverse
impact on our business. Further, our product offerings in the digital healthcare solutions space which include the collection and
impact on our business. Further, our product offerings in the digital healthcare solutions space which include the collection and
processing of sensitive personal information subject us to heightened requirements under data privacy laws.
processing of sensitive personal information subject us to heightened requirements under data privacy laws.
Given that the scope, interpretation, and application of these laws and regulations are often uncertain and may be in
Given that the scope, interpretation, and application of these laws and regulations are often uncertain and may be in
conflict across jurisdictions, it is possible that these obligations may be interpreted and applied in a manner that is inconsistent
conflict across jurisdictions, it is possible that these obligations may be interpreted and applied in a manner that is inconsistent
from one jurisdiction to another and may conflict with other rules or our practices. Any failure or perceived failure by us or
from one jurisdiction to another and may conflict with other rules or our practices. Any failure or perceived failure by us or
third party service providers to comply with our privacy or security policies or privacy-related legal obligations, or any
third party service providers to comply with our privacy or security policies or privacy-related legal obligations, or any
compromise of security that results in the unauthorized release or transfer of personal data, may result in governmental
compromise of security that results in the unauthorized release or transfer of personal data, may result in governmental
enforcement actions, litigation, or negative publicity, and could have an adverse effect on our operating results and financial
enforcement actions, litigation, or negative publicity, and could have an adverse effect on our operating results and financial
We are occasionally involved in litigation, administrative proceedings, and regulatory proceedings, which could be costly to
We are occasionally involved in litigation, administrative proceedings, and regulatory proceedings, which could be costly to
resolve and could require us to redesign products, pay significant royalties or fines, or refrain from engaging in specific
resolve and could require us to redesign products, pay significant royalties or fines, or refrain from engaging in specific
condition.
condition.
conduct.
conduct.
From time to time, we are involved in various legal, administrative and regulatory proceedings, claims, demands and
From time to time, we are involved in various legal, administrative and regulatory proceedings, claims, demands and
investigations relating to our business, including inquiries from and discussions with government entities regarding the
investigations relating to our business, including inquiries from and discussions with government entities regarding the
compliance of our contracting and sales practices with laws and regulations which may result in claims with respect to
compliance of our contracting and sales practices with laws and regulations which may result in claims with respect to
commercial, product liability, intellectual property, cybersecurity, privacy, data protection, antitrust, breach of contract,
commercial, product liability, intellectual property, cybersecurity, privacy, data protection, antitrust, breach of contract,
employment, class action, whistleblower, mergers and acquisitions and other matters. We could also be subject to litigation or
employment, class action, whistleblower, mergers and acquisitions and other matters. We could also be subject to litigation or
arbitration disputes arising under our contractual obligations, customer indemnity, warranty or product liability claims, or other
arbitration disputes arising under our contractual obligations, customer indemnity, warranty or product liability claims, or other
matters that could lead to significant costs and expenses as we defend those claims or pay damage awards. For example, in
matters that could lead to significant costs and expenses as we defend those claims or pay damage awards. For example, in
March 2022, a putative class action was filed in the Court of Chancery of the State of Delaware against us and the former
March 2022, a putative class action was filed in the Court of Chancery of the State of Delaware against us and the former
directors of Maxim as described in Part I, Item 3, “Legal Proceedings.”
directors of Maxim as described in Part I, Item 3, “Legal Proceedings.”
Further, the semiconductor industry is characterized by frequent claims and litigation involving patent and other
Further, the semiconductor industry is characterized by frequent claims and litigation involving patent and other
intellectual property rights. Other companies or individuals have obtained patents covering a variety of semiconductor designs
intellectual property rights. Other companies or individuals have obtained patents covering a variety of semiconductor designs
and processes, and we might be required to obtain licenses under some of these patents or be precluded from making and selling
and processes, and we might be required to obtain licenses under some of these patents or be precluded from making and selling
infringing products, if those patents are found to be valid and infringed by us. In the event a third party makes a valid
infringing products, if those patents are found to be valid and infringed by us. In the event a third party makes a valid
intellectual property claim against us and a license is not available to us on commercially reasonable terms, or at all, we could
intellectual property claim against us and a license is not available to us on commercially reasonable terms, or at all, we could
be forced either to redesign or to stop production of products incorporating that intellectual property, and our operating results
be forced either to redesign or to stop production of products incorporating that intellectual property, and our operating results
could be materially and adversely affected. Litigation may be necessary to enforce our patents or other of our intellectual
could be materially and adversely affected. Litigation may be necessary to enforce our patents or other of our intellectual
property rights or to defend us against claims of infringement.
property rights or to defend us against claims of infringement.
These matters can be time-consuming, divert management’s attention and resources and cause us to incur significant
These matters can be time-consuming, divert management’s attention and resources and cause us to incur significant
expenses. Allegations made in the course of regulatory or legal proceedings may also harm our reputation, regardless of
expenses. Allegations made in the course of regulatory or legal proceedings may also harm our reputation, regardless of
whether there is merit to such claims. Because litigation and the outcome of regulatory proceedings are inherently
whether there is merit to such claims. Because litigation and the outcome of regulatory proceedings are inherently
unpredictable, our business, financial condition or operating results could be materially affected by an unfavorable resolution of
unpredictable, our business, financial condition or operating results could be materially affected by an unfavorable resolution of
one or more of these proceedings, claims, demands or investigations. There can be no assurance that we are adequately insured
one or more of these proceedings, claims, demands or investigations. There can be no assurance that we are adequately insured
to protect against all claims and potential liabilities, and we may elect to self-insure with respect to certain matters. An adverse
to protect against all claims and potential liabilities, and we may elect to self-insure with respect to certain matters. An adverse
outcome in litigation or arbitration could have a material adverse effect on our financial position or on our operating results or
outcome in litigation or arbitration could have a material adverse effect on our financial position or on our operating results or
cash flows in the period in which the dispute is resolved.
cash flows in the period in which the dispute is resolved.
Environmental, social and governance (ESG) matters may have an adverse effect on our business, financial condition and
Environmental, social and governance (ESG) matters may have an adverse effect on our business, financial condition and
results of operations, and damage our brand and reputation.
results of operations, and damage our brand and reputation.
There is an increasing focus from investors, customers, employees and potential talent, as well as other stakeholders
There is an increasing focus from investors, customers, employees and potential talent, as well as other stakeholders
concerning ESG matters, including climate change and sustainability, human rights, support for local communities, Board of
concerning ESG matters, including climate change and sustainability, human rights, support for local communities, Board of
Directors and employee diversity, human capital management, employee health and safety practices, product quality, supply
Directors and employee diversity, human capital management, employee health and safety practices, product quality, supply
chain management, and corporate governance and transparency. Current and prospective investors are increasingly utilizing
chain management, and corporate governance and transparency. Current and prospective investors are increasingly utilizing
ESG data to inform their decisions, including investment and voting, using a multitude of evolving score and rating
ESG data to inform their decisions, including investment and voting, using a multitude of evolving score and rating
frameworks. Further, customers are also utilizing ESG data to inform their purchasing decisions. Additionally, public interest
frameworks. Further, customers are also utilizing ESG data to inform their purchasing decisions. Additionally, public interest
and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet the
and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet the
expectations of investors, customers, employees or other stakeholders’ evolving standards, our reputation, brand and employee
expectations of investors, customers, employees or other stakeholders’ evolving standards, our reputation, brand and employee
retention may be negatively impacted, and our customers and suppliers may be unwilling to continue to do business with us.
retention may be negatively impacted, and our customers and suppliers may be unwilling to continue to do business with us.
Additionally, there is increasing legislation globally which will require us to align programs to their expectations and disclose
Additionally, there is increasing legislation globally which will require us to align programs to their expectations and disclose
an increasing amount of information and data to illustrate our position and progress. If we do not adapt our strategy or
an increasing amount of information and data to illustrate our position and progress. If we do not adapt our strategy or
execution quickly enough to meet the evolving expectations of our investors, customers, and regulators, or if our ESG data
execution quickly enough to meet the evolving expectations of our investors, customers, and regulators, or if our ESG data
input, processing and reporting are incomplete or inaccurate, our business, financial condition, results of operations, brand and
input, processing and reporting are incomplete or inaccurate, our business, financial condition, results of operations, brand and
reputation could be adversely affected.
reputation could be adversely affected.
We are subject to environment, health and safety (EHS) standards and hazards which have the potential to adversely affect our
We are subject to environment, health and safety (EHS) standards and hazards which have the potential to adversely affect our
business, increase our expenses, and adversely affect our reputation.
business, increase our expenses, and adversely affect our reputation.
Our industry is subject to EHS requirements and laws, particularly those that control and restrict the sourcing, use,
Our industry is subject to EHS requirements and laws, particularly those that control and restrict the sourcing, use,
transportation, emission, discharge, storage and disposal of certain substances and materials used or produced in the
transportation, emission, discharge, storage and disposal of certain substances and materials used or produced in the
semiconductor manufacturing process and which help ensure the health and safety of our employees. We are also required to
semiconductor manufacturing process and which help ensure the health and safety of our employees. We are also required to
obtain environmental permits from governmental authorities for certain of our operations. Public attention to environmental
obtain environmental permits from governmental authorities for certain of our operations. Public attention to environmental
sustainability and social responsibility concerns continues to increase, and our customers routinely include stringent
sustainability and social responsibility concerns continues to increase, and our customers routinely include stringent
environmental and other standards in their contracts with us. Changes in EHS laws or regulations may require us to invest in
environmental and other standards in their contracts with us. Changes in EHS laws or regulations may require us to invest in
costly equipment or make manufacturing process changes and may adversely affect the sourcing, supply and pricing of
costly equipment or make manufacturing process changes and may adversely affect the sourcing, supply and pricing of
materials used in our products. In particular, climate change concerns and the potential resulting environmental impact may
materials used in our products. In particular, climate change concerns and the potential resulting environmental impact may
result in new or more stringent EHS laws and regulations that may affect us, our suppliers, and our customers. Such laws or
result in new or more stringent EHS laws and regulations that may affect us, our suppliers, and our customers. Such laws or
regulations could cause us to incur additional direct costs for compliance or costs to control or reduce our environmental impact
regulations could cause us to incur additional direct costs for compliance or costs to control or reduce our environmental impact
through, for example, carbon offsets, as well as increased indirect costs resulting from our customers, suppliers, or both
through, for example, carbon offsets, as well as increased indirect costs resulting from our customers, suppliers, or both
incurring additional compliance costs that are passed on to us. These costs may adversely impact our results of operations and
incurring additional compliance costs that are passed on to us. These costs may adversely impact our results of operations and
financial condition. In addition, we use hazardous and other regulated materials that subject us to risks of strict liability for
financial condition. In addition, we use hazardous and other regulated materials that subject us to risks of strict liability for
damages caused by potential or actual releases of such materials. Any failure to control such materials adequately or to comply
damages caused by potential or actual releases of such materials. Any failure to control such materials adequately or to comply
with existing or future EHS statutory or regulatory standards, requirements or contractual obligations could result in any of the
with existing or future EHS statutory or regulatory standards, requirements or contractual obligations could result in any of the
following, each of which could have a material adverse effect on our business and operating results:
following, each of which could have a material adverse effect on our business and operating results:
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liability for damages and remediation;
liability for damages and remediation;
the imposition of regulatory penalties and civil and criminal fines;
the imposition of regulatory penalties and civil and criminal fines;
the suspension or termination of the development, manufacture, sale, or use of certain of our products;
the suspension or termination of the development, manufacture, sale, or use of certain of our products;
changes to our manufacturing processes or a need to substitute materials that may cost more or be less available;
changes to our manufacturing processes or a need to substitute materials that may cost more or be less available;
damage to our reputation; and/or
damage to our reputation; and/or
increased expenses associated with compliance.
increased expenses associated with compliance.
If we fail to comply with government contracting regulations, we could suffer a loss of revenue or incur price adjustments or
If we fail to comply with government contracting regulations, we could suffer a loss of revenue or incur price adjustments or
other penalties.
other penalties.
Some of our revenue is derived from contracts with agencies of the United States government and subcontracts with its
Some of our revenue is derived from contracts with agencies of the United States government and subcontracts with its
prime contractors. As a United States government contractor or subcontractor, we are subject to federal contracting regulations,
prime contractors. As a United States government contractor or subcontractor, we are subject to federal contracting regulations,
including the Federal Acquisition Regulations, which govern the allowability of costs incurred by us in the performance of
including the Federal Acquisition Regulations, which govern the allowability of costs incurred by us in the performance of
United States government contracts. Certain contract pricing is based on estimated direct and indirect costs, which are subject to
United States government contracts. Certain contract pricing is based on estimated direct and indirect costs, which are subject to
change. Additionally, the United States government is entitled after final payment on certain negotiated contracts to examine all
change. Additionally, the United States government is entitled after final payment on certain negotiated contracts to examine all
of our cost records with respect to such contracts and to seek a downward adjustment to the price of the contract if it determines
of our cost records with respect to such contracts and to seek a downward adjustment to the price of the contract if it determines
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that we failed to furnish complete, accurate and current cost or pricing data in connection with the negotiation of the price of the
that we failed to furnish complete, accurate and current cost or pricing data in connection with the negotiation of the price of the
contract.
contract.
Cooperation and Development's Base Erosion and Profit Shifting Actions Plans, could impact the jurisdictions where we are
Cooperation and Development's Base Erosion and Profit Shifting Actions Plans, could impact the jurisdictions where we are
deemed to earn income, which could in turn adversely affect our tax liability and results of operations.
deemed to earn income, which could in turn adversely affect our tax liability and results of operations.
In connection with our United States government business, we are subject to evolving procurement rules and
In connection with our United States government business, we are subject to evolving procurement rules and
Risks Related to Financial Markets, Indebtedness and Capital Return
Risks Related to Financial Markets, Indebtedness and Capital Return
regulations, as well as government audits and to review and approval of our policies, procedures, and internal controls for
regulations, as well as government audits and to review and approval of our policies, procedures, and internal controls for
compliance with procurement regulations and applicable laws, such as the Cybersecurity Maturity Model Certification. In
compliance with procurement regulations and applicable laws, such as the Cybersecurity Maturity Model Certification. In
certain circumstances, if we do not comply with the terms of a government contract or with regulations or statutes, we could be
certain circumstances, if we do not comply with the terms of a government contract or with regulations or statutes, we could be
subject to downward contract price adjustments or refund obligations or could in extreme circumstances be assessed civil and
subject to downward contract price adjustments or refund obligations or could in extreme circumstances be assessed civil and
criminal penalties or be debarred or suspended from obtaining future contracts for a specified period of time. Any such
criminal penalties or be debarred or suspended from obtaining future contracts for a specified period of time. Any such
suspension or debarment or other sanction could have an adverse effect on our business.
suspension or debarment or other sanction could have an adverse effect on our business.
Under some of our government subcontracts, we are required to maintain secure facilities and to obtain security
Under some of our government subcontracts, we are required to maintain secure facilities and to obtain security
clearances for personnel involved in performance of the contract, in compliance with applicable federal standards. If we were
clearances for personnel involved in performance of the contract, in compliance with applicable federal standards. If we were
unable to comply with these requirements, or if personnel critical to our performance of these contracts were unable to obtain or
unable to comply with these requirements, or if personnel critical to our performance of these contracts were unable to obtain or
maintain their security clearances, we might be unable to perform these contracts or compete for other projects of this nature,
maintain their security clearances, we might be unable to perform these contracts or compete for other projects of this nature,
which could adversely affect our revenue.
which could adversely affect our revenue.
Damage to our reputation can damage our business.
Damage to our reputation can damage our business.
Our reputation is a critical factor in our relationships with customers, employees, governments, suppliers, and other
Our reputation is a critical factor in our relationships with customers, employees, governments, suppliers, and other
our business operations or returned to shareholders, repatriate earnings as dividends from foreign locations with potential
our business operations or returned to shareholders, repatriate earnings as dividends from foreign locations with potential
stakeholders. Our failure to address, or the appearance of our failure to address, issues that give rise to reputational risk,
stakeholders. Our failure to address, or the appearance of our failure to address, issues that give rise to reputational risk,
including those described in this Risk Factors section, could significantly harm our reputation and our brands. We may be
including those described in this Risk Factors section, could significantly harm our reputation and our brands. We may be
subject to reputational risks and our brand loyalty may decline if others adopt the same or confusingly similar marks in an effort
subject to reputational risks and our brand loyalty may decline if others adopt the same or confusingly similar marks in an effort
to misappropriate and profit on our brand name and do not provide the same level of quality as is delivered by our solutions and
to misappropriate and profit on our brand name and do not provide the same level of quality as is delivered by our solutions and
services. It may also limit our ability to be seen as an employer of choice when competing for highly skilled employees and
services. It may also limit our ability to be seen as an employer of choice when competing for highly skilled employees and
repairing our reputation and brands may be difficult, time-consuming, and expensive. To the extent we fail to respond quickly
repairing our reputation and brands may be difficult, time-consuming, and expensive. To the extent we fail to respond quickly
and effectively to address corporate and brand crises, the ensuing negative public reaction could significantly harm our
and effectively to address corporate and brand crises, the ensuing negative public reaction could significantly harm our
reputation and our brands, which could lead to increases in litigation claims and asserted damages or subject us to regulatory
reputation and our brands, which could lead to increases in litigation claims and asserted damages or subject us to regulatory
actions or restrictions. If we fail to police, maintain, enhance and protect our brands, if we incur excessive expenses in this
actions or restrictions. If we fail to police, maintain, enhance and protect our brands, if we incur excessive expenses in this
effort or if customers or potential customers are confused by others’ trademarks, our business, operating results, and financial
effort or if customers or potential customers are confused by others’ trademarks, our business, operating results, and financial
condition may be materially and adversely affected.
condition may be materially and adversely affected.
Increases in our effective tax rate, exposure to additional tax liabilities, or substantial changes in domestic or international
Increases in our effective tax rate, exposure to additional tax liabilities, or substantial changes in domestic or international
corporate tax policies, regulations or guidance may adversely impact our results of operations.
corporate tax policies, regulations or guidance may adversely impact our results of operations.
Our effective tax rate reflects the applicable tax rate in effect in the various tax jurisdictions around the world where our
Our effective tax rate reflects the applicable tax rate in effect in the various tax jurisdictions around the world where our
income is earned. Our effective tax rate for the fiscal year ended October 29, 2022 was below the U.S. federal statutory rate of
income is earned. Our effective tax rate for the fiscal year ended October 29, 2022 was below the U.S. federal statutory rate of
21%. This is primarily due to lower statutory tax rates applicable to our operations in the foreign jurisdictions in which we earn
21%. This is primarily due to lower statutory tax rates applicable to our operations in the foreign jurisdictions in which we earn
income.
income.
A number of factors may increase our future effective tax rate, including: new or revised tax laws or legislation or the
A number of factors may increase our future effective tax rate, including: new or revised tax laws or legislation or the
interpretation of such laws or legislation by governmental authorities; increases in tax rates in various jurisdictions; variation in
interpretation of such laws or legislation by governmental authorities; increases in tax rates in various jurisdictions; variation in
the mix of jurisdictions in which our profits are earned and taxed; deferred taxes arising from basis differences in investments in
the mix of jurisdictions in which our profits are earned and taxed; deferred taxes arising from basis differences in investments in
foreign subsidiaries; any adverse resolution of ongoing tax audits or adverse rulings from taxing authorities worldwide; changes
foreign subsidiaries; any adverse resolution of ongoing tax audits or adverse rulings from taxing authorities worldwide; changes
in the valuation of our deferred tax assets and liabilities; adjustments to income taxes upon finalization of various tax returns;
in the valuation of our deferred tax assets and liabilities; adjustments to income taxes upon finalization of various tax returns;
increases in expenses not deductible for tax purposes, including executive compensation subject to the limitations of Section
increases in expenses not deductible for tax purposes, including executive compensation subject to the limitations of Section
162(m) of the Internal Revenue Code and amortization of assets acquired in connection with strategic transactions; decreased
162(m) of the Internal Revenue Code and amortization of assets acquired in connection with strategic transactions; decreased
availability of tax deductions for stock-based compensation awards worldwide; and changes in available tax credits. Any
availability of tax deductions for stock-based compensation awards worldwide; and changes in available tax credits. Any
significant increase in our future effective tax rate could adversely impact our net income during future periods.
significant increase in our future effective tax rate could adversely impact our net income during future periods.
Compliance with tax legislation may require the collection of information not regularly produced by us, and therefore
Compliance with tax legislation may require the collection of information not regularly produced by us, and therefore
necessitate the use of estimates in our Consolidated Financial Statements and the exercise of significant judgment in accounting
necessitate the use of estimates in our Consolidated Financial Statements and the exercise of significant judgment in accounting
for its provisions. As regulations and guidance evolve with respect to tax legislation, and as more information is gathered and
for its provisions. As regulations and guidance evolve with respect to tax legislation, and as more information is gathered and
analyzed, our results may differ from previous estimates and may materially affect our Consolidated Financial Statements.
analyzed, our results may differ from previous estimates and may materially affect our Consolidated Financial Statements.
We are also subject to laws and regulations in various jurisdictions that determine how much profit has been earned and
We are also subject to laws and regulations in various jurisdictions that determine how much profit has been earned and
when it is subject to taxation in that jurisdiction. On August 16, 2022, the U.S. government enacted the Inflation Reduction Act
when it is subject to taxation in that jurisdiction. On August 16, 2022, the U.S. government enacted the Inflation Reduction Act
(IRA) which imposes a 15% book minimum tax on corporations with three-year average annual adjusted financial statement
(IRA) which imposes a 15% book minimum tax on corporations with three-year average annual adjusted financial statement
income exceeding $1 billion. We are in the process of assessing whether the book minimum tax would impact our effective tax
income exceeding $1 billion. We are in the process of assessing whether the book minimum tax would impact our effective tax
rate. Corporate tax reform, anti-base-erosion rules and tax transparency continue to be high priorities in many jurisdictions.
rate. Corporate tax reform, anti-base-erosion rules and tax transparency continue to be high priorities in many jurisdictions.
Changes in these laws and regulations, including those that align to or are associated with the Organization for Economic
Changes in these laws and regulations, including those that align to or are associated with the Organization for Economic
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We have substantial existing indebtedness and the ability to incur significant additional indebtedness, which could limit our
We have substantial existing indebtedness and the ability to incur significant additional indebtedness, which could limit our
operations and our use of our cash flow and negatively impact our credit ratings.
operations and our use of our cash flow and negatively impact our credit ratings.
As of October 29, 2022, we had approximately $6.5 billion in outstanding indebtedness. In addition, we had $2.5 billion
As of October 29, 2022, we had approximately $6.5 billion in outstanding indebtedness. In addition, we had $2.5 billion
of availability under our unsecured revolving credit facility. Our leverage could have negative consequences, including
of availability under our unsecured revolving credit facility. Our leverage could have negative consequences, including
increasing our vulnerability to adverse economic and industry conditions, limiting our ability to obtain additional financing and
increasing our vulnerability to adverse economic and industry conditions, limiting our ability to obtain additional financing and
limiting our ability to acquire new products and technologies through strategic acquisitions. Further, on October 5, 2021, we
limiting our ability to acquire new products and technologies through strategic acquisitions. Further, on October 5, 2021, we
issued $500 million aggregate principal amount of floating rate senior notes (the “Floating Rate Notes”). Our Floating Rate
issued $500 million aggregate principal amount of floating rate senior notes (the “Floating Rate Notes”). Our Floating Rate
Notes and our net interest expense is exposed to changes in market interest rates and will increase as market interest rates rise.
Notes and our net interest expense is exposed to changes in market interest rates and will increase as market interest rates rise.
We may also incur additional debt, including debt with variable interest rates, in the future, which would increase these risks.
We may also incur additional debt, including debt with variable interest rates, in the future, which would increase these risks.
Our ability to make payments of principal and interest on our indebtedness when due depends upon our future operating
Our ability to make payments of principal and interest on our indebtedness when due depends upon our future operating
performance, which may be impacted by general economic conditions, industry cycles and other factors beyond our control. If
performance, which may be impacted by general economic conditions, industry cycles and other factors beyond our control. If
we are unable to service or refinance our debt, we may be required to divert funds that would otherwise be invested in growing
we are unable to service or refinance our debt, we may be required to divert funds that would otherwise be invested in growing
negative tax consequences, or sell selected assets. Such measures might not be sufficient to enable us to service our debt, which
negative tax consequences, or sell selected assets. Such measures might not be sufficient to enable us to service our debt, which
could negatively impact our financial results. In addition, we may not be able to obtain any such financing, refinancing or
could negatively impact our financial results. In addition, we may not be able to obtain any such financing, refinancing or
complete a sale of assets on economically favorable terms. In the case of financing or refinancing, favorable interest rates will
complete a sale of assets on economically favorable terms. In the case of financing or refinancing, favorable interest rates will
depend on conditions in the debt capital markets. In addition, if our credit ratings are downgraded or put on watch for a
depend on conditions in the debt capital markets. In addition, if our credit ratings are downgraded or put on watch for a
potential downgrade, the applicable interest rate on borrowings under our current revolving credit facility may rise and our
potential downgrade, the applicable interest rate on borrowings under our current revolving credit facility may rise and our
ability to obtain additional financing or refinance our existing debt may be negatively affected.
ability to obtain additional financing or refinance our existing debt may be negatively affected.
Restrictions in our revolving credit facility and outstanding debt instruments may limit our activities.
Restrictions in our revolving credit facility and outstanding debt instruments may limit our activities.
Our current revolving credit facility and outstanding debt instruments impose, and future debt instruments to which we
Our current revolving credit facility and outstanding debt instruments impose, and future debt instruments to which we
may become subject may impose, restrictions that limit our ability to engage in activities that could otherwise benefit us,
may become subject may impose, restrictions that limit our ability to engage in activities that could otherwise benefit us,
including to undertake certain transactions, to create certain liens on our assets and to incur certain subsidiary indebtedness. Our
including to undertake certain transactions, to create certain liens on our assets and to incur certain subsidiary indebtedness. Our
ability to comply with these financial restrictions and covenants is dependent on our future performance, which is subject to
ability to comply with these financial restrictions and covenants is dependent on our future performance, which is subject to
prevailing economic conditions and other factors, including factors that are beyond our control such as changes in technology,
prevailing economic conditions and other factors, including factors that are beyond our control such as changes in technology,
government regulations and the level of competition in our markets. In addition, our revolving credit facility requires us to
government regulations and the level of competition in our markets. In addition, our revolving credit facility requires us to
maintain compliance with specified financial ratios. If we breach any of the covenants under our revolving credit facility, the
maintain compliance with specified financial ratios. If we breach any of the covenants under our revolving credit facility, the
indentures governing our outstanding senior unsecured notes, or any future debt instruments to which we may become subject
indentures governing our outstanding senior unsecured notes, or any future debt instruments to which we may become subject
and do not obtain appropriate waivers, then, subject to applicable cure periods, our outstanding indebtedness thereunder could
and do not obtain appropriate waivers, then, subject to applicable cure periods, our outstanding indebtedness thereunder could
be declared immediately due and payable and/or we may be restricted from further borrowing under our revolving credit
be declared immediately due and payable and/or we may be restricted from further borrowing under our revolving credit
facility.
facility.
reputation and business.
reputation and business.
We may not meet expectations or targets in connection with our “green” financing arrangements, which could harm our
We may not meet expectations or targets in connection with our “green” financing arrangements, which could harm our
From time to time, we may enter into “green” financing arrangements that require us to use proceeds for
From time to time, we may enter into “green” financing arrangements that require us to use proceeds for
environmental sustainability purposes or have targets related to environmental sustainability. For example, we entered into a
environmental sustainability purposes or have targets related to environmental sustainability. For example, we entered into a
revolving credit agreement on June 23, 2021 (the “Revolving Credit Agreement”) that contains a sustainability-linked pricing
revolving credit agreement on June 23, 2021 (the “Revolving Credit Agreement”) that contains a sustainability-linked pricing
component, which provides for interest rate and facility fee reductions or increases based on meeting or missing targets related
component, which provides for interest rate and facility fee reductions or increases based on meeting or missing targets related
to environmental sustainability, specifically greenhouse gas emissions and renewable energy usage. For calendar year 2021, we
to environmental sustainability, specifically greenhouse gas emissions and renewable energy usage. For calendar year 2021, we
did not achieve the greenhouse gas emissions reduction threshold goal related to this sustainability-linked pricing component
did not achieve the greenhouse gas emissions reduction threshold goal related to this sustainability-linked pricing component
due in part to increased demand for product, which did not have a material impact on our business, net income, or financing
due in part to increased demand for product, which did not have a material impact on our business, net income, or financing
costs. On October 5, 2021, we issued $750 million sustainability-linked senior notes (the “Sustainability-Linked Senior
costs. On October 5, 2021, we issued $750 million sustainability-linked senior notes (the “Sustainability-Linked Senior
Notes”). Our Sustainability-Linked Senior Notes initially bear interest at a rate of 1.7% per annum and are subject to an
Notes”). Our Sustainability-Linked Senior Notes initially bear interest at a rate of 1.7% per annum and are subject to an
increase of an additional 30 basis points per annum from April 1, 2026 to the maturity date unless the Sustainability
increase of an additional 30 basis points per annum from April 1, 2026 to the maturity date unless the Sustainability
Performance Target (as defined in the Sustainability-Linked Senior Notes) has been satisfied. Failing to use the net proceeds
Performance Target (as defined in the Sustainability-Linked Senior Notes) has been satisfied. Failing to use the net proceeds
under green financing arrangements that satisfies investor criteria and expectations regarding environmental impact or achieve
under green financing arrangements that satisfies investor criteria and expectations regarding environmental impact or achieve
targets related to environmental sustainability under such financing arrangements could result in reputational harm and our
targets related to environmental sustainability under such financing arrangements could result in reputational harm and our
business and operating results could be negatively impacted.
business and operating results could be negatively impacted.
If we are not able to meet our U.S. cash requirements, it may be necessary for us to consider repatriation of foreign earnings,
If we are not able to meet our U.S. cash requirements, it may be necessary for us to consider repatriation of foreign earnings,
which could have a material adverse effect on our results of operations and financial condition.
which could have a material adverse effect on our results of operations and financial condition.
that we failed to furnish complete, accurate and current cost or pricing data in connection with the negotiation of the price of the
that we failed to furnish complete, accurate and current cost or pricing data in connection with the negotiation of the price of the
contract.
contract.
Cooperation and Development's Base Erosion and Profit Shifting Actions Plans, could impact the jurisdictions where we are
Cooperation and Development's Base Erosion and Profit Shifting Actions Plans, could impact the jurisdictions where we are
deemed to earn income, which could in turn adversely affect our tax liability and results of operations.
deemed to earn income, which could in turn adversely affect our tax liability and results of operations.
In connection with our United States government business, we are subject to evolving procurement rules and
In connection with our United States government business, we are subject to evolving procurement rules and
Risks Related to Financial Markets, Indebtedness and Capital Return
Risks Related to Financial Markets, Indebtedness and Capital Return
regulations, as well as government audits and to review and approval of our policies, procedures, and internal controls for
regulations, as well as government audits and to review and approval of our policies, procedures, and internal controls for
compliance with procurement regulations and applicable laws, such as the Cybersecurity Maturity Model Certification. In
compliance with procurement regulations and applicable laws, such as the Cybersecurity Maturity Model Certification. In
certain circumstances, if we do not comply with the terms of a government contract or with regulations or statutes, we could be
certain circumstances, if we do not comply with the terms of a government contract or with regulations or statutes, we could be
subject to downward contract price adjustments or refund obligations or could in extreme circumstances be assessed civil and
subject to downward contract price adjustments or refund obligations or could in extreme circumstances be assessed civil and
criminal penalties or be debarred or suspended from obtaining future contracts for a specified period of time. Any such
criminal penalties or be debarred or suspended from obtaining future contracts for a specified period of time. Any such
suspension or debarment or other sanction could have an adverse effect on our business.
suspension or debarment or other sanction could have an adverse effect on our business.
Under some of our government subcontracts, we are required to maintain secure facilities and to obtain security
Under some of our government subcontracts, we are required to maintain secure facilities and to obtain security
clearances for personnel involved in performance of the contract, in compliance with applicable federal standards. If we were
clearances for personnel involved in performance of the contract, in compliance with applicable federal standards. If we were
unable to comply with these requirements, or if personnel critical to our performance of these contracts were unable to obtain or
unable to comply with these requirements, or if personnel critical to our performance of these contracts were unable to obtain or
maintain their security clearances, we might be unable to perform these contracts or compete for other projects of this nature,
maintain their security clearances, we might be unable to perform these contracts or compete for other projects of this nature,
which could adversely affect our revenue.
which could adversely affect our revenue.
Damage to our reputation can damage our business.
Damage to our reputation can damage our business.
Our reputation is a critical factor in our relationships with customers, employees, governments, suppliers, and other
Our reputation is a critical factor in our relationships with customers, employees, governments, suppliers, and other
stakeholders. Our failure to address, or the appearance of our failure to address, issues that give rise to reputational risk,
stakeholders. Our failure to address, or the appearance of our failure to address, issues that give rise to reputational risk,
including those described in this Risk Factors section, could significantly harm our reputation and our brands. We may be
including those described in this Risk Factors section, could significantly harm our reputation and our brands. We may be
subject to reputational risks and our brand loyalty may decline if others adopt the same or confusingly similar marks in an effort
subject to reputational risks and our brand loyalty may decline if others adopt the same or confusingly similar marks in an effort
to misappropriate and profit on our brand name and do not provide the same level of quality as is delivered by our solutions and
to misappropriate and profit on our brand name and do not provide the same level of quality as is delivered by our solutions and
services. It may also limit our ability to be seen as an employer of choice when competing for highly skilled employees and
services. It may also limit our ability to be seen as an employer of choice when competing for highly skilled employees and
repairing our reputation and brands may be difficult, time-consuming, and expensive. To the extent we fail to respond quickly
repairing our reputation and brands may be difficult, time-consuming, and expensive. To the extent we fail to respond quickly
and effectively to address corporate and brand crises, the ensuing negative public reaction could significantly harm our
and effectively to address corporate and brand crises, the ensuing negative public reaction could significantly harm our
reputation and our brands, which could lead to increases in litigation claims and asserted damages or subject us to regulatory
reputation and our brands, which could lead to increases in litigation claims and asserted damages or subject us to regulatory
actions or restrictions. If we fail to police, maintain, enhance and protect our brands, if we incur excessive expenses in this
actions or restrictions. If we fail to police, maintain, enhance and protect our brands, if we incur excessive expenses in this
effort or if customers or potential customers are confused by others’ trademarks, our business, operating results, and financial
effort or if customers or potential customers are confused by others’ trademarks, our business, operating results, and financial
condition may be materially and adversely affected.
condition may be materially and adversely affected.
Increases in our effective tax rate, exposure to additional tax liabilities, or substantial changes in domestic or international
Increases in our effective tax rate, exposure to additional tax liabilities, or substantial changes in domestic or international
corporate tax policies, regulations or guidance may adversely impact our results of operations.
corporate tax policies, regulations or guidance may adversely impact our results of operations.
Our effective tax rate reflects the applicable tax rate in effect in the various tax jurisdictions around the world where our
Our effective tax rate reflects the applicable tax rate in effect in the various tax jurisdictions around the world where our
income is earned. Our effective tax rate for the fiscal year ended October 29, 2022 was below the U.S. federal statutory rate of
income is earned. Our effective tax rate for the fiscal year ended October 29, 2022 was below the U.S. federal statutory rate of
21%. This is primarily due to lower statutory tax rates applicable to our operations in the foreign jurisdictions in which we earn
21%. This is primarily due to lower statutory tax rates applicable to our operations in the foreign jurisdictions in which we earn
income.
income.
A number of factors may increase our future effective tax rate, including: new or revised tax laws or legislation or the
A number of factors may increase our future effective tax rate, including: new or revised tax laws or legislation or the
interpretation of such laws or legislation by governmental authorities; increases in tax rates in various jurisdictions; variation in
interpretation of such laws or legislation by governmental authorities; increases in tax rates in various jurisdictions; variation in
the mix of jurisdictions in which our profits are earned and taxed; deferred taxes arising from basis differences in investments in
the mix of jurisdictions in which our profits are earned and taxed; deferred taxes arising from basis differences in investments in
foreign subsidiaries; any adverse resolution of ongoing tax audits or adverse rulings from taxing authorities worldwide; changes
foreign subsidiaries; any adverse resolution of ongoing tax audits or adverse rulings from taxing authorities worldwide; changes
in the valuation of our deferred tax assets and liabilities; adjustments to income taxes upon finalization of various tax returns;
in the valuation of our deferred tax assets and liabilities; adjustments to income taxes upon finalization of various tax returns;
increases in expenses not deductible for tax purposes, including executive compensation subject to the limitations of Section
increases in expenses not deductible for tax purposes, including executive compensation subject to the limitations of Section
162(m) of the Internal Revenue Code and amortization of assets acquired in connection with strategic transactions; decreased
162(m) of the Internal Revenue Code and amortization of assets acquired in connection with strategic transactions; decreased
availability of tax deductions for stock-based compensation awards worldwide; and changes in available tax credits. Any
availability of tax deductions for stock-based compensation awards worldwide; and changes in available tax credits. Any
significant increase in our future effective tax rate could adversely impact our net income during future periods.
significant increase in our future effective tax rate could adversely impact our net income during future periods.
Compliance with tax legislation may require the collection of information not regularly produced by us, and therefore
Compliance with tax legislation may require the collection of information not regularly produced by us, and therefore
necessitate the use of estimates in our Consolidated Financial Statements and the exercise of significant judgment in accounting
necessitate the use of estimates in our Consolidated Financial Statements and the exercise of significant judgment in accounting
for its provisions. As regulations and guidance evolve with respect to tax legislation, and as more information is gathered and
for its provisions. As regulations and guidance evolve with respect to tax legislation, and as more information is gathered and
analyzed, our results may differ from previous estimates and may materially affect our Consolidated Financial Statements.
analyzed, our results may differ from previous estimates and may materially affect our Consolidated Financial Statements.
We are also subject to laws and regulations in various jurisdictions that determine how much profit has been earned and
We are also subject to laws and regulations in various jurisdictions that determine how much profit has been earned and
when it is subject to taxation in that jurisdiction. On August 16, 2022, the U.S. government enacted the Inflation Reduction Act
when it is subject to taxation in that jurisdiction. On August 16, 2022, the U.S. government enacted the Inflation Reduction Act
(IRA) which imposes a 15% book minimum tax on corporations with three-year average annual adjusted financial statement
(IRA) which imposes a 15% book minimum tax on corporations with three-year average annual adjusted financial statement
income exceeding $1 billion. We are in the process of assessing whether the book minimum tax would impact our effective tax
income exceeding $1 billion. We are in the process of assessing whether the book minimum tax would impact our effective tax
rate. Corporate tax reform, anti-base-erosion rules and tax transparency continue to be high priorities in many jurisdictions.
rate. Corporate tax reform, anti-base-erosion rules and tax transparency continue to be high priorities in many jurisdictions.
Changes in these laws and regulations, including those that align to or are associated with the Organization for Economic
Changes in these laws and regulations, including those that align to or are associated with the Organization for Economic
We have substantial existing indebtedness and the ability to incur significant additional indebtedness, which could limit our
We have substantial existing indebtedness and the ability to incur significant additional indebtedness, which could limit our
operations and our use of our cash flow and negatively impact our credit ratings.
operations and our use of our cash flow and negatively impact our credit ratings.
As of October 29, 2022, we had approximately $6.5 billion in outstanding indebtedness. In addition, we had $2.5 billion
As of October 29, 2022, we had approximately $6.5 billion in outstanding indebtedness. In addition, we had $2.5 billion
of availability under our unsecured revolving credit facility. Our leverage could have negative consequences, including
of availability under our unsecured revolving credit facility. Our leverage could have negative consequences, including
increasing our vulnerability to adverse economic and industry conditions, limiting our ability to obtain additional financing and
increasing our vulnerability to adverse economic and industry conditions, limiting our ability to obtain additional financing and
limiting our ability to acquire new products and technologies through strategic acquisitions. Further, on October 5, 2021, we
limiting our ability to acquire new products and technologies through strategic acquisitions. Further, on October 5, 2021, we
issued $500 million aggregate principal amount of floating rate senior notes (the “Floating Rate Notes”). Our Floating Rate
issued $500 million aggregate principal amount of floating rate senior notes (the “Floating Rate Notes”). Our Floating Rate
Notes and our net interest expense is exposed to changes in market interest rates and will increase as market interest rates rise.
Notes and our net interest expense is exposed to changes in market interest rates and will increase as market interest rates rise.
We may also incur additional debt, including debt with variable interest rates, in the future, which would increase these risks.
We may also incur additional debt, including debt with variable interest rates, in the future, which would increase these risks.
Our ability to make payments of principal and interest on our indebtedness when due depends upon our future operating
Our ability to make payments of principal and interest on our indebtedness when due depends upon our future operating
performance, which may be impacted by general economic conditions, industry cycles and other factors beyond our control. If
performance, which may be impacted by general economic conditions, industry cycles and other factors beyond our control. If
we are unable to service or refinance our debt, we may be required to divert funds that would otherwise be invested in growing
we are unable to service or refinance our debt, we may be required to divert funds that would otherwise be invested in growing
our business operations or returned to shareholders, repatriate earnings as dividends from foreign locations with potential
our business operations or returned to shareholders, repatriate earnings as dividends from foreign locations with potential
negative tax consequences, or sell selected assets. Such measures might not be sufficient to enable us to service our debt, which
negative tax consequences, or sell selected assets. Such measures might not be sufficient to enable us to service our debt, which
could negatively impact our financial results. In addition, we may not be able to obtain any such financing, refinancing or
could negatively impact our financial results. In addition, we may not be able to obtain any such financing, refinancing or
complete a sale of assets on economically favorable terms. In the case of financing or refinancing, favorable interest rates will
complete a sale of assets on economically favorable terms. In the case of financing or refinancing, favorable interest rates will
depend on conditions in the debt capital markets. In addition, if our credit ratings are downgraded or put on watch for a
depend on conditions in the debt capital markets. In addition, if our credit ratings are downgraded or put on watch for a
potential downgrade, the applicable interest rate on borrowings under our current revolving credit facility may rise and our
potential downgrade, the applicable interest rate on borrowings under our current revolving credit facility may rise and our
ability to obtain additional financing or refinance our existing debt may be negatively affected.
ability to obtain additional financing or refinance our existing debt may be negatively affected.
Restrictions in our revolving credit facility and outstanding debt instruments may limit our activities.
Restrictions in our revolving credit facility and outstanding debt instruments may limit our activities.
Our current revolving credit facility and outstanding debt instruments impose, and future debt instruments to which we
Our current revolving credit facility and outstanding debt instruments impose, and future debt instruments to which we
may become subject may impose, restrictions that limit our ability to engage in activities that could otherwise benefit us,
may become subject may impose, restrictions that limit our ability to engage in activities that could otherwise benefit us,
including to undertake certain transactions, to create certain liens on our assets and to incur certain subsidiary indebtedness. Our
including to undertake certain transactions, to create certain liens on our assets and to incur certain subsidiary indebtedness. Our
ability to comply with these financial restrictions and covenants is dependent on our future performance, which is subject to
ability to comply with these financial restrictions and covenants is dependent on our future performance, which is subject to
prevailing economic conditions and other factors, including factors that are beyond our control such as changes in technology,
prevailing economic conditions and other factors, including factors that are beyond our control such as changes in technology,
government regulations and the level of competition in our markets. In addition, our revolving credit facility requires us to
government regulations and the level of competition in our markets. In addition, our revolving credit facility requires us to
maintain compliance with specified financial ratios. If we breach any of the covenants under our revolving credit facility, the
maintain compliance with specified financial ratios. If we breach any of the covenants under our revolving credit facility, the
indentures governing our outstanding senior unsecured notes, or any future debt instruments to which we may become subject
indentures governing our outstanding senior unsecured notes, or any future debt instruments to which we may become subject
and do not obtain appropriate waivers, then, subject to applicable cure periods, our outstanding indebtedness thereunder could
and do not obtain appropriate waivers, then, subject to applicable cure periods, our outstanding indebtedness thereunder could
be declared immediately due and payable and/or we may be restricted from further borrowing under our revolving credit
be declared immediately due and payable and/or we may be restricted from further borrowing under our revolving credit
facility.
facility.
We may not meet expectations or targets in connection with our “green” financing arrangements, which could harm our
We may not meet expectations or targets in connection with our “green” financing arrangements, which could harm our
reputation and business.
reputation and business.
From time to time, we may enter into “green” financing arrangements that require us to use proceeds for
From time to time, we may enter into “green” financing arrangements that require us to use proceeds for
environmental sustainability purposes or have targets related to environmental sustainability. For example, we entered into a
environmental sustainability purposes or have targets related to environmental sustainability. For example, we entered into a
revolving credit agreement on June 23, 2021 (the “Revolving Credit Agreement”) that contains a sustainability-linked pricing
revolving credit agreement on June 23, 2021 (the “Revolving Credit Agreement”) that contains a sustainability-linked pricing
component, which provides for interest rate and facility fee reductions or increases based on meeting or missing targets related
component, which provides for interest rate and facility fee reductions or increases based on meeting or missing targets related
to environmental sustainability, specifically greenhouse gas emissions and renewable energy usage. For calendar year 2021, we
to environmental sustainability, specifically greenhouse gas emissions and renewable energy usage. For calendar year 2021, we
did not achieve the greenhouse gas emissions reduction threshold goal related to this sustainability-linked pricing component
did not achieve the greenhouse gas emissions reduction threshold goal related to this sustainability-linked pricing component
due in part to increased demand for product, which did not have a material impact on our business, net income, or financing
due in part to increased demand for product, which did not have a material impact on our business, net income, or financing
costs. On October 5, 2021, we issued $750 million sustainability-linked senior notes (the “Sustainability-Linked Senior
costs. On October 5, 2021, we issued $750 million sustainability-linked senior notes (the “Sustainability-Linked Senior
Notes”). Our Sustainability-Linked Senior Notes initially bear interest at a rate of 1.7% per annum and are subject to an
Notes”). Our Sustainability-Linked Senior Notes initially bear interest at a rate of 1.7% per annum and are subject to an
increase of an additional 30 basis points per annum from April 1, 2026 to the maturity date unless the Sustainability
increase of an additional 30 basis points per annum from April 1, 2026 to the maturity date unless the Sustainability
Performance Target (as defined in the Sustainability-Linked Senior Notes) has been satisfied. Failing to use the net proceeds
Performance Target (as defined in the Sustainability-Linked Senior Notes) has been satisfied. Failing to use the net proceeds
under green financing arrangements that satisfies investor criteria and expectations regarding environmental impact or achieve
under green financing arrangements that satisfies investor criteria and expectations regarding environmental impact or achieve
targets related to environmental sustainability under such financing arrangements could result in reputational harm and our
targets related to environmental sustainability under such financing arrangements could result in reputational harm and our
business and operating results could be negatively impacted.
business and operating results could be negatively impacted.
If we are not able to meet our U.S. cash requirements, it may be necessary for us to consider repatriation of foreign earnings,
If we are not able to meet our U.S. cash requirements, it may be necessary for us to consider repatriation of foreign earnings,
which could have a material adverse effect on our results of operations and financial condition.
which could have a material adverse effect on our results of operations and financial condition.
21
21
22
22
We carry outside basis differences in certain of our subsidiaries, primarily arising from acquisition accounting adjustments
We carry outside basis differences in certain of our subsidiaries, primarily arising from acquisition accounting adjustments
ITEM 1B.
ITEM 1B.
UNRESOLVED STAFF COMMENTS
UNRESOLVED STAFF COMMENTS
None.
None.
and certain undistributed earnings that are considered indefinitely reinvested. We intend to reinvest these funds in our
and certain undistributed earnings that are considered indefinitely reinvested. We intend to reinvest these funds in our
international operations, and our current plans do not demonstrate a need to repatriate these earnings to fund our U.S. cash
international operations, and our current plans do not demonstrate a need to repatriate these earnings to fund our U.S. cash
requirements. We require a substantial amount of cash in the United States for operating requirements, stock repurchases, cash
requirements. We require a substantial amount of cash in the United States for operating requirements, stock repurchases, cash
dividends and acquisitions. If we are not able to meet our U.S. cash requirements through operations, borrowings under our
dividends and acquisitions. If we are not able to meet our U.S. cash requirements through operations, borrowings under our
current revolving credit facility, future debt or equity offerings or other sources of cash obtained at an acceptable cost, it may be
current revolving credit facility, future debt or equity offerings or other sources of cash obtained at an acceptable cost, it may be
necessary for us to consider repatriation of earnings that are indefinitely reinvested, and we may be required to pay additional
necessary for us to consider repatriation of earnings that are indefinitely reinvested, and we may be required to pay additional
taxes under current tax laws, which could have a material adverse effect on our results of operations and financial condition.
taxes under current tax laws, which could have a material adverse effect on our results of operations and financial condition.
General Risk Factors
General Risk Factors
Our results of operations could be affected by natural disasters in the locations in which we operate.
Our results of operations could be affected by natural disasters in the locations in which we operate.
We, like many companies in the semiconductor industry, rely on supplies, services, internal manufacturing capacity,
We, like many companies in the semiconductor industry, rely on supplies, services, internal manufacturing capacity,
wafer fabrication foundries and other subcontractors in locations around the world that are susceptible to natural disasters and
wafer fabrication foundries and other subcontractors in locations around the world that are susceptible to natural disasters and
other significant disruptions. Earthquakes, fires, tsunamis, flooding or other natural disasters may disrupt local semiconductor-
other significant disruptions. Earthquakes, fires, tsunamis, flooding or other natural disasters may disrupt local semiconductor-
related businesses and adversely affect manufacturing capacity, availability and cost of key raw materials, utilities and
related businesses and adversely affect manufacturing capacity, availability and cost of key raw materials, utilities and
equipment, and availability of key services, including transport of our products worldwide. Our insurance may not adequately
equipment, and availability of key services, including transport of our products worldwide. Our insurance may not adequately
cover losses resulting from such disruptions. Any prolonged inability to utilize one of our manufacturing facilities, or those of
cover losses resulting from such disruptions. Any prolonged inability to utilize one of our manufacturing facilities, or those of
our subcontractors or third-party wafer fabrication foundries, as a result of fire, flood, natural disaster, unavailability of utilities
our subcontractors or third-party wafer fabrication foundries, as a result of fire, flood, natural disaster, unavailability of utilities
or otherwise, could result in a temporary or permanent loss of customers for affected products, which could have a material
or otherwise, could result in a temporary or permanent loss of customers for affected products, which could have a material
adverse effect on our results of operations and financial condition. In addition, global climate change may result in certain
adverse effect on our results of operations and financial condition. In addition, global climate change may result in certain
natural disasters occurring more frequently or with greater intensity, such as drought, wildfires, storms, sea-level rise, and
natural disasters occurring more frequently or with greater intensity, such as drought, wildfires, storms, sea-level rise, and
flooding, and could disrupt the availability of water necessary for the operation of our fabrication facilities located in semi-arid
flooding, and could disrupt the availability of water necessary for the operation of our fabrication facilities located in semi-arid
regions. The long-term effects of climate change on the global economy and the semiconductor industry in particular are
regions. The long-term effects of climate change on the global economy and the semiconductor industry in particular are
unclear, but could be severe.
unclear, but could be severe.
Our stock price may be volatile.
Our stock price may be volatile.
The market price of our common stock may be volatile, as it may be significantly affected by factors including:
The market price of our common stock may be volatile, as it may be significantly affected by factors including:
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global economic conditions generally;
global economic conditions generally;
crises in global credit, debt and financial markets;
crises in global credit, debt and financial markets;
actual or anticipated fluctuations in our revenue and operating results;
actual or anticipated fluctuations in our revenue and operating results;
changes in financial estimates or other statements made by securities analysts or others in analyst reports or other
changes in financial estimates or other statements made by securities analysts or others in analyst reports or other
publications, or our failure to perform in line with those estimates or statements or our published guidance;
publications, or our failure to perform in line with those estimates or statements or our published guidance;
financial results and prospects of our customers;
financial results and prospects of our customers;
U.S. and foreign government actions, including with respect to trade, travel, export and taxation;
U.S. and foreign government actions, including with respect to trade, travel, export and taxation;
the extent of the impact and the duration of the COVID-19 pandemic;
the extent of the impact and the duration of the COVID-19 pandemic;
changes in market valuations of other semiconductor companies;
changes in market valuations of other semiconductor companies;
rumors and speculation in the press, investment community or on social media about us, our customers or other
rumors and speculation in the press, investment community or on social media about us, our customers or other
companies in our industry;
companies in our industry;
announcements by us, our customers or our competitors of significant new products, technical innovations, material
announcements by us, our customers or our competitors of significant new products, technical innovations, material
transactions, acquisitions or dispositions, litigation, capital commitments, including share repurchases and dividend
transactions, acquisitions or dispositions, litigation, capital commitments, including share repurchases and dividend
policies, or revised earnings estimates;
policies, or revised earnings estimates;
departures of key personnel;
departures of key personnel;
alleged noncompliance with laws, regulations or ethics standards by us or any of our employees, officers or directors;
alleged noncompliance with laws, regulations or ethics standards by us or any of our employees, officers or directors;
and
and
negative media publicity targeting us or our suppliers, customers or competitors.
negative media publicity targeting us or our suppliers, customers or competitors.
The stock market has historically experienced volatility, especially within the semiconductor industry, that often has
The stock market has historically experienced volatility, especially within the semiconductor industry, that often has
been unrelated to the performance of particular companies, such as the response to rising inflation and increasing interest rates.
been unrelated to the performance of particular companies, such as the response to rising inflation and increasing interest rates.
These market fluctuations may cause our stock price to fall regardless of our operating results.
These market fluctuations may cause our stock price to fall regardless of our operating results.
Our directors and executive officers periodically buy or sell shares of our common stock in the market, including
Our directors and executive officers periodically buy or sell shares of our common stock in the market, including
pursuant to Rule 10b5-1 trading plans. Regardless of the individual's reasons for such purchases or sales, securities analysts and
pursuant to Rule 10b5-1 trading plans. Regardless of the individual's reasons for such purchases or sales, securities analysts and
investors could view such transactions as positive or negative indicators and our stock price could be adversely affected as a
investors could view such transactions as positive or negative indicators and our stock price could be adversely affected as a
result.
result.
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We carry outside basis differences in certain of our subsidiaries, primarily arising from acquisition accounting adjustments
We carry outside basis differences in certain of our subsidiaries, primarily arising from acquisition accounting adjustments
ITEM 1B.
ITEM 1B.
UNRESOLVED STAFF COMMENTS
UNRESOLVED STAFF COMMENTS
None.
None.
and certain undistributed earnings that are considered indefinitely reinvested. We intend to reinvest these funds in our
and certain undistributed earnings that are considered indefinitely reinvested. We intend to reinvest these funds in our
international operations, and our current plans do not demonstrate a need to repatriate these earnings to fund our U.S. cash
international operations, and our current plans do not demonstrate a need to repatriate these earnings to fund our U.S. cash
requirements. We require a substantial amount of cash in the United States for operating requirements, stock repurchases, cash
requirements. We require a substantial amount of cash in the United States for operating requirements, stock repurchases, cash
dividends and acquisitions. If we are not able to meet our U.S. cash requirements through operations, borrowings under our
dividends and acquisitions. If we are not able to meet our U.S. cash requirements through operations, borrowings under our
current revolving credit facility, future debt or equity offerings or other sources of cash obtained at an acceptable cost, it may be
current revolving credit facility, future debt or equity offerings or other sources of cash obtained at an acceptable cost, it may be
necessary for us to consider repatriation of earnings that are indefinitely reinvested, and we may be required to pay additional
necessary for us to consider repatriation of earnings that are indefinitely reinvested, and we may be required to pay additional
taxes under current tax laws, which could have a material adverse effect on our results of operations and financial condition.
taxes under current tax laws, which could have a material adverse effect on our results of operations and financial condition.
General Risk Factors
General Risk Factors
Our results of operations could be affected by natural disasters in the locations in which we operate.
Our results of operations could be affected by natural disasters in the locations in which we operate.
We, like many companies in the semiconductor industry, rely on supplies, services, internal manufacturing capacity,
We, like many companies in the semiconductor industry, rely on supplies, services, internal manufacturing capacity,
wafer fabrication foundries and other subcontractors in locations around the world that are susceptible to natural disasters and
wafer fabrication foundries and other subcontractors in locations around the world that are susceptible to natural disasters and
other significant disruptions. Earthquakes, fires, tsunamis, flooding or other natural disasters may disrupt local semiconductor-
other significant disruptions. Earthquakes, fires, tsunamis, flooding or other natural disasters may disrupt local semiconductor-
related businesses and adversely affect manufacturing capacity, availability and cost of key raw materials, utilities and
related businesses and adversely affect manufacturing capacity, availability and cost of key raw materials, utilities and
equipment, and availability of key services, including transport of our products worldwide. Our insurance may not adequately
equipment, and availability of key services, including transport of our products worldwide. Our insurance may not adequately
cover losses resulting from such disruptions. Any prolonged inability to utilize one of our manufacturing facilities, or those of
cover losses resulting from such disruptions. Any prolonged inability to utilize one of our manufacturing facilities, or those of
our subcontractors or third-party wafer fabrication foundries, as a result of fire, flood, natural disaster, unavailability of utilities
our subcontractors or third-party wafer fabrication foundries, as a result of fire, flood, natural disaster, unavailability of utilities
or otherwise, could result in a temporary or permanent loss of customers for affected products, which could have a material
or otherwise, could result in a temporary or permanent loss of customers for affected products, which could have a material
adverse effect on our results of operations and financial condition. In addition, global climate change may result in certain
adverse effect on our results of operations and financial condition. In addition, global climate change may result in certain
natural disasters occurring more frequently or with greater intensity, such as drought, wildfires, storms, sea-level rise, and
natural disasters occurring more frequently or with greater intensity, such as drought, wildfires, storms, sea-level rise, and
flooding, and could disrupt the availability of water necessary for the operation of our fabrication facilities located in semi-arid
flooding, and could disrupt the availability of water necessary for the operation of our fabrication facilities located in semi-arid
regions. The long-term effects of climate change on the global economy and the semiconductor industry in particular are
regions. The long-term effects of climate change on the global economy and the semiconductor industry in particular are
unclear, but could be severe.
unclear, but could be severe.
Our stock price may be volatile.
Our stock price may be volatile.
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The market price of our common stock may be volatile, as it may be significantly affected by factors including:
The market price of our common stock may be volatile, as it may be significantly affected by factors including:
global economic conditions generally;
global economic conditions generally;
crises in global credit, debt and financial markets;
crises in global credit, debt and financial markets;
actual or anticipated fluctuations in our revenue and operating results;
actual or anticipated fluctuations in our revenue and operating results;
changes in financial estimates or other statements made by securities analysts or others in analyst reports or other
changes in financial estimates or other statements made by securities analysts or others in analyst reports or other
publications, or our failure to perform in line with those estimates or statements or our published guidance;
publications, or our failure to perform in line with those estimates or statements or our published guidance;
financial results and prospects of our customers;
financial results and prospects of our customers;
U.S. and foreign government actions, including with respect to trade, travel, export and taxation;
U.S. and foreign government actions, including with respect to trade, travel, export and taxation;
the extent of the impact and the duration of the COVID-19 pandemic;
the extent of the impact and the duration of the COVID-19 pandemic;
changes in market valuations of other semiconductor companies;
changes in market valuations of other semiconductor companies;
rumors and speculation in the press, investment community or on social media about us, our customers or other
rumors and speculation in the press, investment community or on social media about us, our customers or other
companies in our industry;
companies in our industry;
announcements by us, our customers or our competitors of significant new products, technical innovations, material
announcements by us, our customers or our competitors of significant new products, technical innovations, material
transactions, acquisitions or dispositions, litigation, capital commitments, including share repurchases and dividend
transactions, acquisitions or dispositions, litigation, capital commitments, including share repurchases and dividend
policies, or revised earnings estimates;
policies, or revised earnings estimates;
departures of key personnel;
departures of key personnel;
and
and
alleged noncompliance with laws, regulations or ethics standards by us or any of our employees, officers or directors;
alleged noncompliance with laws, regulations or ethics standards by us or any of our employees, officers or directors;
negative media publicity targeting us or our suppliers, customers or competitors.
negative media publicity targeting us or our suppliers, customers or competitors.
The stock market has historically experienced volatility, especially within the semiconductor industry, that often has
The stock market has historically experienced volatility, especially within the semiconductor industry, that often has
been unrelated to the performance of particular companies, such as the response to rising inflation and increasing interest rates.
been unrelated to the performance of particular companies, such as the response to rising inflation and increasing interest rates.
These market fluctuations may cause our stock price to fall regardless of our operating results.
These market fluctuations may cause our stock price to fall regardless of our operating results.
Our directors and executive officers periodically buy or sell shares of our common stock in the market, including
Our directors and executive officers periodically buy or sell shares of our common stock in the market, including
pursuant to Rule 10b5-1 trading plans. Regardless of the individual's reasons for such purchases or sales, securities analysts and
pursuant to Rule 10b5-1 trading plans. Regardless of the individual's reasons for such purchases or sales, securities analysts and
investors could view such transactions as positive or negative indicators and our stock price could be adversely affected as a
investors could view such transactions as positive or negative indicators and our stock price could be adversely affected as a
result.
result.
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From time to time in the ordinary course of our business, various claims, charges and litigation are asserted or
From time to time in the ordinary course of our business, various claims, charges and litigation are asserted or
commenced against us arising from, or related to, among other things, contractual matters, patents, trademarks, personal injury,
commenced against us arising from, or related to, among other things, contractual matters, patents, trademarks, personal injury,
environmental matters, product liability, insurance coverage, employment or employee benefits. As to such claims and
environmental matters, product liability, insurance coverage, employment or employee benefits. As to such claims and
litigation, we can give no assurance that we will prevail. We do not believe that any current legal matters will have a material
litigation, we can give no assurance that we will prevail. We do not believe that any current legal matters will have a material
adverse effect on our financial position, results of operations or cash flows. For information regarding material pending legal
adverse effect on our financial position, results of operations or cash flows. For information regarding material pending legal
proceedings in which we are involved, see Note 10, Commitments and Contingencies of the Notes to Consolidated Financial
proceedings in which we are involved, see Note 10, Commitments and Contingencies of the Notes to Consolidated Financial
Statements contained in Part II, Item 8 of this Annual Report on Form 10-K.
Statements contained in Part II, Item 8 of this Annual Report on Form 10-K.
ITEM 4. MINE SAFETY DISCLOSURES
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
Not Applicable.
ITEM 2.
ITEM 2.
PROPERTIES
PROPERTIES
ITEM 3. LEGAL PROCEEDINGS
ITEM 3. LEGAL PROCEEDINGS
Manufacturing and other operations are conducted in several locations worldwide. The following tables provide certain
Manufacturing and other operations are conducted in several locations worldwide. The following tables provide certain
information about our significant general offices and manufacturing facilities:
information about our significant general offices and manufacturing facilities:
Properties
Properties
Owned:
Owned:
Use
Use
Cavite, Philippines
Cavite, Philippines
Wafer probe and testing, warehouse, engineering and administrative offices
Wafer probe and testing, warehouse, engineering and administrative offices
Wilmington, MA
Wilmington, MA
Limerick, Ireland
Limerick, Ireland
San Jose, CA
San Jose, CA
Corporate headquarters, wafer fabrication, testing, engineering, sales, marketing
Corporate headquarters, wafer fabrication, testing, engineering, sales, marketing
and administrative offices
and administrative offices
Wafer fabrication, wafer probe and testing, warehouse and distribution,
Wafer fabrication, wafer probe and testing, warehouse and distribution,
engineering and administrative offices
engineering and administrative offices
Engineering, sales, marketing and administrative offices
Engineering, sales, marketing and administrative offices
Wafer fabrication, engineering and administrative offices
Wafer fabrication, engineering and administrative offices
Beaverton, OR
Beaverton, OR
Penang, Malaysia (1) Wafer probe and testing, assembly and engineering offices
Penang, Malaysia (1) Wafer probe and testing, assembly and engineering offices
Chonburi Province,
Chonburi Province,
Thailand
Thailand
Chelmsford, MA
Chelmsford, MA
Wafer probe and testing, warehouse, engineering and administrative offices
Wafer probe and testing, warehouse, engineering and administrative offices
Final assembly of certain module and subsystem-level products, testing,
Final assembly of certain module and subsystem-level products, testing,
engineering and administrative offices
engineering and administrative offices
Wafer fabrication
Wafer fabrication
Camas, WA
Camas, WA
Properties
Properties
Leased:
Leased:
Use
Use
Approximate
Approximate
Total Sq. Ft.
Total Sq. Ft.
Lease
Lease
Termination
Termination
(fiscal year)
(fiscal year)
Bangalore, India
Bangalore, India
Engineering and administrative offices
Engineering and administrative offices
175,000 sq. ft.
175,000 sq. ft.
2027
2027
San Jose, CA
San Jose, CA
Manufacturing, marketing, and administrative
Manufacturing, marketing, and administrative
offices
offices
103,000 sq. ft.
103,000 sq. ft.
2035
2035
(1) Leases on the land used for this facility expire in 2054 through 2057.
(1) Leases on the land used for this facility expire in 2054 through 2057.
Approximate
Approximate
Total Sq. Ft.
Total Sq. Ft.
1,518,000 sq. ft.
1,518,000 sq. ft.
826,000 sq. ft.
826,000 sq. ft.
646,000 sq. ft.
646,000 sq. ft.
435,000 sq. ft.
435,000 sq. ft.
432,000 sq. ft.
432,000 sq. ft.
364,000 sq. ft.
364,000 sq. ft.
194,000 sq. ft.
194,000 sq. ft.
174,000 sq. ft.
174,000 sq. ft.
105,000 sq. ft.
105,000 sq. ft.
Renewals
Renewals
1, five-yr.
1, five-yr.
period
period
1, five-yr.
1, five-yr.
period
period
In addition to the properties listed in the above tables, we also own or lease a number of other facilities in various
In addition to the properties listed in the above tables, we also own or lease a number of other facilities in various
locations in the United States and internationally that are used for manufacturing, engineering, sales and marketing and
locations in the United States and internationally that are used for manufacturing, engineering, sales and marketing and
administration activities. Leases for these leased facilities expire at various dates through the year 2039. We do not anticipate
administration activities. Leases for these leased facilities expire at various dates through the year 2039. We do not anticipate
experiencing significant difficulty in retaining occupancy of any of our facilities through lease renewals prior to expiration or
experiencing significant difficulty in retaining occupancy of any of our facilities through lease renewals prior to expiration or
through month-to-month occupancy, or in replacing them with equivalent facilities. For information concerning our obligations
through month-to-month occupancy, or in replacing them with equivalent facilities. For information concerning our obligations
under all operating leases, see Note 9, Leases, of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of
under all operating leases, see Note 9, Leases, of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of
this Annual Report on Form 10-K.
this Annual Report on Form 10-K.
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26
ITEM 2.
ITEM 2.
PROPERTIES
PROPERTIES
ITEM 3. LEGAL PROCEEDINGS
ITEM 3. LEGAL PROCEEDINGS
From time to time in the ordinary course of our business, various claims, charges and litigation are asserted or
From time to time in the ordinary course of our business, various claims, charges and litigation are asserted or
commenced against us arising from, or related to, among other things, contractual matters, patents, trademarks, personal injury,
commenced against us arising from, or related to, among other things, contractual matters, patents, trademarks, personal injury,
environmental matters, product liability, insurance coverage, employment or employee benefits. As to such claims and
environmental matters, product liability, insurance coverage, employment or employee benefits. As to such claims and
litigation, we can give no assurance that we will prevail. We do not believe that any current legal matters will have a material
litigation, we can give no assurance that we will prevail. We do not believe that any current legal matters will have a material
adverse effect on our financial position, results of operations or cash flows. For information regarding material pending legal
adverse effect on our financial position, results of operations or cash flows. For information regarding material pending legal
proceedings in which we are involved, see Note 10, Commitments and Contingencies of the Notes to Consolidated Financial
proceedings in which we are involved, see Note 10, Commitments and Contingencies of the Notes to Consolidated Financial
Statements contained in Part II, Item 8 of this Annual Report on Form 10-K.
Statements contained in Part II, Item 8 of this Annual Report on Form 10-K.
ITEM 4. MINE SAFETY DISCLOSURES
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
Not Applicable.
Manufacturing and other operations are conducted in several locations worldwide. The following tables provide certain
Manufacturing and other operations are conducted in several locations worldwide. The following tables provide certain
information about our significant general offices and manufacturing facilities:
information about our significant general offices and manufacturing facilities:
Properties
Properties
Owned:
Owned:
Use
Use
Approximate
Approximate
Total Sq. Ft.
Total Sq. Ft.
Cavite, Philippines
Cavite, Philippines
Wafer probe and testing, warehouse, engineering and administrative offices
Wafer probe and testing, warehouse, engineering and administrative offices
1,518,000 sq. ft.
1,518,000 sq. ft.
Wilmington, MA
Wilmington, MA
Corporate headquarters, wafer fabrication, testing, engineering, sales, marketing
Corporate headquarters, wafer fabrication, testing, engineering, sales, marketing
826,000 sq. ft.
826,000 sq. ft.
Limerick, Ireland
Limerick, Ireland
Wafer fabrication, wafer probe and testing, warehouse and distribution,
Wafer fabrication, wafer probe and testing, warehouse and distribution,
646,000 sq. ft.
646,000 sq. ft.
and administrative offices
and administrative offices
engineering and administrative offices
engineering and administrative offices
San Jose, CA
San Jose, CA
Beaverton, OR
Beaverton, OR
Engineering, sales, marketing and administrative offices
Engineering, sales, marketing and administrative offices
Wafer fabrication, engineering and administrative offices
Wafer fabrication, engineering and administrative offices
Penang, Malaysia (1) Wafer probe and testing, assembly and engineering offices
Penang, Malaysia (1) Wafer probe and testing, assembly and engineering offices
Chonburi Province,
Chonburi Province,
Wafer probe and testing, warehouse, engineering and administrative offices
Wafer probe and testing, warehouse, engineering and administrative offices
Thailand
Thailand
Chelmsford, MA
Chelmsford, MA
Final assembly of certain module and subsystem-level products, testing,
Final assembly of certain module and subsystem-level products, testing,
174,000 sq. ft.
174,000 sq. ft.
Camas, WA
Camas, WA
Wafer fabrication
Wafer fabrication
engineering and administrative offices
engineering and administrative offices
Properties
Properties
Leased:
Leased:
Use
Use
Approximate
Approximate
Total Sq. Ft.
Total Sq. Ft.
Lease
Lease
Termination
Termination
(fiscal year)
(fiscal year)
Bangalore, India
Bangalore, India
Engineering and administrative offices
Engineering and administrative offices
175,000 sq. ft.
175,000 sq. ft.
2027
2027
San Jose, CA
San Jose, CA
Manufacturing, marketing, and administrative
Manufacturing, marketing, and administrative
103,000 sq. ft.
103,000 sq. ft.
2035
2035
offices
offices
(1) Leases on the land used for this facility expire in 2054 through 2057.
(1) Leases on the land used for this facility expire in 2054 through 2057.
435,000 sq. ft.
435,000 sq. ft.
432,000 sq. ft.
432,000 sq. ft.
364,000 sq. ft.
364,000 sq. ft.
194,000 sq. ft.
194,000 sq. ft.
105,000 sq. ft.
105,000 sq. ft.
Renewals
Renewals
1, five-yr.
1, five-yr.
period
period
1, five-yr.
1, five-yr.
period
period
In addition to the properties listed in the above tables, we also own or lease a number of other facilities in various
In addition to the properties listed in the above tables, we also own or lease a number of other facilities in various
locations in the United States and internationally that are used for manufacturing, engineering, sales and marketing and
locations in the United States and internationally that are used for manufacturing, engineering, sales and marketing and
administration activities. Leases for these leased facilities expire at various dates through the year 2039. We do not anticipate
administration activities. Leases for these leased facilities expire at various dates through the year 2039. We do not anticipate
experiencing significant difficulty in retaining occupancy of any of our facilities through lease renewals prior to expiration or
experiencing significant difficulty in retaining occupancy of any of our facilities through lease renewals prior to expiration or
through month-to-month occupancy, or in replacing them with equivalent facilities. For information concerning our obligations
through month-to-month occupancy, or in replacing them with equivalent facilities. For information concerning our obligations
under all operating leases, see Note 9, Leases, of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of
under all operating leases, see Note 9, Leases, of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of
this Annual Report on Form 10-K.
this Annual Report on Form 10-K.
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The following graph compares cumulative total shareholder return on our common stock since October 28, 2017 with the
The following graph compares cumulative total shareholder return on our common stock since October 28, 2017 with the
cumulative total return of the Standard & Poor’s (S&P) 500 Index and the S&P Semiconductors Index. This graph assumes the
cumulative total return of the Standard & Poor’s (S&P) 500 Index and the S&P Semiconductors Index. This graph assumes the
investment of $100 on October 28, 2017 in our common stock, the S&P 500 Index and the S&P Semiconductors Index and
investment of $100 on October 28, 2017 in our common stock, the S&P 500 Index and the S&P Semiconductors Index and
assumes all dividends are reinvested. Measurement points are the last trading day for each respective fiscal year.
assumes all dividends are reinvested. Measurement points are the last trading day for each respective fiscal year.
PART II
PART II
Comparative Stock Performance Graph
Comparative Stock Performance Graph
ITEM 5.
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock is listed on The Nasdaq Global Select Market under the symbol ADI. The number of holders of record
Our common stock is listed on The Nasdaq Global Select Market under the symbol ADI. The number of holders of record
of our common stock at November 18, 2022 was 2,382. This number does not include shareholders for whom shares are held in
of our common stock at November 18, 2022 was 2,382. This number does not include shareholders for whom shares are held in
a “nominee” or “street” name. On October 28, 2022, the last reported sales price of our common stock on The Nasdaq Global
a “nominee” or “street” name. On October 28, 2022, the last reported sales price of our common stock on The Nasdaq Global
Select Market was $144.88 per share.
Select Market was $144.88 per share.
On November 21, 2022, our Board of Directors declared a cash dividend of $0.76 per outstanding share of common
On November 21, 2022, our Board of Directors declared a cash dividend of $0.76 per outstanding share of common
stock. The dividend will be paid on December 15, 2022 to all shareholders of record at the close of business on December 5,
stock. The dividend will be paid on December 15, 2022 to all shareholders of record at the close of business on December 5,
2022 and is expected to total approximately $387.1 million. We currently expect quarterly dividends to continue in future
2022 and is expected to total approximately $387.1 million. We currently expect quarterly dividends to continue in future
periods, although they remain subject to determination and declaration by our Board of Directors. The payment of future
periods, although they remain subject to determination and declaration by our Board of Directors. The payment of future
dividends, if any, will be based on several factors, including our financial performance, outlook and liquidity.
dividends, if any, will be based on several factors, including our financial performance, outlook and liquidity.
Information regarding our equity compensation plans and the securities authorized for issuance thereunder is set forth in
Information regarding our equity compensation plans and the securities authorized for issuance thereunder is set forth in
Item 12 of this Annual Report on Form 10-K.
Item 12 of this Annual Report on Form 10-K.
Issuer Purchases of Equity Securities
Issuer Purchases of Equity Securities
The table below summarizes the activity related to stock repurchases for the three months ended October 29, 2022. We
The table below summarizes the activity related to stock repurchases for the three months ended October 29, 2022. We
have an ongoing authorization, originally approved by our Board of Directors in 2004, and subsequently amended, to
have an ongoing authorization, originally approved by our Board of Directors in 2004, and subsequently amended, to
repurchase shares of our common stock in open market or negotiated transactions. In March 2020, we temporarily suspended
repurchase shares of our common stock in open market or negotiated transactions. In March 2020, we temporarily suspended
our share repurchase program as a result of the global macroeconomic environment. That suspension continued through the
our share repurchase program as a result of the global macroeconomic environment. That suspension continued through the
fourth quarter of fiscal 2020 given the planned acquisition of Maxim Integrated Products, Inc. We reinstated the common stock
fourth quarter of fiscal 2020 given the planned acquisition of Maxim Integrated Products, Inc. We reinstated the common stock
repurchase program effective November 2020. As of October 29, 2022, the Company had repurchased a total of approximately
repurchase program effective November 2020. As of October 29, 2022, the Company had repurchased a total of approximately
189.6 million shares of its common stock for approximately $11.7 billion under our share repurchase program. An additional
189.6 million shares of its common stock for approximately $11.7 billion under our share repurchase program. An additional
$4.9 billion remains available for repurchase of shares under the current authorized program. Future repurchases of common
$4.9 billion remains available for repurchase of shares under the current authorized program. Future repurchases of common
stock will be dependent upon our financial position, results of operations, outlook, liquidity, and other factors we deem
stock will be dependent upon our financial position, results of operations, outlook, liquidity, and other factors we deem
relevant.
relevant.
Period
Period
July 31, 2022 through August 27, 2022
July 31, 2022 through August 27, 2022
August 28, 2022 through September 24, 2022
August 28, 2022 through September 24, 2022
September 25, 2022 through October 29, 2022
September 25, 2022 through October 29, 2022
_______________________________________
_______________________________________
Total
Total
Total Number
Total Number
of
of
Shares
Shares
Purchased (1)
Purchased (1)
Average
Average
Price Paid
Price Paid
Per Share (2)
Per Share (2)
Total Number of Shares
Total Number of Shares
Purchased as Part of
Purchased as Part of
Publicly Announced
Publicly Announced
Plans or Programs (3)
Plans or Programs (3)
Approximate Dollar
Approximate Dollar
Value of Shares that
Value of Shares that
May Yet Be Purchased
May Yet Be Purchased
Under the Plans or
Under the Plans or
Programs
Programs
1,572,964 $ 172.62
1,572,964 $ 172.62
1,058,260 $ 148.76
1,058,260 $ 148.76
2,718,976 $ 143.15
2,718,976 $ 143.15
5,350,200 $ 152.93
5,350,200 $ 152.93
1,515,606 $
1,515,606 $
1,041,800 $
1,041,800 $
2,705,200 $
2,705,200 $
5,262,606 $
5,262,606 $
5,471,910,519
5,471,910,519
5,316,957,211
5,316,957,211
4,929,659,276
4,929,659,276
4,929,659,276
4,929,659,276
(1)
(1)
(2)
(2)
(3)
(3)
Includes 87,594 shares withheld by us from employees to satisfy employee tax obligations upon vesting of restricted stock units/
Includes 87,594 shares withheld by us from employees to satisfy employee tax obligations upon vesting of restricted stock units/
awards granted to our employees under our equity compensation plans.
awards granted to our employees under our equity compensation plans.
The average price paid for shares in connection with vesting of restricted stock units/awards are averages of the closing stock price at
The average price paid for shares in connection with vesting of restricted stock units/awards are averages of the closing stock price at
the vesting date which is used to calculate the number of shares to be withheld.
the vesting date which is used to calculate the number of shares to be withheld.
Shares repurchased pursuant to the stock repurchase program publicly announced on August 12, 2004. On August 25, 2021, the Board
Shares repurchased pursuant to the stock repurchase program publicly announced on August 12, 2004. On August 25, 2021, the Board
of Directors approved an increase to the current authorization for the stock repurchase program by an additional $8.5 billion to $16.7
of Directors approved an increase to the current authorization for the stock repurchase program by an additional $8.5 billion to $16.7
billion in the aggregate. Under the repurchase program, we may repurchase outstanding shares of our common stock from time to time
billion in the aggregate. Under the repurchase program, we may repurchase outstanding shares of our common stock from time to time
in the open market and through privately negotiated transactions. Unless terminated earlier by resolution of our Board of Directors, the
in the open market and through privately negotiated transactions. Unless terminated earlier by resolution of our Board of Directors, the
repurchase program will expire when we have repurchased all shares authorized for repurchase under the repurchase program.
repurchase program will expire when we have repurchased all shares authorized for repurchase under the repurchase program.
ITEM 6. RESERVED
ITEM 6. RESERVED
27
27
28
28
PART II
PART II
Comparative Stock Performance Graph
Comparative Stock Performance Graph
ITEM 5.
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock is listed on The Nasdaq Global Select Market under the symbol ADI. The number of holders of record
Our common stock is listed on The Nasdaq Global Select Market under the symbol ADI. The number of holders of record
of our common stock at November 18, 2022 was 2,382. This number does not include shareholders for whom shares are held in
of our common stock at November 18, 2022 was 2,382. This number does not include shareholders for whom shares are held in
a “nominee” or “street” name. On October 28, 2022, the last reported sales price of our common stock on The Nasdaq Global
a “nominee” or “street” name. On October 28, 2022, the last reported sales price of our common stock on The Nasdaq Global
Select Market was $144.88 per share.
Select Market was $144.88 per share.
On November 21, 2022, our Board of Directors declared a cash dividend of $0.76 per outstanding share of common
On November 21, 2022, our Board of Directors declared a cash dividend of $0.76 per outstanding share of common
stock. The dividend will be paid on December 15, 2022 to all shareholders of record at the close of business on December 5,
stock. The dividend will be paid on December 15, 2022 to all shareholders of record at the close of business on December 5,
2022 and is expected to total approximately $387.1 million. We currently expect quarterly dividends to continue in future
2022 and is expected to total approximately $387.1 million. We currently expect quarterly dividends to continue in future
periods, although they remain subject to determination and declaration by our Board of Directors. The payment of future
periods, although they remain subject to determination and declaration by our Board of Directors. The payment of future
dividends, if any, will be based on several factors, including our financial performance, outlook and liquidity.
dividends, if any, will be based on several factors, including our financial performance, outlook and liquidity.
Information regarding our equity compensation plans and the securities authorized for issuance thereunder is set forth in
Information regarding our equity compensation plans and the securities authorized for issuance thereunder is set forth in
Item 12 of this Annual Report on Form 10-K.
Item 12 of this Annual Report on Form 10-K.
Issuer Purchases of Equity Securities
Issuer Purchases of Equity Securities
The table below summarizes the activity related to stock repurchases for the three months ended October 29, 2022. We
The table below summarizes the activity related to stock repurchases for the three months ended October 29, 2022. We
have an ongoing authorization, originally approved by our Board of Directors in 2004, and subsequently amended, to
have an ongoing authorization, originally approved by our Board of Directors in 2004, and subsequently amended, to
repurchase shares of our common stock in open market or negotiated transactions. In March 2020, we temporarily suspended
repurchase shares of our common stock in open market or negotiated transactions. In March 2020, we temporarily suspended
our share repurchase program as a result of the global macroeconomic environment. That suspension continued through the
our share repurchase program as a result of the global macroeconomic environment. That suspension continued through the
fourth quarter of fiscal 2020 given the planned acquisition of Maxim Integrated Products, Inc. We reinstated the common stock
fourth quarter of fiscal 2020 given the planned acquisition of Maxim Integrated Products, Inc. We reinstated the common stock
repurchase program effective November 2020. As of October 29, 2022, the Company had repurchased a total of approximately
repurchase program effective November 2020. As of October 29, 2022, the Company had repurchased a total of approximately
189.6 million shares of its common stock for approximately $11.7 billion under our share repurchase program. An additional
189.6 million shares of its common stock for approximately $11.7 billion under our share repurchase program. An additional
$4.9 billion remains available for repurchase of shares under the current authorized program. Future repurchases of common
$4.9 billion remains available for repurchase of shares under the current authorized program. Future repurchases of common
stock will be dependent upon our financial position, results of operations, outlook, liquidity, and other factors we deem
stock will be dependent upon our financial position, results of operations, outlook, liquidity, and other factors we deem
relevant.
relevant.
Period
Period
Total Number
Total Number
of
of
Shares
Shares
Average
Average
Price Paid
Price Paid
Purchased (1)
Purchased (1)
Per Share (2)
Per Share (2)
Total Number of Shares
Total Number of Shares
Purchased as Part of
Purchased as Part of
Publicly Announced
Publicly Announced
Plans or Programs (3)
Plans or Programs (3)
Approximate Dollar
Approximate Dollar
Value of Shares that
Value of Shares that
May Yet Be Purchased
May Yet Be Purchased
Under the Plans or
Under the Plans or
Programs
Programs
July 31, 2022 through August 27, 2022
July 31, 2022 through August 27, 2022
1,572,964 $ 172.62
1,572,964 $ 172.62
1,515,606 $
1,515,606 $
5,471,910,519
5,471,910,519
August 28, 2022 through September 24, 2022
August 28, 2022 through September 24, 2022
1,058,260 $ 148.76
1,058,260 $ 148.76
1,041,800 $
1,041,800 $
5,316,957,211
5,316,957,211
September 25, 2022 through October 29, 2022
September 25, 2022 through October 29, 2022
2,718,976 $ 143.15
2,718,976 $ 143.15
2,705,200 $
2,705,200 $
4,929,659,276
4,929,659,276
Total
Total
5,350,200 $ 152.93
5,350,200 $ 152.93
5,262,606 $
5,262,606 $
4,929,659,276
4,929,659,276
_______________________________________
_______________________________________
(1)
(1)
Includes 87,594 shares withheld by us from employees to satisfy employee tax obligations upon vesting of restricted stock units/
Includes 87,594 shares withheld by us from employees to satisfy employee tax obligations upon vesting of restricted stock units/
awards granted to our employees under our equity compensation plans.
awards granted to our employees under our equity compensation plans.
(2)
(2)
The average price paid for shares in connection with vesting of restricted stock units/awards are averages of the closing stock price at
The average price paid for shares in connection with vesting of restricted stock units/awards are averages of the closing stock price at
the vesting date which is used to calculate the number of shares to be withheld.
the vesting date which is used to calculate the number of shares to be withheld.
(3)
(3)
Shares repurchased pursuant to the stock repurchase program publicly announced on August 12, 2004. On August 25, 2021, the Board
Shares repurchased pursuant to the stock repurchase program publicly announced on August 12, 2004. On August 25, 2021, the Board
of Directors approved an increase to the current authorization for the stock repurchase program by an additional $8.5 billion to $16.7
of Directors approved an increase to the current authorization for the stock repurchase program by an additional $8.5 billion to $16.7
billion in the aggregate. Under the repurchase program, we may repurchase outstanding shares of our common stock from time to time
billion in the aggregate. Under the repurchase program, we may repurchase outstanding shares of our common stock from time to time
in the open market and through privately negotiated transactions. Unless terminated earlier by resolution of our Board of Directors, the
in the open market and through privately negotiated transactions. Unless terminated earlier by resolution of our Board of Directors, the
repurchase program will expire when we have repurchased all shares authorized for repurchase under the repurchase program.
repurchase program will expire when we have repurchased all shares authorized for repurchase under the repurchase program.
The following graph compares cumulative total shareholder return on our common stock since October 28, 2017 with the
The following graph compares cumulative total shareholder return on our common stock since October 28, 2017 with the
cumulative total return of the Standard & Poor’s (S&P) 500 Index and the S&P Semiconductors Index. This graph assumes the
cumulative total return of the Standard & Poor’s (S&P) 500 Index and the S&P Semiconductors Index. This graph assumes the
investment of $100 on October 28, 2017 in our common stock, the S&P 500 Index and the S&P Semiconductors Index and
investment of $100 on October 28, 2017 in our common stock, the S&P 500 Index and the S&P Semiconductors Index and
assumes all dividends are reinvested. Measurement points are the last trading day for each respective fiscal year.
assumes all dividends are reinvested. Measurement points are the last trading day for each respective fiscal year.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Analog Devices, Inc., the S&P 500 Index
and the S&P Semiconductors Index
$300
$250
$200
$150
$100
$50
100.00
107.35
100.99
97.51
170.40
124.89
124.42
122.72
138.26
134.64
258.15
205.88
192.42
176.06
175.05
164.31
$0
10/28/17
11/3/18
11/2/19
10/31/20
10/30/21
10/29/22
Analog Devices, Inc.
S&P 500
S&P Semiconductors
ITEM 6. RESERVED
ITEM 6. RESERVED
27
27
28
28
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
Revenue Trends by End Market
Revenue Trends by End Market
OF OPERATIONS (all tabular amounts in thousands except per share amounts)
OF OPERATIONS (all tabular amounts in thousands except per share amounts)
The following discussion includes results of operations and financial condition for the fiscal year ended October 29, 2022
The following discussion includes results of operations and financial condition for the fiscal year ended October 29, 2022
(fiscal 2022) and the fiscal year ended October 30, 2021 (fiscal 2021) and year-over-year comparisons between fiscal 2022 and
(fiscal 2022) and the fiscal year ended October 30, 2021 (fiscal 2021) and year-over-year comparisons between fiscal 2022 and
fiscal 2021. For discussion on results of operations and financial condition for fiscal 2021 and the fiscal year ended October 31,
fiscal 2021. For discussion on results of operations and financial condition for fiscal 2021 and the fiscal year ended October 31,
2020 (fiscal 2020) and year-over-year comparisons between fiscal 2021 and fiscal 2020, please refer to Management’s
2020 (fiscal 2020) and year-over-year comparisons between fiscal 2021 and fiscal 2020, please refer to Management’s
Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-
Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-
K for fiscal 2021 filed with the Securities and Exchange Commission on December 3, 2021. Our fiscal year is the 52-week or
K for fiscal 2021 filed with the Securities and Exchange Commission on December 3, 2021. Our fiscal year is the 52-week or
53-week period ending on the Saturday closest to the last day in October. Fiscal 2022 and fiscal 2021 were 52-week fiscal
53-week period ending on the Saturday closest to the last day in October. Fiscal 2022 and fiscal 2021 were 52-week fiscal
periods.
periods.
Impact of COVID-19 on our Business
Impact of COVID-19 on our Business
The pandemic caused by the novel strain of the coronavirus (COVID-19) and the numerous measures implemented by
The pandemic caused by the novel strain of the coronavirus (COVID-19) and the numerous measures implemented by
government authorities in response, have impacted and may continue to impact our workforce and operations, the operations of
government authorities in response, have impacted and may continue to impact our workforce and operations, the operations of
our customers and those of our respective vendors and suppliers. We have significant operations worldwide, including in the
our customers and those of our respective vendors and suppliers. We have significant operations worldwide, including in the
United States, the Philippines, Ireland, Malaysia, Thailand and India. Each of these countries has been affected by the
United States, the Philippines, Ireland, Malaysia, Thailand and India. Each of these countries has been affected by the
pandemic and taken measures to try to contain it, resulting in disruptions at some of our manufacturing operations and facilities,
pandemic and taken measures to try to contain it, resulting in disruptions at some of our manufacturing operations and facilities,
including restrictions on our access to facilities.
including restrictions on our access to facilities.
The spread of COVID-19 has caused us to modify our business practices (including restricting employee travel,
The spread of COVID-19 has caused us to modify our business practices (including restricting employee travel,
modifying employee work locations and cancelling physical participation in meetings, events and conferences) and we may
modifying employee work locations and cancelling physical participation in meetings, events and conferences) and we may
take further actions as may be required by government authorities or that we determine are in the best interests of our
take further actions as may be required by government authorities or that we determine are in the best interests of our
employees, customers, partners, suppliers and shareholders.
employees, customers, partners, suppliers and shareholders.
While we are confident that our strategy and long-term contingency planning have positioned us well to weather the
While we are confident that our strategy and long-term contingency planning have positioned us well to weather the
current uncertainty, we cannot at this time fully quantify or forecast the impact of COVID-19 on our business. The ultimate
current uncertainty, we cannot at this time fully quantify or forecast the impact of COVID-19 on our business. The ultimate
impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows continues to
impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows continues to
largely depend on future developments, including the duration, scope and severity of the pandemic, any additional resurgences,
largely depend on future developments, including the duration, scope and severity of the pandemic, any additional resurgences,
variants and severity of variants and the ability to effectively and widely manufacture and distribute vaccines, which are not
variants and severity of variants and the ability to effectively and widely manufacture and distribute vaccines, which are not
within our control and cannot be accurately predicted and are uncertain.
within our control and cannot be accurately predicted and are uncertain.
Acquisition of Maxim Integrated Products, Inc.
Acquisition of Maxim Integrated Products, Inc.
On August 26, 2021 (Acquisition Date), we completed the acquisition of Maxim Integrated Products, Inc. (Maxim), an
On August 26, 2021 (Acquisition Date), we completed the acquisition of Maxim Integrated Products, Inc. (Maxim), an
independent manufacturer of innovative analog and mixed-signal products and technologies. Pursuant to the Agreement and
independent manufacturer of innovative analog and mixed-signal products and technologies. Pursuant to the Agreement and
Plan of Merger, dated as of July 12, 2020 (the Merger Agreement), Maxim stockholders received, for each outstanding share of
Plan of Merger, dated as of July 12, 2020 (the Merger Agreement), Maxim stockholders received, for each outstanding share of
Maxim common stock, 0.6300 of a share of the Company’s common stock as of the Acquisition Date, for total consideration of
Maxim common stock, 0.6300 of a share of the Company’s common stock as of the Acquisition Date, for total consideration of
approximately $28.0 billion of our common stock. The acquisition of Maxim is referred to as the Acquisition. The
approximately $28.0 billion of our common stock. The acquisition of Maxim is referred to as the Acquisition. The
consolidated financial statements included in this Annual Report on Form 10-K include the financial results of Maxim
consolidated financial statements included in this Annual Report on Form 10-K include the financial results of Maxim
prospectively from the Acquisition Date. See Note 6, Acquisitions, of the Notes to the Consolidated Financial Statements
prospectively from the Acquisition Date. See Note 6, Acquisitions, of the Notes to the Consolidated Financial Statements
contained in Part II, Item 8 of this Annual Report on Form 10-K for further information.
contained in Part II, Item 8 of this Annual Report on Form 10-K for further information.
Results of Operations
Results of Operations
Overview
Overview
Revenue
Revenue
Gross margin %
Gross margin %
Net income
Net income
Net income as a % of revenue
Net income as a % of revenue
Diluted EPS
Diluted EPS
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
$ 12,013,953
$ 12,013,953
$ 7,318,286
$ 7,318,286
$
$
4,695,667
4,695,667
62.7 %
62.7 %
61.8 %
61.8 %
$ 2,748,561
$ 2,748,561
$ 1,390,422
$ 1,390,422
$
$
1,358,139
1,358,139
22.9 %
22.9 %
19.0 %
19.0 %
$
$
5.25
5.25
$
$
3.46
3.46
$
$
1.79
1.79
64 %
64 %
98 %
98 %
52 %
52 %
The following table summarizes revenue by end market. The categorization of revenue by end market is determined using
The following table summarizes revenue by end market. The categorization of revenue by end market is determined using
a variety of data points including the technical characteristics of the product, the “sold to” customer information, the "ship to"
a variety of data points including the technical characteristics of the product, the “sold to” customer information, the "ship to"
customer information and the end customer product or application into which our product will be incorporated. As data systems
customer information and the end customer product or application into which our product will be incorporated. As data systems
for capturing and tracking this data and our methodology evolves and improves, the categorization of products by end market
for capturing and tracking this data and our methodology evolves and improves, the categorization of products by end market
can vary over time. When this occurs, we reclassify revenue by end market for prior periods. Such reclassifications typically do
can vary over time. When this occurs, we reclassify revenue by end market for prior periods. Such reclassifications typically do
not materially change the sizing of, or the underlying trends of results within, each end market.
not materially change the sizing of, or the underlying trends of results within, each end market.
Fiscal 2021
Fiscal 2021
Fiscal 2022
Fiscal 2022
% of
% of
Total
Total
Revenue
Revenue
Revenue (1)
Revenue (1)
Y/Y%
Y/Y%
Revenue
Revenue
Revenue (1)
Revenue (1)
$ 6,069,332
$ 6,069,332
2,515,513
2,515,513
1,880,697
1,880,697
1,548,411
1,548,411
51 %
51 %
21 %
21 %
16 %
16 %
13 %
13 %
51 % $ 4,026,909
51 % $ 4,026,909
102 %
102 %
1,248,169
1,248,169
56 %
56 %
1,206,867
1,206,867
85 %
85 %
836,341
836,341
$ 12,013,953
$ 12,013,953
100 %
100 %
64 % $ 7,318,286
64 % $ 7,318,286
100 %
100 %
% of
% of
Total
Total
55 %
55 %
17 %
17 %
16 %
16 %
11 %
11 %
Industrial
Industrial
Automotive
Automotive
Communications
Communications
Consumer
Consumer
Total Revenue
Total Revenue
Distributors
Distributors
Direct customers
Direct customers
Other
Other
Total Revenue
Total Revenue
_______________________________________
_______________________________________
(1) The sum of the individual percentages may not equal the total due to rounding.
(1) The sum of the individual percentages may not equal the total due to rounding.
Revenue increased across all end markets in fiscal 2022 as compared to fiscal 2021 primarily as a result of the
Revenue increased across all end markets in fiscal 2022 as compared to fiscal 2021 primarily as a result of the
Acquisition, which contributed approximately 65% of the increase in total revenue year over year, a broad-based increase in
Acquisition, which contributed approximately 65% of the increase in total revenue year over year, a broad-based increase in
demand for our products across all end markets as well as inflationary price increases.
demand for our products across all end markets as well as inflationary price increases.
Revenue by Sales Channel
Revenue by Sales Channel
The following table summarizes revenue by sales channel. We sell our products globally through a direct sales force,
The following table summarizes revenue by sales channel. We sell our products globally through a direct sales force,
third party distributors, independent sales representatives and via our website. Distributors are customers that buy products with
third party distributors, independent sales representatives and via our website. Distributors are customers that buy products with
the intention of reselling them. Direct customers are non-distributor customers and consist primarily of original equipment
the intention of reselling them. Direct customers are non-distributor customers and consist primarily of original equipment
manufacturers (OEMs). Other customers include the U.S. government, government prime contractors and certain commercial
manufacturers (OEMs). Other customers include the U.S. government, government prime contractors and certain commercial
customers for which revenue is recorded over time.
customers for which revenue is recorded over time.
Fiscal 2022
Fiscal 2022
Fiscal 2021
Fiscal 2021
% of
% of
Total
Total
Revenue
Revenue
Revenue (1)
Revenue (1)
Revenue
Revenue
Revenue (1)
Revenue (1)
$
$
7,458,478
7,458,478
4,423,883
4,423,883
131,592
131,592
62 % $
62 % $
37 %
37 %
1 %
1 %
4,589,944
4,589,944
2,600,353
2,600,353
127,989
127,989
$
$
12,013,953
12,013,953
100 % $
100 % $
7,318,286
7,318,286
% of
% of
Total
Total
63 %
63 %
36 %
36 %
2 %
2 %
100 %
100 %
_______________________________________
_______________________________________
(1) The sum of the individual percentages may not equal the total due to rounding.
(1) The sum of the individual percentages may not equal the total due to rounding.
As indicated in the table above, the percentage of total revenue sold via each channel has remained relatively consistent in
As indicated in the table above, the percentage of total revenue sold via each channel has remained relatively consistent in
the periods presented, but can fluctuate from time to time based on end customer demand.
the periods presented, but can fluctuate from time to time based on end customer demand.
29
29
30
30
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
Revenue Trends by End Market
Revenue Trends by End Market
OF OPERATIONS (all tabular amounts in thousands except per share amounts)
OF OPERATIONS (all tabular amounts in thousands except per share amounts)
The following discussion includes results of operations and financial condition for the fiscal year ended October 29, 2022
The following discussion includes results of operations and financial condition for the fiscal year ended October 29, 2022
(fiscal 2022) and the fiscal year ended October 30, 2021 (fiscal 2021) and year-over-year comparisons between fiscal 2022 and
(fiscal 2022) and the fiscal year ended October 30, 2021 (fiscal 2021) and year-over-year comparisons between fiscal 2022 and
fiscal 2021. For discussion on results of operations and financial condition for fiscal 2021 and the fiscal year ended October 31,
fiscal 2021. For discussion on results of operations and financial condition for fiscal 2021 and the fiscal year ended October 31,
2020 (fiscal 2020) and year-over-year comparisons between fiscal 2021 and fiscal 2020, please refer to Management’s
2020 (fiscal 2020) and year-over-year comparisons between fiscal 2021 and fiscal 2020, please refer to Management’s
Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-
Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-
K for fiscal 2021 filed with the Securities and Exchange Commission on December 3, 2021. Our fiscal year is the 52-week or
K for fiscal 2021 filed with the Securities and Exchange Commission on December 3, 2021. Our fiscal year is the 52-week or
53-week period ending on the Saturday closest to the last day in October. Fiscal 2022 and fiscal 2021 were 52-week fiscal
53-week period ending on the Saturday closest to the last day in October. Fiscal 2022 and fiscal 2021 were 52-week fiscal
periods.
periods.
Impact of COVID-19 on our Business
Impact of COVID-19 on our Business
The pandemic caused by the novel strain of the coronavirus (COVID-19) and the numerous measures implemented by
The pandemic caused by the novel strain of the coronavirus (COVID-19) and the numerous measures implemented by
government authorities in response, have impacted and may continue to impact our workforce and operations, the operations of
government authorities in response, have impacted and may continue to impact our workforce and operations, the operations of
our customers and those of our respective vendors and suppliers. We have significant operations worldwide, including in the
our customers and those of our respective vendors and suppliers. We have significant operations worldwide, including in the
United States, the Philippines, Ireland, Malaysia, Thailand and India. Each of these countries has been affected by the
United States, the Philippines, Ireland, Malaysia, Thailand and India. Each of these countries has been affected by the
pandemic and taken measures to try to contain it, resulting in disruptions at some of our manufacturing operations and facilities,
pandemic and taken measures to try to contain it, resulting in disruptions at some of our manufacturing operations and facilities,
including restrictions on our access to facilities.
including restrictions on our access to facilities.
The spread of COVID-19 has caused us to modify our business practices (including restricting employee travel,
The spread of COVID-19 has caused us to modify our business practices (including restricting employee travel,
modifying employee work locations and cancelling physical participation in meetings, events and conferences) and we may
modifying employee work locations and cancelling physical participation in meetings, events and conferences) and we may
take further actions as may be required by government authorities or that we determine are in the best interests of our
take further actions as may be required by government authorities or that we determine are in the best interests of our
employees, customers, partners, suppliers and shareholders.
employees, customers, partners, suppliers and shareholders.
While we are confident that our strategy and long-term contingency planning have positioned us well to weather the
While we are confident that our strategy and long-term contingency planning have positioned us well to weather the
current uncertainty, we cannot at this time fully quantify or forecast the impact of COVID-19 on our business. The ultimate
current uncertainty, we cannot at this time fully quantify or forecast the impact of COVID-19 on our business. The ultimate
impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows continues to
impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows continues to
largely depend on future developments, including the duration, scope and severity of the pandemic, any additional resurgences,
largely depend on future developments, including the duration, scope and severity of the pandemic, any additional resurgences,
variants and severity of variants and the ability to effectively and widely manufacture and distribute vaccines, which are not
variants and severity of variants and the ability to effectively and widely manufacture and distribute vaccines, which are not
within our control and cannot be accurately predicted and are uncertain.
within our control and cannot be accurately predicted and are uncertain.
Acquisition of Maxim Integrated Products, Inc.
Acquisition of Maxim Integrated Products, Inc.
On August 26, 2021 (Acquisition Date), we completed the acquisition of Maxim Integrated Products, Inc. (Maxim), an
On August 26, 2021 (Acquisition Date), we completed the acquisition of Maxim Integrated Products, Inc. (Maxim), an
independent manufacturer of innovative analog and mixed-signal products and technologies. Pursuant to the Agreement and
independent manufacturer of innovative analog and mixed-signal products and technologies. Pursuant to the Agreement and
Plan of Merger, dated as of July 12, 2020 (the Merger Agreement), Maxim stockholders received, for each outstanding share of
Plan of Merger, dated as of July 12, 2020 (the Merger Agreement), Maxim stockholders received, for each outstanding share of
Maxim common stock, 0.6300 of a share of the Company’s common stock as of the Acquisition Date, for total consideration of
Maxim common stock, 0.6300 of a share of the Company’s common stock as of the Acquisition Date, for total consideration of
approximately $28.0 billion of our common stock. The acquisition of Maxim is referred to as the Acquisition. The
approximately $28.0 billion of our common stock. The acquisition of Maxim is referred to as the Acquisition. The
consolidated financial statements included in this Annual Report on Form 10-K include the financial results of Maxim
consolidated financial statements included in this Annual Report on Form 10-K include the financial results of Maxim
prospectively from the Acquisition Date. See Note 6, Acquisitions, of the Notes to the Consolidated Financial Statements
prospectively from the Acquisition Date. See Note 6, Acquisitions, of the Notes to the Consolidated Financial Statements
contained in Part II, Item 8 of this Annual Report on Form 10-K for further information.
contained in Part II, Item 8 of this Annual Report on Form 10-K for further information.
Results of Operations
Results of Operations
Overview
Overview
Revenue
Revenue
Gross margin %
Gross margin %
Net income
Net income
Net income as a % of revenue
Net income as a % of revenue
Diluted EPS
Diluted EPS
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
$ 12,013,953
$ 12,013,953
$ 7,318,286
$ 7,318,286
$
$
4,695,667
4,695,667
$ 2,748,561
$ 2,748,561
$ 1,390,422
$ 1,390,422
$
$
1,358,139
1,358,139
62.7 %
62.7 %
61.8 %
61.8 %
22.9 %
22.9 %
19.0 %
19.0 %
$
$
5.25
5.25
$
$
3.46
3.46
$
$
1.79
1.79
64 %
64 %
98 %
98 %
52 %
52 %
The following table summarizes revenue by end market. The categorization of revenue by end market is determined using
The following table summarizes revenue by end market. The categorization of revenue by end market is determined using
a variety of data points including the technical characteristics of the product, the “sold to” customer information, the "ship to"
a variety of data points including the technical characteristics of the product, the “sold to” customer information, the "ship to"
customer information and the end customer product or application into which our product will be incorporated. As data systems
customer information and the end customer product or application into which our product will be incorporated. As data systems
for capturing and tracking this data and our methodology evolves and improves, the categorization of products by end market
for capturing and tracking this data and our methodology evolves and improves, the categorization of products by end market
can vary over time. When this occurs, we reclassify revenue by end market for prior periods. Such reclassifications typically do
can vary over time. When this occurs, we reclassify revenue by end market for prior periods. Such reclassifications typically do
not materially change the sizing of, or the underlying trends of results within, each end market.
not materially change the sizing of, or the underlying trends of results within, each end market.
Industrial
Industrial
Automotive
Automotive
Communications
Communications
Consumer
Consumer
Total Revenue
Total Revenue
Fiscal 2022
Fiscal 2022
Fiscal 2021
Fiscal 2021
Revenue
Revenue
$ 6,069,332
$ 6,069,332
2,515,513
2,515,513
1,880,697
1,880,697
1,548,411
1,548,411
% of
% of
Total
Total
Revenue (1)
Revenue (1)
51 %
51 %
21 %
21 %
16 %
16 %
13 %
13 %
Y/Y%
Y/Y%
Revenue
Revenue
51 % $ 4,026,909
51 % $ 4,026,909
102 %
102 %
1,248,169
1,248,169
56 %
56 %
1,206,867
1,206,867
85 %
85 %
836,341
836,341
% of
% of
Total
Total
Revenue (1)
Revenue (1)
55 %
55 %
17 %
17 %
16 %
16 %
11 %
11 %
$ 12,013,953
$ 12,013,953
100 %
100 %
64 % $ 7,318,286
64 % $ 7,318,286
100 %
100 %
_______________________________________
_______________________________________
(1) The sum of the individual percentages may not equal the total due to rounding.
(1) The sum of the individual percentages may not equal the total due to rounding.
Revenue increased across all end markets in fiscal 2022 as compared to fiscal 2021 primarily as a result of the
Revenue increased across all end markets in fiscal 2022 as compared to fiscal 2021 primarily as a result of the
Acquisition, which contributed approximately 65% of the increase in total revenue year over year, a broad-based increase in
Acquisition, which contributed approximately 65% of the increase in total revenue year over year, a broad-based increase in
demand for our products across all end markets as well as inflationary price increases.
demand for our products across all end markets as well as inflationary price increases.
Revenue by Sales Channel
Revenue by Sales Channel
The following table summarizes revenue by sales channel. We sell our products globally through a direct sales force,
The following table summarizes revenue by sales channel. We sell our products globally through a direct sales force,
third party distributors, independent sales representatives and via our website. Distributors are customers that buy products with
third party distributors, independent sales representatives and via our website. Distributors are customers that buy products with
the intention of reselling them. Direct customers are non-distributor customers and consist primarily of original equipment
the intention of reselling them. Direct customers are non-distributor customers and consist primarily of original equipment
manufacturers (OEMs). Other customers include the U.S. government, government prime contractors and certain commercial
manufacturers (OEMs). Other customers include the U.S. government, government prime contractors and certain commercial
customers for which revenue is recorded over time.
customers for which revenue is recorded over time.
Distributors
Distributors
Direct customers
Direct customers
Other
Other
Total Revenue
Total Revenue
Fiscal 2022
Fiscal 2022
Fiscal 2021
Fiscal 2021
Revenue
Revenue
7,458,478
7,458,478
4,423,883
4,423,883
131,592
131,592
12,013,953
12,013,953
$
$
$
$
% of
% of
Total
Total
Revenue (1)
Revenue (1)
62 % $
62 % $
37 %
37 %
1 %
1 %
100 % $
100 % $
Revenue
Revenue
4,589,944
4,589,944
2,600,353
2,600,353
127,989
127,989
7,318,286
7,318,286
% of
% of
Total
Total
Revenue (1)
Revenue (1)
63 %
63 %
36 %
36 %
2 %
2 %
100 %
100 %
_______________________________________
_______________________________________
(1) The sum of the individual percentages may not equal the total due to rounding.
(1) The sum of the individual percentages may not equal the total due to rounding.
As indicated in the table above, the percentage of total revenue sold via each channel has remained relatively consistent in
As indicated in the table above, the percentage of total revenue sold via each channel has remained relatively consistent in
the periods presented, but can fluctuate from time to time based on end customer demand.
the periods presented, but can fluctuate from time to time based on end customer demand.
29
29
30
30
Revenue Trends by Geographic Region
Revenue Trends by Geographic Region
Revenue by geographic region, based upon the geographic location of the distributors or OEMs who purchased the
Revenue by geographic region, based upon the geographic location of the distributors or OEMs who purchased the
Company's products, for fiscal 2022 and fiscal 2021 was as follows:
Company's products, for fiscal 2022 and fiscal 2021 was as follows:
United States
United States
Rest of North and South America
Rest of North and South America
Europe
Europe
Japan
Japan
China
China
Rest of Asia
Rest of Asia
Total Revenue
Total Revenue
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change (1)
% Change (1)
$
$
4,025,398 $
4,025,398 $
2,389,439 $
2,389,439 $
1,635,959
1,635,959
72,497
72,497
2,534,423
2,534,423
1,221,549
1,221,549
2,563,536
2,563,536
1,596,550
1,596,550
42,830
42,830
1,592,989
1,592,989
787,966
787,966
1,614,396
1,614,396
890,666
890,666
29,667
29,667
941,434
941,434
433,583
433,583
949,140
949,140
705,884
705,884
$
$
12,013,953 $
12,013,953 $
7,318,286 $
7,318,286 $
4,695,667
4,695,667
68 %
68 %
69 %
69 %
59 %
59 %
55 %
55 %
59 %
59 %
79 %
79 %
64 %
64 %
_______________________________________
_______________________________________
(1) The sum of the individual percentages may not equal the total due to rounding.
(1) The sum of the individual percentages may not equal the total due to rounding.
In all periods presented, the predominant countries comprising “Rest of North and South America” are Canada and
In all periods presented, the predominant countries comprising “Rest of North and South America” are Canada and
Mexico; the predominant countries comprising “Europe” are Germany, Sweden, and the Netherlands; and the predominant
Mexico; the predominant countries comprising “Europe” are Germany, Sweden, and the Netherlands; and the predominant
countries comprising “Rest of Asia” are Taiwan, Malaysia, South Korea and Singapore.
countries comprising “Rest of Asia” are Taiwan, Malaysia, South Korea and Singapore.
Total revenue increased in fiscal 2022 as compared to fiscal 2021 due to the incremental impact of revenue from the
Total revenue increased in fiscal 2022 as compared to fiscal 2021 due to the incremental impact of revenue from the
Acquisition, broad-based, global demand in the semiconductor industry as well as inflationary price increases.
Acquisition, broad-based, global demand in the semiconductor industry as well as inflationary price increases.
Gross Margin
Gross Margin
Gross margin
Gross margin
Gross margin %
Gross margin %
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
$ 7,532,474
$ 7,532,474
$ 4,525,012
$ 4,525,012
$
$
3,007,462
3,007,462
66 %
66 %
62.7 %
62.7 %
61.8 %
61.8 %
Gross margin percentage in fiscal 2022 increased by 90 basis points compared to fiscal 2021 primarily as a result of
Gross margin percentage in fiscal 2022 increased by 90 basis points compared to fiscal 2021 primarily as a result of
favorable product mix, synergies related to the Acquisition and higher utilization of our factories due to increased customer
favorable product mix, synergies related to the Acquisition and higher utilization of our factories due to increased customer
demand, partially offset by additional cost of goods sold related to the Acquisition. This additional cost of goods sold related to
demand, partially offset by additional cost of goods sold related to the Acquisition. This additional cost of goods sold related to
the Acquisition consisted of amortization expense of intangible assets of $857.1 million in fiscal 2022 compared to $155.4
the Acquisition consisted of amortization expense of intangible assets of $857.1 million in fiscal 2022 compared to $155.4
million in fiscal 2021, and nonrecurring fair value adjustments recorded to inventory of $271.4 million in fiscal 2022 compared
million in fiscal 2021, and nonrecurring fair value adjustments recorded to inventory of $271.4 million in fiscal 2022 compared
to $331.1 million in fiscal 2021. In addition, gross margin percentage in fiscal 2022 included price increases in revenue to
to $331.1 million in fiscal 2021. In addition, gross margin percentage in fiscal 2022 included price increases in revenue to
offset inflationary cost increases.
offset inflationary cost increases.
Research and Development (R&D)
Research and Development (R&D)
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
R&D expenses
R&D expenses
$ 1,700,518
$ 1,700,518
$ 1,296,126
$ 1,296,126
$
$
404,392
404,392
31 %
31 %
R&D expenses as a % of revenue
R&D expenses as a % of revenue
14 %
14 %
18 %
18 %
Nonoperating (Income) Expense
Nonoperating (Income) Expense
R&D expenses increased in fiscal 2022 as compared to fiscal 2021 primarily as a result of the Acquisition.
R&D expenses increased in fiscal 2022 as compared to fiscal 2021 primarily as a result of the Acquisition.
R&D expenses as a percentage of revenue will fluctuate from year-to-year depending on the amount of revenue and the
R&D expenses as a percentage of revenue will fluctuate from year-to-year depending on the amount of revenue and the
success of new product development efforts, which we view as critical to our future growth. We expect to continue the
success of new product development efforts, which we view as critical to our future growth. We expect to continue the
development of innovative technologies and processes for new products. We believe that a continued commitment to R&D is
development of innovative technologies and processes for new products. We believe that a continued commitment to R&D is
essential to maintain product leadership with our existing products as well as to provide innovative new product offerings.
essential to maintain product leadership with our existing products as well as to provide innovative new product offerings.
Selling, Marketing, General and Administrative (SMG&A)
Selling, Marketing, General and Administrative (SMG&A)
SMG&A expenses
SMG&A expenses
SMG&A expenses as a % of revenue
SMG&A expenses as a % of revenue
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
$ 1,266,175
$ 1,266,175
$
$
915,418
915,418
$
$
350,757
350,757
38 %
38 %
11 %
11 %
13 %
13 %
31
31
32
32
SMG&A expenses increased in fiscal 2022 as compared to fiscal 2021, primarily as a result of the Acquisition as well as
SMG&A expenses increased in fiscal 2022 as compared to fiscal 2021, primarily as a result of the Acquisition as well as
higher salary and benefit expenses and higher variable compensation expenses, partially offset by lower acquisition-related
higher salary and benefit expenses and higher variable compensation expenses, partially offset by lower acquisition-related
transaction costs.
transaction costs.
Amortization of Intangibles
Amortization of Intangibles
Amortization expenses
Amortization expenses
$ 1,012,572
$ 1,012,572
$
$
536,811
536,811
$
$
475,761
475,761
89 %
89 %
Amortization expenses as a % of revenue
Amortization expenses as a % of revenue
8 %
8 %
7 %
7 %
Amortization expenses increased in fiscal 2022 as compared to fiscal 2021, primarily as a result of amortization expense
Amortization expenses increased in fiscal 2022 as compared to fiscal 2021, primarily as a result of amortization expense
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
of intangible assets recorded as part of the Acquisition.
of intangible assets recorded as part of the Acquisition.
Special Charges, Net
Special Charges, Net
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
Special charges, net
Special charges, net
$
$
274,509
274,509
$
$
84,456
84,456
$
$
190,053
190,053
225 %
225 %
Special charges, net as a % of revenue
Special charges, net as a % of revenue
2 %
2 %
1 %
1 %
Special charges, net increased in fiscal 2022 as compared to fiscal 2021, primarily as a result of charges recorded as part
Special charges, net increased in fiscal 2022 as compared to fiscal 2021, primarily as a result of charges recorded as part
of the integration of Maxim and continued organizational initiatives to better align our global workforce with our long-term
of the integration of Maxim and continued organizational initiatives to better align our global workforce with our long-term
strategic plan. During the third quarter of fiscal 2022, we transitioned our engineering, sales, marketing and administrative
strategic plan. During the third quarter of fiscal 2022, we transitioned our engineering, sales, marketing and administrative
activities from a leased property in Santa Clara, California to an owned property in San Jose, California. As a result, we entered
activities from a leased property in Santa Clara, California to an owned property in San Jose, California. As a result, we entered
into a sublease agreement for a portion of the leased property and recorded an impairment charge of $91.9 million in the third
into a sublease agreement for a portion of the leased property and recorded an impairment charge of $91.9 million in the third
quarter of fiscal 2022 related to the associated asset group. The remaining charges were for severance and benefit costs as well
quarter of fiscal 2022 related to the associated asset group. The remaining charges were for severance and benefit costs as well
as charges recorded from the acceleration of equity awards in connection with the termination of certain employees in
as charges recorded from the acceleration of equity awards in connection with the termination of certain employees in
manufacturing, engineering and SMG&A roles at sites assumed in connection with the Acquisition and various other locations
manufacturing, engineering and SMG&A roles at sites assumed in connection with the Acquisition and various other locations
throughout the world.
throughout the world.
Operating Income
Operating Income
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
Operating income
Operating income
$ 3,278,700
$ 3,278,700
$ 1,692,201
$ 1,692,201
$
$
1,586,499
1,586,499
94 %
94 %
Operating income as a % of revenue
Operating income as a % of revenue
27.3 %
27.3 %
23.1 %
23.1 %
The increase in operating income in fiscal 2022 as compared to fiscal 2021 was primarily the result of a $3,007.5 million
The increase in operating income in fiscal 2022 as compared to fiscal 2021 was primarily the result of a $3,007.5 million
increase in gross margin, partially offset by a $475.8 million increase in amortization expenses, a $404.4 million increase in
increase in gross margin, partially offset by a $475.8 million increase in amortization expenses, a $404.4 million increase in
R&D expenses, a $350.8 million increase in SMG&A expenses and a $190.1 million increase in special charges, net as more
R&D expenses, a $350.8 million increase in SMG&A expenses and a $190.1 million increase in special charges, net as more
fully described above under the headings Gross Margin, Amortization of Intangibles, Research and Development (R&D),
fully described above under the headings Gross Margin, Amortization of Intangibles, Research and Development (R&D),
Selling, Marketing, General and Administrative (SMG&A) and Special Charges, Net.
Selling, Marketing, General and Administrative (SMG&A) and Special Charges, Net.
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
Total Nonoperating expense
Total Nonoperating expense
$
$
179,951 $
179,951 $
363,487 $
363,487 $
(183,536)
(183,536)
(50) %
(50) %
The year-over-year decrease in nonoperating expense in fiscal 2022 as compared to fiscal 2021 was primarily the result of
The year-over-year decrease in nonoperating expense in fiscal 2022 as compared to fiscal 2021 was primarily the result of
a loss on the extinguishment of debt of $215.2 million related to debt transactions in the fourth quarter of fiscal 2021, partially
a loss on the extinguishment of debt of $215.2 million related to debt transactions in the fourth quarter of fiscal 2021, partially
offset by higher interest expense in fiscal 2022 related to our debt obligations and fewer gains on investments in fiscal 2022.
offset by higher interest expense in fiscal 2022 related to our debt obligations and fewer gains on investments in fiscal 2022.
Revenue Trends by Geographic Region
Revenue Trends by Geographic Region
Revenue by geographic region, based upon the geographic location of the distributors or OEMs who purchased the
Revenue by geographic region, based upon the geographic location of the distributors or OEMs who purchased the
Company's products, for fiscal 2022 and fiscal 2021 was as follows:
Company's products, for fiscal 2022 and fiscal 2021 was as follows:
SMG&A expenses increased in fiscal 2022 as compared to fiscal 2021, primarily as a result of the Acquisition as well as
SMG&A expenses increased in fiscal 2022 as compared to fiscal 2021, primarily as a result of the Acquisition as well as
higher salary and benefit expenses and higher variable compensation expenses, partially offset by lower acquisition-related
higher salary and benefit expenses and higher variable compensation expenses, partially offset by lower acquisition-related
transaction costs.
transaction costs.
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change (1)
% Change (1)
$
$
4,025,398 $
4,025,398 $
2,389,439 $
2,389,439 $
1,635,959
1,635,959
Amortization of Intangibles
Amortization of Intangibles
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
Amortization expenses
Amortization expenses
$ 1,012,572
$ 1,012,572
$
$
536,811
536,811
$
$
475,761
475,761
89 %
89 %
Amortization expenses as a % of revenue
Amortization expenses as a % of revenue
8 %
8 %
7 %
7 %
Amortization expenses increased in fiscal 2022 as compared to fiscal 2021, primarily as a result of amortization expense
Amortization expenses increased in fiscal 2022 as compared to fiscal 2021, primarily as a result of amortization expense
of intangible assets recorded as part of the Acquisition.
of intangible assets recorded as part of the Acquisition.
Special Charges, Net
Special Charges, Net
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
Special charges, net
Special charges, net
$
$
274,509
274,509
$
$
84,456
84,456
$
$
190,053
190,053
225 %
225 %
Special charges, net as a % of revenue
Special charges, net as a % of revenue
2 %
2 %
1 %
1 %
Special charges, net increased in fiscal 2022 as compared to fiscal 2021, primarily as a result of charges recorded as part
Special charges, net increased in fiscal 2022 as compared to fiscal 2021, primarily as a result of charges recorded as part
of the integration of Maxim and continued organizational initiatives to better align our global workforce with our long-term
of the integration of Maxim and continued organizational initiatives to better align our global workforce with our long-term
strategic plan. During the third quarter of fiscal 2022, we transitioned our engineering, sales, marketing and administrative
strategic plan. During the third quarter of fiscal 2022, we transitioned our engineering, sales, marketing and administrative
activities from a leased property in Santa Clara, California to an owned property in San Jose, California. As a result, we entered
activities from a leased property in Santa Clara, California to an owned property in San Jose, California. As a result, we entered
into a sublease agreement for a portion of the leased property and recorded an impairment charge of $91.9 million in the third
into a sublease agreement for a portion of the leased property and recorded an impairment charge of $91.9 million in the third
quarter of fiscal 2022 related to the associated asset group. The remaining charges were for severance and benefit costs as well
quarter of fiscal 2022 related to the associated asset group. The remaining charges were for severance and benefit costs as well
as charges recorded from the acceleration of equity awards in connection with the termination of certain employees in
as charges recorded from the acceleration of equity awards in connection with the termination of certain employees in
manufacturing, engineering and SMG&A roles at sites assumed in connection with the Acquisition and various other locations
manufacturing, engineering and SMG&A roles at sites assumed in connection with the Acquisition and various other locations
throughout the world.
throughout the world.
Operating Income
Operating Income
Operating income
Operating income
Operating income as a % of revenue
Operating income as a % of revenue
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
$ 3,278,700
$ 3,278,700
$ 1,692,201
$ 1,692,201
$
$
1,586,499
1,586,499
94 %
94 %
27.3 %
27.3 %
23.1 %
23.1 %
The increase in operating income in fiscal 2022 as compared to fiscal 2021 was primarily the result of a $3,007.5 million
The increase in operating income in fiscal 2022 as compared to fiscal 2021 was primarily the result of a $3,007.5 million
increase in gross margin, partially offset by a $475.8 million increase in amortization expenses, a $404.4 million increase in
increase in gross margin, partially offset by a $475.8 million increase in amortization expenses, a $404.4 million increase in
R&D expenses, a $350.8 million increase in SMG&A expenses and a $190.1 million increase in special charges, net as more
R&D expenses, a $350.8 million increase in SMG&A expenses and a $190.1 million increase in special charges, net as more
fully described above under the headings Gross Margin, Amortization of Intangibles, Research and Development (R&D),
fully described above under the headings Gross Margin, Amortization of Intangibles, Research and Development (R&D),
Selling, Marketing, General and Administrative (SMG&A) and Special Charges, Net.
Selling, Marketing, General and Administrative (SMG&A) and Special Charges, Net.
R&D expenses
R&D expenses
$ 1,700,518
$ 1,700,518
$ 1,296,126
$ 1,296,126
$
$
404,392
404,392
31 %
31 %
R&D expenses as a % of revenue
R&D expenses as a % of revenue
14 %
14 %
18 %
18 %
Nonoperating (Income) Expense
Nonoperating (Income) Expense
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
Total Nonoperating expense
Total Nonoperating expense
$
$
179,951 $
179,951 $
363,487 $
363,487 $
(183,536)
(183,536)
(50) %
(50) %
The year-over-year decrease in nonoperating expense in fiscal 2022 as compared to fiscal 2021 was primarily the result of
The year-over-year decrease in nonoperating expense in fiscal 2022 as compared to fiscal 2021 was primarily the result of
a loss on the extinguishment of debt of $215.2 million related to debt transactions in the fourth quarter of fiscal 2021, partially
a loss on the extinguishment of debt of $215.2 million related to debt transactions in the fourth quarter of fiscal 2021, partially
offset by higher interest expense in fiscal 2022 related to our debt obligations and fewer gains on investments in fiscal 2022.
offset by higher interest expense in fiscal 2022 related to our debt obligations and fewer gains on investments in fiscal 2022.
31
31
32
32
United States
United States
Rest of North and South America
Rest of North and South America
Europe
Europe
Japan
Japan
China
China
Rest of Asia
Rest of Asia
Total Revenue
Total Revenue
72,497
72,497
2,534,423
2,534,423
1,221,549
1,221,549
2,563,536
2,563,536
1,596,550
1,596,550
42,830
42,830
1,592,989
1,592,989
787,966
787,966
1,614,396
1,614,396
890,666
890,666
29,667
29,667
941,434
941,434
433,583
433,583
949,140
949,140
705,884
705,884
$
$
12,013,953 $
12,013,953 $
7,318,286 $
7,318,286 $
4,695,667
4,695,667
68 %
68 %
69 %
69 %
59 %
59 %
55 %
55 %
59 %
59 %
79 %
79 %
64 %
64 %
_______________________________________
_______________________________________
(1) The sum of the individual percentages may not equal the total due to rounding.
(1) The sum of the individual percentages may not equal the total due to rounding.
In all periods presented, the predominant countries comprising “Rest of North and South America” are Canada and
In all periods presented, the predominant countries comprising “Rest of North and South America” are Canada and
Mexico; the predominant countries comprising “Europe” are Germany, Sweden, and the Netherlands; and the predominant
Mexico; the predominant countries comprising “Europe” are Germany, Sweden, and the Netherlands; and the predominant
countries comprising “Rest of Asia” are Taiwan, Malaysia, South Korea and Singapore.
countries comprising “Rest of Asia” are Taiwan, Malaysia, South Korea and Singapore.
Total revenue increased in fiscal 2022 as compared to fiscal 2021 due to the incremental impact of revenue from the
Total revenue increased in fiscal 2022 as compared to fiscal 2021 due to the incremental impact of revenue from the
Acquisition, broad-based, global demand in the semiconductor industry as well as inflationary price increases.
Acquisition, broad-based, global demand in the semiconductor industry as well as inflationary price increases.
Gross Margin
Gross Margin
Gross margin
Gross margin
Gross margin %
Gross margin %
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
$ 7,532,474
$ 7,532,474
$ 4,525,012
$ 4,525,012
$
$
3,007,462
3,007,462
66 %
66 %
62.7 %
62.7 %
61.8 %
61.8 %
Gross margin percentage in fiscal 2022 increased by 90 basis points compared to fiscal 2021 primarily as a result of
Gross margin percentage in fiscal 2022 increased by 90 basis points compared to fiscal 2021 primarily as a result of
favorable product mix, synergies related to the Acquisition and higher utilization of our factories due to increased customer
favorable product mix, synergies related to the Acquisition and higher utilization of our factories due to increased customer
demand, partially offset by additional cost of goods sold related to the Acquisition. This additional cost of goods sold related to
demand, partially offset by additional cost of goods sold related to the Acquisition. This additional cost of goods sold related to
the Acquisition consisted of amortization expense of intangible assets of $857.1 million in fiscal 2022 compared to $155.4
the Acquisition consisted of amortization expense of intangible assets of $857.1 million in fiscal 2022 compared to $155.4
million in fiscal 2021, and nonrecurring fair value adjustments recorded to inventory of $271.4 million in fiscal 2022 compared
million in fiscal 2021, and nonrecurring fair value adjustments recorded to inventory of $271.4 million in fiscal 2022 compared
to $331.1 million in fiscal 2021. In addition, gross margin percentage in fiscal 2022 included price increases in revenue to
to $331.1 million in fiscal 2021. In addition, gross margin percentage in fiscal 2022 included price increases in revenue to
offset inflationary cost increases.
offset inflationary cost increases.
Research and Development (R&D)
Research and Development (R&D)
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
R&D expenses increased in fiscal 2022 as compared to fiscal 2021 primarily as a result of the Acquisition.
R&D expenses increased in fiscal 2022 as compared to fiscal 2021 primarily as a result of the Acquisition.
R&D expenses as a percentage of revenue will fluctuate from year-to-year depending on the amount of revenue and the
R&D expenses as a percentage of revenue will fluctuate from year-to-year depending on the amount of revenue and the
success of new product development efforts, which we view as critical to our future growth. We expect to continue the
success of new product development efforts, which we view as critical to our future growth. We expect to continue the
development of innovative technologies and processes for new products. We believe that a continued commitment to R&D is
development of innovative technologies and processes for new products. We believe that a continued commitment to R&D is
essential to maintain product leadership with our existing products as well as to provide innovative new product offerings.
essential to maintain product leadership with our existing products as well as to provide innovative new product offerings.
Selling, Marketing, General and Administrative (SMG&A)
Selling, Marketing, General and Administrative (SMG&A)
SMG&A expenses
SMG&A expenses
$ 1,266,175
$ 1,266,175
$
$
915,418
915,418
$
$
350,757
350,757
38 %
38 %
SMG&A expenses as a % of revenue
SMG&A expenses as a % of revenue
11 %
11 %
13 %
13 %
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
Provision for (Benefit From) Income Taxes
Provision for (Benefit From) Income Taxes
Investing Activities
Investing Activities
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
Provision for (benefit from) income taxes
Provision for (benefit from) income taxes
$
$
350,188
350,188
$
$
(61,708)
(61,708)
$
$
411,896
411,896
n/a
n/a
Effective income tax rate
Effective income tax rate
11.3 %
11.3 %
(4.6) %
(4.6) %
Our effective tax rates for fiscal 2022 and fiscal 2021 were below the U.S. statutory rate of 21% due to lower statutory tax
Our effective tax rates for fiscal 2022 and fiscal 2021 were below the U.S. statutory rate of 21% due to lower statutory tax
rates applicable to our operations in the foreign jurisdictions in which we earn income. In fiscal 2021, we recorded a net
rates applicable to our operations in the foreign jurisdictions in which we earn income. In fiscal 2021, we recorded a net
deferred tax benefit of $188.8 million from deferred tax assets related to an intra-entity transfer of intangible assets. Also, our
deferred tax benefit of $188.8 million from deferred tax assets related to an intra-entity transfer of intangible assets. Also, our
provision for income taxes increased in fiscal 2022 as a result of higher income before taxes primarily related to the
provision for income taxes increased in fiscal 2022 as a result of higher income before taxes primarily related to the
Acquisition. For fiscal 2022 and fiscal 2021 our pretax income was primarily generated in Ireland at a tax rate of 12.5%.
Acquisition. For fiscal 2022 and fiscal 2021 our pretax income was primarily generated in Ireland at a tax rate of 12.5%.
Investing cash flows generally consist of capital expenditures, cash used for acquisitions and proceeds from or purchases
Investing cash flows generally consist of capital expenditures, cash used for acquisitions and proceeds from or purchases
of investments. The change in cash (used for) provided by investing activities during fiscal 2022 as compared to fiscal 2021
of investments. The change in cash (used for) provided by investing activities during fiscal 2022 as compared to fiscal 2021
was primarily the result of cash received from the Acquisition during fiscal 2021, partially offset by an increase in cash used for
was primarily the result of cash received from the Acquisition during fiscal 2021, partially offset by an increase in cash used for
capital expenditures during fiscal 2022.
capital expenditures during fiscal 2022.
Financing Activities
Financing Activities
Financing cash flows consist primarily of payments of dividends to stockholders, repurchases of common stock, issuance
Financing cash flows consist primarily of payments of dividends to stockholders, repurchases of common stock, issuance
and repayment of debt, and proceeds from the sale of shares of common stock pursuant to employee equity incentive plans.
and repayment of debt, and proceeds from the sale of shares of common stock pursuant to employee equity incentive plans.
The change in cash used for financing activities during fiscal 2022 as compared to fiscal 2021 was primarily the result of a net
The change in cash used for financing activities during fiscal 2022 as compared to fiscal 2021 was primarily the result of a net
decrease in debt in fiscal 2022 as compared to a net increase in debt in fiscal 2021, as well as higher dividend payments,
decrease in debt in fiscal 2022 as compared to a net increase in debt in fiscal 2021, as well as higher dividend payments,
See Note 12, Income Taxes, of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report
See Note 12, Income Taxes, of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report
partially offset by lower common stock repurchases.
partially offset by lower common stock repurchases.
on Form 10-K for further discussion.
on Form 10-K for further discussion.
Net Income
Net Income
Net income
Net income
Net income, as a % of revenue
Net income, as a % of revenue
Diluted EPS
Diluted EPS
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
$ 2,748,561
$ 2,748,561
$ 1,390,422
$ 1,390,422
22.9 %
22.9 %
5.25
5.25
$
$
19.0 %
19.0 %
3.46
3.46
$
$
$
$
$
$
1,358,139
1,358,139
1.79
1.79
98 %
98 %
52 %
52 %
The increase in net income in fiscal 2022 as compared to fiscal 2021 was a result of a $1,586.5 million increase in
The increase in net income in fiscal 2022 as compared to fiscal 2021 was a result of a $1,586.5 million increase in
operating income and a $183.5 million decrease in nonoperating expense, partially offset by a $411.9 million increase in
operating income and a $183.5 million decrease in nonoperating expense, partially offset by a $411.9 million increase in
provision for income taxes, as more fully described above under the headings Operating Income, Nonoperating (Income)
provision for income taxes, as more fully described above under the headings Operating Income, Nonoperating (Income)
Expense, and Provision for (Benefit From) Income Taxes.
Expense, and Provision for (Benefit From) Income Taxes.
Liquidity and Capital Resources
Liquidity and Capital Resources
At October 29, 2022, our principal source of liquidity was $1,470.6 million of cash and cash equivalents, of which
At October 29, 2022, our principal source of liquidity was $1,470.6 million of cash and cash equivalents, of which
approximately $307.4 million was held in the United States and the balance of our cash and cash equivalents was held outside
approximately $307.4 million was held in the United States and the balance of our cash and cash equivalents was held outside
the United States in various foreign subsidiaries. We manage our worldwide cash requirements by, among other things,
the United States in various foreign subsidiaries. We manage our worldwide cash requirements by, among other things,
reviewing available funds held by our foreign subsidiaries and the cost effectiveness by which those funds can be accessed in
reviewing available funds held by our foreign subsidiaries and the cost effectiveness by which those funds can be accessed in
the United States. We do not expect current regulatory restrictions or taxes on repatriation to have a material adverse effect on
the United States. We do not expect current regulatory restrictions or taxes on repatriation to have a material adverse effect on
our overall liquidity, financial condition or results of operations. Our cash and cash equivalents consist of highly liquid
our overall liquidity, financial condition or results of operations. Our cash and cash equivalents consist of highly liquid
investments with maturities of three months or less, including money market funds. We maintain these balances with high
investments with maturities of three months or less, including money market funds. We maintain these balances with high
credit quality counterparties, continually monitor the amount of credit exposure to any one issuer and diversify our investments
credit quality counterparties, continually monitor the amount of credit exposure to any one issuer and diversify our investments
in order to minimize our credit risk.
in order to minimize our credit risk.
We believe that our existing sources of liquidity and cash expected to be generated from future operations, together with
We believe that our existing sources of liquidity and cash expected to be generated from future operations, together with
existing and anticipated available short- and long-term financing, will be sufficient to fund operations, capital expenditures,
existing and anticipated available short- and long-term financing, will be sufficient to fund operations, capital expenditures,
research and development efforts and dividend payments (if any) in the immediate future and for at least the next twelve
research and development efforts and dividend payments (if any) in the immediate future and for at least the next twelve
months.
months.
Net cash provided by operating activities
Net cash provided by operating activities
Net cash provided by operating activities as a % of revenue
Net cash provided by operating activities as a % of revenue
Net cash (used for) provided by investing activities
Net cash (used for) provided by investing activities
Net cash used for financing activities
Net cash used for financing activities
Fiscal Year
Fiscal Year
2022
2022
4,475,402
4,475,402
37 %
37 %
(657,368)
(657,368)
(4,290,720)
(4,290,720)
$
$
$
$
$
$
2021
2021
2,735,069
2,735,069
37 %
37 %
2,143,525
2,143,525
(3,959,664)
(3,959,664)
$
$
$
$
$
$
The following changes contributed to the net change in cash and cash equivalents from fiscal 2021 to fiscal 2022.
The following changes contributed to the net change in cash and cash equivalents from fiscal 2021 to fiscal 2022.
Operating Activities
Operating Activities
Cash provided by operating activities is net income adjusted for certain non-cash items and changes in assets and
Cash provided by operating activities is net income adjusted for certain non-cash items and changes in assets and
liabilities. The increase in cash provided by operating activities during fiscal 2022 as compared to fiscal 2021 was primarily a
liabilities. The increase in cash provided by operating activities during fiscal 2022 as compared to fiscal 2021 was primarily a
result of higher net income adjusted for noncash items offset by changes in working capital.
result of higher net income adjusted for noncash items offset by changes in working capital.
Working Capital
Working Capital
Accounts receivable, net
Accounts receivable, net
Days sales outstanding (1)
Days sales outstanding (1)
Inventory
Inventory
Days cost of sales in inventory (1)
Days cost of sales in inventory (1)
_______________________________________
_______________________________________
Fiscal Year
Fiscal Year
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
$ 1,800,462 $ 1,459,056 $ 341,406
$ 1,800,462 $ 1,459,056 $ 341,406
23 %
23 %
$ 1,399,914 $ 1,200,610 $ 199,304
$ 1,399,914 $ 1,200,610 $ 199,304
17 %
17 %
50
50
52
52
106
106
118
118
(1) We use the average of the current year and prior year ending net accounts receivable and ending inventory balance in our calculation of
(1) We use the average of the current year and prior year ending net accounts receivable and ending inventory balance in our calculation of
days sales outstanding and days cost of sales in inventory, respectively. Cost of sales amounts used in the calculation of days cost of
days sales outstanding and days cost of sales in inventory, respectively. Cost of sales amounts used in the calculation of days cost of
sales in inventory include Acquisition accounting adjustments related to the sale of acquired inventory written up to fair value,
sales in inventory include Acquisition accounting adjustments related to the sale of acquired inventory written up to fair value,
amortization of developed technology intangible assets acquired and depreciation related to the write-up of fixed assets to fair value.
amortization of developed technology intangible assets acquired and depreciation related to the write-up of fixed assets to fair value.
The calculations above include the financial results of Maxim prospectively from the Acquisition Date.
The calculations above include the financial results of Maxim prospectively from the Acquisition Date.
The increase in accounts receivable for fiscal 2022 compared to fiscal 2021 was primarily the result of variations in the
The increase in accounts receivable for fiscal 2022 compared to fiscal 2021 was primarily the result of variations in the
timing of collections and billings and increased revenue levels.
timing of collections and billings and increased revenue levels.
Inventory increased in fiscal 2022 as compared to fiscal 2021, primarily as a result of our efforts to balance
Inventory increased in fiscal 2022 as compared to fiscal 2021, primarily as a result of our efforts to balance
manufacturing production, demand and inventory levels. Our inventory levels are impacted by our need to support forecasted
manufacturing production, demand and inventory levels. Our inventory levels are impacted by our need to support forecasted
sales demand and variations between those forecasts and actual demand. As of October 30, 2021, our inventory balance also
sales demand and variations between those forecasts and actual demand. As of October 30, 2021, our inventory balance also
included additional costs related to the Acquisition as a result of accounting for acquired inventory at fair-value.
included additional costs related to the Acquisition as a result of accounting for acquired inventory at fair-value.
Current liabilities decreased to $2,442.7 million at October 29, 2022 from $2,770.3 million recorded at the end of fiscal
Current liabilities decreased to $2,442.7 million at October 29, 2022 from $2,770.3 million recorded at the end of fiscal
2021, primarily due to early termination of debt, partially offset by higher accounts payable and accruals.
2021, primarily due to early termination of debt, partially offset by higher accounts payable and accruals.
Revolving Credit Facility
Revolving Credit Facility
Our Third Amended and Restated Revolving Credit Agreement, dated as of June 23, 2021, with Bank of America N.A. as
Our Third Amended and Restated Revolving Credit Agreement, dated as of June 23, 2021, with Bank of America N.A. as
administrative agent and the other banks identified therein as lenders (Revolving Credit Agreement) amended and restated our
administrative agent and the other banks identified therein as lenders (Revolving Credit Agreement) amended and restated our
Second Amended and Restated Credit Agreement dated as of June 28, 2019 and provides for a five year unsecured revolving
Second Amended and Restated Credit Agreement dated as of June 28, 2019 and provides for a five year unsecured revolving
credit facility in an aggregate principal amount not to exceed $2.5 billion (subject to certain terms and conditions).
credit facility in an aggregate principal amount not to exceed $2.5 billion (subject to certain terms and conditions).
We may borrow under this revolving credit facility in the future and use the proceeds for repayment of existing
We may borrow under this revolving credit facility in the future and use the proceeds for repayment of existing
indebtedness, stock repurchases, acquisitions, capital expenditures, working capital and other lawful corporate purposes. The
indebtedness, stock repurchases, acquisitions, capital expenditures, working capital and other lawful corporate purposes. The
terms of the Revolving Credit Agreement impose restrictions on our ability to undertake certain transactions, to create certain
terms of the Revolving Credit Agreement impose restrictions on our ability to undertake certain transactions, to create certain
liens on assets and to incur certain subsidiary indebtedness. In addition, the Revolving Credit Agreement contains a
liens on assets and to incur certain subsidiary indebtedness. In addition, the Revolving Credit Agreement contains a
consolidated leverage ratio covenant of total consolidated funded debt to consolidated earnings before interest, taxes,
consolidated leverage ratio covenant of total consolidated funded debt to consolidated earnings before interest, taxes,
depreciation, and amortization (EBITDA) of not greater than 3.5 to 1.0. As of October 29, 2022, we were in compliance with
depreciation, and amortization (EBITDA) of not greater than 3.5 to 1.0. As of October 29, 2022, we were in compliance with
these covenants. See Note 13, Revolving Credit Facility, of the Notes to Consolidated Financial Statements contained in Item 8
these covenants. See Note 13, Revolving Credit Facility, of the Notes to Consolidated Financial Statements contained in Item 8
of this Annual Report on Form 10-K for further information on our revolving credit facility.
of this Annual Report on Form 10-K for further information on our revolving credit facility.
33
33
34
34
Provision for (Benefit From) Income Taxes
Provision for (Benefit From) Income Taxes
Investing Activities
Investing Activities
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
Provision for (benefit from) income taxes
Provision for (benefit from) income taxes
$
$
350,188
350,188
$
$
(61,708)
(61,708)
$
$
411,896
411,896
n/a
n/a
Effective income tax rate
Effective income tax rate
11.3 %
11.3 %
(4.6) %
(4.6) %
Our effective tax rates for fiscal 2022 and fiscal 2021 were below the U.S. statutory rate of 21% due to lower statutory tax
Our effective tax rates for fiscal 2022 and fiscal 2021 were below the U.S. statutory rate of 21% due to lower statutory tax
rates applicable to our operations in the foreign jurisdictions in which we earn income. In fiscal 2021, we recorded a net
rates applicable to our operations in the foreign jurisdictions in which we earn income. In fiscal 2021, we recorded a net
deferred tax benefit of $188.8 million from deferred tax assets related to an intra-entity transfer of intangible assets. Also, our
deferred tax benefit of $188.8 million from deferred tax assets related to an intra-entity transfer of intangible assets. Also, our
provision for income taxes increased in fiscal 2022 as a result of higher income before taxes primarily related to the
provision for income taxes increased in fiscal 2022 as a result of higher income before taxes primarily related to the
Acquisition. For fiscal 2022 and fiscal 2021 our pretax income was primarily generated in Ireland at a tax rate of 12.5%.
Acquisition. For fiscal 2022 and fiscal 2021 our pretax income was primarily generated in Ireland at a tax rate of 12.5%.
See Note 12, Income Taxes, of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report
See Note 12, Income Taxes, of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report
Investing cash flows generally consist of capital expenditures, cash used for acquisitions and proceeds from or purchases
Investing cash flows generally consist of capital expenditures, cash used for acquisitions and proceeds from or purchases
of investments. The change in cash (used for) provided by investing activities during fiscal 2022 as compared to fiscal 2021
of investments. The change in cash (used for) provided by investing activities during fiscal 2022 as compared to fiscal 2021
was primarily the result of cash received from the Acquisition during fiscal 2021, partially offset by an increase in cash used for
was primarily the result of cash received from the Acquisition during fiscal 2021, partially offset by an increase in cash used for
capital expenditures during fiscal 2022.
capital expenditures during fiscal 2022.
Financing Activities
Financing Activities
Financing cash flows consist primarily of payments of dividends to stockholders, repurchases of common stock, issuance
Financing cash flows consist primarily of payments of dividends to stockholders, repurchases of common stock, issuance
and repayment of debt, and proceeds from the sale of shares of common stock pursuant to employee equity incentive plans.
and repayment of debt, and proceeds from the sale of shares of common stock pursuant to employee equity incentive plans.
The change in cash used for financing activities during fiscal 2022 as compared to fiscal 2021 was primarily the result of a net
The change in cash used for financing activities during fiscal 2022 as compared to fiscal 2021 was primarily the result of a net
decrease in debt in fiscal 2022 as compared to a net increase in debt in fiscal 2021, as well as higher dividend payments,
decrease in debt in fiscal 2022 as compared to a net increase in debt in fiscal 2021, as well as higher dividend payments,
partially offset by lower common stock repurchases.
partially offset by lower common stock repurchases.
on Form 10-K for further discussion.
on Form 10-K for further discussion.
Net Income
Net Income
Net income
Net income
Diluted EPS
Diluted EPS
Net income, as a % of revenue
Net income, as a % of revenue
Fiscal Year
Fiscal Year
2022 over 2021
2022 over 2021
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
$ 2,748,561
$ 2,748,561
$ 1,390,422
$ 1,390,422
1,358,139
1,358,139
$
$
$
$
19.0 %
19.0 %
3.46
3.46
1.79
1.79
98 %
98 %
52 %
52 %
22.9 %
22.9 %
$
$
5.25
5.25
$
$
The increase in net income in fiscal 2022 as compared to fiscal 2021 was a result of a $1,586.5 million increase in
The increase in net income in fiscal 2022 as compared to fiscal 2021 was a result of a $1,586.5 million increase in
operating income and a $183.5 million decrease in nonoperating expense, partially offset by a $411.9 million increase in
operating income and a $183.5 million decrease in nonoperating expense, partially offset by a $411.9 million increase in
provision for income taxes, as more fully described above under the headings Operating Income, Nonoperating (Income)
provision for income taxes, as more fully described above under the headings Operating Income, Nonoperating (Income)
Expense, and Provision for (Benefit From) Income Taxes.
Expense, and Provision for (Benefit From) Income Taxes.
Liquidity and Capital Resources
Liquidity and Capital Resources
At October 29, 2022, our principal source of liquidity was $1,470.6 million of cash and cash equivalents, of which
At October 29, 2022, our principal source of liquidity was $1,470.6 million of cash and cash equivalents, of which
approximately $307.4 million was held in the United States and the balance of our cash and cash equivalents was held outside
approximately $307.4 million was held in the United States and the balance of our cash and cash equivalents was held outside
the United States in various foreign subsidiaries. We manage our worldwide cash requirements by, among other things,
the United States in various foreign subsidiaries. We manage our worldwide cash requirements by, among other things,
reviewing available funds held by our foreign subsidiaries and the cost effectiveness by which those funds can be accessed in
reviewing available funds held by our foreign subsidiaries and the cost effectiveness by which those funds can be accessed in
the United States. We do not expect current regulatory restrictions or taxes on repatriation to have a material adverse effect on
the United States. We do not expect current regulatory restrictions or taxes on repatriation to have a material adverse effect on
our overall liquidity, financial condition or results of operations. Our cash and cash equivalents consist of highly liquid
our overall liquidity, financial condition or results of operations. Our cash and cash equivalents consist of highly liquid
investments with maturities of three months or less, including money market funds. We maintain these balances with high
investments with maturities of three months or less, including money market funds. We maintain these balances with high
credit quality counterparties, continually monitor the amount of credit exposure to any one issuer and diversify our investments
credit quality counterparties, continually monitor the amount of credit exposure to any one issuer and diversify our investments
in order to minimize our credit risk.
in order to minimize our credit risk.
We believe that our existing sources of liquidity and cash expected to be generated from future operations, together with
We believe that our existing sources of liquidity and cash expected to be generated from future operations, together with
existing and anticipated available short- and long-term financing, will be sufficient to fund operations, capital expenditures,
existing and anticipated available short- and long-term financing, will be sufficient to fund operations, capital expenditures,
research and development efforts and dividend payments (if any) in the immediate future and for at least the next twelve
research and development efforts and dividend payments (if any) in the immediate future and for at least the next twelve
months.
months.
Net cash provided by operating activities
Net cash provided by operating activities
Net cash provided by operating activities as a % of revenue
Net cash provided by operating activities as a % of revenue
Net cash (used for) provided by investing activities
Net cash (used for) provided by investing activities
Net cash used for financing activities
Net cash used for financing activities
Fiscal Year
Fiscal Year
2022
2022
4,475,402
4,475,402
37 %
37 %
(657,368)
(657,368)
(4,290,720)
(4,290,720)
$
$
$
$
$
$
2021
2021
2,735,069
2,735,069
37 %
37 %
2,143,525
2,143,525
(3,959,664)
(3,959,664)
$
$
$
$
$
$
The following changes contributed to the net change in cash and cash equivalents from fiscal 2021 to fiscal 2022.
The following changes contributed to the net change in cash and cash equivalents from fiscal 2021 to fiscal 2022.
Operating Activities
Operating Activities
Cash provided by operating activities is net income adjusted for certain non-cash items and changes in assets and
Cash provided by operating activities is net income adjusted for certain non-cash items and changes in assets and
liabilities. The increase in cash provided by operating activities during fiscal 2022 as compared to fiscal 2021 was primarily a
liabilities. The increase in cash provided by operating activities during fiscal 2022 as compared to fiscal 2021 was primarily a
result of higher net income adjusted for noncash items offset by changes in working capital.
result of higher net income adjusted for noncash items offset by changes in working capital.
Working Capital
Working Capital
Accounts receivable, net
Accounts receivable, net
Days sales outstanding (1)
Days sales outstanding (1)
Inventory
Inventory
Days cost of sales in inventory (1)
Days cost of sales in inventory (1)
Fiscal Year
Fiscal Year
2022
2022
2021
2021
$ Change
$ Change
% Change
% Change
$ 1,800,462 $ 1,459,056 $ 341,406
$ 1,800,462 $ 1,459,056 $ 341,406
23 %
23 %
50
50
52
52
$ 1,399,914 $ 1,200,610 $ 199,304
$ 1,399,914 $ 1,200,610 $ 199,304
17 %
17 %
106
106
118
118
_______________________________________
_______________________________________
(1) We use the average of the current year and prior year ending net accounts receivable and ending inventory balance in our calculation of
(1) We use the average of the current year and prior year ending net accounts receivable and ending inventory balance in our calculation of
days sales outstanding and days cost of sales in inventory, respectively. Cost of sales amounts used in the calculation of days cost of
days sales outstanding and days cost of sales in inventory, respectively. Cost of sales amounts used in the calculation of days cost of
sales in inventory include Acquisition accounting adjustments related to the sale of acquired inventory written up to fair value,
sales in inventory include Acquisition accounting adjustments related to the sale of acquired inventory written up to fair value,
amortization of developed technology intangible assets acquired and depreciation related to the write-up of fixed assets to fair value.
amortization of developed technology intangible assets acquired and depreciation related to the write-up of fixed assets to fair value.
The calculations above include the financial results of Maxim prospectively from the Acquisition Date.
The calculations above include the financial results of Maxim prospectively from the Acquisition Date.
The increase in accounts receivable for fiscal 2022 compared to fiscal 2021 was primarily the result of variations in the
The increase in accounts receivable for fiscal 2022 compared to fiscal 2021 was primarily the result of variations in the
timing of collections and billings and increased revenue levels.
timing of collections and billings and increased revenue levels.
Inventory increased in fiscal 2022 as compared to fiscal 2021, primarily as a result of our efforts to balance
Inventory increased in fiscal 2022 as compared to fiscal 2021, primarily as a result of our efforts to balance
manufacturing production, demand and inventory levels. Our inventory levels are impacted by our need to support forecasted
manufacturing production, demand and inventory levels. Our inventory levels are impacted by our need to support forecasted
sales demand and variations between those forecasts and actual demand. As of October 30, 2021, our inventory balance also
sales demand and variations between those forecasts and actual demand. As of October 30, 2021, our inventory balance also
included additional costs related to the Acquisition as a result of accounting for acquired inventory at fair-value.
included additional costs related to the Acquisition as a result of accounting for acquired inventory at fair-value.
Current liabilities decreased to $2,442.7 million at October 29, 2022 from $2,770.3 million recorded at the end of fiscal
Current liabilities decreased to $2,442.7 million at October 29, 2022 from $2,770.3 million recorded at the end of fiscal
2021, primarily due to early termination of debt, partially offset by higher accounts payable and accruals.
2021, primarily due to early termination of debt, partially offset by higher accounts payable and accruals.
Revolving Credit Facility
Revolving Credit Facility
Our Third Amended and Restated Revolving Credit Agreement, dated as of June 23, 2021, with Bank of America N.A. as
Our Third Amended and Restated Revolving Credit Agreement, dated as of June 23, 2021, with Bank of America N.A. as
administrative agent and the other banks identified therein as lenders (Revolving Credit Agreement) amended and restated our
administrative agent and the other banks identified therein as lenders (Revolving Credit Agreement) amended and restated our
Second Amended and Restated Credit Agreement dated as of June 28, 2019 and provides for a five year unsecured revolving
Second Amended and Restated Credit Agreement dated as of June 28, 2019 and provides for a five year unsecured revolving
credit facility in an aggregate principal amount not to exceed $2.5 billion (subject to certain terms and conditions).
credit facility in an aggregate principal amount not to exceed $2.5 billion (subject to certain terms and conditions).
We may borrow under this revolving credit facility in the future and use the proceeds for repayment of existing
We may borrow under this revolving credit facility in the future and use the proceeds for repayment of existing
indebtedness, stock repurchases, acquisitions, capital expenditures, working capital and other lawful corporate purposes. The
indebtedness, stock repurchases, acquisitions, capital expenditures, working capital and other lawful corporate purposes. The
terms of the Revolving Credit Agreement impose restrictions on our ability to undertake certain transactions, to create certain
terms of the Revolving Credit Agreement impose restrictions on our ability to undertake certain transactions, to create certain
liens on assets and to incur certain subsidiary indebtedness. In addition, the Revolving Credit Agreement contains a
liens on assets and to incur certain subsidiary indebtedness. In addition, the Revolving Credit Agreement contains a
consolidated leverage ratio covenant of total consolidated funded debt to consolidated earnings before interest, taxes,
consolidated leverage ratio covenant of total consolidated funded debt to consolidated earnings before interest, taxes,
depreciation, and amortization (EBITDA) of not greater than 3.5 to 1.0. As of October 29, 2022, we were in compliance with
depreciation, and amortization (EBITDA) of not greater than 3.5 to 1.0. As of October 29, 2022, we were in compliance with
these covenants. See Note 13, Revolving Credit Facility, of the Notes to Consolidated Financial Statements contained in Item 8
these covenants. See Note 13, Revolving Credit Facility, of the Notes to Consolidated Financial Statements contained in Item 8
of this Annual Report on Form 10-K for further information on our revolving credit facility.
of this Annual Report on Form 10-K for further information on our revolving credit facility.
33
33
34
34
Debt
Debt
As of October 29, 2022, we had approximately $6.5 billion of carrying value outstanding on our debt. The difference in
As of October 29, 2022, we had approximately $6.5 billion of carrying value outstanding on our debt. The difference in
the carrying value of the debt and the principal is due to the unamortized discount and issuance fees and other adjustments on
the carrying value of the debt and the principal is due to the unamortized discount and issuance fees and other adjustments on
these instruments. The indentures governing certain of our debt instruments contain covenants that may limit our ability to:
these instruments. The indentures governing certain of our debt instruments contain covenants that may limit our ability to:
incur, create, assume or guarantee any debt or borrowed money secured by a lien upon a principal property; enter into sale and
incur, create, assume or guarantee any debt or borrowed money secured by a lien upon a principal property; enter into sale and
lease-back transactions with respect to a principal property; and consolidate with or merge into, or transfer or lease all or
lease-back transactions with respect to a principal property; and consolidate with or merge into, or transfer or lease all or
substantially all of our assets to, any other party. As of October 29, 2022, we were compliant with these covenants. See Note
substantially all of our assets to, any other party. As of October 29, 2022, we were compliant with these covenants. See Note
14, Debt of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report on Form 10-K for further
14, Debt of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report on Form 10-K for further
information on our outstanding debt.
information on our outstanding debt.
Stock Repurchase Program
Stock Repurchase Program
Our common stock repurchase program has been in place since August 2004. Since inception, our Board of Directors has
Our common stock repurchase program has been in place since August 2004. Since inception, our Board of Directors has
authorized us to repurchase $16.7 billion of our common stock under the program, which includes the $8.5 billion authorization
authorized us to repurchase $16.7 billion of our common stock under the program, which includes the $8.5 billion authorization
approved by the Board of Directors on August 25, 2021. Under the program, we may repurchase outstanding shares of our
approved by the Board of Directors on August 25, 2021. Under the program, we may repurchase outstanding shares of our
common stock from time to time in the open market and through privately negotiated transactions. Unless terminated earlier by
common stock from time to time in the open market and through privately negotiated transactions. Unless terminated earlier by
resolution of our Board of Directors, the repurchase program will expire when we have repurchased all shares authorized under
resolution of our Board of Directors, the repurchase program will expire when we have repurchased all shares authorized under
the program.
the program.
As of October 29, 2022, $4.9 billion remained available for repurchase under the current authorized program. The
As of October 29, 2022, $4.9 billion remained available for repurchase under the current authorized program. The
repurchased shares are held as authorized but unissued shares of common stock. We also repurchase shares in settlement of
repurchased shares are held as authorized but unissued shares of common stock. We also repurchase shares in settlement of
employee tax withholding obligations due upon the vesting of restricted stock units/awards or the exercise of stock options.
employee tax withholding obligations due upon the vesting of restricted stock units/awards or the exercise of stock options.
Future repurchases of common stock will be dependent upon our financial position, results of operations, outlook, liquidity, and
Future repurchases of common stock will be dependent upon our financial position, results of operations, outlook, liquidity, and
other factors we deem relevant.
other factors we deem relevant.
Capital Expenditures
Capital Expenditures
Net additions to property, plant and equipment were $699.3 million in fiscal 2022 and were funded with a combination of
Net additions to property, plant and equipment were $699.3 million in fiscal 2022 and were funded with a combination of
cash on hand and cash generated from operations. We expect capital expenditures for fiscal 2023 to be between 6% and 8% of
cash on hand and cash generated from operations. We expect capital expenditures for fiscal 2023 to be between 6% and 8% of
revenue, which is above our historical levels primarily due to our plans to continue to expand internal manufacturing capacity.
revenue, which is above our historical levels primarily due to our plans to continue to expand internal manufacturing capacity.
These capital expenditures will be funded with a combination of cash on hand and cash expected to be generated from future
These capital expenditures will be funded with a combination of cash on hand and cash expected to be generated from future
operations, together with existing and anticipated available short- and long-term financing.
operations, together with existing and anticipated available short- and long-term financing.
Dividends
Dividends
On November 21, 2022, our Board of Directors declared a cash dividend of $0.76 per outstanding share of common
On November 21, 2022, our Board of Directors declared a cash dividend of $0.76 per outstanding share of common
stock. The dividend will be paid on December 15, 2022 to all shareholders of record at the close of business on December 5,
stock. The dividend will be paid on December 15, 2022 to all shareholders of record at the close of business on December 5,
2022 and is expected to total approximately $387.1 million. We currently expect quarterly dividends to continue in future
2022 and is expected to total approximately $387.1 million. We currently expect quarterly dividends to continue in future
periods, although they remain subject to determination and declaration by our Board of Directors. The payment of future
periods, although they remain subject to determination and declaration by our Board of Directors. The payment of future
dividends, if any, will be based on several factors, including our financial performance, outlook and liquidity.
dividends, if any, will be based on several factors, including our financial performance, outlook and liquidity.
Contractual Obligations
Contractual Obligations
The table below summarizes our material contractual obligations in specified periods as of October 29, 2022:
The table below summarizes our material contractual obligations in specified periods as of October 29, 2022:
(thousands)
(thousands)
Debt obligations (1)
Debt obligations (1)
Payment due by period
Payment due by period
Less than
Less than
More than
More than
Total
Total
1 Year
1 Year
1-3 Years
1-3 Years
3-5 Years
3-5 Years
5 Years
5 Years
$ 6,576,865 $
$ 6,576,865 $
— $ 900,000 $ 1,400,000 $ 4,276,865
— $ 900,000 $ 1,400,000 $ 4,276,865
Interest payments associated with debt obligations
Interest payments associated with debt obligations
2,446,434
2,446,434
198,459
198,459
Transition tax (2)
Transition tax (2)
Operating leases (3)
Operating leases (3)
Inventory-related purchase commitments (4)
Inventory-related purchase commitments (4)
656,070
656,070
454,543
454,543
127,008
127,008
31,199
31,199
428,352
428,352
130,069
130,069
373,706
373,706
529,062
529,062
131,498
131,498
168,817
168,817
323,989
323,989
1,550,280
1,550,280
—
—
113,183
113,183
64,364
64,364
—
—
178,663
178,663
65,102
65,102
Total
Total
$ 10,562,264 $ 486,735 $ 2,103,083 $ 1,901,536 $ 6,070,910
$ 10,562,264 $ 486,735 $ 2,103,083 $ 1,901,536 $ 6,070,910
_______________________________________
_______________________________________
(1) Debt obligations are assumed to be held to maturity.
(1) Debt obligations are assumed to be held to maturity.
(2) Tax obligation relates to the one-time tax on deemed repatriated earnings under the Tax Cuts and Jobs Act of 2017 enacted in fiscal
(2) Tax obligation relates to the one-time tax on deemed repatriated earnings under the Tax Cuts and Jobs Act of 2017 enacted in fiscal
2018.
2018.
(3) Certain of our operating lease obligations include escalation clauses. These escalating payment requirements are reflected in the table.
(3) Certain of our operating lease obligations include escalation clauses. These escalating payment requirements are reflected in the table.
(4) We have supplier commitments for the purchase of materials and supplies in advance or with minimum purchase quantities.
(4) We have supplier commitments for the purchase of materials and supplies in advance or with minimum purchase quantities.
As of October 29, 2022, our total liabilities associated with uncertain tax positions was $194.4 million, which are
As of October 29, 2022, our total liabilities associated with uncertain tax positions was $194.4 million, which are
included in non-current income taxes payable in our Consolidated Balance Sheets contained in Item 8 of this Annual Report on
included in non-current income taxes payable in our Consolidated Balance Sheets contained in Item 8 of this Annual Report on
Form 10-K. Due to the complexity associated with our tax uncertainties, we cannot make a reasonably reliable estimate of the
Form 10-K. Due to the complexity associated with our tax uncertainties, we cannot make a reasonably reliable estimate of the
period in which we expect to settle the non-current liabilities associated with these uncertain tax positions. Therefore, we have
period in which we expect to settle the non-current liabilities associated with these uncertain tax positions. Therefore, we have
not included these uncertain tax positions in the above contractual obligations table.
not included these uncertain tax positions in the above contractual obligations table.
New Accounting Pronouncements
New Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) and
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) and
are adopted by us as of the specified effective date. Unless otherwise discussed, management believes that the impact of
are adopted by us as of the specified effective date. Unless otherwise discussed, management believes that the impact of
recently issued standards will not have a material impact on our future financial condition and results of operations. See Note
recently issued standards will not have a material impact on our future financial condition and results of operations. See Note
2s, New Accounting Pronouncements, of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual
2s, New Accounting Pronouncements, of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual
Report on Form 10-K for a description of recently issued and adopted accounting pronouncements, including the dates of
Report on Form 10-K for a description of recently issued and adopted accounting pronouncements, including the dates of
adoption and impact on our historical financial condition and results of operations.
adoption and impact on our historical financial condition and results of operations.
Critical Accounting Policies and Estimates
Critical Accounting Policies and Estimates
Management’s discussion and analysis of the financial condition and results of operations is based upon the Consolidated
Management’s discussion and analysis of the financial condition and results of operations is based upon the Consolidated
Financial Statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements
Financial Statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and
requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and
related disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience, knowledge
related disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience, knowledge
of current conditions and beliefs of what could occur in the future based on available information. We consider the following
of current conditions and beliefs of what could occur in the future based on available information. We consider the following
accounting policies to be both those most important to the portrayal of our financial condition and those that require the most
accounting policies to be both those most important to the portrayal of our financial condition and those that require the most
subjective judgment. If actual results differ significantly from management’s estimates and projections, there could be a
subjective judgment. If actual results differ significantly from management’s estimates and projections, there could be a
material effect on our financial statements. We also have other policies that we consider key accounting policies; however, the
material effect on our financial statements. We also have other policies that we consider key accounting policies; however, the
application of these policies does not require us to make significant estimates or judgments that are difficult or subjective.
application of these policies does not require us to make significant estimates or judgments that are difficult or subjective.
Revenue Recognition
Revenue Recognition
Recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects
Recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects
the consideration to which the providing entity expects to be entitled in exchange for those goods or services. We recognize
the consideration to which the providing entity expects to be entitled in exchange for those goods or services. We recognize
revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration that
revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration that
we expect to receive in exchange for those products or services. We recognize revenue when all of the following criteria are
we expect to receive in exchange for those products or services. We recognize revenue when all of the following criteria are
met: (1) we have entered into a binding agreement, (2) the performance obligations have been identified, (3) the transaction
met: (1) we have entered into a binding agreement, (2) the performance obligations have been identified, (3) the transaction
price to the customer has been determined, (4) the transaction price has been allocated to the performance obligations in the
price to the customer has been determined, (4) the transaction price has been allocated to the performance obligations in the
contract, and (5) the performance obligations have been satisfied. The majority of our shipping terms permit us to recognize
contract, and (5) the performance obligations have been satisfied. The majority of our shipping terms permit us to recognize
revenue at point of shipment or delivery. Certain shipping terms require the goods to be through customs or be received by the
revenue at point of shipment or delivery. Certain shipping terms require the goods to be through customs or be received by the
customer before title passes. In those instances, we defer the revenue recognized until title has passed. Shipping costs are
customer before title passes. In those instances, we defer the revenue recognized until title has passed. Shipping costs are
charged to selling, marketing, general and administrative expense as incurred. Sales taxes are excluded from revenue.
charged to selling, marketing, general and administrative expense as incurred. Sales taxes are excluded from revenue.
Revenue from contracts with the United States government, government prime contractors and certain commercial
Revenue from contracts with the United States government, government prime contractors and certain commercial
customers is recorded over time using either units delivered or costs incurred as the measurement basis for progress toward
customers is recorded over time using either units delivered or costs incurred as the measurement basis for progress toward
completion. These measures are used to measure results directly and is generally the best measure of progress toward
completion. These measures are used to measure results directly and is generally the best measure of progress toward
completion in circumstances in which a reliable measure of output can be established. Estimated revenue in excess of amounts
completion in circumstances in which a reliable measure of output can be established. Estimated revenue in excess of amounts
billed is reported as unbilled receivables. Contract accounting requires judgment in estimating costs and assumptions related to
billed is reported as unbilled receivables. Contract accounting requires judgment in estimating costs and assumptions related to
technical issues and delivery schedule. Contract costs include material, subcontract costs, labor and an allocation of indirect
technical issues and delivery schedule. Contract costs include material, subcontract costs, labor and an allocation of indirect
costs. The estimation of costs at completion of a contract is subject to numerous variables involving contract costs and estimates
costs. The estimation of costs at completion of a contract is subject to numerous variables involving contract costs and estimates
as to the length of time to complete the contract. Changes in contract performance, estimated gross margin, including the impact
as to the length of time to complete the contract. Changes in contract performance, estimated gross margin, including the impact
of final contract settlements, and estimated losses are recognized in the period in which the changes or losses are determined.
of final contract settlements, and estimated losses are recognized in the period in which the changes or losses are determined.
Performance Obligations: Substantially all of our contracts with customers contain a single performance obligation, the
Performance Obligations: Substantially all of our contracts with customers contain a single performance obligation, the
sale of mixed-signal integrated circuit (IC) products. Such sales represent a single performance obligation because the sale is
sale of mixed-signal integrated circuit (IC) products. Such sales represent a single performance obligation because the sale is
one type of good or includes multiple goods that are neither capable of being distinct nor separable from the other promises in
one type of good or includes multiple goods that are neither capable of being distinct nor separable from the other promises in
the contract. This performance obligation is satisfied when control of the product is transferred to the customer, which occurs
the contract. This performance obligation is satisfied when control of the product is transferred to the customer, which occurs
upon shipment or delivery. Unsatisfied performance obligations primarily represent contracts for products with future delivery
upon shipment or delivery. Unsatisfied performance obligations primarily represent contracts for products with future delivery
dates and with an original expected duration of one year or less. We generally warrant that our products will meet their
dates and with an original expected duration of one year or less. We generally warrant that our products will meet their
published specifications, and that we will repair or replace defective products, for one year from the date title passes from us to
published specifications, and that we will repair or replace defective products, for one year from the date title passes from us to
the customer. Specific accruals are recorded for known product warranty issues.
the customer. Specific accruals are recorded for known product warranty issues.
Transaction Price: The transaction price reflects our expectations about the consideration we will be entitled to receive
Transaction Price: The transaction price reflects our expectations about the consideration we will be entitled to receive
from the customer and may include fixed or variable amounts. Fixed consideration primarily includes sales to direct customers
from the customer and may include fixed or variable amounts. Fixed consideration primarily includes sales to direct customers
and sales to distributors in which both the sale to the distributor and the sale to the end customer occur within the same
and sales to distributors in which both the sale to the distributor and the sale to the end customer occur within the same
reporting period. Variable consideration includes sales in which the amount of consideration that we will receive is unknown as
reporting period. Variable consideration includes sales in which the amount of consideration that we will receive is unknown as
35
35
36
36
Debt
Debt
As of October 29, 2022, we had approximately $6.5 billion of carrying value outstanding on our debt. The difference in
As of October 29, 2022, we had approximately $6.5 billion of carrying value outstanding on our debt. The difference in
the carrying value of the debt and the principal is due to the unamortized discount and issuance fees and other adjustments on
the carrying value of the debt and the principal is due to the unamortized discount and issuance fees and other adjustments on
these instruments. The indentures governing certain of our debt instruments contain covenants that may limit our ability to:
these instruments. The indentures governing certain of our debt instruments contain covenants that may limit our ability to:
incur, create, assume or guarantee any debt or borrowed money secured by a lien upon a principal property; enter into sale and
incur, create, assume or guarantee any debt or borrowed money secured by a lien upon a principal property; enter into sale and
lease-back transactions with respect to a principal property; and consolidate with or merge into, or transfer or lease all or
lease-back transactions with respect to a principal property; and consolidate with or merge into, or transfer or lease all or
substantially all of our assets to, any other party. As of October 29, 2022, we were compliant with these covenants. See Note
substantially all of our assets to, any other party. As of October 29, 2022, we were compliant with these covenants. See Note
14, Debt of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report on Form 10-K for further
14, Debt of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report on Form 10-K for further
information on our outstanding debt.
information on our outstanding debt.
Stock Repurchase Program
Stock Repurchase Program
Our common stock repurchase program has been in place since August 2004. Since inception, our Board of Directors has
Our common stock repurchase program has been in place since August 2004. Since inception, our Board of Directors has
authorized us to repurchase $16.7 billion of our common stock under the program, which includes the $8.5 billion authorization
authorized us to repurchase $16.7 billion of our common stock under the program, which includes the $8.5 billion authorization
approved by the Board of Directors on August 25, 2021. Under the program, we may repurchase outstanding shares of our
approved by the Board of Directors on August 25, 2021. Under the program, we may repurchase outstanding shares of our
common stock from time to time in the open market and through privately negotiated transactions. Unless terminated earlier by
common stock from time to time in the open market and through privately negotiated transactions. Unless terminated earlier by
resolution of our Board of Directors, the repurchase program will expire when we have repurchased all shares authorized under
resolution of our Board of Directors, the repurchase program will expire when we have repurchased all shares authorized under
the program.
the program.
As of October 29, 2022, $4.9 billion remained available for repurchase under the current authorized program. The
As of October 29, 2022, $4.9 billion remained available for repurchase under the current authorized program. The
repurchased shares are held as authorized but unissued shares of common stock. We also repurchase shares in settlement of
repurchased shares are held as authorized but unissued shares of common stock. We also repurchase shares in settlement of
employee tax withholding obligations due upon the vesting of restricted stock units/awards or the exercise of stock options.
employee tax withholding obligations due upon the vesting of restricted stock units/awards or the exercise of stock options.
Future repurchases of common stock will be dependent upon our financial position, results of operations, outlook, liquidity, and
Future repurchases of common stock will be dependent upon our financial position, results of operations, outlook, liquidity, and
other factors we deem relevant.
other factors we deem relevant.
Capital Expenditures
Capital Expenditures
Net additions to property, plant and equipment were $699.3 million in fiscal 2022 and were funded with a combination of
Net additions to property, plant and equipment were $699.3 million in fiscal 2022 and were funded with a combination of
cash on hand and cash generated from operations. We expect capital expenditures for fiscal 2023 to be between 6% and 8% of
cash on hand and cash generated from operations. We expect capital expenditures for fiscal 2023 to be between 6% and 8% of
revenue, which is above our historical levels primarily due to our plans to continue to expand internal manufacturing capacity.
revenue, which is above our historical levels primarily due to our plans to continue to expand internal manufacturing capacity.
These capital expenditures will be funded with a combination of cash on hand and cash expected to be generated from future
These capital expenditures will be funded with a combination of cash on hand and cash expected to be generated from future
operations, together with existing and anticipated available short- and long-term financing.
operations, together with existing and anticipated available short- and long-term financing.
On November 21, 2022, our Board of Directors declared a cash dividend of $0.76 per outstanding share of common
On November 21, 2022, our Board of Directors declared a cash dividend of $0.76 per outstanding share of common
stock. The dividend will be paid on December 15, 2022 to all shareholders of record at the close of business on December 5,
stock. The dividend will be paid on December 15, 2022 to all shareholders of record at the close of business on December 5,
2022 and is expected to total approximately $387.1 million. We currently expect quarterly dividends to continue in future
2022 and is expected to total approximately $387.1 million. We currently expect quarterly dividends to continue in future
periods, although they remain subject to determination and declaration by our Board of Directors. The payment of future
periods, although they remain subject to determination and declaration by our Board of Directors. The payment of future
dividends, if any, will be based on several factors, including our financial performance, outlook and liquidity.
dividends, if any, will be based on several factors, including our financial performance, outlook and liquidity.
The table below summarizes our material contractual obligations in specified periods as of October 29, 2022:
The table below summarizes our material contractual obligations in specified periods as of October 29, 2022:
Interest payments associated with debt obligations
Interest payments associated with debt obligations
2,446,434
2,446,434
198,459
198,459
Payment due by period
Payment due by period
Less than
Less than
More than
More than
Total
Total
1 Year
1 Year
1-3 Years
1-3 Years
3-5 Years
3-5 Years
5 Years
5 Years
$ 6,576,865 $
$ 6,576,865 $
— $ 900,000 $ 1,400,000 $ 4,276,865
— $ 900,000 $ 1,400,000 $ 4,276,865
656,070
656,070
127,008
127,008
454,543
454,543
31,199
31,199
428,352
428,352
130,069
130,069
373,706
373,706
529,062
529,062
131,498
131,498
168,817
168,817
323,989
323,989
1,550,280
1,550,280
—
—
—
—
113,183
113,183
178,663
178,663
64,364
64,364
65,102
65,102
$ 10,562,264 $ 486,735 $ 2,103,083 $ 1,901,536 $ 6,070,910
$ 10,562,264 $ 486,735 $ 2,103,083 $ 1,901,536 $ 6,070,910
Inventory-related purchase commitments (4)
Inventory-related purchase commitments (4)
_______________________________________
_______________________________________
(1) Debt obligations are assumed to be held to maturity.
(1) Debt obligations are assumed to be held to maturity.
(2) Tax obligation relates to the one-time tax on deemed repatriated earnings under the Tax Cuts and Jobs Act of 2017 enacted in fiscal
(2) Tax obligation relates to the one-time tax on deemed repatriated earnings under the Tax Cuts and Jobs Act of 2017 enacted in fiscal
(3) Certain of our operating lease obligations include escalation clauses. These escalating payment requirements are reflected in the table.
(3) Certain of our operating lease obligations include escalation clauses. These escalating payment requirements are reflected in the table.
(4) We have supplier commitments for the purchase of materials and supplies in advance or with minimum purchase quantities.
(4) We have supplier commitments for the purchase of materials and supplies in advance or with minimum purchase quantities.
As of October 29, 2022, our total liabilities associated with uncertain tax positions was $194.4 million, which are
As of October 29, 2022, our total liabilities associated with uncertain tax positions was $194.4 million, which are
Dividends
Dividends
Contractual Obligations
Contractual Obligations
(thousands)
(thousands)
Debt obligations (1)
Debt obligations (1)
Transition tax (2)
Transition tax (2)
Operating leases (3)
Operating leases (3)
Total
Total
2018.
2018.
included in non-current income taxes payable in our Consolidated Balance Sheets contained in Item 8 of this Annual Report on
included in non-current income taxes payable in our Consolidated Balance Sheets contained in Item 8 of this Annual Report on
Form 10-K. Due to the complexity associated with our tax uncertainties, we cannot make a reasonably reliable estimate of the
Form 10-K. Due to the complexity associated with our tax uncertainties, we cannot make a reasonably reliable estimate of the
period in which we expect to settle the non-current liabilities associated with these uncertain tax positions. Therefore, we have
period in which we expect to settle the non-current liabilities associated with these uncertain tax positions. Therefore, we have
not included these uncertain tax positions in the above contractual obligations table.
not included these uncertain tax positions in the above contractual obligations table.
New Accounting Pronouncements
New Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) and
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) and
are adopted by us as of the specified effective date. Unless otherwise discussed, management believes that the impact of
are adopted by us as of the specified effective date. Unless otherwise discussed, management believes that the impact of
recently issued standards will not have a material impact on our future financial condition and results of operations. See Note
recently issued standards will not have a material impact on our future financial condition and results of operations. See Note
2s, New Accounting Pronouncements, of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual
2s, New Accounting Pronouncements, of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual
Report on Form 10-K for a description of recently issued and adopted accounting pronouncements, including the dates of
Report on Form 10-K for a description of recently issued and adopted accounting pronouncements, including the dates of
adoption and impact on our historical financial condition and results of operations.
adoption and impact on our historical financial condition and results of operations.
Critical Accounting Policies and Estimates
Critical Accounting Policies and Estimates
Management’s discussion and analysis of the financial condition and results of operations is based upon the Consolidated
Management’s discussion and analysis of the financial condition and results of operations is based upon the Consolidated
Financial Statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements
Financial Statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and
requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and
related disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience, knowledge
related disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience, knowledge
of current conditions and beliefs of what could occur in the future based on available information. We consider the following
of current conditions and beliefs of what could occur in the future based on available information. We consider the following
accounting policies to be both those most important to the portrayal of our financial condition and those that require the most
accounting policies to be both those most important to the portrayal of our financial condition and those that require the most
subjective judgment. If actual results differ significantly from management’s estimates and projections, there could be a
subjective judgment. If actual results differ significantly from management’s estimates and projections, there could be a
material effect on our financial statements. We also have other policies that we consider key accounting policies; however, the
material effect on our financial statements. We also have other policies that we consider key accounting policies; however, the
application of these policies does not require us to make significant estimates or judgments that are difficult or subjective.
application of these policies does not require us to make significant estimates or judgments that are difficult or subjective.
Revenue Recognition
Revenue Recognition
Recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects
Recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects
the consideration to which the providing entity expects to be entitled in exchange for those goods or services. We recognize
the consideration to which the providing entity expects to be entitled in exchange for those goods or services. We recognize
revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration that
revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration that
we expect to receive in exchange for those products or services. We recognize revenue when all of the following criteria are
we expect to receive in exchange for those products or services. We recognize revenue when all of the following criteria are
met: (1) we have entered into a binding agreement, (2) the performance obligations have been identified, (3) the transaction
met: (1) we have entered into a binding agreement, (2) the performance obligations have been identified, (3) the transaction
price to the customer has been determined, (4) the transaction price has been allocated to the performance obligations in the
price to the customer has been determined, (4) the transaction price has been allocated to the performance obligations in the
contract, and (5) the performance obligations have been satisfied. The majority of our shipping terms permit us to recognize
contract, and (5) the performance obligations have been satisfied. The majority of our shipping terms permit us to recognize
revenue at point of shipment or delivery. Certain shipping terms require the goods to be through customs or be received by the
revenue at point of shipment or delivery. Certain shipping terms require the goods to be through customs or be received by the
customer before title passes. In those instances, we defer the revenue recognized until title has passed. Shipping costs are
customer before title passes. In those instances, we defer the revenue recognized until title has passed. Shipping costs are
charged to selling, marketing, general and administrative expense as incurred. Sales taxes are excluded from revenue.
charged to selling, marketing, general and administrative expense as incurred. Sales taxes are excluded from revenue.
Revenue from contracts with the United States government, government prime contractors and certain commercial
Revenue from contracts with the United States government, government prime contractors and certain commercial
customers is recorded over time using either units delivered or costs incurred as the measurement basis for progress toward
customers is recorded over time using either units delivered or costs incurred as the measurement basis for progress toward
completion. These measures are used to measure results directly and is generally the best measure of progress toward
completion. These measures are used to measure results directly and is generally the best measure of progress toward
completion in circumstances in which a reliable measure of output can be established. Estimated revenue in excess of amounts
completion in circumstances in which a reliable measure of output can be established. Estimated revenue in excess of amounts
billed is reported as unbilled receivables. Contract accounting requires judgment in estimating costs and assumptions related to
billed is reported as unbilled receivables. Contract accounting requires judgment in estimating costs and assumptions related to
technical issues and delivery schedule. Contract costs include material, subcontract costs, labor and an allocation of indirect
technical issues and delivery schedule. Contract costs include material, subcontract costs, labor and an allocation of indirect
costs. The estimation of costs at completion of a contract is subject to numerous variables involving contract costs and estimates
costs. The estimation of costs at completion of a contract is subject to numerous variables involving contract costs and estimates
as to the length of time to complete the contract. Changes in contract performance, estimated gross margin, including the impact
as to the length of time to complete the contract. Changes in contract performance, estimated gross margin, including the impact
of final contract settlements, and estimated losses are recognized in the period in which the changes or losses are determined.
of final contract settlements, and estimated losses are recognized in the period in which the changes or losses are determined.
Performance Obligations: Substantially all of our contracts with customers contain a single performance obligation, the
Performance Obligations: Substantially all of our contracts with customers contain a single performance obligation, the
sale of mixed-signal integrated circuit (IC) products. Such sales represent a single performance obligation because the sale is
sale of mixed-signal integrated circuit (IC) products. Such sales represent a single performance obligation because the sale is
one type of good or includes multiple goods that are neither capable of being distinct nor separable from the other promises in
one type of good or includes multiple goods that are neither capable of being distinct nor separable from the other promises in
the contract. This performance obligation is satisfied when control of the product is transferred to the customer, which occurs
the contract. This performance obligation is satisfied when control of the product is transferred to the customer, which occurs
upon shipment or delivery. Unsatisfied performance obligations primarily represent contracts for products with future delivery
upon shipment or delivery. Unsatisfied performance obligations primarily represent contracts for products with future delivery
dates and with an original expected duration of one year or less. We generally warrant that our products will meet their
dates and with an original expected duration of one year or less. We generally warrant that our products will meet their
published specifications, and that we will repair or replace defective products, for one year from the date title passes from us to
published specifications, and that we will repair or replace defective products, for one year from the date title passes from us to
the customer. Specific accruals are recorded for known product warranty issues.
the customer. Specific accruals are recorded for known product warranty issues.
Transaction Price: The transaction price reflects our expectations about the consideration we will be entitled to receive
Transaction Price: The transaction price reflects our expectations about the consideration we will be entitled to receive
from the customer and may include fixed or variable amounts. Fixed consideration primarily includes sales to direct customers
from the customer and may include fixed or variable amounts. Fixed consideration primarily includes sales to direct customers
and sales to distributors in which both the sale to the distributor and the sale to the end customer occur within the same
and sales to distributors in which both the sale to the distributor and the sale to the end customer occur within the same
reporting period. Variable consideration includes sales in which the amount of consideration that we will receive is unknown as
reporting period. Variable consideration includes sales in which the amount of consideration that we will receive is unknown as
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of the end of a reporting period. The vast majority of such consideration are credits issued to the distributor due to price
of the end of a reporting period. The vast majority of such consideration are credits issued to the distributor due to price
protection, but also include sales made to distributors under agreements that allow certain rights of return, referred to as stock
protection, but also include sales made to distributors under agreements that allow certain rights of return, referred to as stock
rotation. Price protection represents price discounts granted to certain distributors to allow the distributor to earn an appropriate
rotation. Price protection represents price discounts granted to certain distributors to allow the distributor to earn an appropriate
margin on sales negotiated with certain customers and in the event of a price decrease subsequent to the date the product was
margin on sales negotiated with certain customers and in the event of a price decrease subsequent to the date the product was
shipped and billed to the distributor. Stock rotation allows distributors limited levels of returns in order to reduce the amounts
shipped and billed to the distributor. Stock rotation allows distributors limited levels of returns in order to reduce the amounts
of slow-moving, discontinued or obsolete product from their inventory. A liability for distributor credits covering variable
of slow-moving, discontinued or obsolete product from their inventory. A liability for distributor credits covering variable
consideration is made based on management's estimate of historical experience rates as well as considering economic
consideration is made based on management's estimate of historical experience rates as well as considering economic
conditions and contractual terms. To date, actual distributor claims activity has been materially consistent with the provisions
conditions and contractual terms. To date, actual distributor claims activity has been materially consistent with the provisions
we have made based on our historical estimates.
we have made based on our historical estimates.
Contract Balances: Accounts receivable represents our unconditional right to receive consideration from our customers.
Contract Balances: Accounts receivable represents our unconditional right to receive consideration from our customers.
than carrying value, an impairment loss is recognized for the amount of the carrying value that exceeds the amount of the
than carrying value, an impairment loss is recognized for the amount of the carrying value that exceeds the amount of the
Payments are typically due within 30 to 45 days of invoicing and do not include a significant financing component. To date,
Payments are typically due within 30 to 45 days of invoicing and do not include a significant financing component. To date,
there have been no material impairment losses on accounts receivable. There were no material contract assets or contract
there have been no material impairment losses on accounts receivable. There were no material contract assets or contract
liabilities recorded on the Consolidated Balance Sheets in any of the periods presented.
liabilities recorded on the Consolidated Balance Sheets in any of the periods presented.
Inventory Valuation
Inventory Valuation
We value inventories at the lower of cost (first-in, first-out method) or net realizable value. Because of the cyclical nature
We value inventories at the lower of cost (first-in, first-out method) or net realizable value. Because of the cyclical nature
of the semiconductor industry, changes in inventory levels, obsolescence of technology, and product life cycles, we write down
of the semiconductor industry, changes in inventory levels, obsolescence of technology, and product life cycles, we write down
inventories to net realizable value. We employ a variety of methodologies to determine the net realizable value of inventory.
inventories to net realizable value. We employ a variety of methodologies to determine the net realizable value of inventory.
While a portion of the calculation is determined via reference to the age of inventory and lower of cost or net realizable value
While a portion of the calculation is determined via reference to the age of inventory and lower of cost or net realizable value
calculations, an element of the calculation is subject to significant judgments made by us about future demand for our
calculations, an element of the calculation is subject to significant judgments made by us about future demand for our
inventory. If actual demand for our products is less than our estimates, additional adjustments to existing inventories may need
inventory. If actual demand for our products is less than our estimates, additional adjustments to existing inventories may need
to be recorded in future periods. To date, our actual results have not been materially different than our estimates.
to be recorded in future periods. To date, our actual results have not been materially different than our estimates.
Long-Lived Assets
Long-Lived Assets
We review property, plant, and equipment and intangible assets for impairment whenever events or changes in
We review property, plant, and equipment and intangible assets for impairment whenever events or changes in
circumstances indicate that the carrying value of assets may not be recoverable. Recoverability of these assets is determined by
circumstances indicate that the carrying value of assets may not be recoverable. Recoverability of these assets is determined by
comparison of their carrying value to the estimated future undiscounted cash flows that the assets are expected to generate over
comparison of their carrying value to the estimated future undiscounted cash flows that the assets are expected to generate over
their remaining estimated lives. If such assets are considered to be impaired, the impairment to be recognized in earnings equals
their remaining estimated lives. If such assets are considered to be impaired, the impairment to be recognized in earnings equals
the amount by which the carrying value of the assets exceeds their fair value determined by either a quoted market price, if any,
the amount by which the carrying value of the assets exceeds their fair value determined by either a quoted market price, if any,
or a value determined by utilizing a discounted cash flow technique. Material impairment adjustments related to our property,
or a value determined by utilizing a discounted cash flow technique. Material impairment adjustments related to our property,
plant, and equipment are reflected in our financial statements for the periods presented. Any deterioration in our business in the
plant, and equipment are reflected in our financial statements for the periods presented. Any deterioration in our business in the
future could lead to such impairment adjustments in future periods.
future could lead to such impairment adjustments in future periods.
Evaluation of impairment of long-lived assets requires estimates of future operating results that are used in the
Evaluation of impairment of long-lived assets requires estimates of future operating results that are used in the
preparation of the expected future undiscounted cash flows. Actual future operating results and the remaining economic lives of
preparation of the expected future undiscounted cash flows. Actual future operating results and the remaining economic lives of
our long-lived assets could differ from the estimates used in assessing the recoverability of these assets. These differences could
our long-lived assets could differ from the estimates used in assessing the recoverability of these assets. These differences could
result in impairment charges, which could have a material adverse impact on our results of operations. In addition, in certain
result in impairment charges, which could have a material adverse impact on our results of operations. In addition, in certain
instances, assets may not be impaired but their estimated useful lives may have decreased. In these situations, we amortize the
instances, assets may not be impaired but their estimated useful lives may have decreased. In these situations, we amortize the
remaining net book values over the revised useful lives.
remaining net book values over the revised useful lives.
Goodwill
Goodwill
Goodwill is subject to impairment tests annually or more frequently if events or changes in circumstances suggest that the
Goodwill is subject to impairment tests annually or more frequently if events or changes in circumstances suggest that the
carrying value of goodwill may not be recoverable, utilizing either the qualitative or quantitative method. We test goodwill for
carrying value of goodwill may not be recoverable, utilizing either the qualitative or quantitative method. We test goodwill for
impairment at the reporting unit level, which we determined is consistent with our identified operating segments, on an annual
impairment at the reporting unit level, which we determined is consistent with our identified operating segments, on an annual
basis on the first day of the fourth quarter (on or about July 31) or more frequently if we believe indicators of impairment exist
basis on the first day of the fourth quarter (on or about July 31) or more frequently if we believe indicators of impairment exist
or we reorganize our operating segments or reporting units.
or we reorganize our operating segments or reporting units.
We have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a
We have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a
reporting unit is less than its net book value. When using the qualitative method, we consider several factors, including the
reporting unit is less than its net book value. When using the qualitative method, we consider several factors, including the
following:
following:
–
–
–
–
–
–
–
–
the amount by which the fair values of each reporting unit exceeded their carrying values as of the date of the most
the amount by which the fair values of each reporting unit exceeded their carrying values as of the date of the most
recent quantitative impairment analysis, which indicated there would need to be substantial negative developments in
recent quantitative impairment analysis, which indicated there would need to be substantial negative developments in
the markets in which these reporting units operate in order for there to be potential impairment;
the markets in which these reporting units operate in order for there to be potential impairment;
the carrying values of these reporting units as of the assessment date compared to their previously calculated fair
the carrying values of these reporting units as of the assessment date compared to their previously calculated fair
values as of the date of the most recent quantitative impairment analysis;
values as of the date of the most recent quantitative impairment analysis;
the current forecasts as compared to the forecasts included in the most recent quantitative impairment analysis;
the current forecasts as compared to the forecasts included in the most recent quantitative impairment analysis;
public information from competitors and other industry information to determine if there were any significant adverse
public information from competitors and other industry information to determine if there were any significant adverse
trends in our competitors' businesses;
trends in our competitors' businesses;
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–
–
–
–
changes in the value of major U.S. stock indices that could suggest declines in overall market stability that could
changes in the value of major U.S. stock indices that could suggest declines in overall market stability that could
impact the valuation of our reporting units;
impact the valuation of our reporting units;
changes in our market capitalization and overall enterprise valuation to determine if there were any significant
changes in our market capitalization and overall enterprise valuation to determine if there were any significant
decreases that could be an indication that the valuation of our reporting units had significantly decreased; and
decreases that could be an indication that the valuation of our reporting units had significantly decreased; and
– whether there had been any significant increases to the weighted-average cost of capital rates for each reporting unit,
– whether there had been any significant increases to the weighted-average cost of capital rates for each reporting unit,
which could materially lower our prior valuation conclusions under a discounted cash flow approach.
which could materially lower our prior valuation conclusions under a discounted cash flow approach.
If we elect not to use this option, or we determine that it is more likely than not that the fair value of a reporting unit is
If we elect not to use this option, or we determine that it is more likely than not that the fair value of a reporting unit is
less than its net book value, then we perform the quantitative goodwill impairment test. The quantitative goodwill impairment
less than its net book value, then we perform the quantitative goodwill impairment test. The quantitative goodwill impairment
test requires an entity to compare the fair value of a reporting unit with its carrying amount. If fair value is determined to be less
test requires an entity to compare the fair value of a reporting unit with its carrying amount. If fair value is determined to be less
reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit. Additionally, we consider
reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit. Additionally, we consider
income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill
income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill
impairment loss, if applicable. We determine the fair value of our reporting units using a weighting of the income and market
impairment loss, if applicable. We determine the fair value of our reporting units using a weighting of the income and market
approaches. Under the income approach, we use a discounted cash flow methodology which requires management to make
approaches. Under the income approach, we use a discounted cash flow methodology which requires management to make
significant estimates and assumptions related to forecasted revenues, gross profit margins, operating income margins, working
significant estimates and assumptions related to forecasted revenues, gross profit margins, operating income margins, working
capital cash flow, perpetual growth rates, and long-term discount rates, among others. For the market approach, we use
capital cash flow, perpetual growth rates, and long-term discount rates, among others. For the market approach, we use
the guideline public company method. Under this method we utilize information from comparable publicly traded companies
the guideline public company method. Under this method we utilize information from comparable publicly traded companies
with similar operating and investment characteristics as the reporting units, to create valuation multiples that are applied to the
with similar operating and investment characteristics as the reporting units, to create valuation multiples that are applied to the
operating performance of the reporting unit being tested, in order to obtain their respective fair values. In order to assess the
operating performance of the reporting unit being tested, in order to obtain their respective fair values. In order to assess the
reasonableness of the calculated reporting unit fair values, we reconcile the aggregate fair values of our reporting units
reasonableness of the calculated reporting unit fair values, we reconcile the aggregate fair values of our reporting units
determined, as described above, to our total company market capitalization, allowing for a reasonable control premium.
determined, as described above, to our total company market capitalization, allowing for a reasonable control premium.
In fiscal 2022, we used a combination of the qualitative and quantitative methods of assessing goodwill for our reporting
In fiscal 2022, we used a combination of the qualitative and quantitative methods of assessing goodwill for our reporting
units. In fiscal 2021, we used the quantitative method of assessing goodwill for all reporting units. In all periods presented, we
units. In fiscal 2021, we used the quantitative method of assessing goodwill for all reporting units. In all periods presented, we
concluded the reporting units' fair values exceeded their carrying amounts as of the assessment dates and no risk of impairment
concluded the reporting units' fair values exceeded their carrying amounts as of the assessment dates and no risk of impairment
existed.
existed.
Business Combinations
Business Combinations
Under the acquisition method of accounting, we recognize tangible and identifiable intangible assets acquired and
Under the acquisition method of accounting, we recognize tangible and identifiable intangible assets acquired and
liabilities assumed based on their estimated fair values. We record the excess of the fair value of the purchase consideration
liabilities assumed based on their estimated fair values. We record the excess of the fair value of the purchase consideration
over the value of the net assets acquired as goodwill. The accounting for business combinations requires us to make significant
over the value of the net assets acquired as goodwill. The accounting for business combinations requires us to make significant
estimates and assumptions, especially with respect to intangible assets and the fair value of contingent payment obligations.
estimates and assumptions, especially with respect to intangible assets and the fair value of contingent payment obligations.
Critical estimates in valuing purchased technology, customer lists and other identifiable intangible assets include future cash
Critical estimates in valuing purchased technology, customer lists and other identifiable intangible assets include future cash
flows that we expect to generate from the acquired assets. If the subsequent actual results and updated projections of the
flows that we expect to generate from the acquired assets. If the subsequent actual results and updated projections of the
underlying business activity change compared with the assumptions and projections used to develop these values, we could
underlying business activity change compared with the assumptions and projections used to develop these values, we could
experience impairment charges which could be material. In addition, we have estimated the economic lives of certain acquired
experience impairment charges which could be material. In addition, we have estimated the economic lives of certain acquired
assets and these lives are used to calculate depreciation and amortization expense. If our estimates of the economic lives
assets and these lives are used to calculate depreciation and amortization expense. If our estimates of the economic lives
change, depreciation or amortization expenses could be accelerated or slowed.
change, depreciation or amortization expenses could be accelerated or slowed.
We record contingent consideration resulting from a business combination at its fair value on the acquisition date. We
We record contingent consideration resulting from a business combination at its fair value on the acquisition date. We
generally determine the fair value of the contingent consideration using the income approach methodology of valuation. Each
generally determine the fair value of the contingent consideration using the income approach methodology of valuation. Each
reporting period thereafter, we revalue these obligations and record increases or decreases in their fair value as an adjustment to
reporting period thereafter, we revalue these obligations and record increases or decreases in their fair value as an adjustment to
operating expenses within the Consolidated Statements of Income. Changes in the fair value of the contingent consideration can
operating expenses within the Consolidated Statements of Income. Changes in the fair value of the contingent consideration can
result from changes in assumed discount periods and rates, and from changes pertaining to the achievement of the defined
result from changes in assumed discount periods and rates, and from changes pertaining to the achievement of the defined
milestones. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date
milestones. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date
and for each subsequent period. Accordingly, future business and economic conditions, as well as changes in any of the
and for each subsequent period. Accordingly, future business and economic conditions, as well as changes in any of the
assumptions described above, can materially impact the amount of contingent consideration expense we record in any given
assumptions described above, can materially impact the amount of contingent consideration expense we record in any given
period.
period.
of the end of a reporting period. The vast majority of such consideration are credits issued to the distributor due to price
of the end of a reporting period. The vast majority of such consideration are credits issued to the distributor due to price
protection, but also include sales made to distributors under agreements that allow certain rights of return, referred to as stock
protection, but also include sales made to distributors under agreements that allow certain rights of return, referred to as stock
rotation. Price protection represents price discounts granted to certain distributors to allow the distributor to earn an appropriate
rotation. Price protection represents price discounts granted to certain distributors to allow the distributor to earn an appropriate
margin on sales negotiated with certain customers and in the event of a price decrease subsequent to the date the product was
margin on sales negotiated with certain customers and in the event of a price decrease subsequent to the date the product was
shipped and billed to the distributor. Stock rotation allows distributors limited levels of returns in order to reduce the amounts
shipped and billed to the distributor. Stock rotation allows distributors limited levels of returns in order to reduce the amounts
of slow-moving, discontinued or obsolete product from their inventory. A liability for distributor credits covering variable
of slow-moving, discontinued or obsolete product from their inventory. A liability for distributor credits covering variable
consideration is made based on management's estimate of historical experience rates as well as considering economic
consideration is made based on management's estimate of historical experience rates as well as considering economic
conditions and contractual terms. To date, actual distributor claims activity has been materially consistent with the provisions
conditions and contractual terms. To date, actual distributor claims activity has been materially consistent with the provisions
we have made based on our historical estimates.
we have made based on our historical estimates.
Contract Balances: Accounts receivable represents our unconditional right to receive consideration from our customers.
Contract Balances: Accounts receivable represents our unconditional right to receive consideration from our customers.
Payments are typically due within 30 to 45 days of invoicing and do not include a significant financing component. To date,
Payments are typically due within 30 to 45 days of invoicing and do not include a significant financing component. To date,
there have been no material impairment losses on accounts receivable. There were no material contract assets or contract
there have been no material impairment losses on accounts receivable. There were no material contract assets or contract
liabilities recorded on the Consolidated Balance Sheets in any of the periods presented.
liabilities recorded on the Consolidated Balance Sheets in any of the periods presented.
We value inventories at the lower of cost (first-in, first-out method) or net realizable value. Because of the cyclical nature
We value inventories at the lower of cost (first-in, first-out method) or net realizable value. Because of the cyclical nature
of the semiconductor industry, changes in inventory levels, obsolescence of technology, and product life cycles, we write down
of the semiconductor industry, changes in inventory levels, obsolescence of technology, and product life cycles, we write down
inventories to net realizable value. We employ a variety of methodologies to determine the net realizable value of inventory.
inventories to net realizable value. We employ a variety of methodologies to determine the net realizable value of inventory.
While a portion of the calculation is determined via reference to the age of inventory and lower of cost or net realizable value
While a portion of the calculation is determined via reference to the age of inventory and lower of cost or net realizable value
calculations, an element of the calculation is subject to significant judgments made by us about future demand for our
calculations, an element of the calculation is subject to significant judgments made by us about future demand for our
inventory. If actual demand for our products is less than our estimates, additional adjustments to existing inventories may need
inventory. If actual demand for our products is less than our estimates, additional adjustments to existing inventories may need
to be recorded in future periods. To date, our actual results have not been materially different than our estimates.
to be recorded in future periods. To date, our actual results have not been materially different than our estimates.
Inventory Valuation
Inventory Valuation
Long-Lived Assets
Long-Lived Assets
We review property, plant, and equipment and intangible assets for impairment whenever events or changes in
We review property, plant, and equipment and intangible assets for impairment whenever events or changes in
circumstances indicate that the carrying value of assets may not be recoverable. Recoverability of these assets is determined by
circumstances indicate that the carrying value of assets may not be recoverable. Recoverability of these assets is determined by
comparison of their carrying value to the estimated future undiscounted cash flows that the assets are expected to generate over
comparison of their carrying value to the estimated future undiscounted cash flows that the assets are expected to generate over
their remaining estimated lives. If such assets are considered to be impaired, the impairment to be recognized in earnings equals
their remaining estimated lives. If such assets are considered to be impaired, the impairment to be recognized in earnings equals
the amount by which the carrying value of the assets exceeds their fair value determined by either a quoted market price, if any,
the amount by which the carrying value of the assets exceeds their fair value determined by either a quoted market price, if any,
or a value determined by utilizing a discounted cash flow technique. Material impairment adjustments related to our property,
or a value determined by utilizing a discounted cash flow technique. Material impairment adjustments related to our property,
plant, and equipment are reflected in our financial statements for the periods presented. Any deterioration in our business in the
plant, and equipment are reflected in our financial statements for the periods presented. Any deterioration in our business in the
future could lead to such impairment adjustments in future periods.
future could lead to such impairment adjustments in future periods.
Evaluation of impairment of long-lived assets requires estimates of future operating results that are used in the
Evaluation of impairment of long-lived assets requires estimates of future operating results that are used in the
preparation of the expected future undiscounted cash flows. Actual future operating results and the remaining economic lives of
preparation of the expected future undiscounted cash flows. Actual future operating results and the remaining economic lives of
our long-lived assets could differ from the estimates used in assessing the recoverability of these assets. These differences could
our long-lived assets could differ from the estimates used in assessing the recoverability of these assets. These differences could
result in impairment charges, which could have a material adverse impact on our results of operations. In addition, in certain
result in impairment charges, which could have a material adverse impact on our results of operations. In addition, in certain
instances, assets may not be impaired but their estimated useful lives may have decreased. In these situations, we amortize the
instances, assets may not be impaired but their estimated useful lives may have decreased. In these situations, we amortize the
remaining net book values over the revised useful lives.
remaining net book values over the revised useful lives.
Goodwill
Goodwill
Goodwill is subject to impairment tests annually or more frequently if events or changes in circumstances suggest that the
Goodwill is subject to impairment tests annually or more frequently if events or changes in circumstances suggest that the
carrying value of goodwill may not be recoverable, utilizing either the qualitative or quantitative method. We test goodwill for
carrying value of goodwill may not be recoverable, utilizing either the qualitative or quantitative method. We test goodwill for
impairment at the reporting unit level, which we determined is consistent with our identified operating segments, on an annual
impairment at the reporting unit level, which we determined is consistent with our identified operating segments, on an annual
basis on the first day of the fourth quarter (on or about July 31) or more frequently if we believe indicators of impairment exist
basis on the first day of the fourth quarter (on or about July 31) or more frequently if we believe indicators of impairment exist
or we reorganize our operating segments or reporting units.
or we reorganize our operating segments or reporting units.
We have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a
We have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a
reporting unit is less than its net book value. When using the qualitative method, we consider several factors, including the
reporting unit is less than its net book value. When using the qualitative method, we consider several factors, including the
following:
following:
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the amount by which the fair values of each reporting unit exceeded their carrying values as of the date of the most
the amount by which the fair values of each reporting unit exceeded their carrying values as of the date of the most
recent quantitative impairment analysis, which indicated there would need to be substantial negative developments in
recent quantitative impairment analysis, which indicated there would need to be substantial negative developments in
the markets in which these reporting units operate in order for there to be potential impairment;
the markets in which these reporting units operate in order for there to be potential impairment;
the carrying values of these reporting units as of the assessment date compared to their previously calculated fair
the carrying values of these reporting units as of the assessment date compared to their previously calculated fair
values as of the date of the most recent quantitative impairment analysis;
values as of the date of the most recent quantitative impairment analysis;
the current forecasts as compared to the forecasts included in the most recent quantitative impairment analysis;
the current forecasts as compared to the forecasts included in the most recent quantitative impairment analysis;
public information from competitors and other industry information to determine if there were any significant adverse
public information from competitors and other industry information to determine if there were any significant adverse
trends in our competitors' businesses;
trends in our competitors' businesses;
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changes in the value of major U.S. stock indices that could suggest declines in overall market stability that could
changes in the value of major U.S. stock indices that could suggest declines in overall market stability that could
impact the valuation of our reporting units;
impact the valuation of our reporting units;
changes in our market capitalization and overall enterprise valuation to determine if there were any significant
changes in our market capitalization and overall enterprise valuation to determine if there were any significant
decreases that could be an indication that the valuation of our reporting units had significantly decreased; and
decreases that could be an indication that the valuation of our reporting units had significantly decreased; and
– whether there had been any significant increases to the weighted-average cost of capital rates for each reporting unit,
– whether there had been any significant increases to the weighted-average cost of capital rates for each reporting unit,
which could materially lower our prior valuation conclusions under a discounted cash flow approach.
which could materially lower our prior valuation conclusions under a discounted cash flow approach.
If we elect not to use this option, or we determine that it is more likely than not that the fair value of a reporting unit is
If we elect not to use this option, or we determine that it is more likely than not that the fair value of a reporting unit is
less than its net book value, then we perform the quantitative goodwill impairment test. The quantitative goodwill impairment
less than its net book value, then we perform the quantitative goodwill impairment test. The quantitative goodwill impairment
test requires an entity to compare the fair value of a reporting unit with its carrying amount. If fair value is determined to be less
test requires an entity to compare the fair value of a reporting unit with its carrying amount. If fair value is determined to be less
than carrying value, an impairment loss is recognized for the amount of the carrying value that exceeds the amount of the
than carrying value, an impairment loss is recognized for the amount of the carrying value that exceeds the amount of the
reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit. Additionally, we consider
reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit. Additionally, we consider
income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill
income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill
impairment loss, if applicable. We determine the fair value of our reporting units using a weighting of the income and market
impairment loss, if applicable. We determine the fair value of our reporting units using a weighting of the income and market
approaches. Under the income approach, we use a discounted cash flow methodology which requires management to make
approaches. Under the income approach, we use a discounted cash flow methodology which requires management to make
significant estimates and assumptions related to forecasted revenues, gross profit margins, operating income margins, working
significant estimates and assumptions related to forecasted revenues, gross profit margins, operating income margins, working
capital cash flow, perpetual growth rates, and long-term discount rates, among others. For the market approach, we use
capital cash flow, perpetual growth rates, and long-term discount rates, among others. For the market approach, we use
the guideline public company method. Under this method we utilize information from comparable publicly traded companies
the guideline public company method. Under this method we utilize information from comparable publicly traded companies
with similar operating and investment characteristics as the reporting units, to create valuation multiples that are applied to the
with similar operating and investment characteristics as the reporting units, to create valuation multiples that are applied to the
operating performance of the reporting unit being tested, in order to obtain their respective fair values. In order to assess the
operating performance of the reporting unit being tested, in order to obtain their respective fair values. In order to assess the
reasonableness of the calculated reporting unit fair values, we reconcile the aggregate fair values of our reporting units
reasonableness of the calculated reporting unit fair values, we reconcile the aggregate fair values of our reporting units
determined, as described above, to our total company market capitalization, allowing for a reasonable control premium.
determined, as described above, to our total company market capitalization, allowing for a reasonable control premium.
In fiscal 2022, we used a combination of the qualitative and quantitative methods of assessing goodwill for our reporting
In fiscal 2022, we used a combination of the qualitative and quantitative methods of assessing goodwill for our reporting
units. In fiscal 2021, we used the quantitative method of assessing goodwill for all reporting units. In all periods presented, we
units. In fiscal 2021, we used the quantitative method of assessing goodwill for all reporting units. In all periods presented, we
concluded the reporting units' fair values exceeded their carrying amounts as of the assessment dates and no risk of impairment
concluded the reporting units' fair values exceeded their carrying amounts as of the assessment dates and no risk of impairment
existed.
existed.
Business Combinations
Business Combinations
Under the acquisition method of accounting, we recognize tangible and identifiable intangible assets acquired and
Under the acquisition method of accounting, we recognize tangible and identifiable intangible assets acquired and
liabilities assumed based on their estimated fair values. We record the excess of the fair value of the purchase consideration
liabilities assumed based on their estimated fair values. We record the excess of the fair value of the purchase consideration
over the value of the net assets acquired as goodwill. The accounting for business combinations requires us to make significant
over the value of the net assets acquired as goodwill. The accounting for business combinations requires us to make significant
estimates and assumptions, especially with respect to intangible assets and the fair value of contingent payment obligations.
estimates and assumptions, especially with respect to intangible assets and the fair value of contingent payment obligations.
Critical estimates in valuing purchased technology, customer lists and other identifiable intangible assets include future cash
Critical estimates in valuing purchased technology, customer lists and other identifiable intangible assets include future cash
flows that we expect to generate from the acquired assets. If the subsequent actual results and updated projections of the
flows that we expect to generate from the acquired assets. If the subsequent actual results and updated projections of the
underlying business activity change compared with the assumptions and projections used to develop these values, we could
underlying business activity change compared with the assumptions and projections used to develop these values, we could
experience impairment charges which could be material. In addition, we have estimated the economic lives of certain acquired
experience impairment charges which could be material. In addition, we have estimated the economic lives of certain acquired
assets and these lives are used to calculate depreciation and amortization expense. If our estimates of the economic lives
assets and these lives are used to calculate depreciation and amortization expense. If our estimates of the economic lives
change, depreciation or amortization expenses could be accelerated or slowed.
change, depreciation or amortization expenses could be accelerated or slowed.
We record contingent consideration resulting from a business combination at its fair value on the acquisition date. We
We record contingent consideration resulting from a business combination at its fair value on the acquisition date. We
generally determine the fair value of the contingent consideration using the income approach methodology of valuation. Each
generally determine the fair value of the contingent consideration using the income approach methodology of valuation. Each
reporting period thereafter, we revalue these obligations and record increases or decreases in their fair value as an adjustment to
reporting period thereafter, we revalue these obligations and record increases or decreases in their fair value as an adjustment to
operating expenses within the Consolidated Statements of Income. Changes in the fair value of the contingent consideration can
operating expenses within the Consolidated Statements of Income. Changes in the fair value of the contingent consideration can
result from changes in assumed discount periods and rates, and from changes pertaining to the achievement of the defined
result from changes in assumed discount periods and rates, and from changes pertaining to the achievement of the defined
milestones. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date
milestones. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date
and for each subsequent period. Accordingly, future business and economic conditions, as well as changes in any of the
and for each subsequent period. Accordingly, future business and economic conditions, as well as changes in any of the
assumptions described above, can materially impact the amount of contingent consideration expense we record in any given
assumptions described above, can materially impact the amount of contingent consideration expense we record in any given
period.
period.
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Accounting for Income Taxes
Accounting for Income Taxes
Contingencies
Contingencies
We make certain estimates and judgments in determining income tax expense for financial statement purposes. These
We make certain estimates and judgments in determining income tax expense for financial statement purposes. These
From time to time, in the ordinary course of business, various claims, charges and litigation are asserted or commenced
From time to time, in the ordinary course of business, various claims, charges and litigation are asserted or commenced
against us arising from, or related to, among other things, contractual matters, patents, trademarks, personal injury,
against us arising from, or related to, among other things, contractual matters, patents, trademarks, personal injury,
environmental matters, product liability, insurance coverage, employment or employment benefits. We periodically assess each
environmental matters, product liability, insurance coverage, employment or employment benefits. We periodically assess each
matter to determine if a contingent liability should be recorded. In making this determination, we may, depending on the nature
matter to determine if a contingent liability should be recorded. In making this determination, we may, depending on the nature
of the matter, consult with internal and external legal counsel and technical experts. Based on the information we obtain,
of the matter, consult with internal and external legal counsel and technical experts. Based on the information we obtain,
combined with our judgment regarding all the facts and circumstances of each matter, we determine whether it is probable that
combined with our judgment regarding all the facts and circumstances of each matter, we determine whether it is probable that
a contingent loss may be incurred and whether the amount of such loss can be reasonably estimated. If a loss is probable and
a contingent loss may be incurred and whether the amount of such loss can be reasonably estimated. If a loss is probable and
reasonably estimable, we record a contingent loss. In determining the amount of a contingent loss, we consider advice received
reasonably estimable, we record a contingent loss. In determining the amount of a contingent loss, we consider advice received
from experts in the specific matter, current status of legal proceedings, settlement negotiations that may be ongoing, prior case
from experts in the specific matter, current status of legal proceedings, settlement negotiations that may be ongoing, prior case
history and other factors. If the judgments and estimates made by us are incorrect, we may need to record additional contingent
history and other factors. If the judgments and estimates made by us are incorrect, we may need to record additional contingent
losses that could materially adversely impact our results of operations.
losses that could materially adversely impact our results of operations.
estimates and judgments occur in the calculation of income tax credits, benefits, and deductions, and in the calculation of
estimates and judgments occur in the calculation of income tax credits, benefits, and deductions, and in the calculation of
certain tax assets and liabilities, which arise from differences in the timing of the recognition of certain expenses for tax and
certain tax assets and liabilities, which arise from differences in the timing of the recognition of certain expenses for tax and
financial statement purposes. We assess the likelihood of the realization of deferred tax assets and record a corresponding
financial statement purposes. We assess the likelihood of the realization of deferred tax assets and record a corresponding
valuation allowance as necessary if we determine those deferred tax assets may not be realized due to the uncertainty of the
valuation allowance as necessary if we determine those deferred tax assets may not be realized due to the uncertainty of the
timing and amount to be realized of certain state and international tax credit carryovers. In reaching our conclusion, we
timing and amount to be realized of certain state and international tax credit carryovers. In reaching our conclusion, we
evaluate certain relevant criteria including the existence of deferred tax liabilities that can be used to realize deferred tax assets,
evaluate certain relevant criteria including the existence of deferred tax liabilities that can be used to realize deferred tax assets,
the taxable income in prior carryback years in the impacted state and international jurisdictions that can be used to absorb net
the taxable income in prior carryback years in the impacted state and international jurisdictions that can be used to absorb net
operating losses and taxable income in future years. Our judgments regarding future profitability may change due to future
operating losses and taxable income in future years. Our judgments regarding future profitability may change due to future
market conditions, changes in U.S. or international tax laws and other factors. These changes, if any, may require material
market conditions, changes in U.S. or international tax laws and other factors. These changes, if any, may require material
adjustments to these deferred tax assets, which may result in an increase or decrease to our income tax provision in future
adjustments to these deferred tax assets, which may result in an increase or decrease to our income tax provision in future
periods.
periods.
We account for uncertain tax positions by first determining if it is “more likely than not” that a tax position will be
We account for uncertain tax positions by first determining if it is “more likely than not” that a tax position will be
sustained by the appropriate taxing authorities prior to recording any benefit in the financial statements. An uncertain income
sustained by the appropriate taxing authorities prior to recording any benefit in the financial statements. An uncertain income
tax position is not recognized if it has less than a 50% likelihood of being sustained. For those tax positions where it is more
tax position is not recognized if it has less than a 50% likelihood of being sustained. For those tax positions where it is more
likely than not that a tax position will be sustained, we have recorded the largest amount of tax benefit with a greater than 50%
likely than not that a tax position will be sustained, we have recorded the largest amount of tax benefit with a greater than 50%
likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.
likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.
For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been
For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been
recognized in the financial statements. We classify interest and penalties related to uncertain tax positions within the provision
recognized in the financial statements. We classify interest and penalties related to uncertain tax positions within the provision
for (benefit from) income taxes line of the Consolidated Statements of Income. We reevaluate these uncertain tax positions on
for (benefit from) income taxes line of the Consolidated Statements of Income. We reevaluate these uncertain tax positions on
a quarterly basis. This evaluation is based on factors including, but not limited to, changes in known facts or circumstances,
a quarterly basis. This evaluation is based on factors including, but not limited to, changes in known facts or circumstances,
changes in tax law, effectively settled issues under audit, and new guidance on legislative interpretations. A change in these
changes in tax law, effectively settled issues under audit, and new guidance on legislative interpretations. A change in these
factors could result in the recognition of an increase or decrease to our income tax provision, which could materially impact our
factors could result in the recognition of an increase or decrease to our income tax provision, which could materially impact our
consolidated financial position and results of operations.
consolidated financial position and results of operations.
In the ordinary course of global business, there are many transactions and calculations where the ultimate tax outcome is
In the ordinary course of global business, there are many transactions and calculations where the ultimate tax outcome is
uncertain. Some of these uncertainties arise as a consequence of cost reimbursement and royalty arrangements among related
uncertain. Some of these uncertainties arise as a consequence of cost reimbursement and royalty arrangements among related
entities. Although we believe our estimates are reasonable, no assurance can be given that the final tax outcome of these matters
entities. Although we believe our estimates are reasonable, no assurance can be given that the final tax outcome of these matters
will not be different than that which is reflected in our historical income tax provisions and income tax liabilities. In the event
will not be different than that which is reflected in our historical income tax provisions and income tax liabilities. In the event
our assumptions are incorrect, the differences could have a material impact on our income tax provision and operating results in
our assumptions are incorrect, the differences could have a material impact on our income tax provision and operating results in
the period in which such determination is made. In addition to the factors described above, our current and expected effective
the period in which such determination is made. In addition to the factors described above, our current and expected effective
tax rate is based on then-current tax law. Significant changes during the year in enacted tax law could affect these estimates.
tax rate is based on then-current tax law. Significant changes during the year in enacted tax law could affect these estimates.
See Note 12, Income Taxes, of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report
See Note 12, Income Taxes, of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report
on Form 10-K for further discussion.
on Form 10-K for further discussion.
Stock-Based Compensation
Stock-Based Compensation
Stock-based compensation expense associated with stock options and related awards is recognized in the Consolidated
Stock-based compensation expense associated with stock options and related awards is recognized in the Consolidated
Statements of Income. Determining the amount of stock-based compensation to be recorded requires us to develop estimates to
Statements of Income. Determining the amount of stock-based compensation to be recorded requires us to develop estimates to
be used in calculating the grant-date fair value of stock options, restricted stock units and market-based and/or performance-
be used in calculating the grant-date fair value of stock options, restricted stock units and market-based and/or performance-
based restricted stock units. We calculate the grant-date fair values of stock options using the Black-Scholes valuation model.
based restricted stock units. We calculate the grant-date fair values of stock options using the Black-Scholes valuation model.
The grant-date fair value of restricted stock units with a service condition and restricted stock units with both service and
The grant-date fair value of restricted stock units with a service condition and restricted stock units with both service and
performance conditions is calculated using the value of our common stock on the date of grant, reduced by the present value of
performance conditions is calculated using the value of our common stock on the date of grant, reduced by the present value of
dividends expected to be paid on our common stock prior to vesting. For restricted stock units with both service and
dividends expected to be paid on our common stock prior to vesting. For restricted stock units with both service and
performance conditions, this grant-date fair value is also impacted by the number of units that are expected to vest during the
performance conditions, this grant-date fair value is also impacted by the number of units that are expected to vest during the
performance period and is adjusted through the related stock-based compensation expense at each reporting period based on the
performance period and is adjusted through the related stock-based compensation expense at each reporting period based on the
probability of achievement of that performance condition. If we determine that an award is unlikely to vest, any previously
probability of achievement of that performance condition. If we determine that an award is unlikely to vest, any previously
recorded stock-based compensation expense is reversed in the period of that determination. The grant date fair value of
recorded stock-based compensation expense is reversed in the period of that determination. The grant date fair value of
restricted stock units and performance-based stock options with both service and market conditions are calculated using the
restricted stock units and performance-based stock options with both service and market conditions are calculated using the
Monte Carlo simulation model to estimate the probability of satisfying the performance condition stipulated in the award grant,
Monte Carlo simulation model to estimate the probability of satisfying the performance condition stipulated in the award grant,
including the possibility that the market condition may not be satisfied.
including the possibility that the market condition may not be satisfied.
The use of valuation models requires us to make estimates of key assumptions such as expected volatility, expected term,
The use of valuation models requires us to make estimates of key assumptions such as expected volatility, expected term,
risk-free interest rate, expected dividend yield, forfeiture rate and others. The estimate of these key assumptions is based on
risk-free interest rate, expected dividend yield, forfeiture rate and others. The estimate of these key assumptions is based on
historical information and judgment regarding market factors and trends. We recognize the expense related to equity awards on
historical information and judgment regarding market factors and trends. We recognize the expense related to equity awards on
a straight-line basis over the vesting period. See Note 2r, Stock-based Compensation, and Note 3, Stock-Based Compensation
a straight-line basis over the vesting period. See Note 2r, Stock-based Compensation, and Note 3, Stock-Based Compensation
and Shareholders' Equity, of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report on
and Shareholders' Equity, of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report on
Form 10-K for more information related to stock-based compensation.
Form 10-K for more information related to stock-based compensation.
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Accounting for Income Taxes
Accounting for Income Taxes
Contingencies
Contingencies
From time to time, in the ordinary course of business, various claims, charges and litigation are asserted or commenced
From time to time, in the ordinary course of business, various claims, charges and litigation are asserted or commenced
against us arising from, or related to, among other things, contractual matters, patents, trademarks, personal injury,
against us arising from, or related to, among other things, contractual matters, patents, trademarks, personal injury,
environmental matters, product liability, insurance coverage, employment or employment benefits. We periodically assess each
environmental matters, product liability, insurance coverage, employment or employment benefits. We periodically assess each
matter to determine if a contingent liability should be recorded. In making this determination, we may, depending on the nature
matter to determine if a contingent liability should be recorded. In making this determination, we may, depending on the nature
of the matter, consult with internal and external legal counsel and technical experts. Based on the information we obtain,
of the matter, consult with internal and external legal counsel and technical experts. Based on the information we obtain,
combined with our judgment regarding all the facts and circumstances of each matter, we determine whether it is probable that
combined with our judgment regarding all the facts and circumstances of each matter, we determine whether it is probable that
a contingent loss may be incurred and whether the amount of such loss can be reasonably estimated. If a loss is probable and
a contingent loss may be incurred and whether the amount of such loss can be reasonably estimated. If a loss is probable and
reasonably estimable, we record a contingent loss. In determining the amount of a contingent loss, we consider advice received
reasonably estimable, we record a contingent loss. In determining the amount of a contingent loss, we consider advice received
from experts in the specific matter, current status of legal proceedings, settlement negotiations that may be ongoing, prior case
from experts in the specific matter, current status of legal proceedings, settlement negotiations that may be ongoing, prior case
history and other factors. If the judgments and estimates made by us are incorrect, we may need to record additional contingent
history and other factors. If the judgments and estimates made by us are incorrect, we may need to record additional contingent
losses that could materially adversely impact our results of operations.
losses that could materially adversely impact our results of operations.
We make certain estimates and judgments in determining income tax expense for financial statement purposes. These
We make certain estimates and judgments in determining income tax expense for financial statement purposes. These
estimates and judgments occur in the calculation of income tax credits, benefits, and deductions, and in the calculation of
estimates and judgments occur in the calculation of income tax credits, benefits, and deductions, and in the calculation of
certain tax assets and liabilities, which arise from differences in the timing of the recognition of certain expenses for tax and
certain tax assets and liabilities, which arise from differences in the timing of the recognition of certain expenses for tax and
financial statement purposes. We assess the likelihood of the realization of deferred tax assets and record a corresponding
financial statement purposes. We assess the likelihood of the realization of deferred tax assets and record a corresponding
valuation allowance as necessary if we determine those deferred tax assets may not be realized due to the uncertainty of the
valuation allowance as necessary if we determine those deferred tax assets may not be realized due to the uncertainty of the
timing and amount to be realized of certain state and international tax credit carryovers. In reaching our conclusion, we
timing and amount to be realized of certain state and international tax credit carryovers. In reaching our conclusion, we
evaluate certain relevant criteria including the existence of deferred tax liabilities that can be used to realize deferred tax assets,
evaluate certain relevant criteria including the existence of deferred tax liabilities that can be used to realize deferred tax assets,
the taxable income in prior carryback years in the impacted state and international jurisdictions that can be used to absorb net
the taxable income in prior carryback years in the impacted state and international jurisdictions that can be used to absorb net
operating losses and taxable income in future years. Our judgments regarding future profitability may change due to future
operating losses and taxable income in future years. Our judgments regarding future profitability may change due to future
market conditions, changes in U.S. or international tax laws and other factors. These changes, if any, may require material
market conditions, changes in U.S. or international tax laws and other factors. These changes, if any, may require material
adjustments to these deferred tax assets, which may result in an increase or decrease to our income tax provision in future
adjustments to these deferred tax assets, which may result in an increase or decrease to our income tax provision in future
periods.
periods.
We account for uncertain tax positions by first determining if it is “more likely than not” that a tax position will be
We account for uncertain tax positions by first determining if it is “more likely than not” that a tax position will be
sustained by the appropriate taxing authorities prior to recording any benefit in the financial statements. An uncertain income
sustained by the appropriate taxing authorities prior to recording any benefit in the financial statements. An uncertain income
tax position is not recognized if it has less than a 50% likelihood of being sustained. For those tax positions where it is more
tax position is not recognized if it has less than a 50% likelihood of being sustained. For those tax positions where it is more
likely than not that a tax position will be sustained, we have recorded the largest amount of tax benefit with a greater than 50%
likely than not that a tax position will be sustained, we have recorded the largest amount of tax benefit with a greater than 50%
likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.
likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.
For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been
For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been
recognized in the financial statements. We classify interest and penalties related to uncertain tax positions within the provision
recognized in the financial statements. We classify interest and penalties related to uncertain tax positions within the provision
for (benefit from) income taxes line of the Consolidated Statements of Income. We reevaluate these uncertain tax positions on
for (benefit from) income taxes line of the Consolidated Statements of Income. We reevaluate these uncertain tax positions on
a quarterly basis. This evaluation is based on factors including, but not limited to, changes in known facts or circumstances,
a quarterly basis. This evaluation is based on factors including, but not limited to, changes in known facts or circumstances,
changes in tax law, effectively settled issues under audit, and new guidance on legislative interpretations. A change in these
changes in tax law, effectively settled issues under audit, and new guidance on legislative interpretations. A change in these
factors could result in the recognition of an increase or decrease to our income tax provision, which could materially impact our
factors could result in the recognition of an increase or decrease to our income tax provision, which could materially impact our
consolidated financial position and results of operations.
consolidated financial position and results of operations.
In the ordinary course of global business, there are many transactions and calculations where the ultimate tax outcome is
In the ordinary course of global business, there are many transactions and calculations where the ultimate tax outcome is
uncertain. Some of these uncertainties arise as a consequence of cost reimbursement and royalty arrangements among related
uncertain. Some of these uncertainties arise as a consequence of cost reimbursement and royalty arrangements among related
entities. Although we believe our estimates are reasonable, no assurance can be given that the final tax outcome of these matters
entities. Although we believe our estimates are reasonable, no assurance can be given that the final tax outcome of these matters
will not be different than that which is reflected in our historical income tax provisions and income tax liabilities. In the event
will not be different than that which is reflected in our historical income tax provisions and income tax liabilities. In the event
our assumptions are incorrect, the differences could have a material impact on our income tax provision and operating results in
our assumptions are incorrect, the differences could have a material impact on our income tax provision and operating results in
the period in which such determination is made. In addition to the factors described above, our current and expected effective
the period in which such determination is made. In addition to the factors described above, our current and expected effective
tax rate is based on then-current tax law. Significant changes during the year in enacted tax law could affect these estimates.
tax rate is based on then-current tax law. Significant changes during the year in enacted tax law could affect these estimates.
See Note 12, Income Taxes, of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report
See Note 12, Income Taxes, of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report
on Form 10-K for further discussion.
on Form 10-K for further discussion.
Stock-Based Compensation
Stock-Based Compensation
Stock-based compensation expense associated with stock options and related awards is recognized in the Consolidated
Stock-based compensation expense associated with stock options and related awards is recognized in the Consolidated
Statements of Income. Determining the amount of stock-based compensation to be recorded requires us to develop estimates to
Statements of Income. Determining the amount of stock-based compensation to be recorded requires us to develop estimates to
be used in calculating the grant-date fair value of stock options, restricted stock units and market-based and/or performance-
be used in calculating the grant-date fair value of stock options, restricted stock units and market-based and/or performance-
based restricted stock units. We calculate the grant-date fair values of stock options using the Black-Scholes valuation model.
based restricted stock units. We calculate the grant-date fair values of stock options using the Black-Scholes valuation model.
The grant-date fair value of restricted stock units with a service condition and restricted stock units with both service and
The grant-date fair value of restricted stock units with a service condition and restricted stock units with both service and
performance conditions is calculated using the value of our common stock on the date of grant, reduced by the present value of
performance conditions is calculated using the value of our common stock on the date of grant, reduced by the present value of
dividends expected to be paid on our common stock prior to vesting. For restricted stock units with both service and
dividends expected to be paid on our common stock prior to vesting. For restricted stock units with both service and
performance conditions, this grant-date fair value is also impacted by the number of units that are expected to vest during the
performance conditions, this grant-date fair value is also impacted by the number of units that are expected to vest during the
performance period and is adjusted through the related stock-based compensation expense at each reporting period based on the
performance period and is adjusted through the related stock-based compensation expense at each reporting period based on the
probability of achievement of that performance condition. If we determine that an award is unlikely to vest, any previously
probability of achievement of that performance condition. If we determine that an award is unlikely to vest, any previously
recorded stock-based compensation expense is reversed in the period of that determination. The grant date fair value of
recorded stock-based compensation expense is reversed in the period of that determination. The grant date fair value of
restricted stock units and performance-based stock options with both service and market conditions are calculated using the
restricted stock units and performance-based stock options with both service and market conditions are calculated using the
Monte Carlo simulation model to estimate the probability of satisfying the performance condition stipulated in the award grant,
Monte Carlo simulation model to estimate the probability of satisfying the performance condition stipulated in the award grant,
including the possibility that the market condition may not be satisfied.
including the possibility that the market condition may not be satisfied.
The use of valuation models requires us to make estimates of key assumptions such as expected volatility, expected term,
The use of valuation models requires us to make estimates of key assumptions such as expected volatility, expected term,
risk-free interest rate, expected dividend yield, forfeiture rate and others. The estimate of these key assumptions is based on
risk-free interest rate, expected dividend yield, forfeiture rate and others. The estimate of these key assumptions is based on
historical information and judgment regarding market factors and trends. We recognize the expense related to equity awards on
historical information and judgment regarding market factors and trends. We recognize the expense related to equity awards on
a straight-line basis over the vesting period. See Note 2r, Stock-based Compensation, and Note 3, Stock-Based Compensation
a straight-line basis over the vesting period. See Note 2r, Stock-based Compensation, and Note 3, Stock-Based Compensation
and Shareholders' Equity, of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report on
and Shareholders' Equity, of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report on
Form 10-K for more information related to stock-based compensation.
Form 10-K for more information related to stock-based compensation.
39
39
40
40
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Exposure
Interest Rate Exposure
Our interest income and expense are sensitive to changes in the general level of interest rates. In this regard, changes in
Our interest income and expense are sensitive to changes in the general level of interest rates. In this regard, changes in
interest rates affect the interest earned or paid on our marketable securities and debt, as well as the fair value of our investments
interest rates affect the interest earned or paid on our marketable securities and debt, as well as the fair value of our investments
and debt.
and debt.
Based on the $500.0 million of our floating rate debt outstanding as of October 29, 2022, our annual interest expense
Based on the $500.0 million of our floating rate debt outstanding as of October 29, 2022, our annual interest expense
would change by approximately $5.0 million for each 100 basis point increase in interest rates.
would change by approximately $5.0 million for each 100 basis point increase in interest rates.
counterparties.
counterparties.
The market risk associated with our derivative instruments results from currency exchange rates that are expected to
The market risk associated with our derivative instruments results from currency exchange rates that are expected to
offset the market risk of the underlying transactions, assets and liabilities being hedged. The counterparties to the agreements
offset the market risk of the underlying transactions, assets and liabilities being hedged. The counterparties to the agreements
relating to our foreign exchange instruments consist of a number of major international financial institutions with high credit
relating to our foreign exchange instruments consist of a number of major international financial institutions with high credit
ratings. Based on the credit ratings of our counterparties as of October 29, 2022, we do not believe that there is significant risk
ratings. Based on the credit ratings of our counterparties as of October 29, 2022, we do not believe that there is significant risk
of nonperformance by them. While the contract or notional amounts of derivative financial instruments provide one measure of
of nonperformance by them. While the contract or notional amounts of derivative financial instruments provide one measure of
the volume of these transactions, they do not represent the amount of our exposure to credit risk. The amounts potentially
the volume of these transactions, they do not represent the amount of our exposure to credit risk. The amounts potentially
subject to credit risk (arising from the possible inability of counterparties to meet the terms of their contracts) are generally
subject to credit risk (arising from the possible inability of counterparties to meet the terms of their contracts) are generally
limited to the amounts, if any, by which the counterparties’ obligations under the contracts exceed our obligations to the
limited to the amounts, if any, by which the counterparties’ obligations under the contracts exceed our obligations to the
Based on our cash and marketable securities outstanding as of October 29, 2022 and October 30, 2021, our annual interest
Based on our cash and marketable securities outstanding as of October 29, 2022 and October 30, 2021, our annual interest
income would change by approximately $14.7 million and $19.7 million, respectively, for each 100 basis point increase in
income would change by approximately $14.7 million and $19.7 million, respectively, for each 100 basis point increase in
interest rates.
interest rates.
The following table illustrates the effect that an immediate 10% unfavorable or favorable movement in foreign currency
The following table illustrates the effect that an immediate 10% unfavorable or favorable movement in foreign currency
exchange rates, relative to the U.S. dollar, would have on the fair value of our forward exchange contracts as of October 29,
exchange rates, relative to the U.S. dollar, would have on the fair value of our forward exchange contracts as of October 29,
2022 and October 30, 2021:
2022 and October 30, 2021:
To provide a meaningful assessment of the interest rate risk associated with our investment portfolio, we performed a
To provide a meaningful assessment of the interest rate risk associated with our investment portfolio, we performed a
sensitivity analysis to determine the impact a change in interest rates would have on the value of our investment portfolio
sensitivity analysis to determine the impact a change in interest rates would have on the value of our investment portfolio
assuming an immediate 100 basis point parallel shift in the yield curve. Based on investment positions as of October 29, 2022
assuming an immediate 100 basis point parallel shift in the yield curve. Based on investment positions as of October 29, 2022
and October 30, 2021, a hypothetical 100 basis point increase in interest rates across all maturities would not materially impact
and October 30, 2021, a hypothetical 100 basis point increase in interest rates across all maturities would not materially impact
the fair market value of the portfolio in either period. If significant, such losses would only be realized if we sold the
the fair market value of the portfolio in either period. If significant, such losses would only be realized if we sold the
investments prior to maturity.
investments prior to maturity.
As of October 29, 2022, we had $6.6 billion in principal amount of senior unsecured notes outstanding, with a fair value
As of October 29, 2022, we had $6.6 billion in principal amount of senior unsecured notes outstanding, with a fair value
of $5.5 billion. The fair value of our notes is subject to interest rate risk, market risk, and other factors. Generally, the fair value
of $5.5 billion. The fair value of our notes is subject to interest rate risk, market risk, and other factors. Generally, the fair value
of our notes will increase as interest rates fall and decrease as interest rates rise. The fair values of our notes as of October 29,
of our notes will increase as interest rates fall and decrease as interest rates rise. The fair values of our notes as of October 29,
2022 and October 30, 2021, assuming a hypothetical 100 basis point increase in market interest rates, are as follows:
2022 and October 30, 2021, assuming a hypothetical 100 basis point increase in market interest rates, are as follows:
Fair value of forward exchange contracts
Fair value of forward exchange contracts
Fair value of forward exchange contracts after a 10% unfavorable movement in foreign
Fair value of forward exchange contracts after a 10% unfavorable movement in foreign
currency exchange rates asset
currency exchange rates asset
currency exchange rates liability
currency exchange rates liability
Fair value of forward exchange contracts after a 10% favorable movement in foreign
Fair value of forward exchange contracts after a 10% favorable movement in foreign
October 29, 2022
October 29, 2022
October 30, 2021
October 30, 2021
(16,984) $
(16,984) $
(8,085)
(8,085)
21,193 $
21,193 $
26,673
26,673
(51,604) $
(51,604) $
(41,034)
(41,034)
$
$
$
$
$
$
The calculation assumes that each exchange rate would change in the same direction relative to the U.S. dollar. In
The calculation assumes that each exchange rate would change in the same direction relative to the U.S. dollar. In
addition to the direct effects of changes in exchange rates, such changes typically affect the volume of sales or the foreign
addition to the direct effects of changes in exchange rates, such changes typically affect the volume of sales or the foreign
currency sales price as competitors’ products become more or less attractive. Our sensitivity analysis of the effects of changes
currency sales price as competitors’ products become more or less attractive. Our sensitivity analysis of the effects of changes
in foreign currency exchange rates does not factor in a potential change in sales levels or local currency selling prices.
in foreign currency exchange rates does not factor in a potential change in sales levels or local currency selling prices.
October 29, 2022
October 29, 2022
October 30, 2021
October 30, 2021
Principal
Principal
Amount
Amount
Outstanding
Outstanding
Fair Value
Fair Value
Fair Value
Fair Value
given an
given an
increase in
increase in
interest rates
interest rates
of 100 basis
of 100 basis
points
points
Principal
Principal
Amount
Amount
Outstanding
Outstanding
Fair Value
Fair Value
Fair Value
Fair Value
given an
given an
increase in
increase in
interest rates
interest rates
of 100 basis
of 100 basis
points
points
$
$
— $
— $
— $
— $
— $
— $
491,982
491,982
383,378
383,378
851,479
851,479
54,771
54,771
410,091
410,091
621,093
621,093
786,772
786,772
278,359
278,359
126,274
126,274
513,709
513,709
313,931
313,931
640,766
640,766
500,000 $
500,000 $
500,000
500,000
400,000
400,000
900,000
900,000
500,000
500,000
—
—
750,000
750,000
1,000,000
1,000,000
—
—
144,278
144,278
750,000
750,000
332,587
332,587
520,236 $
520,236 $
500,482
500,482
423,265
423,265
986,243
986,243
542,942
542,942
—
—
743,109
743,109
996,702
996,702
—
—
176,960
176,960
758,246
758,246
469,592
469,592
483,035
483,035
374,686
374,686
820,203
820,203
52,534
52,534
393,294
393,294
588,044
588,044
727,579
727,579
257,337
257,337
114,389
114,389
450,337
450,337
276,820
276,820
545,958
545,958
1,000,000
1,000,000
1,029,830
1,029,830
513,273
513,273
486,201
486,201
409,725
409,725
941,160
941,160
515,866
515,866
—
—
696,554
696,554
912,196
912,196
—
—
158,110
158,110
652,754
652,754
404,287
404,287
848,513
848,513
(thousands)
(thousands)
Maxim 2023 Notes, due March
Maxim 2023 Notes, due March
2023
2023
2024 Notes, due October 2024
2024 Notes, due October 2024
2025 Notes, due April 2025
2025 Notes, due April 2025
2026 Notes, due December 2026
2026 Notes, due December 2026
Maxim 2027 Notes, due June 2027
Maxim 2027 Notes, due June 2027
2027 Notes, due June 2027
2027 Notes, due June 2027
2028 Notes, due October 2028
2028 Notes, due October 2028
2031 Notes, due October 2031
2031 Notes, due October 2031
2032 Notes, due October 2032
2032 Notes, due October 2032
2036 Notes, due December 2036
2036 Notes, due December 2036
2041 Notes, due October 2041
2041 Notes, due October 2041
2045 Notes, due December 2045
2045 Notes, due December 2045
500,000
500,000
400,000
400,000
900,000
900,000
59,788
59,788
440,212
440,212
750,000
750,000
1,000,000
1,000,000
300,000
300,000
144,278
144,278
750,000
750,000
332,587
332,587
2051 Notes, due October 2051
2051 Notes, due October 2051
1,000,000
1,000,000
Foreign Currency Exposure
Foreign Currency Exposure
As more fully described in Note 2i, Derivative and Hedging Agreements, of the Notes to Consolidated Financial
As more fully described in Note 2i, Derivative and Hedging Agreements, of the Notes to Consolidated Financial
Statements contained in Item 8 of this Annual Report on Form 10-K, we regularly hedge our non-U.S. dollar-based exposures
Statements contained in Item 8 of this Annual Report on Form 10-K, we regularly hedge our non-U.S. dollar-based exposures
by entering into forward foreign currency exchange contracts. The terms of these contracts are for periods matching the
by entering into forward foreign currency exchange contracts. The terms of these contracts are for periods matching the
duration of the underlying exposure and generally range from one to twelve months. Currently, our largest foreign currency
duration of the underlying exposure and generally range from one to twelve months. Currently, our largest foreign currency
exposure is the Euro, primarily because our European operations have the highest proportion of our local currency denominated
exposure is the Euro, primarily because our European operations have the highest proportion of our local currency denominated
expenses. Relative to the net unhedged foreign currency exposures existing at October 29, 2022 and October 30, 2021, an
expenses. Relative to the net unhedged foreign currency exposures existing at October 29, 2022 and October 30, 2021, an
immediate 10% unfavorable movement in foreign currency exchange rates would result in approximately $69.5 million of
immediate 10% unfavorable movement in foreign currency exchange rates would result in approximately $69.5 million of
losses and $39.5 million of losses, respectively, in changes in earnings or cash flows over the course of the year.
losses and $39.5 million of losses, respectively, in changes in earnings or cash flows over the course of the year.
41
41
42
42
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Exposure
Interest Rate Exposure
Our interest income and expense are sensitive to changes in the general level of interest rates. In this regard, changes in
Our interest income and expense are sensitive to changes in the general level of interest rates. In this regard, changes in
interest rates affect the interest earned or paid on our marketable securities and debt, as well as the fair value of our investments
interest rates affect the interest earned or paid on our marketable securities and debt, as well as the fair value of our investments
Based on the $500.0 million of our floating rate debt outstanding as of October 29, 2022, our annual interest expense
Based on the $500.0 million of our floating rate debt outstanding as of October 29, 2022, our annual interest expense
would change by approximately $5.0 million for each 100 basis point increase in interest rates.
would change by approximately $5.0 million for each 100 basis point increase in interest rates.
Based on our cash and marketable securities outstanding as of October 29, 2022 and October 30, 2021, our annual interest
Based on our cash and marketable securities outstanding as of October 29, 2022 and October 30, 2021, our annual interest
income would change by approximately $14.7 million and $19.7 million, respectively, for each 100 basis point increase in
income would change by approximately $14.7 million and $19.7 million, respectively, for each 100 basis point increase in
and debt.
and debt.
interest rates.
interest rates.
To provide a meaningful assessment of the interest rate risk associated with our investment portfolio, we performed a
To provide a meaningful assessment of the interest rate risk associated with our investment portfolio, we performed a
sensitivity analysis to determine the impact a change in interest rates would have on the value of our investment portfolio
sensitivity analysis to determine the impact a change in interest rates would have on the value of our investment portfolio
assuming an immediate 100 basis point parallel shift in the yield curve. Based on investment positions as of October 29, 2022
assuming an immediate 100 basis point parallel shift in the yield curve. Based on investment positions as of October 29, 2022
and October 30, 2021, a hypothetical 100 basis point increase in interest rates across all maturities would not materially impact
and October 30, 2021, a hypothetical 100 basis point increase in interest rates across all maturities would not materially impact
the fair market value of the portfolio in either period. If significant, such losses would only be realized if we sold the
the fair market value of the portfolio in either period. If significant, such losses would only be realized if we sold the
investments prior to maturity.
investments prior to maturity.
The market risk associated with our derivative instruments results from currency exchange rates that are expected to
The market risk associated with our derivative instruments results from currency exchange rates that are expected to
offset the market risk of the underlying transactions, assets and liabilities being hedged. The counterparties to the agreements
offset the market risk of the underlying transactions, assets and liabilities being hedged. The counterparties to the agreements
relating to our foreign exchange instruments consist of a number of major international financial institutions with high credit
relating to our foreign exchange instruments consist of a number of major international financial institutions with high credit
ratings. Based on the credit ratings of our counterparties as of October 29, 2022, we do not believe that there is significant risk
ratings. Based on the credit ratings of our counterparties as of October 29, 2022, we do not believe that there is significant risk
of nonperformance by them. While the contract or notional amounts of derivative financial instruments provide one measure of
of nonperformance by them. While the contract or notional amounts of derivative financial instruments provide one measure of
the volume of these transactions, they do not represent the amount of our exposure to credit risk. The amounts potentially
the volume of these transactions, they do not represent the amount of our exposure to credit risk. The amounts potentially
subject to credit risk (arising from the possible inability of counterparties to meet the terms of their contracts) are generally
subject to credit risk (arising from the possible inability of counterparties to meet the terms of their contracts) are generally
limited to the amounts, if any, by which the counterparties’ obligations under the contracts exceed our obligations to the
limited to the amounts, if any, by which the counterparties’ obligations under the contracts exceed our obligations to the
counterparties.
counterparties.
The following table illustrates the effect that an immediate 10% unfavorable or favorable movement in foreign currency
The following table illustrates the effect that an immediate 10% unfavorable or favorable movement in foreign currency
exchange rates, relative to the U.S. dollar, would have on the fair value of our forward exchange contracts as of October 29,
exchange rates, relative to the U.S. dollar, would have on the fair value of our forward exchange contracts as of October 29,
2022 and October 30, 2021:
2022 and October 30, 2021:
Fair value of forward exchange contracts
Fair value of forward exchange contracts
Fair value of forward exchange contracts after a 10% unfavorable movement in foreign
Fair value of forward exchange contracts after a 10% unfavorable movement in foreign
currency exchange rates asset
currency exchange rates asset
Fair value of forward exchange contracts after a 10% favorable movement in foreign
Fair value of forward exchange contracts after a 10% favorable movement in foreign
currency exchange rates liability
currency exchange rates liability
$
$
$
$
$
$
(16,984) $
(16,984) $
(8,085)
(8,085)
21,193 $
21,193 $
26,673
26,673
(51,604) $
(51,604) $
(41,034)
(41,034)
October 29, 2022
October 29, 2022
October 30, 2021
October 30, 2021
As of October 29, 2022, we had $6.6 billion in principal amount of senior unsecured notes outstanding, with a fair value
As of October 29, 2022, we had $6.6 billion in principal amount of senior unsecured notes outstanding, with a fair value
of $5.5 billion. The fair value of our notes is subject to interest rate risk, market risk, and other factors. Generally, the fair value
of $5.5 billion. The fair value of our notes is subject to interest rate risk, market risk, and other factors. Generally, the fair value
of our notes will increase as interest rates fall and decrease as interest rates rise. The fair values of our notes as of October 29,
of our notes will increase as interest rates fall and decrease as interest rates rise. The fair values of our notes as of October 29,
2022 and October 30, 2021, assuming a hypothetical 100 basis point increase in market interest rates, are as follows:
2022 and October 30, 2021, assuming a hypothetical 100 basis point increase in market interest rates, are as follows:
The calculation assumes that each exchange rate would change in the same direction relative to the U.S. dollar. In
The calculation assumes that each exchange rate would change in the same direction relative to the U.S. dollar. In
addition to the direct effects of changes in exchange rates, such changes typically affect the volume of sales or the foreign
addition to the direct effects of changes in exchange rates, such changes typically affect the volume of sales or the foreign
currency sales price as competitors’ products become more or less attractive. Our sensitivity analysis of the effects of changes
currency sales price as competitors’ products become more or less attractive. Our sensitivity analysis of the effects of changes
in foreign currency exchange rates does not factor in a potential change in sales levels or local currency selling prices.
in foreign currency exchange rates does not factor in a potential change in sales levels or local currency selling prices.
2031 Notes, due October 2031
2031 Notes, due October 2031
1,000,000
1,000,000
727,579
727,579
1,000,000
1,000,000
October 29, 2022
October 29, 2022
October 30, 2021
October 30, 2021
Principal
Principal
Amount
Amount
Outstanding
Outstanding
Fair Value
Fair Value
Principal
Principal
Amount
Amount
Outstanding
Outstanding
Fair Value
Fair Value
$
$
— $
— $
— $
— $
— $
— $
500,000 $
500,000 $
520,236 $
520,236 $
513,273
513,273
Fair Value
Fair Value
given an
given an
increase in
increase in
interest rates
interest rates
of 100 basis
of 100 basis
points
points
483,035
483,035
374,686
374,686
820,203
820,203
52,534
52,534
393,294
393,294
588,044
588,044
257,337
257,337
114,389
114,389
450,337
450,337
276,820
276,820
500,000
500,000
400,000
400,000
900,000
900,000
59,788
59,788
440,212
440,212
750,000
750,000
300,000
300,000
144,278
144,278
750,000
750,000
332,587
332,587
491,982
491,982
383,378
383,378
851,479
851,479
54,771
54,771
410,091
410,091
621,093
621,093
786,772
786,772
278,359
278,359
126,274
126,274
513,709
513,709
313,931
313,931
640,766
640,766
Fair Value
Fair Value
given an
given an
increase in
increase in
interest rates
interest rates
of 100 basis
of 100 basis
points
points
486,201
486,201
409,725
409,725
941,160
941,160
515,866
515,866
—
—
696,554
696,554
912,196
912,196
—
—
158,110
158,110
652,754
652,754
404,287
404,287
848,513
848,513
500,000
500,000
400,000
400,000
900,000
900,000
500,000
500,000
—
—
750,000
750,000
—
—
144,278
144,278
750,000
750,000
332,587
332,587
500,482
500,482
423,265
423,265
986,243
986,243
542,942
542,942
—
—
743,109
743,109
996,702
996,702
—
—
176,960
176,960
758,246
758,246
469,592
469,592
(thousands)
(thousands)
2023
2023
Maxim 2023 Notes, due March
Maxim 2023 Notes, due March
2024 Notes, due October 2024
2024 Notes, due October 2024
2025 Notes, due April 2025
2025 Notes, due April 2025
2026 Notes, due December 2026
2026 Notes, due December 2026
Maxim 2027 Notes, due June 2027
Maxim 2027 Notes, due June 2027
2027 Notes, due June 2027
2027 Notes, due June 2027
2028 Notes, due October 2028
2028 Notes, due October 2028
2032 Notes, due October 2032
2032 Notes, due October 2032
2036 Notes, due December 2036
2036 Notes, due December 2036
2041 Notes, due October 2041
2041 Notes, due October 2041
2045 Notes, due December 2045
2045 Notes, due December 2045
Foreign Currency Exposure
Foreign Currency Exposure
2051 Notes, due October 2051
2051 Notes, due October 2051
1,000,000
1,000,000
545,958
545,958
1,000,000
1,000,000
1,029,830
1,029,830
As more fully described in Note 2i, Derivative and Hedging Agreements, of the Notes to Consolidated Financial
As more fully described in Note 2i, Derivative and Hedging Agreements, of the Notes to Consolidated Financial
Statements contained in Item 8 of this Annual Report on Form 10-K, we regularly hedge our non-U.S. dollar-based exposures
Statements contained in Item 8 of this Annual Report on Form 10-K, we regularly hedge our non-U.S. dollar-based exposures
by entering into forward foreign currency exchange contracts. The terms of these contracts are for periods matching the
by entering into forward foreign currency exchange contracts. The terms of these contracts are for periods matching the
duration of the underlying exposure and generally range from one to twelve months. Currently, our largest foreign currency
duration of the underlying exposure and generally range from one to twelve months. Currently, our largest foreign currency
exposure is the Euro, primarily because our European operations have the highest proportion of our local currency denominated
exposure is the Euro, primarily because our European operations have the highest proportion of our local currency denominated
expenses. Relative to the net unhedged foreign currency exposures existing at October 29, 2022 and October 30, 2021, an
expenses. Relative to the net unhedged foreign currency exposures existing at October 29, 2022 and October 30, 2021, an
immediate 10% unfavorable movement in foreign currency exchange rates would result in approximately $69.5 million of
immediate 10% unfavorable movement in foreign currency exchange rates would result in approximately $69.5 million of
losses and $39.5 million of losses, respectively, in changes in earnings or cash flows over the course of the year.
losses and $39.5 million of losses, respectively, in changes in earnings or cash flows over the course of the year.
41
41
42
42
How We
How We
Addressed the
Addressed the
Matter in Our
Matter in Our
Audit
Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over
the Company's process to calculate the price protection credits. For example, we tested controls over the
the Company's process to calculate the price protection credits. For example, we tested controls over the
appropriateness of assumptions management used as well as controls over the completeness and accuracy of
appropriateness of assumptions management used as well as controls over the completeness and accuracy of
the data underlying estimates of expected price protection credits.
the data underlying estimates of expected price protection credits.
Our audit procedures included, among others, inspecting contractual terms in distributor agreements and
Our audit procedures included, among others, inspecting contractual terms in distributor agreements and
testing the underlying data used in management’s calculation for completeness and accuracy as well as
testing the underlying data used in management’s calculation for completeness and accuracy as well as
evaluating the significant assumptions used in the estimation of the price protection credits. We evaluated
evaluating the significant assumptions used in the estimation of the price protection credits. We evaluated
the Company’s methods and assumptions used in the estimates, which included comparing the assumptions
the Company’s methods and assumptions used in the estimates, which included comparing the assumptions
to historical trends. We inspected and tested the results of the Company's retrospective review analysis of
to historical trends. We inspected and tested the results of the Company's retrospective review analysis of
actual price protection credits claimed by distributors, evaluated the estimates made based on historical
actual price protection credits claimed by distributors, evaluated the estimates made based on historical
experience and performed sensitivity analyses of the Company’s significant assumptions to assess the
experience and performed sensitivity analyses of the Company’s significant assumptions to assess the
impact on the price protection credits. We also evaluated whether the Company appropriately considered
impact on the price protection credits. We also evaluated whether the Company appropriately considered
new information that could significantly change the estimated future price protection credits.
new information that could significantly change the estimated future price protection credits.
We have served as the Company’s auditor since 1967.
We have served as the Company’s auditor since 1967.
/s/ Ernst & Young LLP
/s/ Ernst & Young LLP
Boston, Massachusetts
Boston, Massachusetts
November 22, 2022
November 22, 2022
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Analog Devices, Inc.
To the Shareholders and the Board of Directors of Analog Devices, Inc.
Opinion on the Financial Statements
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Analog Devices, Inc. (the Company) as of October 29, 2022
We have audited the accompanying consolidated balance sheets of Analog Devices, Inc. (the Company) as of October 29, 2022
and October 30, 2021, the related consolidated statements of income, comprehensive income, shareholders' equity and cash
and October 30, 2021, the related consolidated statements of income, comprehensive income, shareholders' equity and cash
flows for each of the three years in the period ended October 29, 2022, and the related notes and financial statement schedule
flows for each of the three years in the period ended October 29, 2022, and the related notes and financial statement schedule
listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the
listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the
consolidated financial statements present fairly, in all material respects, the financial position of the Company at October 29,
consolidated financial statements present fairly, in all material respects, the financial position of the Company at October 29,
2022 and October 30, 2021, and the results of its operations and its cash flows for each of the three years in the period ended
2022 and October 30, 2021, and the results of its operations and its cash flows for each of the three years in the period ended
October 29, 2022, in conformity with U.S. generally accepted accounting principles.
October 29, 2022, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company's internal control over financial reporting as of October 29, 2022, based on criteria established in
(PCAOB), the Company's internal control over financial reporting as of October 29, 2022, based on criteria established in
Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(2013 framework), and our report dated November 22, 2022 expressed an unqualified opinion thereon.
(2013 framework), and our report dated November 22, 2022 expressed an unqualified opinion thereon.
Basis for Opinion
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that
was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The
are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The
communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken
communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken
as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit
as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit
matter or on the account or disclosure to which it relates.
matter or on the account or disclosure to which it relates.
Revenue Recognition – Measuring Price Protection Credits
Revenue Recognition – Measuring Price Protection Credits
Description of
Description of
the Matter
the Matter
As described in Note 2n to the consolidated financial statements, the Company's sales contracts provide
As described in Note 2n to the consolidated financial statements, the Company's sales contracts provide
certain distributors with credits for price protection and rights of return, which results in variable
certain distributors with credits for price protection and rights of return, which results in variable
consideration. During 2022, sales to distributors were $7.5 billion net of expected price protection credits
consideration. During 2022, sales to distributors were $7.5 billion net of expected price protection credits
and rights of return for which the liability balance as of October 29, 2022 was $749.4 million, of which the
and rights of return for which the liability balance as of October 29, 2022 was $749.4 million, of which the
vast majority relates to the price protection credits.
vast majority relates to the price protection credits.
Auditing the Company's measurement for price protection credits under distributor contracts involved
Auditing the Company's measurement for price protection credits under distributor contracts involved
especially challenging judgment because the calculation involves subjective management assumptions about
especially challenging judgment because the calculation involves subjective management assumptions about
estimates of expected price protection credits. For example, estimated price protection credits included in the
estimates of expected price protection credits. For example, estimated price protection credits included in the
transaction price reflects management's evaluation of contractual terms, historical experience and
transaction price reflects management's evaluation of contractual terms, historical experience and
assumptions about future economic conditions. Changes in those assumptions can have a material effect on
assumptions about future economic conditions. Changes in those assumptions can have a material effect on
the amount recognized for price protection credits.
the amount recognized for price protection credits.
43
43
44
44
How We
How We
Addressed the
Addressed the
Matter in Our
Matter in Our
Audit
Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over
the Company's process to calculate the price protection credits. For example, we tested controls over the
the Company's process to calculate the price protection credits. For example, we tested controls over the
appropriateness of assumptions management used as well as controls over the completeness and accuracy of
appropriateness of assumptions management used as well as controls over the completeness and accuracy of
the data underlying estimates of expected price protection credits.
the data underlying estimates of expected price protection credits.
Our audit procedures included, among others, inspecting contractual terms in distributor agreements and
Our audit procedures included, among others, inspecting contractual terms in distributor agreements and
testing the underlying data used in management’s calculation for completeness and accuracy as well as
testing the underlying data used in management’s calculation for completeness and accuracy as well as
evaluating the significant assumptions used in the estimation of the price protection credits. We evaluated
evaluating the significant assumptions used in the estimation of the price protection credits. We evaluated
the Company’s methods and assumptions used in the estimates, which included comparing the assumptions
the Company’s methods and assumptions used in the estimates, which included comparing the assumptions
to historical trends. We inspected and tested the results of the Company's retrospective review analysis of
to historical trends. We inspected and tested the results of the Company's retrospective review analysis of
actual price protection credits claimed by distributors, evaluated the estimates made based on historical
actual price protection credits claimed by distributors, evaluated the estimates made based on historical
experience and performed sensitivity analyses of the Company’s significant assumptions to assess the
experience and performed sensitivity analyses of the Company’s significant assumptions to assess the
impact on the price protection credits. We also evaluated whether the Company appropriately considered
impact on the price protection credits. We also evaluated whether the Company appropriately considered
new information that could significantly change the estimated future price protection credits.
new information that could significantly change the estimated future price protection credits.
/s/ Ernst & Young LLP
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 1967.
We have served as the Company’s auditor since 1967.
Boston, Massachusetts
Boston, Massachusetts
November 22, 2022
November 22, 2022
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Analog Devices, Inc.
To the Shareholders and the Board of Directors of Analog Devices, Inc.
Opinion on the Financial Statements
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Analog Devices, Inc. (the Company) as of October 29, 2022
We have audited the accompanying consolidated balance sheets of Analog Devices, Inc. (the Company) as of October 29, 2022
and October 30, 2021, the related consolidated statements of income, comprehensive income, shareholders' equity and cash
and October 30, 2021, the related consolidated statements of income, comprehensive income, shareholders' equity and cash
flows for each of the three years in the period ended October 29, 2022, and the related notes and financial statement schedule
flows for each of the three years in the period ended October 29, 2022, and the related notes and financial statement schedule
listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the
listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the
consolidated financial statements present fairly, in all material respects, the financial position of the Company at October 29,
consolidated financial statements present fairly, in all material respects, the financial position of the Company at October 29,
2022 and October 30, 2021, and the results of its operations and its cash flows for each of the three years in the period ended
2022 and October 30, 2021, and the results of its operations and its cash flows for each of the three years in the period ended
October 29, 2022, in conformity with U.S. generally accepted accounting principles.
October 29, 2022, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company's internal control over financial reporting as of October 29, 2022, based on criteria established in
(PCAOB), the Company's internal control over financial reporting as of October 29, 2022, based on criteria established in
Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(2013 framework), and our report dated November 22, 2022 expressed an unqualified opinion thereon.
(2013 framework), and our report dated November 22, 2022 expressed an unqualified opinion thereon.
Basis for Opinion
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that
was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The
are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The
communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken
communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken
as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit
as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit
matter or on the account or disclosure to which it relates.
matter or on the account or disclosure to which it relates.
Revenue Recognition – Measuring Price Protection Credits
Revenue Recognition – Measuring Price Protection Credits
Description of
Description of
the Matter
the Matter
As described in Note 2n to the consolidated financial statements, the Company's sales contracts provide
As described in Note 2n to the consolidated financial statements, the Company's sales contracts provide
certain distributors with credits for price protection and rights of return, which results in variable
certain distributors with credits for price protection and rights of return, which results in variable
consideration. During 2022, sales to distributors were $7.5 billion net of expected price protection credits
consideration. During 2022, sales to distributors were $7.5 billion net of expected price protection credits
and rights of return for which the liability balance as of October 29, 2022 was $749.4 million, of which the
and rights of return for which the liability balance as of October 29, 2022 was $749.4 million, of which the
vast majority relates to the price protection credits.
vast majority relates to the price protection credits.
Auditing the Company's measurement for price protection credits under distributor contracts involved
Auditing the Company's measurement for price protection credits under distributor contracts involved
especially challenging judgment because the calculation involves subjective management assumptions about
especially challenging judgment because the calculation involves subjective management assumptions about
estimates of expected price protection credits. For example, estimated price protection credits included in the
estimates of expected price protection credits. For example, estimated price protection credits included in the
transaction price reflects management's evaluation of contractual terms, historical experience and
transaction price reflects management's evaluation of contractual terms, historical experience and
assumptions about future economic conditions. Changes in those assumptions can have a material effect on
assumptions about future economic conditions. Changes in those assumptions can have a material effect on
the amount recognized for price protection credits.
the amount recognized for price protection credits.
43
43
44
44
ITEM 8.
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
CONSOLIDATED STATEMENTS OF INCOME
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
(thousands, except per share amounts)
(thousands, except per share amounts)
2022
2022
2021
2021
2020
2020
Change in unrecognized gains/losses on derivative instruments designated as cash
Change in unrecognized gains/losses on derivative instruments designated as cash
Revenue
Revenue
Revenue
Revenue
Costs and Expenses
Costs and Expenses
Cost of sales
Cost of sales
Gross margin
Gross margin
Operating expenses:
Operating expenses:
Research and development
Research and development
Selling, marketing, general and administrative
Selling, marketing, general and administrative
Amortization of intangibles
Amortization of intangibles
Special charges, net
Special charges, net
Operating income:
Operating income:
Nonoperating expense (income):
Nonoperating expense (income):
Interest expense
Interest expense
Loss on extinguishment of debt
Loss on extinguishment of debt
Interest income
Interest income
Other, net
Other, net
Earnings
Earnings
Income before income taxes
Income before income taxes
Provision for (benefit from) income taxes
Provision for (benefit from) income taxes
Net income
Net income
$
$
12,013,953 $
12,013,953 $
7,318,286 $
7,318,286 $
5,603,056
5,603,056
4,481,479
4,481,479
7,532,474
7,532,474
2,793,274
2,793,274
4,525,012
4,525,012
1,912,578
1,912,578
3,690,478
3,690,478
Changes in fair value of derivatives (net of tax of $2,902 in 2022, $14,217 in 2021
Changes in fair value of derivatives (net of tax of $2,902 in 2022, $14,217 in 2021
and $17,468 in 2020)
and $17,468 in 2020)
Adjustment for realized loss/(gain) reclassified into earnings (net of tax of $5,054
Adjustment for realized loss/(gain) reclassified into earnings (net of tax of $5,054
in 2022, $189 in 2021 and $158 in 2020)
in 2022, $189 in 2021 and $158 in 2020)
Total change in derivative instruments designated as cash flow hedges, net of tax
Total change in derivative instruments designated as cash flow hedges, net of tax
Changes in accumulated other comprehensive loss — pension plans:
Changes in accumulated other comprehensive loss — pension plans:
1,700,518
1,700,518
1,266,175
1,266,175
1,012,572
1,012,572
274,509
274,509
4,253,774
4,253,774
3,278,700
3,278,700
200,408
200,408
—
—
(6,906)
(6,906)
(13,551)
(13,551)
179,951
179,951
1,296,126
1,296,126
1,050,519
1,050,519
Change in actuarial gain/(loss) (net of tax of $7,756 in 2022, $637 in 2021 and
Change in actuarial gain/(loss) (net of tax of $7,756 in 2022, $637 in 2021 and
915,418
915,418
536,811
536,811
84,456
84,456
2,832,811
2,832,811
1,692,201
1,692,201
184,825
184,825
215,150
215,150
(1,220)
(1,220)
(35,268)
(35,268)
363,487
363,487
659,923
659,923
429,455
429,455
52,337
52,337
2,192,234
2,192,234
1,498,244
1,498,244
193,305
193,305
—
—
(4,305)
(4,305)
(2,373)
(2,373)
186,627
186,627
3,098,749
3,098,749
350,188
350,188
1,328,714
1,328,714
1,311,617
1,311,617
(61,708)
(61,708)
90,856
90,856
$
$
2,748,561 $
2,748,561 $
1,390,422 $
1,390,422 $
1,220,761
1,220,761
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
(thousands)
(thousands)
Net income
Net income
flow hedges:
flow hedges:
Foreign currency translation adjustment
Foreign currency translation adjustment
$5,167 in 2020)
$5,167 in 2020)
Other comprehensive (loss) income
Other comprehensive (loss) income
Comprehensive income
Comprehensive income
2022
2022
2021
2021
2020
2020
$
$
2,748,561 $
2,748,561 $
1,390,422 $
1,390,422 $
1,220,761
1,220,761
(46,341)
(46,341)
1,057
1,057
3,224
3,224
(30,331)
(30,331)
41,817
41,817
(51,437)
(51,437)
34,472
34,472
4,141
4,141
30,613
30,613
(11,587)
(11,587)
7,099
7,099
48,916
48,916
12,923
12,923
62,896
62,896
(839)
(839)
(52,276)
(52,276)
(10,231)
(10,231)
(59,283)
(59,283)
$
$
2,736,974 $
2,736,974 $
1,453,318 $
1,453,318 $
1,161,478
1,161,478
See accompanying Notes.
See accompanying Notes.
Shares used to compute earnings per common share — basic
Shares used to compute earnings per common share — basic
Shares used to compute earnings per common share — diluted
Shares used to compute earnings per common share — diluted
519,226
519,226
523,178
523,178
397,462
397,462
401,288
401,288
368,633
368,633
371,973
371,973
Basic earnings per common share
Basic earnings per common share
Diluted earnings per common share
Diluted earnings per common share
$
$
$
$
5.29 $
5.29 $
5.25 $
5.25 $
3.50 $
3.50 $
3.46 $
3.46 $
3.31
3.31
3.28
3.28
See accompanying Notes.
See accompanying Notes.
45
45
46
46
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
(thousands)
(thousands)
Net income
Net income
Foreign currency translation adjustment
Foreign currency translation adjustment
2022
2022
2021
2021
2020
2020
$
$
2,748,561 $
2,748,561 $
1,390,422 $
1,390,422 $
1,220,761
1,220,761
(46,341)
(46,341)
1,057
1,057
3,224
3,224
Change in unrecognized gains/losses on derivative instruments designated as cash
Change in unrecognized gains/losses on derivative instruments designated as cash
flow hedges:
flow hedges:
Changes in fair value of derivatives (net of tax of $2,902 in 2022, $14,217 in 2021
Changes in fair value of derivatives (net of tax of $2,902 in 2022, $14,217 in 2021
and $17,468 in 2020)
and $17,468 in 2020)
Adjustment for realized loss/(gain) reclassified into earnings (net of tax of $5,054
Adjustment for realized loss/(gain) reclassified into earnings (net of tax of $5,054
in 2022, $189 in 2021 and $158 in 2020)
in 2022, $189 in 2021 and $158 in 2020)
Total change in derivative instruments designated as cash flow hedges, net of tax
Total change in derivative instruments designated as cash flow hedges, net of tax
Changes in accumulated other comprehensive loss — pension plans:
Changes in accumulated other comprehensive loss — pension plans:
Change in actuarial gain/(loss) (net of tax of $7,756 in 2022, $637 in 2021 and
Change in actuarial gain/(loss) (net of tax of $7,756 in 2022, $637 in 2021 and
$5,167 in 2020)
$5,167 in 2020)
Other comprehensive (loss) income
Other comprehensive (loss) income
Comprehensive income
Comprehensive income
(30,331)
(30,331)
41,817
41,817
(51,437)
(51,437)
34,472
34,472
4,141
4,141
30,613
30,613
(11,587)
(11,587)
7,099
7,099
48,916
48,916
12,923
12,923
62,896
62,896
(839)
(839)
(52,276)
(52,276)
(10,231)
(10,231)
(59,283)
(59,283)
$
$
2,736,974 $
2,736,974 $
1,453,318 $
1,453,318 $
1,161,478
1,161,478
See accompanying Notes.
See accompanying Notes.
ITEM 8.
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
CONSOLIDATED STATEMENTS OF INCOME
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
(thousands, except per share amounts)
(thousands, except per share amounts)
2022
2022
2021
2021
2020
2020
Revenue
Revenue
Revenue
Revenue
Costs and Expenses
Costs and Expenses
Cost of sales
Cost of sales
Gross margin
Gross margin
Operating expenses:
Operating expenses:
Research and development
Research and development
Selling, marketing, general and administrative
Selling, marketing, general and administrative
Amortization of intangibles
Amortization of intangibles
Special charges, net
Special charges, net
Operating income:
Operating income:
Nonoperating expense (income):
Nonoperating expense (income):
Interest expense
Interest expense
Loss on extinguishment of debt
Loss on extinguishment of debt
Interest income
Interest income
Other, net
Other, net
Earnings
Earnings
Income before income taxes
Income before income taxes
Provision for (benefit from) income taxes
Provision for (benefit from) income taxes
Net income
Net income
$
$
12,013,953 $
12,013,953 $
7,318,286 $
7,318,286 $
5,603,056
5,603,056
4,481,479
4,481,479
7,532,474
7,532,474
2,793,274
2,793,274
4,525,012
4,525,012
1,912,578
1,912,578
3,690,478
3,690,478
1,296,126
1,296,126
1,050,519
1,050,519
1,700,518
1,700,518
1,266,175
1,266,175
1,012,572
1,012,572
274,509
274,509
4,253,774
4,253,774
3,278,700
3,278,700
200,408
200,408
—
—
(6,906)
(6,906)
(13,551)
(13,551)
179,951
179,951
915,418
915,418
536,811
536,811
84,456
84,456
2,832,811
2,832,811
1,692,201
1,692,201
184,825
184,825
215,150
215,150
(1,220)
(1,220)
(35,268)
(35,268)
363,487
363,487
659,923
659,923
429,455
429,455
52,337
52,337
2,192,234
2,192,234
1,498,244
1,498,244
193,305
193,305
—
—
(4,305)
(4,305)
(2,373)
(2,373)
186,627
186,627
3,098,749
3,098,749
350,188
350,188
1,328,714
1,328,714
1,311,617
1,311,617
(61,708)
(61,708)
90,856
90,856
$
$
2,748,561 $
2,748,561 $
1,390,422 $
1,390,422 $
1,220,761
1,220,761
Shares used to compute earnings per common share — basic
Shares used to compute earnings per common share — basic
Shares used to compute earnings per common share — diluted
Shares used to compute earnings per common share — diluted
519,226
519,226
523,178
523,178
397,462
397,462
401,288
401,288
368,633
368,633
371,973
371,973
Basic earnings per common share
Basic earnings per common share
Diluted earnings per common share
Diluted earnings per common share
$
$
$
$
5.29 $
5.29 $
5.25 $
5.25 $
3.50 $
3.50 $
3.46 $
3.46 $
3.31
3.31
3.28
3.28
See accompanying Notes.
See accompanying Notes.
45
45
46
46
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS
October 29, 2022 and October 30, 2021
October 29, 2022 and October 30, 2021
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
(thousands, except per share amounts)
(thousands, except per share amounts)
ASSETS
ASSETS
Current Assets
Current Assets
Cash and cash equivalents
Cash and cash equivalents
Accounts receivable less allowances of $4,571 ($2,658 in 2021)
Accounts receivable less allowances of $4,571 ($2,658 in 2021)
Inventories
Inventories
Prepaid expenses and other current assets
Prepaid expenses and other current assets
Total current assets
Total current assets
Other Assets
Other Assets
Net property, plant and equipment
Net property, plant and equipment
Other investments
Other investments
Goodwill
Goodwill
Intangible assets, net
Intangible assets, net
Deferred tax assets
Deferred tax assets
Other assets
Other assets
Total other assets
Total other assets
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Current Liabilities
Accounts payable
Accounts payable
Income taxes payable
Income taxes payable
Debt, current
Debt, current
Accrued liabilities
Accrued liabilities
Total current liabilities
Total current liabilities
Non-current Liabilities
Non-current Liabilities
Long-term debt
Long-term debt
Deferred income taxes
Deferred income taxes
Income taxes payable
Income taxes payable
Other non-current liabilities
Other non-current liabilities
Total non-current liabilities
Total non-current liabilities
Commitments and contingencies (Note 10)
Commitments and contingencies (Note 10)
Shareholders’ Equity
Shareholders’ Equity
2022
2022
2021
2021
$
$
1,470,572 $
1,470,572 $
1,800,462
1,800,462
1,399,914
1,399,914
267,044
267,044
4,937,992
4,937,992
2,401,304
2,401,304
122,285
122,285
26,913,134
26,913,134
13,265,406
13,265,406
2,264,888
2,264,888
397,341
397,341
45,364,358
45,364,358
50,302,350 $
50,302,350 $
582,160 $
582,160 $
$
$
$
$
265,845
265,845
—
—
1,594,650
1,594,650
2,442,655
2,442,655
6,548,625
6,548,625
3,622,538
3,622,538
707,846
707,846
515,363
515,363
11,394,372
11,394,372
1,977,964
1,977,964
1,459,056
1,459,056
1,200,610
1,200,610
740,687
740,687
5,378,317
5,378,317
1,979,051
1,979,051
127,856
127,856
26,918,470
26,918,470
15,267,170
15,267,170
2,267,269
2,267,269
383,938
383,938
46,943,754
46,943,754
52,322,071
52,322,071
443,434
443,434
332,685
332,685
516,663
516,663
1,477,530
1,477,530
2,770,312
2,770,312
6,253,212
6,253,212
3,938,830
3,938,830
811,337
811,337
555,838
555,838
11,559,217
11,559,217
Preferred stock, $1.00 par value, 471,934 shares authorized, none outstanding
Preferred stock, $1.00 par value, 471,934 shares authorized, none outstanding
—
—
—
—
Stock-based compensation expense
Stock-based compensation expense
Common stock, $0.16 2/3 par value, 1,200,000,000 shares authorized, 509,295,941 shares outstanding
Common stock, $0.16 2/3 par value, 1,200,000,000 shares authorized, 509,295,941 shares outstanding
(525,330,672 on October 30, 2021)
(525,330,672 on October 30, 2021)
Capital in excess of par value
Capital in excess of par value
Retained earnings
Retained earnings
Accumulated other comprehensive loss
Accumulated other comprehensive loss
Total shareholders’ equity
Total shareholders’ equity
84,880
84,880
27,857,270
27,857,270
8,721,325
8,721,325
(198,152)
(198,152)
36,465,323
36,465,323
87,554
87,554
30,574,237
30,574,237
7,517,316
7,517,316
(186,565)
(186,565)
37,992,542
37,992,542
$
$
50,302,350 $
50,302,350 $
52,322,071
52,322,071
See accompanying Notes.
See accompanying Notes.
BALANCE, NOVEMBER 2, 2019
BALANCE, NOVEMBER 2, 2019
368,302 $
368,302 $
61,385 $ 4,936,349 $ 6,899,253 $
61,385 $ 4,936,349 $ 6,899,253 $
(187,799)
(187,799)
Common Stock
Common Stock
Shares
Shares
Amount
Amount
Capital in
Capital in
Excess of
Excess of
Par Value
Par Value
Accumulated
Accumulated
Other
Other
Retained
Retained
Earnings
Earnings
Comprehensive
Comprehensive
(Loss) Income
(Loss) Income
(2,379)
(2,379)
2,379
2,379
1,220,761
1,220,761
(886,155)
(886,155)
3,110
3,110
336
336
518
518
56
56
67,885
67,885
39,944
39,944
149,518
149,518
(2,263)
(2,263)
(377)
(377)
(244,110)
(244,110)
(thousands)
(thousands)
Effect of Accounting Standards Update 2018-02
Effect of Accounting Standards Update 2018-02
Net Income — 2020
Net Income — 2020
Dividends declared and paid - $2.40 per share
Dividends declared and paid - $2.40 per share
Issuance of stock under stock plans and other
Issuance of stock under stock plans and other
Issuance of stock as charitable contribution
Issuance of stock as charitable contribution
Stock-based compensation expense
Stock-based compensation expense
Other comprehensive loss
Other comprehensive loss
Common stock repurchased
Common stock repurchased
Net Income — 2021
Net Income — 2021
Dividends declared and paid - $2.69 per share
Dividends declared and paid - $2.69 per share
BALANCE, OCTOBER 31, 2020
BALANCE, OCTOBER 31, 2020
369,485
369,485
61,582
61,582
4,949,586
4,949,586
7,236,238
7,236,238
(249,461)
(249,461)
Issuance of stock under stock plans and other
Issuance of stock under stock plans and other
2,738
2,738
355
355
62,750
62,750
Issuance of stock in connection with Acquisition
Issuance of stock in connection with Acquisition
169,233
169,233
28,204
28,204
27,725,957
27,725,957
Stock-based compensation expense
Stock-based compensation expense
Replacement share-based awards issued in connection with
Replacement share-based awards issued in connection with
Acquisition
Acquisition
Other comprehensive income
Other comprehensive income
Common stock repurchased
Common stock repurchased
BALANCE, OCTOBER 30, 2021
BALANCE, OCTOBER 30, 2021
525,331
525,331
87,554
87,554
30,574,237
30,574,237
7,517,316
7,517,316
(186,565)
(186,565)
(16,125)
(16,125)
(2,587)
(2,587)
(2,602,557)
(2,602,557)
Net Income — 2022
Net Income — 2022
Dividends declared and paid - $2.97 per share
Dividends declared and paid - $2.97 per share
Issuance of stock under stock plans and other
Issuance of stock under stock plans and other
2,701
2,701
449
449
Other comprehensive loss
Other comprehensive loss
Common stock repurchased
Common stock repurchased
(18,736)
(18,736)
(3,123)
(3,123)
(3,073,892)
(3,073,892)
BALANCE, OCTOBER 29, 2022
BALANCE, OCTOBER 29, 2022
509,296 $
509,296 $
84,880 $ 27,857,270 $ 8,721,325 $
84,880 $ 27,857,270 $ 8,721,325 $
(198,152)
(198,152)
1,390,422
1,390,422
(1,109,344)
(1,109,344)
2,748,561
2,748,561
(1,544,552)
(1,544,552)
243,611
243,611
194,890
194,890
33,438
33,438
323,487
323,487
(59,283)
(59,283)
62,896
62,896
(11,587)
(11,587)
See accompanying Notes.
See accompanying Notes.
47
47
48
48
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS
October 29, 2022 and October 30, 2021
October 29, 2022 and October 30, 2021
Accounts receivable less allowances of $4,571 ($2,658 in 2021)
Accounts receivable less allowances of $4,571 ($2,658 in 2021)
(thousands)
(thousands)
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
Common Stock
Common Stock
Shares
Shares
Amount
Amount
Capital in
Capital in
Excess of
Excess of
Par Value
Par Value
Retained
Retained
Earnings
Earnings
Accumulated
Accumulated
Other
Other
Comprehensive
Comprehensive
(Loss) Income
(Loss) Income
BALANCE, NOVEMBER 2, 2019
BALANCE, NOVEMBER 2, 2019
368,302 $
368,302 $
61,385 $ 4,936,349 $ 6,899,253 $
61,385 $ 4,936,349 $ 6,899,253 $
(187,799)
(187,799)
Effect of Accounting Standards Update 2018-02
Effect of Accounting Standards Update 2018-02
Net Income — 2020
Net Income — 2020
Dividends declared and paid - $2.40 per share
Dividends declared and paid - $2.40 per share
Issuance of stock under stock plans and other
Issuance of stock under stock plans and other
Issuance of stock as charitable contribution
Issuance of stock as charitable contribution
Stock-based compensation expense
Stock-based compensation expense
Other comprehensive loss
Other comprehensive loss
Common stock repurchased
Common stock repurchased
(2,379)
(2,379)
2,379
2,379
1,220,761
1,220,761
(886,155)
(886,155)
(59,283)
(59,283)
3,110
3,110
336
336
518
518
56
56
67,885
67,885
39,944
39,944
149,518
149,518
(2,263)
(2,263)
(377)
(377)
(244,110)
(244,110)
$
$
50,302,350 $
50,302,350 $
52,322,071
52,322,071
BALANCE, OCTOBER 31, 2020
BALANCE, OCTOBER 31, 2020
369,485
369,485
61,582
61,582
4,949,586
4,949,586
7,236,238
7,236,238
(249,461)
(249,461)
Net Income — 2021
Net Income — 2021
Dividends declared and paid - $2.69 per share
Dividends declared and paid - $2.69 per share
1,390,422
1,390,422
(1,109,344)
(1,109,344)
Issuance of stock under stock plans and other
Issuance of stock under stock plans and other
2,738
2,738
355
355
62,750
62,750
Issuance of stock in connection with Acquisition
Issuance of stock in connection with Acquisition
169,233
169,233
28,204
28,204
27,725,957
27,725,957
Stock-based compensation expense
Stock-based compensation expense
Replacement share-based awards issued in connection with
Replacement share-based awards issued in connection with
Acquisition
Acquisition
Other comprehensive income
Other comprehensive income
Common stock repurchased
Common stock repurchased
243,611
243,611
194,890
194,890
(16,125)
(16,125)
(2,587)
(2,587)
(2,602,557)
(2,602,557)
62,896
62,896
BALANCE, OCTOBER 30, 2021
BALANCE, OCTOBER 30, 2021
525,331
525,331
87,554
87,554
30,574,237
30,574,237
7,517,316
7,517,316
(186,565)
(186,565)
Preferred stock, $1.00 par value, 471,934 shares authorized, none outstanding
Preferred stock, $1.00 par value, 471,934 shares authorized, none outstanding
—
—
—
—
Stock-based compensation expense
Stock-based compensation expense
11,394,372
11,394,372
11,559,217
11,559,217
Net Income — 2022
Net Income — 2022
Dividends declared and paid - $2.97 per share
Dividends declared and paid - $2.97 per share
Issuance of stock under stock plans and other
Issuance of stock under stock plans and other
2,701
2,701
449
449
2,748,561
2,748,561
(1,544,552)
(1,544,552)
33,438
33,438
323,487
323,487
Common stock, $0.16 2/3 par value, 1,200,000,000 shares authorized, 509,295,941 shares outstanding
Common stock, $0.16 2/3 par value, 1,200,000,000 shares authorized, 509,295,941 shares outstanding
See accompanying Notes.
See accompanying Notes.
Other comprehensive loss
Other comprehensive loss
Common stock repurchased
Common stock repurchased
(18,736)
(18,736)
(3,123)
(3,123)
(3,073,892)
(3,073,892)
(11,587)
(11,587)
BALANCE, OCTOBER 29, 2022
BALANCE, OCTOBER 29, 2022
509,296 $
509,296 $
84,880 $ 27,857,270 $ 8,721,325 $
84,880 $ 27,857,270 $ 8,721,325 $
(198,152)
(198,152)
See accompanying Notes.
See accompanying Notes.
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES AND SHAREHOLDERS’ EQUITY
(thousands, except per share amounts)
(thousands, except per share amounts)
ASSETS
ASSETS
Current Assets
Current Assets
Cash and cash equivalents
Cash and cash equivalents
Inventories
Inventories
Prepaid expenses and other current assets
Prepaid expenses and other current assets
Total current assets
Total current assets
Other Assets
Other Assets
Net property, plant and equipment
Net property, plant and equipment
Other investments
Other investments
Goodwill
Goodwill
Intangible assets, net
Intangible assets, net
Deferred tax assets
Deferred tax assets
Other assets
Other assets
Total other assets
Total other assets
Current Liabilities
Current Liabilities
Accounts payable
Accounts payable
Income taxes payable
Income taxes payable
Debt, current
Debt, current
Accrued liabilities
Accrued liabilities
Total current liabilities
Total current liabilities
Non-current Liabilities
Non-current Liabilities
Long-term debt
Long-term debt
Deferred income taxes
Deferred income taxes
Income taxes payable
Income taxes payable
Other non-current liabilities
Other non-current liabilities
Total non-current liabilities
Total non-current liabilities
Commitments and contingencies (Note 10)
Commitments and contingencies (Note 10)
Shareholders’ Equity
Shareholders’ Equity
(525,330,672 on October 30, 2021)
(525,330,672 on October 30, 2021)
Capital in excess of par value
Capital in excess of par value
Retained earnings
Retained earnings
Accumulated other comprehensive loss
Accumulated other comprehensive loss
Total shareholders’ equity
Total shareholders’ equity
2022
2022
2021
2021
$
$
1,470,572 $
1,470,572 $
1,800,462
1,800,462
1,399,914
1,399,914
267,044
267,044
4,937,992
4,937,992
2,401,304
2,401,304
122,285
122,285
26,913,134
26,913,134
13,265,406
13,265,406
2,264,888
2,264,888
397,341
397,341
45,364,358
45,364,358
265,845
265,845
—
—
1,594,650
1,594,650
2,442,655
2,442,655
6,548,625
6,548,625
3,622,538
3,622,538
707,846
707,846
515,363
515,363
1,977,964
1,977,964
1,459,056
1,459,056
1,200,610
1,200,610
740,687
740,687
5,378,317
5,378,317
1,979,051
1,979,051
127,856
127,856
26,918,470
26,918,470
15,267,170
15,267,170
2,267,269
2,267,269
383,938
383,938
46,943,754
46,943,754
443,434
443,434
332,685
332,685
516,663
516,663
1,477,530
1,477,530
2,770,312
2,770,312
6,253,212
6,253,212
3,938,830
3,938,830
811,337
811,337
555,838
555,838
$
$
582,160 $
582,160 $
84,880
84,880
27,857,270
27,857,270
8,721,325
8,721,325
(198,152)
(198,152)
36,465,323
36,465,323
87,554
87,554
30,574,237
30,574,237
7,517,316
7,517,316
(186,565)
(186,565)
37,992,542
37,992,542
$
$
50,302,350 $
50,302,350 $
52,322,071
52,322,071
47
47
48
48
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
(thousands)
(thousands)
Cash flows from operating activities:
Cash flows from operating activities:
Net income
Net income
Adjustments to reconcile net income to net cash provided by operations:
Adjustments to reconcile net income to net cash provided by operations:
2022
2022
2021
2021
2020
2020
$ 2,748,561 $ 1,390,422 $ 1,220,761
$ 2,748,561 $ 1,390,422 $ 1,220,761
1. Description of Business
1. Description of Business
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
(all tabular amounts in thousands except per share amounts)
(all tabular amounts in thousands except per share amounts)
Depreciation
Depreciation
Amortization of intangibles
Amortization of intangibles
Cost of goods sold for inventory acquired
Cost of goods sold for inventory acquired
Stock-based compensation expense
Stock-based compensation expense
Non-cash contribution to charitable foundation
Non-cash contribution to charitable foundation
Loss on extinguishment of debt
Loss on extinguishment of debt
Non-cash impairment charge
Non-cash impairment charge
Non-cash operating lease costs
Non-cash operating lease costs
Other
Other
Deferred income taxes
Deferred income taxes
Change in operating assets and liabilities:
Change in operating assets and liabilities:
Accounts receivable
Accounts receivable
Inventories
Inventories
Prepaid expenses and other current assets
Prepaid expenses and other current assets
Prepaid income tax
Prepaid income tax
Accounts payable and accrued liabilities
Accounts payable and accrued liabilities
Income taxes payable, current
Income taxes payable, current
Other assets
Other assets
Other liabilities
Other liabilities
Total adjustments
Total adjustments
Net cash provided by operating activities
Net cash provided by operating activities
Cash flows from investing activities:
Cash flows from investing activities:
Additions to property, plant and equipment, net
Additions to property, plant and equipment, net
Cash received from acquisition of Maxim, net of cash paid
Cash received from acquisition of Maxim, net of cash paid
Other
Other
Net cash (used for) provided by investing activities
Net cash (used for) provided by investing activities
Cash flows from financing activities:
Cash flows from financing activities:
Proceeds from debt
Proceeds from debt
Early termination of debt
Early termination of debt
Debt repayments
Debt repayments
Payments on revolver
Payments on revolver
Proceeds from revolver
Proceeds from revolver
Payment on derivative instrument
Payment on derivative instrument
Prepayment for stock repurchases
Prepayment for stock repurchases
Dividend payments to shareholders
Dividend payments to shareholders
Repurchase of common stock
Repurchase of common stock
Proceeds from employee stock plans
Proceeds from employee stock plans
Other
Other
Net cash used for financing activities
Net cash used for financing activities
Effect of exchange rate changes on cash
Effect of exchange rate changes on cash
Net (decrease) increase in cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Cash and cash equivalents at end of year
See accompanying Notes.
See accompanying Notes.
283,338
283,338
2,014,161
2,014,161
271,396
271,396
323,487
323,487
—
—
—
—
91,953
91,953
(44,087)
(44,087)
(2,987)
(2,987)
(326,755)
(326,755)
(343,908)
(343,908)
(470,725)
(470,725)
(79,439)
(79,439)
14,855
14,855
171,772
171,772
(91,852)
(91,852)
(14,441)
(14,441)
(69,927)
(69,927)
1,726,841
1,726,841
4,475,402
4,475,402
231,275
231,275
843,359
843,359
331,083
331,083
243,611
243,611
—
—
215,150
215,150
—
—
19,232
19,232
(24,086)
(24,086)
(406,922)
(406,922)
(114,504)
(114,504)
(65,114)
(65,114)
(53,326)
(53,326)
(5,791)
(5,791)
208,444
208,444
(6,797)
(6,797)
(21,690)
(21,690)
(49,277)
(49,277)
1,344,647
1,344,647
2,735,069
2,735,069
233,775
233,775
577,148
577,148
—
—
149,518
149,518
40,000
40,000
—
—
—
—
(257,607)
(257,607)
5,418
5,418
(113,948)
(113,948)
(101,626)
(101,626)
1,760
1,760
(3,666)
(3,666)
—
—
103,104
103,104
29,441
29,441
—
—
124,409
124,409
787,726
787,726
2,008,487
2,008,487
(699,308)
(699,308)
—
—
41,940
41,940
(657,368)
(657,368)
(343,676)
(343,676)
2,450,550
2,450,550
36,651
36,651
2,143,525
2,143,525
(165,692)
(165,692)
—
—
(14,831)
(14,831)
(180,523)
(180,523)
296,130
296,130
(519,116)
(519,116)
—
—
(400,000)
(400,000)
400,000
400,000
—
—
—
—
(1,544,552)
(1,544,552)
(2,577,015)
(2,577,015)
33,887
33,887
19,946
19,946
(4,290,720)
(4,290,720)
(34,706)
(34,706)
(507,392)
(507,392)
1,977,964
1,977,964
395,646
395,646
—
—
(750,000)
(750,000)
(350,000)
(350,000)
350,000
350,000
—
—
—
—
(886,155)
(886,155)
(244,487)
(244,487)
68,403
68,403
(4,015)
(4,015)
(1,420,608)
(1,420,608)
182
182
407,538
407,538
648,322
648,322
$ 1,470,572 $ 1,977,964 $ 1,055,860
$ 1,470,572 $ 1,977,964 $ 1,055,860
3,939,640
3,939,640
(3,591,982)
(3,591,982)
—
—
(400,000)
(400,000)
400,000
400,000
(153,161)
(153,161)
(500,000)
(500,000)
(1,109,344)
(1,109,344)
(2,605,144)
(2,605,144)
63,105
63,105
(2,778)
(2,778)
(3,959,664)
(3,959,664)
3,174
3,174
922,104
922,104
1,055,860
1,055,860
Analog Devices, Inc. (Analog Devices or the Company) is a leading semiconductor company dedicated to solving its
Analog Devices, Inc. (Analog Devices or the Company) is a leading semiconductor company dedicated to solving its
customers' most complex engineering challenges. Since its inception in 1965, the Company has played a critical role at the
customers' most complex engineering challenges. Since its inception in 1965, the Company has played a critical role at the
intersection of the physical and digital world by providing the building blocks to sense, measure, interpret, connect and power.
intersection of the physical and digital world by providing the building blocks to sense, measure, interpret, connect and power.
The Company designs, manufactures, tests and markets a broad portfolio of solutions, including integrated circuits (ICs),
The Company designs, manufactures, tests and markets a broad portfolio of solutions, including integrated circuits (ICs),
software and subsystems that leverage high-performance analog, mixed-signal and digital signal processing technologies. The
software and subsystems that leverage high-performance analog, mixed-signal and digital signal processing technologies. The
Company's comprehensive product portfolio, deep domain expertise and advanced manufacturing capabilities extend across
Company's comprehensive product portfolio, deep domain expertise and advanced manufacturing capabilities extend across
high-performance precision and high-speed mixed-signal, power management and processing technologies – including data
high-performance precision and high-speed mixed-signal, power management and processing technologies – including data
converters, amplifiers, power management, radio frequency ICs, edge processors and other sensors. The Company's focus is
converters, amplifiers, power management, radio frequency ICs, edge processors and other sensors. The Company's focus is
largely on the business-to-business end markets of Industrial, Automotive and Communications and related applications, as
largely on the business-to-business end markets of Industrial, Automotive and Communications and related applications, as
well as Consumer applications, with the goal of driving sustainable and profitable growth over the long term.
well as Consumer applications, with the goal of driving sustainable and profitable growth over the long term.
2. Summary of Significant Accounting Policies
2. Summary of Significant Accounting Policies
a. Principles of Consolidation
a. Principles of Consolidation
The Consolidated Financial Statements include the accounts of the Company and all of its subsidiaries. Upon
The Consolidated Financial Statements include the accounts of the Company and all of its subsidiaries. Upon
consolidation, all intercompany accounts and transactions are eliminated. Certain amounts reported in previous years have been
consolidation, all intercompany accounts and transactions are eliminated. Certain amounts reported in previous years have been
reclassified to conform to the presentation for the fiscal year ended October 29, 2022 (fiscal 2022). Such reclassified amounts
reclassified to conform to the presentation for the fiscal year ended October 29, 2022 (fiscal 2022). Such reclassified amounts
The Company’s fiscal year is the 52-week or 53-week period ending on the Saturday closest to the last day in October.
The Company’s fiscal year is the 52-week or 53-week period ending on the Saturday closest to the last day in October.
Fiscal 2022, the fiscal year ended October 30, 2021 (fiscal 2021) and the fiscal year ended October 31, 2020 (fiscal 2020) were
Fiscal 2022, the fiscal year ended October 30, 2021 (fiscal 2021) and the fiscal year ended October 31, 2020 (fiscal 2020) were
are immaterial.
are immaterial.
52-week fiscal periods.
52-week fiscal periods.
On August 26, 2021 (Acquisition Date), the Company completed the acquisition of Maxim Integrated Products, Inc.
On August 26, 2021 (Acquisition Date), the Company completed the acquisition of Maxim Integrated Products, Inc.
(Maxim), an independent manufacturer of innovative analog and mixed-signal products and technologies. Pursuant to the
(Maxim), an independent manufacturer of innovative analog and mixed-signal products and technologies. Pursuant to the
Agreement and Plan of Merger, dated as of July 12, 2020 (the Merger Agreement), Maxim stockholders received, for each
Agreement and Plan of Merger, dated as of July 12, 2020 (the Merger Agreement), Maxim stockholders received, for each
outstanding share of Maxim common stock, 0.6300 of a share of the Company’s common stock as of the Acquisition Date for
outstanding share of Maxim common stock, 0.6300 of a share of the Company’s common stock as of the Acquisition Date for
total consideration of approximately $28.0 billion of the Company's common stock. The acquisition of Maxim is referred to as
total consideration of approximately $28.0 billion of the Company's common stock. The acquisition of Maxim is referred to as
the Acquisition. The consolidated financial statements included in this Annual Report on Form 10-K include the financial
the Acquisition. The consolidated financial statements included in this Annual Report on Form 10-K include the financial
results of Maxim prospectively from the Acquisition Date. See Note 6, Acquisitions, of the Notes to Consolidated Financial
results of Maxim prospectively from the Acquisition Date. See Note 6, Acquisitions, of the Notes to Consolidated Financial
Statements for additional information.
Statements for additional information.
b. Cash and Cash Equivalents
b. Cash and Cash Equivalents
Cash and cash equivalents are highly liquid investments with insignificant interest rate risk and maturities of ninety days
Cash and cash equivalents are highly liquid investments with insignificant interest rate risk and maturities of ninety days
or less at the time of acquisition. Cash and cash equivalents consist primarily of government and institutional money market
or less at the time of acquisition. Cash and cash equivalents consist primarily of government and institutional money market
funds, corporate obligations such as commercial paper and floating rate notes, bonds, demand deposit accounts and bank time
funds, corporate obligations such as commercial paper and floating rate notes, bonds, demand deposit accounts and bank time
deposits.
deposits.
The Company classifies its investments in readily marketable debt and equity securities as “held-to-maturity,” “available-
The Company classifies its investments in readily marketable debt and equity securities as “held-to-maturity,” “available-
for-sale” or “trading” at the time of purchase. There were no transfers between investment classifications in any of the fiscal
for-sale” or “trading” at the time of purchase. There were no transfers between investment classifications in any of the fiscal
years presented. Held-to-maturity securities, which are carried at amortized cost, include only those securities the Company has
years presented. Held-to-maturity securities, which are carried at amortized cost, include only those securities the Company has
the positive intent and ability to hold to maturity. Securities such as bank time deposits, which by their nature are typically held
the positive intent and ability to hold to maturity. Securities such as bank time deposits, which by their nature are typically held
to maturity, are classified as such. The Company’s other readily marketable cash equivalents are classified as available-for-sale.
to maturity, are classified as such. The Company’s other readily marketable cash equivalents are classified as available-for-sale.
Available-for-sale securities are carried at fair value with unrealized gains and losses, net of related tax, reported in
Available-for-sale securities are carried at fair value with unrealized gains and losses, net of related tax, reported in
accumulated other comprehensive (loss) income (AOCI). Adjustments to the fair value of investments classified as available-
accumulated other comprehensive (loss) income (AOCI). Adjustments to the fair value of investments classified as available-
for-sale are recorded as an increase or decrease in AOCI, unless the adjustment is considered an other-than-temporary
for-sale are recorded as an increase or decrease in AOCI, unless the adjustment is considered an other-than-temporary
impairment, in which case the adjustment is recorded as a charge in the Consolidated Statements of Income.
impairment, in which case the adjustment is recorded as a charge in the Consolidated Statements of Income.
The Company periodically evaluates its investments for impairment. There were no other-than-temporary impairments of
The Company periodically evaluates its investments for impairment. There were no other-than-temporary impairments of
investments in any of the fiscal years presented.
investments in any of the fiscal years presented.
49
49
50
50
Cash flows from operating activities:
Cash flows from operating activities:
(thousands)
(thousands)
Net income
Net income
Depreciation
Depreciation
Amortization of intangibles
Amortization of intangibles
Cost of goods sold for inventory acquired
Cost of goods sold for inventory acquired
Stock-based compensation expense
Stock-based compensation expense
Non-cash contribution to charitable foundation
Non-cash contribution to charitable foundation
Loss on extinguishment of debt
Loss on extinguishment of debt
Non-cash impairment charge
Non-cash impairment charge
Non-cash operating lease costs
Non-cash operating lease costs
Other
Other
Deferred income taxes
Deferred income taxes
Change in operating assets and liabilities:
Change in operating assets and liabilities:
Accounts receivable
Accounts receivable
Inventories
Inventories
Prepaid expenses and other current assets
Prepaid expenses and other current assets
Prepaid income tax
Prepaid income tax
Accounts payable and accrued liabilities
Accounts payable and accrued liabilities
Income taxes payable, current
Income taxes payable, current
Other assets
Other assets
Other liabilities
Other liabilities
Total adjustments
Total adjustments
Net cash provided by operating activities
Net cash provided by operating activities
Cash flows from investing activities:
Cash flows from investing activities:
Additions to property, plant and equipment, net
Additions to property, plant and equipment, net
Cash received from acquisition of Maxim, net of cash paid
Cash received from acquisition of Maxim, net of cash paid
Other
Other
Net cash (used for) provided by investing activities
Net cash (used for) provided by investing activities
Cash flows from financing activities:
Cash flows from financing activities:
Proceeds from debt
Proceeds from debt
Early termination of debt
Early termination of debt
Debt repayments
Debt repayments
Payments on revolver
Payments on revolver
Proceeds from revolver
Proceeds from revolver
Payment on derivative instrument
Payment on derivative instrument
Prepayment for stock repurchases
Prepayment for stock repurchases
Dividend payments to shareholders
Dividend payments to shareholders
Repurchase of common stock
Repurchase of common stock
Proceeds from employee stock plans
Proceeds from employee stock plans
Other
Other
Net cash used for financing activities
Net cash used for financing activities
Effect of exchange rate changes on cash
Effect of exchange rate changes on cash
Net (decrease) increase in cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Cash and cash equivalents at end of year
See accompanying Notes.
See accompanying Notes.
2022
2022
2021
2021
2020
2020
$ 2,748,561 $ 1,390,422 $ 1,220,761
$ 2,748,561 $ 1,390,422 $ 1,220,761
283,338
283,338
2,014,161
2,014,161
271,396
271,396
323,487
323,487
—
—
—
—
91,953
91,953
(44,087)
(44,087)
(2,987)
(2,987)
(343,908)
(343,908)
(470,725)
(470,725)
(79,439)
(79,439)
14,855
14,855
171,772
171,772
(91,852)
(91,852)
(14,441)
(14,441)
(69,927)
(69,927)
231,275
231,275
843,359
843,359
331,083
331,083
243,611
243,611
215,150
215,150
—
—
—
—
19,232
19,232
(24,086)
(24,086)
(65,114)
(65,114)
(53,326)
(53,326)
(5,791)
(5,791)
208,444
208,444
(6,797)
(6,797)
(21,690)
(21,690)
(49,277)
(49,277)
(326,755)
(326,755)
(406,922)
(406,922)
(113,948)
(113,948)
1,726,841
1,726,841
4,475,402
4,475,402
1,344,647
1,344,647
2,735,069
2,735,069
(699,308)
(699,308)
—
—
41,940
41,940
(343,676)
(343,676)
2,450,550
2,450,550
36,651
36,651
(657,368)
(657,368)
2,143,525
2,143,525
(165,692)
(165,692)
—
—
(14,831)
(14,831)
(180,523)
(180,523)
296,130
296,130
3,939,640
3,939,640
395,646
395,646
(519,116)
(519,116)
(3,591,982)
(3,591,982)
(400,000)
(400,000)
400,000
400,000
—
—
—
—
—
—
—
—
(400,000)
(400,000)
400,000
400,000
(153,161)
(153,161)
(500,000)
(500,000)
(1,544,552)
(1,544,552)
(2,577,015)
(2,577,015)
(1,109,344)
(1,109,344)
(2,605,144)
(2,605,144)
33,887
33,887
19,946
19,946
63,105
63,105
(2,778)
(2,778)
(34,706)
(34,706)
(507,392)
(507,392)
1,977,964
1,977,964
3,174
3,174
922,104
922,104
1,055,860
1,055,860
(4,290,720)
(4,290,720)
(3,959,664)
(3,959,664)
(1,420,608)
(1,420,608)
$ 1,470,572 $ 1,977,964 $ 1,055,860
$ 1,470,572 $ 1,977,964 $ 1,055,860
233,775
233,775
577,148
577,148
—
—
149,518
149,518
40,000
40,000
—
—
—
—
(257,607)
(257,607)
5,418
5,418
1,760
1,760
(3,666)
(3,666)
—
—
103,104
103,104
29,441
29,441
—
—
124,409
124,409
787,726
787,726
2,008,487
2,008,487
—
—
(750,000)
(750,000)
(350,000)
(350,000)
350,000
350,000
—
—
—
—
(886,155)
(886,155)
(244,487)
(244,487)
68,403
68,403
(4,015)
(4,015)
182
182
407,538
407,538
648,322
648,322
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
(all tabular amounts in thousands except per share amounts)
(all tabular amounts in thousands except per share amounts)
Adjustments to reconcile net income to net cash provided by operations:
Adjustments to reconcile net income to net cash provided by operations:
1. Description of Business
1. Description of Business
Analog Devices, Inc. (Analog Devices or the Company) is a leading semiconductor company dedicated to solving its
Analog Devices, Inc. (Analog Devices or the Company) is a leading semiconductor company dedicated to solving its
customers' most complex engineering challenges. Since its inception in 1965, the Company has played a critical role at the
customers' most complex engineering challenges. Since its inception in 1965, the Company has played a critical role at the
intersection of the physical and digital world by providing the building blocks to sense, measure, interpret, connect and power.
intersection of the physical and digital world by providing the building blocks to sense, measure, interpret, connect and power.
The Company designs, manufactures, tests and markets a broad portfolio of solutions, including integrated circuits (ICs),
The Company designs, manufactures, tests and markets a broad portfolio of solutions, including integrated circuits (ICs),
software and subsystems that leverage high-performance analog, mixed-signal and digital signal processing technologies. The
software and subsystems that leverage high-performance analog, mixed-signal and digital signal processing technologies. The
Company's comprehensive product portfolio, deep domain expertise and advanced manufacturing capabilities extend across
Company's comprehensive product portfolio, deep domain expertise and advanced manufacturing capabilities extend across
high-performance precision and high-speed mixed-signal, power management and processing technologies – including data
high-performance precision and high-speed mixed-signal, power management and processing technologies – including data
converters, amplifiers, power management, radio frequency ICs, edge processors and other sensors. The Company's focus is
converters, amplifiers, power management, radio frequency ICs, edge processors and other sensors. The Company's focus is
largely on the business-to-business end markets of Industrial, Automotive and Communications and related applications, as
largely on the business-to-business end markets of Industrial, Automotive and Communications and related applications, as
well as Consumer applications, with the goal of driving sustainable and profitable growth over the long term.
well as Consumer applications, with the goal of driving sustainable and profitable growth over the long term.
(114,504)
(114,504)
(101,626)
(101,626)
2. Summary of Significant Accounting Policies
2. Summary of Significant Accounting Policies
a. Principles of Consolidation
a. Principles of Consolidation
The Consolidated Financial Statements include the accounts of the Company and all of its subsidiaries. Upon
The Consolidated Financial Statements include the accounts of the Company and all of its subsidiaries. Upon
consolidation, all intercompany accounts and transactions are eliminated. Certain amounts reported in previous years have been
consolidation, all intercompany accounts and transactions are eliminated. Certain amounts reported in previous years have been
reclassified to conform to the presentation for the fiscal year ended October 29, 2022 (fiscal 2022). Such reclassified amounts
reclassified to conform to the presentation for the fiscal year ended October 29, 2022 (fiscal 2022). Such reclassified amounts
are immaterial.
are immaterial.
The Company’s fiscal year is the 52-week or 53-week period ending on the Saturday closest to the last day in October.
The Company’s fiscal year is the 52-week or 53-week period ending on the Saturday closest to the last day in October.
Fiscal 2022, the fiscal year ended October 30, 2021 (fiscal 2021) and the fiscal year ended October 31, 2020 (fiscal 2020) were
Fiscal 2022, the fiscal year ended October 30, 2021 (fiscal 2021) and the fiscal year ended October 31, 2020 (fiscal 2020) were
52-week fiscal periods.
52-week fiscal periods.
On August 26, 2021 (Acquisition Date), the Company completed the acquisition of Maxim Integrated Products, Inc.
On August 26, 2021 (Acquisition Date), the Company completed the acquisition of Maxim Integrated Products, Inc.
(Maxim), an independent manufacturer of innovative analog and mixed-signal products and technologies. Pursuant to the
(Maxim), an independent manufacturer of innovative analog and mixed-signal products and technologies. Pursuant to the
Agreement and Plan of Merger, dated as of July 12, 2020 (the Merger Agreement), Maxim stockholders received, for each
Agreement and Plan of Merger, dated as of July 12, 2020 (the Merger Agreement), Maxim stockholders received, for each
outstanding share of Maxim common stock, 0.6300 of a share of the Company’s common stock as of the Acquisition Date for
outstanding share of Maxim common stock, 0.6300 of a share of the Company’s common stock as of the Acquisition Date for
total consideration of approximately $28.0 billion of the Company's common stock. The acquisition of Maxim is referred to as
total consideration of approximately $28.0 billion of the Company's common stock. The acquisition of Maxim is referred to as
the Acquisition. The consolidated financial statements included in this Annual Report on Form 10-K include the financial
the Acquisition. The consolidated financial statements included in this Annual Report on Form 10-K include the financial
results of Maxim prospectively from the Acquisition Date. See Note 6, Acquisitions, of the Notes to Consolidated Financial
results of Maxim prospectively from the Acquisition Date. See Note 6, Acquisitions, of the Notes to Consolidated Financial
Statements for additional information.
Statements for additional information.
b. Cash and Cash Equivalents
b. Cash and Cash Equivalents
Cash and cash equivalents are highly liquid investments with insignificant interest rate risk and maturities of ninety days
Cash and cash equivalents are highly liquid investments with insignificant interest rate risk and maturities of ninety days
or less at the time of acquisition. Cash and cash equivalents consist primarily of government and institutional money market
or less at the time of acquisition. Cash and cash equivalents consist primarily of government and institutional money market
funds, corporate obligations such as commercial paper and floating rate notes, bonds, demand deposit accounts and bank time
funds, corporate obligations such as commercial paper and floating rate notes, bonds, demand deposit accounts and bank time
deposits.
deposits.
The Company classifies its investments in readily marketable debt and equity securities as “held-to-maturity,” “available-
The Company classifies its investments in readily marketable debt and equity securities as “held-to-maturity,” “available-
for-sale” or “trading” at the time of purchase. There were no transfers between investment classifications in any of the fiscal
for-sale” or “trading” at the time of purchase. There were no transfers between investment classifications in any of the fiscal
years presented. Held-to-maturity securities, which are carried at amortized cost, include only those securities the Company has
years presented. Held-to-maturity securities, which are carried at amortized cost, include only those securities the Company has
the positive intent and ability to hold to maturity. Securities such as bank time deposits, which by their nature are typically held
the positive intent and ability to hold to maturity. Securities such as bank time deposits, which by their nature are typically held
to maturity, are classified as such. The Company’s other readily marketable cash equivalents are classified as available-for-sale.
to maturity, are classified as such. The Company’s other readily marketable cash equivalents are classified as available-for-sale.
Available-for-sale securities are carried at fair value with unrealized gains and losses, net of related tax, reported in
Available-for-sale securities are carried at fair value with unrealized gains and losses, net of related tax, reported in
accumulated other comprehensive (loss) income (AOCI). Adjustments to the fair value of investments classified as available-
accumulated other comprehensive (loss) income (AOCI). Adjustments to the fair value of investments classified as available-
for-sale are recorded as an increase or decrease in AOCI, unless the adjustment is considered an other-than-temporary
for-sale are recorded as an increase or decrease in AOCI, unless the adjustment is considered an other-than-temporary
impairment, in which case the adjustment is recorded as a charge in the Consolidated Statements of Income.
impairment, in which case the adjustment is recorded as a charge in the Consolidated Statements of Income.
The Company periodically evaluates its investments for impairment. There were no other-than-temporary impairments of
The Company periodically evaluates its investments for impairment. There were no other-than-temporary impairments of
investments in any of the fiscal years presented.
investments in any of the fiscal years presented.
49
49
50
50
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Realized gains or losses on investments are determined based on the specific identification basis and are recognized in
Realized gains or losses on investments are determined based on the specific identification basis and are recognized in
PP&E is recorded at cost, less allowances for depreciation. The straight-line method of depreciation is used for all classes
PP&E is recorded at cost, less allowances for depreciation. The straight-line method of depreciation is used for all classes
nonoperating (income) expense. There were no material net realized gains or losses from the sales of available-for-sale
nonoperating (income) expense. There were no material net realized gains or losses from the sales of available-for-sale
investments during any of the fiscal periods presented.
investments during any of the fiscal periods presented.
The components of the Company’s cash and cash equivalents as of October 29, 2022 and October 30, 2021 were as
The components of the Company’s cash and cash equivalents as of October 29, 2022 and October 30, 2021 were as
of assets for financial statement purposes while both straight-line and accelerated methods are used for income tax purposes.
of assets for financial statement purposes while both straight-line and accelerated methods are used for income tax purposes.
Leasehold improvements are depreciated over the lesser of the term of the lease or the useful life of the asset. Repairs and
Leasehold improvements are depreciated over the lesser of the term of the lease or the useful life of the asset. Repairs and
maintenance charges are expensed as incurred. Depreciation is based on the following ranges of estimated useful lives:
maintenance charges are expensed as incurred. Depreciation is based on the following ranges of estimated useful lives:
follows:
follows:
Cash
Cash
Available-for-sale securities
Available-for-sale securities
Total cash and cash equivalents
Total cash and cash equivalents
2022
2022
1,016,027 $
1,016,027 $
454,545
454,545
1,470,572 $
1,470,572 $
2021
2021
1,314,967
1,314,967
662,997
662,997
1,977,964
1,977,964
$
$
$
$
See Note 2j, Fair Value, of the Notes to Consolidated Financial Statements for additional information on the Company’s
See Note 2j, Fair Value, of the Notes to Consolidated Financial Statements for additional information on the Company’s
cash equivalents.
cash equivalents.
c. Supplemental Cash Flow Statement Information
c. Supplemental Cash Flow Statement Information
Cash paid during the fiscal year for:
Cash paid during the fiscal year for:
Income taxes
Income taxes
Interest
Interest
Noncash issuance of common stock for the Acquisition
Noncash issuance of common stock for the Acquisition
Fair value of partially vested equity replacement awards issued for the
Fair value of partially vested equity replacement awards issued for the
Acquisition
Acquisition
d.
d.
Inventories
Inventories
$
$
$
$
$
$
$
$
2022
2022
2021
2021
2020
2020
value is depreciated over the revised useful life.
value is depreciated over the revised useful life.
821,683 $
821,683 $
172,957 $
172,957 $
388,115 $
388,115 $
197,841 $
197,841 $
— $ 27,754,161 $
— $ 27,754,161 $
237,691
237,691
185,854
185,854
—
—
PP&E is identified as held for sale when it meets the held for sale criteria of Accounting Standards Codification Topic
PP&E is identified as held for sale when it meets the held for sale criteria of Accounting Standards Codification Topic
360, Property, Plant, and Equipment (ASC 360). Depreciation is not recorded for assets that are classified as held for sale.
360, Property, Plant, and Equipment (ASC 360). Depreciation is not recorded for assets that are classified as held for sale.
When an asset meets the held for sale criteria, the lower of its carrying value or fair value less costs to sell is reclassified from
When an asset meets the held for sale criteria, the lower of its carrying value or fair value less costs to sell is reclassified from
the relevant PP&E line items and into current assets on the balance sheet, where it remains until it is either sold or it no longer
the relevant PP&E line items and into current assets on the balance sheet, where it remains until it is either sold or it no longer
meets the held for sale criteria. If the assets held for sale were carried at fair value, it would be considered a Level 3 fair value
meets the held for sale criteria. If the assets held for sale were carried at fair value, it would be considered a Level 3 fair value
— $
— $
194,890 $
194,890 $
—
—
measurement, and determined based on the use of appraisals and input from market participants.
measurement, and determined based on the use of appraisals and input from market participants.
Inventories are valued at the lower of cost (first-in, first-out method) or net realizable value. The valuation of inventory
Inventories are valued at the lower of cost (first-in, first-out method) or net realizable value. The valuation of inventory
requires the Company to estimate obsolete or excess inventory as well as inventory that is not of saleable quality. The Company
requires the Company to estimate obsolete or excess inventory as well as inventory that is not of saleable quality. The Company
employs a variety of methodologies to determine the net realizable value of its inventory. While a portion of the calculation to
employs a variety of methodologies to determine the net realizable value of its inventory. While a portion of the calculation to
record inventory at its net realizable value is based on the age of the inventory and lower of cost or net realizable value
record inventory at its net realizable value is based on the age of the inventory and lower of cost or net realizable value
calculations, a key factor in estimating obsolete or excess inventory requires the Company to estimate the future demand for its
calculations, a key factor in estimating obsolete or excess inventory requires the Company to estimate the future demand for its
products. If actual demand is less than the Company’s estimates, impairment charges, which are recorded to cost of sales, may
products. If actual demand is less than the Company’s estimates, impairment charges, which are recorded to cost of sales, may
need to be recorded in future periods. Inventory in excess of saleable amounts is not valued, and the remaining inventory is
need to be recorded in future periods. Inventory in excess of saleable amounts is not valued, and the remaining inventory is
valued at the lower of cost or net realizable value.
valued at the lower of cost or net realizable value.
Inventories at October 29, 2022 and October 30, 2021 were as follows:
Inventories at October 29, 2022 and October 30, 2021 were as follows:
Raw materials
Raw materials
Work in process
Work in process
Finished goods
Finished goods
Total inventories
Total inventories
e. Property, Plant and Equipment
e. Property, Plant and Equipment
$
$
2022
2022
2021
2021
110,908 $
110,908 $
904,648
904,648
384,358
384,358
71,639
71,639
858,627
858,627
270,344
270,344
$
$
1,399,914 $
1,399,914 $
1,200,610
1,200,610
The following table presents details of the Company's property, plant and equipment (PP&E), net of accumulated
The following table presents details of the Company's property, plant and equipment (PP&E), net of accumulated
depreciation:
depreciation:
Land and buildings
Land and buildings
Machinery and equipment
Machinery and equipment
Office equipment
Office equipment
Leasehold improvements
Leasehold improvements
Less accumulated depreciation and amortization
Less accumulated depreciation and amortization
Net property, plant and equipment
Net property, plant and equipment
2022
2022
1,459,981 $
1,459,981 $
3,817,812
3,817,812
152,858
152,858
118,856
118,856
5,549,507
5,549,507
3,148,203
3,148,203
2,401,304 $
2,401,304 $
2021
2021
1,392,364
1,392,364
3,210,879
3,210,879
164,431
164,431
167,623
167,623
4,935,297
4,935,297
2,956,246
2,956,246
1,979,051
1,979,051
$
$
$
$
51
51
52
52
Buildings
Buildings
Machinery & equipment
Machinery & equipment
Office equipment
Office equipment
Leasehold improvements
Leasehold improvements
Up to 30 years
Up to 30 years
3-10 years
3-10 years
3-10 years
3-10 years
7-20 years
7-20 years
The Company reviews PP&E for impairment whenever events or changes in circumstances indicate that the carrying
The Company reviews PP&E for impairment whenever events or changes in circumstances indicate that the carrying
amount of assets may not be recoverable. Recoverability of these assets is determined by comparison of their carrying amount
amount of assets may not be recoverable. Recoverability of these assets is determined by comparison of their carrying amount
to the future undiscounted cash flows the assets are expected to generate over their remaining economic lives. If such assets are
to the future undiscounted cash flows the assets are expected to generate over their remaining economic lives. If such assets are
considered to be impaired, the impairment to be recognized in earnings equals the amount by which the carrying value of the
considered to be impaired, the impairment to be recognized in earnings equals the amount by which the carrying value of the
assets exceeds their fair value determined by either a quoted market price, if any, or a value determined by utilizing a
assets exceeds their fair value determined by either a quoted market price, if any, or a value determined by utilizing a
discounted cash flow technique. If such assets are not impaired, but their useful lives have decreased, the remaining net book
discounted cash flow technique. If such assets are not impaired, but their useful lives have decreased, the remaining net book
f. Goodwill and Intangible Assets
f. Goodwill and Intangible Assets
Goodwill
Goodwill
The Company evaluates goodwill for impairment annually, as well as whenever events or changes in circumstances
The Company evaluates goodwill for impairment annually, as well as whenever events or changes in circumstances
suggest that the carrying value of goodwill may not be recoverable, utilizing either the qualitative or quantitative method. The
suggest that the carrying value of goodwill may not be recoverable, utilizing either the qualitative or quantitative method. The
Company tests goodwill for impairment at the reporting unit level, which the Company has determined is consistent with its
Company tests goodwill for impairment at the reporting unit level, which the Company has determined is consistent with its
identified operating segments, on an annual basis on the first day of the fourth quarter (on or about July 31) or more frequently
identified operating segments, on an annual basis on the first day of the fourth quarter (on or about July 31) or more frequently
if indicators of impairment exist or the Company reorganizes its operating segments or reporting units.
if indicators of impairment exist or the Company reorganizes its operating segments or reporting units.
The Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair
The Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair
value of a reporting unit is less than its net book value. When using the qualitative method, the Company considers several
value of a reporting unit is less than its net book value. When using the qualitative method, the Company considers several
factors, including the following:
factors, including the following:
the amount by which the fair values of each reporting unit exceeded their carrying values as of the date of the most
the amount by which the fair values of each reporting unit exceeded their carrying values as of the date of the most
recent quantitative impairment analysis, which indicated there would need to be substantial negative developments in
recent quantitative impairment analysis, which indicated there would need to be substantial negative developments in
the markets in which these reporting units operate in order for there to be potential impairment;
the markets in which these reporting units operate in order for there to be potential impairment;
the carrying values of these reporting units as of the assessment date compared to the previously calculated fair values
the carrying values of these reporting units as of the assessment date compared to the previously calculated fair values
as of the date of the most recent quantitative impairment analysis;
as of the date of the most recent quantitative impairment analysis;
the Company's current forecasts as compared to the forecasts included in the most recent quantitative impairment
the Company's current forecasts as compared to the forecasts included in the most recent quantitative impairment
public information from competitors and other industry information to determine if there were any significant adverse
public information from competitors and other industry information to determine if there were any significant adverse
trends in the Company's competitors' businesses;
trends in the Company's competitors' businesses;
changes in the value of major U.S. stock indices that could suggest declines in overall market stability that could
changes in the value of major U.S. stock indices that could suggest declines in overall market stability that could
impact the valuation of the Company's reporting units;
impact the valuation of the Company's reporting units;
changes in the Company's market capitalization and overall enterprise valuation to determine if there were any
changes in the Company's market capitalization and overall enterprise valuation to determine if there were any
significant decreases that could be an indication that the valuation of its reporting units had significantly decreased;
significant decreases that could be an indication that the valuation of its reporting units had significantly decreased;
–
–
–
–
–
–
–
–
–
–
–
–
analysis;
analysis;
and
and
– whether there had been any significant increases to the weighted-average cost of capital rates for each reporting unit,
– whether there had been any significant increases to the weighted-average cost of capital rates for each reporting unit,
which could materially lower the Company's prior valuation conclusions under a discounted cash flow approach.
which could materially lower the Company's prior valuation conclusions under a discounted cash flow approach.
If the Company elects not to use this option, or it determines that it is more likely than not that the fair value of a
If the Company elects not to use this option, or it determines that it is more likely than not that the fair value of a
reporting unit is less than its net book value, then the Company performs the quantitative goodwill impairment test. The
reporting unit is less than its net book value, then the Company performs the quantitative goodwill impairment test. The
quantitative goodwill impairment test requires an entity to compare the fair value of a reporting unit with its carrying amount. If
quantitative goodwill impairment test requires an entity to compare the fair value of a reporting unit with its carrying amount. If
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Realized gains or losses on investments are determined based on the specific identification basis and are recognized in
Realized gains or losses on investments are determined based on the specific identification basis and are recognized in
PP&E is recorded at cost, less allowances for depreciation. The straight-line method of depreciation is used for all classes
PP&E is recorded at cost, less allowances for depreciation. The straight-line method of depreciation is used for all classes
nonoperating (income) expense. There were no material net realized gains or losses from the sales of available-for-sale
nonoperating (income) expense. There were no material net realized gains or losses from the sales of available-for-sale
investments during any of the fiscal periods presented.
investments during any of the fiscal periods presented.
The components of the Company’s cash and cash equivalents as of October 29, 2022 and October 30, 2021 were as
The components of the Company’s cash and cash equivalents as of October 29, 2022 and October 30, 2021 were as
follows:
follows:
Cash
Cash
Available-for-sale securities
Available-for-sale securities
Total cash and cash equivalents
Total cash and cash equivalents
cash equivalents.
cash equivalents.
Cash paid during the fiscal year for:
Cash paid during the fiscal year for:
Income taxes
Income taxes
Interest
Interest
Acquisition
Acquisition
d.
d.
Inventories
Inventories
2022
2022
2021
2021
$
$
$
$
1,016,027 $
1,016,027 $
1,314,967
1,314,967
454,545
454,545
662,997
662,997
1,470,572 $
1,470,572 $
1,977,964
1,977,964
2022
2022
2021
2021
2020
2020
821,683 $
821,683 $
388,115 $
388,115 $
172,957 $
172,957 $
197,841 $
197,841 $
237,691
237,691
185,854
185,854
— $
— $
194,890 $
194,890 $
—
—
—
—
$
$
$
$
$
$
$
$
See Note 2j, Fair Value, of the Notes to Consolidated Financial Statements for additional information on the Company’s
See Note 2j, Fair Value, of the Notes to Consolidated Financial Statements for additional information on the Company’s
c. Supplemental Cash Flow Statement Information
c. Supplemental Cash Flow Statement Information
Noncash issuance of common stock for the Acquisition
Noncash issuance of common stock for the Acquisition
— $ 27,754,161 $
— $ 27,754,161 $
Fair value of partially vested equity replacement awards issued for the
Fair value of partially vested equity replacement awards issued for the
Inventories are valued at the lower of cost (first-in, first-out method) or net realizable value. The valuation of inventory
Inventories are valued at the lower of cost (first-in, first-out method) or net realizable value. The valuation of inventory
requires the Company to estimate obsolete or excess inventory as well as inventory that is not of saleable quality. The Company
requires the Company to estimate obsolete or excess inventory as well as inventory that is not of saleable quality. The Company
employs a variety of methodologies to determine the net realizable value of its inventory. While a portion of the calculation to
employs a variety of methodologies to determine the net realizable value of its inventory. While a portion of the calculation to
record inventory at its net realizable value is based on the age of the inventory and lower of cost or net realizable value
record inventory at its net realizable value is based on the age of the inventory and lower of cost or net realizable value
calculations, a key factor in estimating obsolete or excess inventory requires the Company to estimate the future demand for its
calculations, a key factor in estimating obsolete or excess inventory requires the Company to estimate the future demand for its
products. If actual demand is less than the Company’s estimates, impairment charges, which are recorded to cost of sales, may
products. If actual demand is less than the Company’s estimates, impairment charges, which are recorded to cost of sales, may
need to be recorded in future periods. Inventory in excess of saleable amounts is not valued, and the remaining inventory is
need to be recorded in future periods. Inventory in excess of saleable amounts is not valued, and the remaining inventory is
valued at the lower of cost or net realizable value.
valued at the lower of cost or net realizable value.
Inventories at October 29, 2022 and October 30, 2021 were as follows:
Inventories at October 29, 2022 and October 30, 2021 were as follows:
e. Property, Plant and Equipment
e. Property, Plant and Equipment
The following table presents details of the Company's property, plant and equipment (PP&E), net of accumulated
The following table presents details of the Company's property, plant and equipment (PP&E), net of accumulated
Raw materials
Raw materials
Work in process
Work in process
Finished goods
Finished goods
Total inventories
Total inventories
depreciation:
depreciation:
Land and buildings
Land and buildings
Machinery and equipment
Machinery and equipment
Office equipment
Office equipment
Leasehold improvements
Leasehold improvements
Less accumulated depreciation and amortization
Less accumulated depreciation and amortization
Net property, plant and equipment
Net property, plant and equipment
2022
2022
2021
2021
$
$
110,908 $
110,908 $
904,648
904,648
384,358
384,358
71,639
71,639
858,627
858,627
270,344
270,344
$
$
1,399,914 $
1,399,914 $
1,200,610
1,200,610
2022
2022
2021
2021
$
$
1,459,981 $
1,459,981 $
1,392,364
1,392,364
3,817,812
3,817,812
3,210,879
3,210,879
152,858
152,858
118,856
118,856
5,549,507
5,549,507
3,148,203
3,148,203
164,431
164,431
167,623
167,623
4,935,297
4,935,297
2,956,246
2,956,246
$
$
2,401,304 $
2,401,304 $
1,979,051
1,979,051
of assets for financial statement purposes while both straight-line and accelerated methods are used for income tax purposes.
of assets for financial statement purposes while both straight-line and accelerated methods are used for income tax purposes.
Leasehold improvements are depreciated over the lesser of the term of the lease or the useful life of the asset. Repairs and
Leasehold improvements are depreciated over the lesser of the term of the lease or the useful life of the asset. Repairs and
maintenance charges are expensed as incurred. Depreciation is based on the following ranges of estimated useful lives:
maintenance charges are expensed as incurred. Depreciation is based on the following ranges of estimated useful lives:
Buildings
Buildings
Machinery & equipment
Machinery & equipment
Office equipment
Office equipment
Leasehold improvements
Leasehold improvements
Up to 30 years
Up to 30 years
3-10 years
3-10 years
3-10 years
3-10 years
7-20 years
7-20 years
The Company reviews PP&E for impairment whenever events or changes in circumstances indicate that the carrying
The Company reviews PP&E for impairment whenever events or changes in circumstances indicate that the carrying
amount of assets may not be recoverable. Recoverability of these assets is determined by comparison of their carrying amount
amount of assets may not be recoverable. Recoverability of these assets is determined by comparison of their carrying amount
to the future undiscounted cash flows the assets are expected to generate over their remaining economic lives. If such assets are
to the future undiscounted cash flows the assets are expected to generate over their remaining economic lives. If such assets are
considered to be impaired, the impairment to be recognized in earnings equals the amount by which the carrying value of the
considered to be impaired, the impairment to be recognized in earnings equals the amount by which the carrying value of the
assets exceeds their fair value determined by either a quoted market price, if any, or a value determined by utilizing a
assets exceeds their fair value determined by either a quoted market price, if any, or a value determined by utilizing a
discounted cash flow technique. If such assets are not impaired, but their useful lives have decreased, the remaining net book
discounted cash flow technique. If such assets are not impaired, but their useful lives have decreased, the remaining net book
value is depreciated over the revised useful life.
value is depreciated over the revised useful life.
PP&E is identified as held for sale when it meets the held for sale criteria of Accounting Standards Codification Topic
PP&E is identified as held for sale when it meets the held for sale criteria of Accounting Standards Codification Topic
360, Property, Plant, and Equipment (ASC 360). Depreciation is not recorded for assets that are classified as held for sale.
360, Property, Plant, and Equipment (ASC 360). Depreciation is not recorded for assets that are classified as held for sale.
When an asset meets the held for sale criteria, the lower of its carrying value or fair value less costs to sell is reclassified from
When an asset meets the held for sale criteria, the lower of its carrying value or fair value less costs to sell is reclassified from
the relevant PP&E line items and into current assets on the balance sheet, where it remains until it is either sold or it no longer
the relevant PP&E line items and into current assets on the balance sheet, where it remains until it is either sold or it no longer
meets the held for sale criteria. If the assets held for sale were carried at fair value, it would be considered a Level 3 fair value
meets the held for sale criteria. If the assets held for sale were carried at fair value, it would be considered a Level 3 fair value
measurement, and determined based on the use of appraisals and input from market participants.
measurement, and determined based on the use of appraisals and input from market participants.
f. Goodwill and Intangible Assets
f. Goodwill and Intangible Assets
Goodwill
Goodwill
The Company evaluates goodwill for impairment annually, as well as whenever events or changes in circumstances
The Company evaluates goodwill for impairment annually, as well as whenever events or changes in circumstances
suggest that the carrying value of goodwill may not be recoverable, utilizing either the qualitative or quantitative method. The
suggest that the carrying value of goodwill may not be recoverable, utilizing either the qualitative or quantitative method. The
Company tests goodwill for impairment at the reporting unit level, which the Company has determined is consistent with its
Company tests goodwill for impairment at the reporting unit level, which the Company has determined is consistent with its
identified operating segments, on an annual basis on the first day of the fourth quarter (on or about July 31) or more frequently
identified operating segments, on an annual basis on the first day of the fourth quarter (on or about July 31) or more frequently
if indicators of impairment exist or the Company reorganizes its operating segments or reporting units.
if indicators of impairment exist or the Company reorganizes its operating segments or reporting units.
The Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair
The Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair
value of a reporting unit is less than its net book value. When using the qualitative method, the Company considers several
value of a reporting unit is less than its net book value. When using the qualitative method, the Company considers several
factors, including the following:
factors, including the following:
–
–
–
–
–
–
–
–
–
–
–
–
the amount by which the fair values of each reporting unit exceeded their carrying values as of the date of the most
the amount by which the fair values of each reporting unit exceeded their carrying values as of the date of the most
recent quantitative impairment analysis, which indicated there would need to be substantial negative developments in
recent quantitative impairment analysis, which indicated there would need to be substantial negative developments in
the markets in which these reporting units operate in order for there to be potential impairment;
the markets in which these reporting units operate in order for there to be potential impairment;
the carrying values of these reporting units as of the assessment date compared to the previously calculated fair values
the carrying values of these reporting units as of the assessment date compared to the previously calculated fair values
as of the date of the most recent quantitative impairment analysis;
as of the date of the most recent quantitative impairment analysis;
the Company's current forecasts as compared to the forecasts included in the most recent quantitative impairment
the Company's current forecasts as compared to the forecasts included in the most recent quantitative impairment
analysis;
analysis;
public information from competitors and other industry information to determine if there were any significant adverse
public information from competitors and other industry information to determine if there were any significant adverse
trends in the Company's competitors' businesses;
trends in the Company's competitors' businesses;
changes in the value of major U.S. stock indices that could suggest declines in overall market stability that could
changes in the value of major U.S. stock indices that could suggest declines in overall market stability that could
impact the valuation of the Company's reporting units;
impact the valuation of the Company's reporting units;
changes in the Company's market capitalization and overall enterprise valuation to determine if there were any
changes in the Company's market capitalization and overall enterprise valuation to determine if there were any
significant decreases that could be an indication that the valuation of its reporting units had significantly decreased;
significant decreases that could be an indication that the valuation of its reporting units had significantly decreased;
and
and
– whether there had been any significant increases to the weighted-average cost of capital rates for each reporting unit,
– whether there had been any significant increases to the weighted-average cost of capital rates for each reporting unit,
which could materially lower the Company's prior valuation conclusions under a discounted cash flow approach.
which could materially lower the Company's prior valuation conclusions under a discounted cash flow approach.
If the Company elects not to use this option, or it determines that it is more likely than not that the fair value of a
If the Company elects not to use this option, or it determines that it is more likely than not that the fair value of a
reporting unit is less than its net book value, then the Company performs the quantitative goodwill impairment test. The
reporting unit is less than its net book value, then the Company performs the quantitative goodwill impairment test. The
quantitative goodwill impairment test requires an entity to compare the fair value of a reporting unit with its carrying amount. If
quantitative goodwill impairment test requires an entity to compare the fair value of a reporting unit with its carrying amount. If
51
51
52
52
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
fair value is determined to be less than carrying value, an impairment loss is recognized for the amount of the carrying value
fair value is determined to be less than carrying value, an impairment loss is recognized for the amount of the carrying value
that exceeds the amount of the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting
that exceeds the amount of the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting
unit. Additionally, the Company considers income tax effects from any tax deductible goodwill on the carrying amount of the
unit. Additionally, the Company considers income tax effects from any tax deductible goodwill on the carrying amount of the
reporting unit when measuring the goodwill impairment loss, if applicable. Management determines the fair values of the
reporting unit when measuring the goodwill impairment loss, if applicable. Management determines the fair values of the
reporting units using a weighting of the income and market approaches. Under the income approach, it uses a discounted cash
reporting units using a weighting of the income and market approaches. Under the income approach, it uses a discounted cash
flow methodology, which requires management to make significant estimates and assumptions related to forecasted revenues,
flow methodology, which requires management to make significant estimates and assumptions related to forecasted revenues,
gross profit margins, operating income margins, working capital cash flow, perpetual growth rates and long-term discount rates,
gross profit margins, operating income margins, working capital cash flow, perpetual growth rates and long-term discount rates,
among others. For the market approach, it uses the guideline public company method. Under this method management utilizes
among others. For the market approach, it uses the guideline public company method. Under this method management utilizes
information from comparable publicly traded companies with similar operating and investment characteristics as the reporting
information from comparable publicly traded companies with similar operating and investment characteristics as the reporting
units, to create valuation multiples that are applied to the operating performance of the reporting unit being tested, in order to
units, to create valuation multiples that are applied to the operating performance of the reporting unit being tested, in order to
obtain its respective fair value. In order to assess the reasonableness of the calculated values, the aggregate fair values of the
obtain its respective fair value. In order to assess the reasonableness of the calculated values, the aggregate fair values of the
reporting units are reconciled to the Company's total market capitalization, allowing for a reasonable control premium.
reporting units are reconciled to the Company's total market capitalization, allowing for a reasonable control premium.
In fiscal 2022, the Company used a combination of the qualitative and quantitative methods of assessing goodwill for the
In fiscal 2022, the Company used a combination of the qualitative and quantitative methods of assessing goodwill for the
Company's reporting units. In fiscal 2021, the Company used the quantitative method of assessing goodwill for the Company's
Company's reporting units. In fiscal 2021, the Company used the quantitative method of assessing goodwill for the Company's
reporting units. In all periods presented, management concluded the reporting units' fair values exceeded their carrying amounts
reporting units. In all periods presented, management concluded the reporting units' fair values exceeded their carrying amounts
as of the assessment dates and no risk of impairment existed.
as of the assessment dates and no risk of impairment existed.
The Company’s next annual impairment assessment will be performed as of the first day of the fourth quarter of the fiscal
The Company’s next annual impairment assessment will be performed as of the first day of the fourth quarter of the fiscal
year ending October 28, 2023 (fiscal 2023) unless indicators arise that would require the Company to reevaluate at an earlier
year ending October 28, 2023 (fiscal 2023) unless indicators arise that would require the Company to reevaluate at an earlier
date.
date.
Fiscal Year
Fiscal Year
years.
years.
2023
2023
2024
2024
2025
2025
2026
2026
2027
2027
The following table presents the changes in goodwill during fiscal 2022 and fiscal 2021:
The following table presents the changes in goodwill during fiscal 2022 and fiscal 2021:
h. Translation of Foreign Currencies
h. Translation of Foreign Currencies
Balance at beginning of year
Balance at beginning of year
Acquisition of Maxim (Note 6)
Acquisition of Maxim (Note 6)
Foreign currency translation adjustment and other adjustments
Foreign currency translation adjustment and other adjustments
Balance at end of year
Balance at end of year
Intangible Assets
Intangible Assets
2022
2022
26,918,470 $
26,918,470 $
15,267
15,267
(20,603)
(20,603)
26,913,134 $
26,913,134 $
2021
2021
12,278,425
12,278,425
14,645,076
14,645,076
(5,031)
(5,031)
26,918,470
26,918,470
$
$
$
$
The Company reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate
The Company reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate
that the carrying value of assets may not be recoverable. If required, recoverability of these assets is determined by comparison
that the carrying value of assets may not be recoverable. If required, recoverability of these assets is determined by comparison
of their carrying value to the estimated future undiscounted cash flows the assets are expected to generate over their remaining
of their carrying value to the estimated future undiscounted cash flows the assets are expected to generate over their remaining
estimated useful lives. If such assets are considered to be impaired, the impairment to be recognized in earnings equals the
estimated useful lives. If such assets are considered to be impaired, the impairment to be recognized in earnings equals the
amount by which the carrying value of the assets exceeds their estimated fair value determined by either a quoted market price,
amount by which the carrying value of the assets exceeds their estimated fair value determined by either a quoted market price,
if any, or a value determined by utilizing a discounted cash flow technique.
if any, or a value determined by utilizing a discounted cash flow technique.
In-process research and development (IPR&D) assets are considered indefinite-lived intangible assets until completion or
In-process research and development (IPR&D) assets are considered indefinite-lived intangible assets until completion or
abandonment of the associated research and development (R&D) efforts. Upon completion of the projects, the IPR&D assets
abandonment of the associated research and development (R&D) efforts. Upon completion of the projects, the IPR&D assets
are reclassified to technology-based intangible assets and amortized over their estimated useful lives.
are reclassified to technology-based intangible assets and amortized over their estimated useful lives.
As of October 29, 2022 and October 30, 2021, the Company’s intangible assets consisted of the following:
As of October 29, 2022 and October 30, 2021, the Company’s intangible assets consisted of the following:
October 29, 2022
October 29, 2022
October 30, 2021
October 30, 2021
Gross Carrying
Gross Carrying
Amount
Amount
Accumulated
Accumulated
Amortization
Amortization
Gross Carrying
Gross Carrying
Amount
Amount
Accumulated
Accumulated
Amortization
Amortization
Customer relationships
Customer relationships
Technology-based
Technology-based
Trade-name
Trade-name
Backlog
Backlog
Assembled workforce
Assembled workforce
IPR&D
IPR&D
Total (1)
Total (1)
$
$
10,335,903 $
10,335,903 $
3,011,889 $
3,011,889 $
10,336,477 $
10,336,477 $
2,191,729
2,191,729
Sheets as of October 29, 2022 and October 30, 2021 were as follows:
Sheets as of October 29, 2022 and October 30, 2021 were as follows:
7,555,708
7,555,708
72,200
72,200
361,200
361,200
1,800
1,800
28,222
28,222
18,355,033 $
18,355,033 $
1,804,596
1,804,596
58,117
58,117
213,346
213,346
1,679
1,679
—
—
5,089,627 $
5,089,627 $
7,559,503
7,559,503
72,200
72,200
361,200
361,200
1,800
1,800
28,222
28,222
18,359,402 $
18,359,402 $
819,204
819,204
47,803
47,803
32,746
32,746
750
750
—
—
3,092,232
3,092,232
$
$
_______________________________________
_______________________________________
(1) Foreign intangible asset carrying amounts are affected by foreign currency translation.
(1) Foreign intangible asset carrying amounts are affected by foreign currency translation.
53
53
54
54
Amortization expense related to intangible assets was $2,014.2 million, $843.4 million and $577.1 million in fiscal 2022,
Amortization expense related to intangible assets was $2,014.2 million, $843.4 million and $577.1 million in fiscal 2022,
2021 and 2020, respectively, and is recorded in Cost of sales and Amortization of intangibles on the Consolidated Statements of
2021 and 2020, respectively, and is recorded in Cost of sales and Amortization of intangibles on the Consolidated Statements of
Income. The remaining amortization expense will be recognized over the remaining weighted average life of approximately 4.5
Income. The remaining amortization expense will be recognized over the remaining weighted average life of approximately 4.5
The Company expects annual amortization expense for intangible assets as follows:
The Company expects annual amortization expense for intangible assets as follows:
Amortization Expense
Amortization Expense
$
$
$
$
$
$
$
$
$
$
1,955,394
1,955,394
1,732,867
1,732,867
1,572,000
1,572,000
1,522,480
1,522,480
1,520,586
1,520,586
g. Grant Accounting
g. Grant Accounting
Certain of the Company’s subsidiaries have received grants from governmental agencies. These grants include capital,
Certain of the Company’s subsidiaries have received grants from governmental agencies. These grants include capital,
employment and research and development grants. Capital grants for the acquisition of property, plant and equipment are netted
employment and research and development grants. Capital grants for the acquisition of property, plant and equipment are netted
against the related capital expenditures and amortized as a credit to depreciation expense over the estimated useful life of the
against the related capital expenditures and amortized as a credit to depreciation expense over the estimated useful life of the
related asset. Employment grants, which relate to employee hiring and training, and research and development grants are
related asset. Employment grants, which relate to employee hiring and training, and research and development grants are
recognized in earnings in the period in which the related expenditures are incurred by the Company.
recognized in earnings in the period in which the related expenditures are incurred by the Company.
The functional currency for certain of the Company’s foreign operations is the applicable local currency. Gains and losses
The functional currency for certain of the Company’s foreign operations is the applicable local currency. Gains and losses
resulting from translation of these foreign currencies into U.S. dollars are recorded in AOCI. Transaction gains and losses and
resulting from translation of these foreign currencies into U.S. dollars are recorded in AOCI. Transaction gains and losses and
re-measurement of foreign currency denominated assets and liabilities are included in income currently, including those at the
re-measurement of foreign currency denominated assets and liabilities are included in income currently, including those at the
Company’s principal foreign manufacturing operations where the functional currency is the U.S. dollar. Foreign currency
Company’s principal foreign manufacturing operations where the functional currency is the U.S. dollar. Foreign currency
transaction gains or losses are included in Other, net in the Consolidated Statements of Income.
transaction gains or losses are included in Other, net in the Consolidated Statements of Income.
i. Derivative Instruments and Hedging Agreements
i. Derivative Instruments and Hedging Agreements
Foreign Exchange Exposure Management — The Company enters into forward foreign currency exchange contracts to
Foreign Exchange Exposure Management — The Company enters into forward foreign currency exchange contracts to
offset certain operational and balance sheet exposures from the impact of changes in foreign currency exchange rates. Such
offset certain operational and balance sheet exposures from the impact of changes in foreign currency exchange rates. Such
exposures result from the portion of the Company’s operations, assets and liabilities that are denominated in currencies other
exposures result from the portion of the Company’s operations, assets and liabilities that are denominated in currencies other
than the U.S. dollar, primarily the Euro; other significant exposures include the British Pound, Philippine Peso, Thai Baht,
than the U.S. dollar, primarily the Euro; other significant exposures include the British Pound, Philippine Peso, Thai Baht,
Malaysian Ringgit and the Japanese Yen. Derivative instruments are employed to eliminate or minimize certain foreign
Malaysian Ringgit and the Japanese Yen. Derivative instruments are employed to eliminate or minimize certain foreign
currency exposures that can be confidently identified and quantified. These foreign currency exchange contracts are entered into
currency exposures that can be confidently identified and quantified. These foreign currency exchange contracts are entered into
to support transactions made in the normal course of business, and accordingly, are not speculative in nature. The contracts are
to support transactions made in the normal course of business, and accordingly, are not speculative in nature. The contracts are
for periods consistent with the terms of the underlying transactions, generally one year or less. Hedges related to anticipated
for periods consistent with the terms of the underlying transactions, generally one year or less. Hedges related to anticipated
transactions are matched with the underlying exposures at inception and designated and documented as cash flow hedges. They
transactions are matched with the underlying exposures at inception and designated and documented as cash flow hedges. They
are qualitatively evaluated for effectiveness on a quarterly basis. The gain or loss on the derivatives are reported as a component
are qualitatively evaluated for effectiveness on a quarterly basis. The gain or loss on the derivatives are reported as a component
of AOCI in shareholders’ equity and reclassified into earnings in the same line item on the Consolidated Statements of Income
of AOCI in shareholders’ equity and reclassified into earnings in the same line item on the Consolidated Statements of Income
as the impact of the hedged transaction in the same period during which the hedged transaction affects earnings.
as the impact of the hedged transaction in the same period during which the hedged transaction affects earnings.
The total notional amounts of forward foreign currency derivative instruments designated as hedging instruments of cash
The total notional amounts of forward foreign currency derivative instruments designated as hedging instruments of cash
flow hedges as of October 29, 2022 and October 30, 2021 was $307.1 million and $343.6 million, respectively. The fair values
flow hedges as of October 29, 2022 and October 30, 2021 was $307.1 million and $343.6 million, respectively. The fair values
of forward foreign currency derivative instruments designated as hedging instruments in the Company’s Consolidated Balance
of forward foreign currency derivative instruments designated as hedging instruments in the Company’s Consolidated Balance
Balance Sheet Location
Balance Sheet Location
October 29, 2022
October 29, 2022
October 30, 2021
October 30, 2021
Fair Value At
Fair Value At
Forward foreign currency exchange contracts Accrued liabilities
Forward foreign currency exchange contracts Accrued liabilities
$
$
18,050 $
18,050 $
7,113
7,113
Additionally, the Company enters into forward foreign currency contracts that economically hedge the gains and losses
Additionally, the Company enters into forward foreign currency contracts that economically hedge the gains and losses
generated by the re-measurement of certain recorded assets and liabilities in a non-functional currency. Changes in the fair
generated by the re-measurement of certain recorded assets and liabilities in a non-functional currency. Changes in the fair
value of these undesignated hedges are recognized in other (income) expense immediately as an offset to the changes in the fair
value of these undesignated hedges are recognized in other (income) expense immediately as an offset to the changes in the fair
value of the asset or liability being hedged. As of October 29, 2022 and October 30, 2021, the total notional amount of these
value of the asset or liability being hedged. As of October 29, 2022 and October 30, 2021, the total notional amount of these
undesignated hedges was $246.4 million and $120.0 million, respectively.
undesignated hedges was $246.4 million and $120.0 million, respectively.
fair value is determined to be less than carrying value, an impairment loss is recognized for the amount of the carrying value
fair value is determined to be less than carrying value, an impairment loss is recognized for the amount of the carrying value
that exceeds the amount of the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting
that exceeds the amount of the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting
unit. Additionally, the Company considers income tax effects from any tax deductible goodwill on the carrying amount of the
unit. Additionally, the Company considers income tax effects from any tax deductible goodwill on the carrying amount of the
reporting unit when measuring the goodwill impairment loss, if applicable. Management determines the fair values of the
reporting unit when measuring the goodwill impairment loss, if applicable. Management determines the fair values of the
reporting units using a weighting of the income and market approaches. Under the income approach, it uses a discounted cash
reporting units using a weighting of the income and market approaches. Under the income approach, it uses a discounted cash
flow methodology, which requires management to make significant estimates and assumptions related to forecasted revenues,
flow methodology, which requires management to make significant estimates and assumptions related to forecasted revenues,
gross profit margins, operating income margins, working capital cash flow, perpetual growth rates and long-term discount rates,
gross profit margins, operating income margins, working capital cash flow, perpetual growth rates and long-term discount rates,
among others. For the market approach, it uses the guideline public company method. Under this method management utilizes
among others. For the market approach, it uses the guideline public company method. Under this method management utilizes
information from comparable publicly traded companies with similar operating and investment characteristics as the reporting
information from comparable publicly traded companies with similar operating and investment characteristics as the reporting
units, to create valuation multiples that are applied to the operating performance of the reporting unit being tested, in order to
units, to create valuation multiples that are applied to the operating performance of the reporting unit being tested, in order to
obtain its respective fair value. In order to assess the reasonableness of the calculated values, the aggregate fair values of the
obtain its respective fair value. In order to assess the reasonableness of the calculated values, the aggregate fair values of the
reporting units are reconciled to the Company's total market capitalization, allowing for a reasonable control premium.
reporting units are reconciled to the Company's total market capitalization, allowing for a reasonable control premium.
In fiscal 2022, the Company used a combination of the qualitative and quantitative methods of assessing goodwill for the
In fiscal 2022, the Company used a combination of the qualitative and quantitative methods of assessing goodwill for the
Company's reporting units. In fiscal 2021, the Company used the quantitative method of assessing goodwill for the Company's
Company's reporting units. In fiscal 2021, the Company used the quantitative method of assessing goodwill for the Company's
reporting units. In all periods presented, management concluded the reporting units' fair values exceeded their carrying amounts
reporting units. In all periods presented, management concluded the reporting units' fair values exceeded their carrying amounts
as of the assessment dates and no risk of impairment existed.
as of the assessment dates and no risk of impairment existed.
The Company’s next annual impairment assessment will be performed as of the first day of the fourth quarter of the fiscal
The Company’s next annual impairment assessment will be performed as of the first day of the fourth quarter of the fiscal
year ending October 28, 2023 (fiscal 2023) unless indicators arise that would require the Company to reevaluate at an earlier
year ending October 28, 2023 (fiscal 2023) unless indicators arise that would require the Company to reevaluate at an earlier
date.
date.
Foreign currency translation adjustment and other adjustments
Foreign currency translation adjustment and other adjustments
Balance at beginning of year
Balance at beginning of year
Acquisition of Maxim (Note 6)
Acquisition of Maxim (Note 6)
Balance at end of year
Balance at end of year
Intangible Assets
Intangible Assets
2022
2022
2021
2021
$
$
26,918,470 $
26,918,470 $
12,278,425
12,278,425
15,267
15,267
14,645,076
14,645,076
(20,603)
(20,603)
(5,031)
(5,031)
$
$
26,913,134 $
26,913,134 $
26,918,470
26,918,470
The Company reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate
The Company reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate
that the carrying value of assets may not be recoverable. If required, recoverability of these assets is determined by comparison
that the carrying value of assets may not be recoverable. If required, recoverability of these assets is determined by comparison
of their carrying value to the estimated future undiscounted cash flows the assets are expected to generate over their remaining
of their carrying value to the estimated future undiscounted cash flows the assets are expected to generate over their remaining
estimated useful lives. If such assets are considered to be impaired, the impairment to be recognized in earnings equals the
estimated useful lives. If such assets are considered to be impaired, the impairment to be recognized in earnings equals the
amount by which the carrying value of the assets exceeds their estimated fair value determined by either a quoted market price,
amount by which the carrying value of the assets exceeds their estimated fair value determined by either a quoted market price,
if any, or a value determined by utilizing a discounted cash flow technique.
if any, or a value determined by utilizing a discounted cash flow technique.
In-process research and development (IPR&D) assets are considered indefinite-lived intangible assets until completion or
In-process research and development (IPR&D) assets are considered indefinite-lived intangible assets until completion or
abandonment of the associated research and development (R&D) efforts. Upon completion of the projects, the IPR&D assets
abandonment of the associated research and development (R&D) efforts. Upon completion of the projects, the IPR&D assets
are reclassified to technology-based intangible assets and amortized over their estimated useful lives.
are reclassified to technology-based intangible assets and amortized over their estimated useful lives.
As of October 29, 2022 and October 30, 2021, the Company’s intangible assets consisted of the following:
As of October 29, 2022 and October 30, 2021, the Company’s intangible assets consisted of the following:
Customer relationships
Customer relationships
Technology-based
Technology-based
Trade-name
Trade-name
Backlog
Backlog
IPR&D
IPR&D
Total (1)
Total (1)
Assembled workforce
Assembled workforce
October 29, 2022
October 29, 2022
October 30, 2021
October 30, 2021
Gross Carrying
Gross Carrying
Amount
Amount
Accumulated
Accumulated
Amortization
Amortization
Gross Carrying
Gross Carrying
Amount
Amount
Accumulated
Accumulated
Amortization
Amortization
$
$
10,335,903 $
10,335,903 $
3,011,889 $
3,011,889 $
10,336,477 $
10,336,477 $
2,191,729
2,191,729
7,555,708
7,555,708
72,200
72,200
361,200
361,200
1,800
1,800
28,222
28,222
1,804,596
1,804,596
58,117
58,117
213,346
213,346
1,679
1,679
—
—
7,559,503
7,559,503
72,200
72,200
361,200
361,200
1,800
1,800
28,222
28,222
819,204
819,204
47,803
47,803
32,746
32,746
750
750
—
—
$
$
18,355,033 $
18,355,033 $
5,089,627 $
5,089,627 $
18,359,402 $
18,359,402 $
3,092,232
3,092,232
_______________________________________
_______________________________________
(1) Foreign intangible asset carrying amounts are affected by foreign currency translation.
(1) Foreign intangible asset carrying amounts are affected by foreign currency translation.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Amortization expense related to intangible assets was $2,014.2 million, $843.4 million and $577.1 million in fiscal 2022,
Amortization expense related to intangible assets was $2,014.2 million, $843.4 million and $577.1 million in fiscal 2022,
2021 and 2020, respectively, and is recorded in Cost of sales and Amortization of intangibles on the Consolidated Statements of
2021 and 2020, respectively, and is recorded in Cost of sales and Amortization of intangibles on the Consolidated Statements of
Income. The remaining amortization expense will be recognized over the remaining weighted average life of approximately 4.5
Income. The remaining amortization expense will be recognized over the remaining weighted average life of approximately 4.5
years.
years.
The Company expects annual amortization expense for intangible assets as follows:
The Company expects annual amortization expense for intangible assets as follows:
Fiscal Year
Fiscal Year
2023
2023
2024
2024
2025
2025
2026
2026
2027
2027
g. Grant Accounting
g. Grant Accounting
Amortization Expense
Amortization Expense
1,955,394
$
1,955,394
$
1,732,867
$
1,732,867
$
1,572,000
$
1,572,000
$
1,522,480
$
1,522,480
$
1,520,586
$
1,520,586
$
Certain of the Company’s subsidiaries have received grants from governmental agencies. These grants include capital,
Certain of the Company’s subsidiaries have received grants from governmental agencies. These grants include capital,
employment and research and development grants. Capital grants for the acquisition of property, plant and equipment are netted
employment and research and development grants. Capital grants for the acquisition of property, plant and equipment are netted
against the related capital expenditures and amortized as a credit to depreciation expense over the estimated useful life of the
against the related capital expenditures and amortized as a credit to depreciation expense over the estimated useful life of the
related asset. Employment grants, which relate to employee hiring and training, and research and development grants are
related asset. Employment grants, which relate to employee hiring and training, and research and development grants are
recognized in earnings in the period in which the related expenditures are incurred by the Company.
recognized in earnings in the period in which the related expenditures are incurred by the Company.
The following table presents the changes in goodwill during fiscal 2022 and fiscal 2021:
The following table presents the changes in goodwill during fiscal 2022 and fiscal 2021:
h. Translation of Foreign Currencies
h. Translation of Foreign Currencies
The functional currency for certain of the Company’s foreign operations is the applicable local currency. Gains and losses
The functional currency for certain of the Company’s foreign operations is the applicable local currency. Gains and losses
resulting from translation of these foreign currencies into U.S. dollars are recorded in AOCI. Transaction gains and losses and
resulting from translation of these foreign currencies into U.S. dollars are recorded in AOCI. Transaction gains and losses and
re-measurement of foreign currency denominated assets and liabilities are included in income currently, including those at the
re-measurement of foreign currency denominated assets and liabilities are included in income currently, including those at the
Company’s principal foreign manufacturing operations where the functional currency is the U.S. dollar. Foreign currency
Company’s principal foreign manufacturing operations where the functional currency is the U.S. dollar. Foreign currency
transaction gains or losses are included in Other, net in the Consolidated Statements of Income.
transaction gains or losses are included in Other, net in the Consolidated Statements of Income.
i. Derivative Instruments and Hedging Agreements
i. Derivative Instruments and Hedging Agreements
Foreign Exchange Exposure Management — The Company enters into forward foreign currency exchange contracts to
Foreign Exchange Exposure Management — The Company enters into forward foreign currency exchange contracts to
offset certain operational and balance sheet exposures from the impact of changes in foreign currency exchange rates. Such
offset certain operational and balance sheet exposures from the impact of changes in foreign currency exchange rates. Such
exposures result from the portion of the Company’s operations, assets and liabilities that are denominated in currencies other
exposures result from the portion of the Company’s operations, assets and liabilities that are denominated in currencies other
than the U.S. dollar, primarily the Euro; other significant exposures include the British Pound, Philippine Peso, Thai Baht,
than the U.S. dollar, primarily the Euro; other significant exposures include the British Pound, Philippine Peso, Thai Baht,
Malaysian Ringgit and the Japanese Yen. Derivative instruments are employed to eliminate or minimize certain foreign
Malaysian Ringgit and the Japanese Yen. Derivative instruments are employed to eliminate or minimize certain foreign
currency exposures that can be confidently identified and quantified. These foreign currency exchange contracts are entered into
currency exposures that can be confidently identified and quantified. These foreign currency exchange contracts are entered into
to support transactions made in the normal course of business, and accordingly, are not speculative in nature. The contracts are
to support transactions made in the normal course of business, and accordingly, are not speculative in nature. The contracts are
for periods consistent with the terms of the underlying transactions, generally one year or less. Hedges related to anticipated
for periods consistent with the terms of the underlying transactions, generally one year or less. Hedges related to anticipated
transactions are matched with the underlying exposures at inception and designated and documented as cash flow hedges. They
transactions are matched with the underlying exposures at inception and designated and documented as cash flow hedges. They
are qualitatively evaluated for effectiveness on a quarterly basis. The gain or loss on the derivatives are reported as a component
are qualitatively evaluated for effectiveness on a quarterly basis. The gain or loss on the derivatives are reported as a component
of AOCI in shareholders’ equity and reclassified into earnings in the same line item on the Consolidated Statements of Income
of AOCI in shareholders’ equity and reclassified into earnings in the same line item on the Consolidated Statements of Income
as the impact of the hedged transaction in the same period during which the hedged transaction affects earnings.
as the impact of the hedged transaction in the same period during which the hedged transaction affects earnings.
The total notional amounts of forward foreign currency derivative instruments designated as hedging instruments of cash
The total notional amounts of forward foreign currency derivative instruments designated as hedging instruments of cash
flow hedges as of October 29, 2022 and October 30, 2021 was $307.1 million and $343.6 million, respectively. The fair values
flow hedges as of October 29, 2022 and October 30, 2021 was $307.1 million and $343.6 million, respectively. The fair values
of forward foreign currency derivative instruments designated as hedging instruments in the Company’s Consolidated Balance
of forward foreign currency derivative instruments designated as hedging instruments in the Company’s Consolidated Balance
Sheets as of October 29, 2022 and October 30, 2021 were as follows:
Sheets as of October 29, 2022 and October 30, 2021 were as follows:
Balance Sheet Location
Balance Sheet Location
October 29, 2022
October 29, 2022
October 30, 2021
October 30, 2021
Fair Value At
Fair Value At
Forward foreign currency exchange contracts Accrued liabilities
Forward foreign currency exchange contracts Accrued liabilities
$
$
18,050 $
18,050 $
7,113
7,113
Additionally, the Company enters into forward foreign currency contracts that economically hedge the gains and losses
Additionally, the Company enters into forward foreign currency contracts that economically hedge the gains and losses
generated by the re-measurement of certain recorded assets and liabilities in a non-functional currency. Changes in the fair
generated by the re-measurement of certain recorded assets and liabilities in a non-functional currency. Changes in the fair
value of these undesignated hedges are recognized in other (income) expense immediately as an offset to the changes in the fair
value of these undesignated hedges are recognized in other (income) expense immediately as an offset to the changes in the fair
value of the asset or liability being hedged. As of October 29, 2022 and October 30, 2021, the total notional amount of these
value of the asset or liability being hedged. As of October 29, 2022 and October 30, 2021, the total notional amount of these
undesignated hedges was $246.4 million and $120.0 million, respectively.
undesignated hedges was $246.4 million and $120.0 million, respectively.
53
53
54
54
observable for substantially the full term of the asset or liability.
observable for substantially the full term of the asset or liability.
Level 3 — Level 3 inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity
Level 3 — Level 3 inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity
for the asset or liability at the measurement date.
for the asset or liability at the measurement date.
The tables below, set forth by level, presents the Company’s financial assets and liabilities, excluding accrued interest
The tables below, set forth by level, presents the Company’s financial assets and liabilities, excluding accrued interest
exclude cash on hand and assets and liabilities that are measured at historical cost or any basis other than fair value. As of
exclude cash on hand and assets and liabilities that are measured at historical cost or any basis other than fair value. As of
October 29, 2022 and October 30, 2021, the Company held $1,016.0 million and $1,315.0 million, respectively, of cash that
October 29, 2022 and October 30, 2021, the Company held $1,016.0 million and $1,315.0 million, respectively, of cash that
was excluded from the tables below.
was excluded from the tables below.
Government and institutional money market funds
Government and institutional money market funds
$
$
454,545 $
454,545 $
— $
— $
454,545
454,545
Assets
Assets
Cash equivalents:
Cash equivalents:
Available-for-sale:
Available-for-sale:
Other assets:
Other assets:
Deferred compensation investments
Deferred compensation investments
Total assets measured at fair value
Total assets measured at fair value
Liabilities
Liabilities
Forward foreign currency exchange contracts (1)
Forward foreign currency exchange contracts (1)
Total liabilities measured at fair value
Total liabilities measured at fair value
October 29, 2022
October 29, 2022
Fair Value measurement at
Fair Value measurement at
Reporting Date using:
Reporting Date using:
Quoted
Quoted
Prices in
Prices in
Active
Active
Markets
Markets
for
for
Identical
Identical
Assets
Assets
(Level 1)
(Level 1)
Significant
Significant
Other
Other
Observable
Observable
Inputs
Inputs
(Level 2)
(Level 2)
Total
Total
63,211
63,211
517,756 $
517,756 $
—
—
63,211
63,211
— $
— $
517,756
517,756
— $
— $
— $
— $
16,984 $
16,984 $
16,984 $
16,984 $
16,984
16,984
16,984
16,984
$
$
$
$
$
$
(1) The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 2i, Derivative
(1) The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 2i, Derivative
Instruments and Hedging Agreements, of the Notes to Consolidated Financial Statements for more information related to the
Instruments and Hedging Agreements, of the Notes to Consolidated Financial Statements for more information related to the
Company's master netting arrangements.
Company's master netting arrangements.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The Company estimates that $12.9 million, net of tax, of losses of forward foreign currency derivative instruments
The Company estimates that $12.9 million, net of tax, of losses of forward foreign currency derivative instruments
Level 2 — Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or
Level 2 — Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or
included in AOCI will be reclassified into earnings within the next 12 months.
included in AOCI will be reclassified into earnings within the next 12 months.
liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be
liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be
All of the Company’s derivative financial instruments are eligible for netting arrangements that allow the Company and
All of the Company’s derivative financial instruments are eligible for netting arrangements that allow the Company and
its counterparties to net settle amounts owed to each other. Derivative assets and liabilities that can be net settled under these
its counterparties to net settle amounts owed to each other. Derivative assets and liabilities that can be net settled under these
arrangements have been presented in the Company's Consolidated Balance Sheets on a net basis. As of October 29, 2022 and
arrangements have been presented in the Company's Consolidated Balance Sheets on a net basis. As of October 29, 2022 and
October 30, 2021, none of the netting arrangements involved collateral.
October 30, 2021, none of the netting arrangements involved collateral.
The following table presents the gross amounts of the Company's forward foreign currency exchange contracts and the net
The following table presents the gross amounts of the Company's forward foreign currency exchange contracts and the net
components, that were accounted for at fair value on a recurring basis as of October 29, 2022 and October 30, 2021. The tables
components, that were accounted for at fair value on a recurring basis as of October 29, 2022 and October 30, 2021. The tables
amounts recorded in the Company's Consolidated Balance Sheets as of October 29, 2022 and October 30, 2021:
amounts recorded in the Company's Consolidated Balance Sheets as of October 29, 2022 and October 30, 2021:
Gross amount of recognized liabilities
Gross amount of recognized liabilities
Gross amounts of recognized assets
Gross amounts of recognized assets
Net liabilities offset and presented in the Consolidated Balance Sheets
Net liabilities offset and presented in the Consolidated Balance Sheets
October 29, 2022
October 29, 2022
October 30, 2021
October 30, 2021
$
$
$
$
(19,846) $
(19,846) $
2,862
2,862
(16,984) $
(16,984) $
(8,404)
(8,404)
319
319
(8,085)
(8,085)
Interest Rate Exposure Management — The Company's current and future debt may be subject to interest rate risk. The
Interest Rate Exposure Management — The Company's current and future debt may be subject to interest rate risk. The
Company utilizes interest rate derivatives to alter interest rate exposure in an attempt to reduce the effects of the changes in
Company utilizes interest rate derivatives to alter interest rate exposure in an attempt to reduce the effects of the changes in
interest rates. During fiscal 2019, the Company entered into an interest rate swap agreement which locked in the interest rate
interest rates. During fiscal 2019, the Company entered into an interest rate swap agreement which locked in the interest rate
for up to $1 billion in future debt issuances. The interest rate swap was designated and qualified as a cash flow hedge. During
for up to $1 billion in future debt issuances. The interest rate swap was designated and qualified as a cash flow hedge. During
fiscal 2021, the Company issued $1 billion of 2.100% Senior Notes due October 2031, and the swap was cash terminated in the
fiscal 2021, the Company issued $1 billion of 2.100% Senior Notes due October 2031, and the swap was cash terminated in the
amount of $153.2 million. The accumulated loss recorded in AOCI will be reclassified to interest expense on a straight-line
amount of $153.2 million. The accumulated loss recorded in AOCI will be reclassified to interest expense on a straight-line
basis over the 10-year term of such Senior Notes.
basis over the 10-year term of such Senior Notes.
The market risk associated with the Company’s derivative instruments results from currency exchange rate or interest rate
The market risk associated with the Company’s derivative instruments results from currency exchange rate or interest rate
movements that are expected to offset the market risk of the underlying transactions, assets and liabilities being hedged. The
movements that are expected to offset the market risk of the underlying transactions, assets and liabilities being hedged. The
counterparties to the agreements relating to the Company’s derivative instruments consist of a number of major international
counterparties to the agreements relating to the Company’s derivative instruments consist of a number of major international
financial institutions with high credit ratings. Based on the credit ratings of the Company’s counterparties as of October 29,
financial institutions with high credit ratings. Based on the credit ratings of the Company’s counterparties as of October 29,
2022 and October 30, 2021, nonperformance is not perceived to be a material risk. Furthermore, none of the Company’s
2022 and October 30, 2021, nonperformance is not perceived to be a material risk. Furthermore, none of the Company’s
derivatives are subject to collateral or other security arrangements and none contain provisions that are dependent on the
derivatives are subject to collateral or other security arrangements and none contain provisions that are dependent on the
Company’s credit ratings from any credit rating agency. While the contract or notional amounts of derivative financial
Company’s credit ratings from any credit rating agency. While the contract or notional amounts of derivative financial
instruments provide one measure of the volume of these transactions, they do not represent the amount of the Company’s
instruments provide one measure of the volume of these transactions, they do not represent the amount of the Company’s
exposure to credit risk. The amounts potentially subject to credit risk (arising from the possible inability of counterparties to
exposure to credit risk. The amounts potentially subject to credit risk (arising from the possible inability of counterparties to
meet the terms of their contracts) are generally limited to the amounts, if any, by which the counterparties’ obligations under the
meet the terms of their contracts) are generally limited to the amounts, if any, by which the counterparties’ obligations under the
contracts exceed the obligations of the Company to the counterparties. As a result of the above considerations, the Company
contracts exceed the obligations of the Company to the counterparties. As a result of the above considerations, the Company
does not consider the risk of counterparty default to be significant.
does not consider the risk of counterparty default to be significant.
The Company records the fair value of its derivative financial instruments in its Consolidated Financial Statements in
The Company records the fair value of its derivative financial instruments in its Consolidated Financial Statements in
other current assets, other assets, accrued liabilities and other non-current liabilities, depending on their net position, regardless
other current assets, other assets, accrued liabilities and other non-current liabilities, depending on their net position, regardless
of the purpose or intent for holding the derivative contract. Changes in the fair value of the derivative financial instruments are
of the purpose or intent for holding the derivative contract. Changes in the fair value of the derivative financial instruments are
either recognized periodically in earnings or in shareholders’ equity as a component of AOCI. Changes in the fair value of cash
either recognized periodically in earnings or in shareholders’ equity as a component of AOCI. Changes in the fair value of cash
flow hedges are recorded in AOCI and reclassified into earnings in the same line item on the Consolidated Statements of
flow hedges are recorded in AOCI and reclassified into earnings in the same line item on the Consolidated Statements of
Income as the impact of the hedged transaction when the underlying contract matures. Changes in the fair values of derivatives
Income as the impact of the hedged transaction when the underlying contract matures. Changes in the fair values of derivatives
not qualifying for hedge accounting are reported in earnings as they occur.
not qualifying for hedge accounting are reported in earnings as they occur.
For information on the unrealized holding gains (losses) on derivatives included in and reclassified out of AOCI into the
For information on the unrealized holding gains (losses) on derivatives included in and reclassified out of AOCI into the
Consolidated Statements of Income related to forward foreign currency exchange contracts, see Note 2o, Accumulated Other
Consolidated Statements of Income related to forward foreign currency exchange contracts, see Note 2o, Accumulated Other
Comprehensive (Loss) Income, of the Notes to Consolidated Financial Statements.
Comprehensive (Loss) Income, of the Notes to Consolidated Financial Statements.
j. Fair Value
j. Fair Value
The Company defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an
The Company defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The Company applies the following fair value
orderly transaction between market participants at the measurement date. The Company applies the following fair value
hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the
hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the
hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the
hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the
highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the
highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the
lowest priority to unobservable inputs (Level 3 measurements).
lowest priority to unobservable inputs (Level 3 measurements).
Level 1 — Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the
Level 1 — Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the
reporting entity has the ability to access at the measurement date.
reporting entity has the ability to access at the measurement date.
55
55
56
56
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The Company estimates that $12.9 million, net of tax, of losses of forward foreign currency derivative instruments
The Company estimates that $12.9 million, net of tax, of losses of forward foreign currency derivative instruments
Level 2 — Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or
Level 2 — Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be
liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be
observable for substantially the full term of the asset or liability.
observable for substantially the full term of the asset or liability.
Level 3 — Level 3 inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity
Level 3 — Level 3 inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity
for the asset or liability at the measurement date.
for the asset or liability at the measurement date.
The tables below, set forth by level, presents the Company’s financial assets and liabilities, excluding accrued interest
The tables below, set forth by level, presents the Company’s financial assets and liabilities, excluding accrued interest
components, that were accounted for at fair value on a recurring basis as of October 29, 2022 and October 30, 2021. The tables
components, that were accounted for at fair value on a recurring basis as of October 29, 2022 and October 30, 2021. The tables
exclude cash on hand and assets and liabilities that are measured at historical cost or any basis other than fair value. As of
exclude cash on hand and assets and liabilities that are measured at historical cost or any basis other than fair value. As of
October 29, 2022 and October 30, 2021, the Company held $1,016.0 million and $1,315.0 million, respectively, of cash that
October 29, 2022 and October 30, 2021, the Company held $1,016.0 million and $1,315.0 million, respectively, of cash that
was excluded from the tables below.
was excluded from the tables below.
October 29, 2022
October 29, 2022
Fair Value measurement at
Fair Value measurement at
Reporting Date using:
Reporting Date using:
Quoted
Quoted
Prices in
Prices in
Active
Active
Markets
Markets
for
for
Identical
Identical
Assets
Assets
(Level 1)
(Level 1)
Significant
Significant
Other
Other
Observable
Observable
Inputs
Inputs
(Level 2)
(Level 2)
Total
Total
Assets
Assets
Cash equivalents:
Cash equivalents:
Available-for-sale:
Available-for-sale:
Government and institutional money market funds
Government and institutional money market funds
$
$
454,545 $
454,545 $
— $
— $
454,545
454,545
Other assets:
Other assets:
Deferred compensation investments
Deferred compensation investments
Total assets measured at fair value
Total assets measured at fair value
Liabilities
Liabilities
Forward foreign currency exchange contracts (1)
Forward foreign currency exchange contracts (1)
Total liabilities measured at fair value
Total liabilities measured at fair value
63,211
63,211
517,756 $
517,756 $
—
—
— $
— $
63,211
63,211
517,756
517,756
— $
— $
— $
— $
16,984 $
16,984 $
16,984 $
16,984 $
16,984
16,984
16,984
16,984
$
$
$
$
$
$
(1) The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 2i, Derivative
(1) The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 2i, Derivative
Instruments and Hedging Agreements, of the Notes to Consolidated Financial Statements for more information related to the
Instruments and Hedging Agreements, of the Notes to Consolidated Financial Statements for more information related to the
Company's master netting arrangements.
Company's master netting arrangements.
included in AOCI will be reclassified into earnings within the next 12 months.
included in AOCI will be reclassified into earnings within the next 12 months.
All of the Company’s derivative financial instruments are eligible for netting arrangements that allow the Company and
All of the Company’s derivative financial instruments are eligible for netting arrangements that allow the Company and
its counterparties to net settle amounts owed to each other. Derivative assets and liabilities that can be net settled under these
its counterparties to net settle amounts owed to each other. Derivative assets and liabilities that can be net settled under these
arrangements have been presented in the Company's Consolidated Balance Sheets on a net basis. As of October 29, 2022 and
arrangements have been presented in the Company's Consolidated Balance Sheets on a net basis. As of October 29, 2022 and
October 30, 2021, none of the netting arrangements involved collateral.
October 30, 2021, none of the netting arrangements involved collateral.
The following table presents the gross amounts of the Company's forward foreign currency exchange contracts and the net
The following table presents the gross amounts of the Company's forward foreign currency exchange contracts and the net
amounts recorded in the Company's Consolidated Balance Sheets as of October 29, 2022 and October 30, 2021:
amounts recorded in the Company's Consolidated Balance Sheets as of October 29, 2022 and October 30, 2021:
Gross amount of recognized liabilities
Gross amount of recognized liabilities
Gross amounts of recognized assets
Gross amounts of recognized assets
Net liabilities offset and presented in the Consolidated Balance Sheets
Net liabilities offset and presented in the Consolidated Balance Sheets
October 29, 2022
October 29, 2022
October 30, 2021
October 30, 2021
$
$
$
$
(19,846) $
(19,846) $
2,862
2,862
(16,984) $
(16,984) $
(8,404)
(8,404)
319
319
(8,085)
(8,085)
Interest Rate Exposure Management — The Company's current and future debt may be subject to interest rate risk. The
Interest Rate Exposure Management — The Company's current and future debt may be subject to interest rate risk. The
Company utilizes interest rate derivatives to alter interest rate exposure in an attempt to reduce the effects of the changes in
Company utilizes interest rate derivatives to alter interest rate exposure in an attempt to reduce the effects of the changes in
interest rates. During fiscal 2019, the Company entered into an interest rate swap agreement which locked in the interest rate
interest rates. During fiscal 2019, the Company entered into an interest rate swap agreement which locked in the interest rate
for up to $1 billion in future debt issuances. The interest rate swap was designated and qualified as a cash flow hedge. During
for up to $1 billion in future debt issuances. The interest rate swap was designated and qualified as a cash flow hedge. During
fiscal 2021, the Company issued $1 billion of 2.100% Senior Notes due October 2031, and the swap was cash terminated in the
fiscal 2021, the Company issued $1 billion of 2.100% Senior Notes due October 2031, and the swap was cash terminated in the
amount of $153.2 million. The accumulated loss recorded in AOCI will be reclassified to interest expense on a straight-line
amount of $153.2 million. The accumulated loss recorded in AOCI will be reclassified to interest expense on a straight-line
basis over the 10-year term of such Senior Notes.
basis over the 10-year term of such Senior Notes.
The market risk associated with the Company’s derivative instruments results from currency exchange rate or interest rate
The market risk associated with the Company’s derivative instruments results from currency exchange rate or interest rate
movements that are expected to offset the market risk of the underlying transactions, assets and liabilities being hedged. The
movements that are expected to offset the market risk of the underlying transactions, assets and liabilities being hedged. The
counterparties to the agreements relating to the Company’s derivative instruments consist of a number of major international
counterparties to the agreements relating to the Company’s derivative instruments consist of a number of major international
financial institutions with high credit ratings. Based on the credit ratings of the Company’s counterparties as of October 29,
financial institutions with high credit ratings. Based on the credit ratings of the Company’s counterparties as of October 29,
2022 and October 30, 2021, nonperformance is not perceived to be a material risk. Furthermore, none of the Company’s
2022 and October 30, 2021, nonperformance is not perceived to be a material risk. Furthermore, none of the Company’s
derivatives are subject to collateral or other security arrangements and none contain provisions that are dependent on the
derivatives are subject to collateral or other security arrangements and none contain provisions that are dependent on the
Company’s credit ratings from any credit rating agency. While the contract or notional amounts of derivative financial
Company’s credit ratings from any credit rating agency. While the contract or notional amounts of derivative financial
instruments provide one measure of the volume of these transactions, they do not represent the amount of the Company’s
instruments provide one measure of the volume of these transactions, they do not represent the amount of the Company’s
exposure to credit risk. The amounts potentially subject to credit risk (arising from the possible inability of counterparties to
exposure to credit risk. The amounts potentially subject to credit risk (arising from the possible inability of counterparties to
meet the terms of their contracts) are generally limited to the amounts, if any, by which the counterparties’ obligations under the
meet the terms of their contracts) are generally limited to the amounts, if any, by which the counterparties’ obligations under the
contracts exceed the obligations of the Company to the counterparties. As a result of the above considerations, the Company
contracts exceed the obligations of the Company to the counterparties. As a result of the above considerations, the Company
does not consider the risk of counterparty default to be significant.
does not consider the risk of counterparty default to be significant.
The Company records the fair value of its derivative financial instruments in its Consolidated Financial Statements in
The Company records the fair value of its derivative financial instruments in its Consolidated Financial Statements in
other current assets, other assets, accrued liabilities and other non-current liabilities, depending on their net position, regardless
other current assets, other assets, accrued liabilities and other non-current liabilities, depending on their net position, regardless
of the purpose or intent for holding the derivative contract. Changes in the fair value of the derivative financial instruments are
of the purpose or intent for holding the derivative contract. Changes in the fair value of the derivative financial instruments are
either recognized periodically in earnings or in shareholders’ equity as a component of AOCI. Changes in the fair value of cash
either recognized periodically in earnings or in shareholders’ equity as a component of AOCI. Changes in the fair value of cash
flow hedges are recorded in AOCI and reclassified into earnings in the same line item on the Consolidated Statements of
flow hedges are recorded in AOCI and reclassified into earnings in the same line item on the Consolidated Statements of
Income as the impact of the hedged transaction when the underlying contract matures. Changes in the fair values of derivatives
Income as the impact of the hedged transaction when the underlying contract matures. Changes in the fair values of derivatives
not qualifying for hedge accounting are reported in earnings as they occur.
not qualifying for hedge accounting are reported in earnings as they occur.
For information on the unrealized holding gains (losses) on derivatives included in and reclassified out of AOCI into the
For information on the unrealized holding gains (losses) on derivatives included in and reclassified out of AOCI into the
Consolidated Statements of Income related to forward foreign currency exchange contracts, see Note 2o, Accumulated Other
Consolidated Statements of Income related to forward foreign currency exchange contracts, see Note 2o, Accumulated Other
Comprehensive (Loss) Income, of the Notes to Consolidated Financial Statements.
Comprehensive (Loss) Income, of the Notes to Consolidated Financial Statements.
j. Fair Value
j. Fair Value
The Company defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an
The Company defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The Company applies the following fair value
orderly transaction between market participants at the measurement date. The Company applies the following fair value
hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the
hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the
hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the
hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the
highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the
highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the
lowest priority to unobservable inputs (Level 3 measurements).
lowest priority to unobservable inputs (Level 3 measurements).
Level 1 — Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the
Level 1 — Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the
reporting entity has the ability to access at the measurement date.
reporting entity has the ability to access at the measurement date.
55
55
56
56
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
October 30, 2021
October 30, 2021
Fair Value measurement at
Fair Value measurement at
Reporting Date using:
Reporting Date using:
Quoted
Quoted
Prices in
Prices in
Active
Active
Markets
Markets
for
for
Identical
Identical
Assets
Assets
(Level 1)
(Level 1)
Significant
Significant
Other
Other
Observable
Observable
Inputs
Inputs
(Level 2)
(Level 2)
Total
Total
Assets
Assets
Cash equivalents:
Cash equivalents:
Available-for-sale:
Available-for-sale:
Government and institutional money market funds
Government and institutional money market funds
$
$
662,997 $
662,997 $
— $
— $
662,997
662,997
Other assets:
Other assets:
Deferred compensation investments
Deferred compensation investments
Total assets measured at fair value
Total assets measured at fair value
Liabilities
Liabilities
Forward foreign currency exchange contracts (1)
Forward foreign currency exchange contracts (1)
Total liabilities measured at fair value
Total liabilities measured at fair value
71,301
71,301
734,298 $
734,298 $
—
—
71,301
71,301
— $
— $
734,298
734,298
— $
— $
— $
— $
8,085 $
8,085 $
8,085 $
8,085 $
8,085
8,085
8,085
8,085
$
$
$
$
$
$
(1) The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 2i, Derivative
(1) The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 2i, Derivative
Instruments and Hedging Agreements, of the Notes to Consolidated Financial Statements for more information related to the
Instruments and Hedging Agreements, of the Notes to Consolidated Financial Statements for more information related to the
Company's master netting arrangements.
Company's master netting arrangements.
The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial
The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
instruments:
instruments:
Cash equivalents — These investments are adjusted to fair value based on quoted market prices or are determined using
Cash equivalents — These investments are adjusted to fair value based on quoted market prices or are determined using
a yield curve model based on current market rates.
a yield curve model based on current market rates.
Deferred compensation plan investments — The fair value of these mutual fund, money market fund and equity
Deferred compensation plan investments — The fair value of these mutual fund, money market fund and equity
investments are based on quoted market prices.
investments are based on quoted market prices.
Forward foreign currency exchange contracts — The estimated fair value of forward foreign currency exchange
Forward foreign currency exchange contracts — The estimated fair value of forward foreign currency exchange
contracts, which includes derivatives that are accounted for as cash flow hedges and those that are not designated as cash flow
contracts, which includes derivatives that are accounted for as cash flow hedges and those that are not designated as cash flow
hedges, is based on the estimated amount the Company would receive if it sold these agreements at the reporting date taking
hedges, is based on the estimated amount the Company would receive if it sold these agreements at the reporting date taking
into consideration current exchange rates as well as the creditworthiness of the counterparty for assets and the Company’s
into consideration current exchange rates as well as the creditworthiness of the counterparty for assets and the Company’s
creditworthiness for liabilities. The fair value of these instruments is based upon valuation models using current market
creditworthiness for liabilities. The fair value of these instruments is based upon valuation models using current market
information such as strike price, spot rate, forward points, and maturity date.
information such as strike price, spot rate, forward points, and maturity date.
Financial Instruments Not Recorded at Fair Value on a Recurring Basis
Financial Instruments Not Recorded at Fair Value on a Recurring Basis
Santa Clara, California leased property asset group - As a result of a sublease transaction involving a leased property in
Santa Clara, California leased property asset group - As a result of a sublease transaction involving a leased property in
Santa Clara, California during the third quarter of 2022, the Company estimated the fair value of the sublease assets using
Santa Clara, California during the third quarter of 2022, the Company estimated the fair value of the sublease assets using
discounted cash flows from the estimated net sublease rental income discounted at a market rate and recorded an impairment
discounted cash flows from the estimated net sublease rental income discounted at a market rate and recorded an impairment
charge which represented the excess carrying value of the asset group associated with the Santa Clara, California leased
charge which represented the excess carrying value of the asset group associated with the Santa Clara, California leased
property over its estimated fair value. These assets are considered a Level 2 fair value measurement. See Note 5, Special
property over its estimated fair value. These assets are considered a Level 2 fair value measurement. See Note 5, Special
Charges, Net, of the Notes to Consolidated Financial Statements for additional information.
Charges, Net, of the Notes to Consolidated Financial Statements for additional information.
Debt — The table below presents the estimated fair value of certain financial instruments not recorded at fair value on a
Debt — The table below presents the estimated fair value of certain financial instruments not recorded at fair value on a
recurring basis. The fair values of the senior unsecured notes are obtained from broker prices and are classified as Level 1
recurring basis. The fair values of the senior unsecured notes are obtained from broker prices and are classified as Level 1
measurements according to the fair value hierarchy. See Note 14, Debt, of the Notes to Consolidated Financial Statements for
measurements according to the fair value hierarchy. See Note 14, Debt, of the Notes to Consolidated Financial Statements for
further discussion related to outstanding debt.
further discussion related to outstanding debt.
57
57
58
58
Maxim 2023 Notes, due March 2023
Maxim 2023 Notes, due March 2023
$
$
— $
— $
— $
— $
500,000 $
500,000 $
520,236
520,236
October 29, 2022
October 29, 2022
October 30, 2021
October 30, 2021
Principal
Principal
Amount
Amount
Outstanding
Outstanding
Fair Value
Fair Value
Fair Value
Fair Value
Principal
Principal
Amount
Amount
Outstanding
Outstanding
500,000
500,000
400,000
400,000
900,000
900,000
59,788
59,788
440,212
440,212
750,000
750,000
1,000,000
1,000,000
300,000
300,000
144,278
144,278
750,000
750,000
332,587
332,587
1,000,000
1,000,000
491,982
491,982
383,378
383,378
851,479
851,479
54,771
54,771
410,091
410,091
621,093
621,093
786,772
786,772
278,359
278,359
126,274
126,274
513,709
513,709
313,931
313,931
640,766
640,766
500,000
500,000
400,000
400,000
900,000
900,000
500,000
500,000
—
—
750,000
750,000
1,000,000
1,000,000
—
—
144,278
144,278
750,000
750,000
332,587
332,587
500,482
500,482
423,265
423,265
986,243
986,243
542,942
542,942
—
—
743,109
743,109
996,702
996,702
—
—
176,960
176,960
758,246
758,246
469,592
469,592
$ 6,576,865 $ 5,472,605 $ 6,776,865 $ 7,147,607
$ 6,576,865 $ 5,472,605 $ 6,776,865 $ 7,147,607
1,000,000
1,000,000
1,029,830
1,029,830
2024 Notes, due October 2024
2024 Notes, due October 2024
2025 Notes, due April 2025
2025 Notes, due April 2025
2026 Notes, due December 2026
2026 Notes, due December 2026
Maxim 2027 Notes, due June 2027
Maxim 2027 Notes, due June 2027
2027 Notes, due June 2027
2027 Notes, due June 2027
2028 Notes, due October 2028
2028 Notes, due October 2028
2031 Notes, due October 2031
2031 Notes, due October 2031
2032 Notes, due October 2032
2032 Notes, due October 2032
2036 Notes, due December 2036
2036 Notes, due December 2036
2041 Notes, due October 2041
2041 Notes, due October 2041
2045 Notes, due December 2045
2045 Notes, due December 2045
2051 Notes, due October 2051
2051 Notes, due October 2051
Total Debt
Total Debt
k. Use of Estimates
k. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States
The preparation of financial statements in conformity with accounting principles generally accepted in the United States
of contingencies at the date of the financial statements and the reported amounts of revenue and expenses during the reporting
of contingencies at the date of the financial statements and the reported amounts of revenue and expenses during the reporting
period. Such estimates relate to the useful lives of fixed assets and identified intangible assets; allowances for doubtful accounts
period. Such estimates relate to the useful lives of fixed assets and identified intangible assets; allowances for doubtful accounts
and customer returns; the net realizable value of inventory; potential reserves relating to litigation matters; accrued liabilities,
and customer returns; the net realizable value of inventory; potential reserves relating to litigation matters; accrued liabilities,
including estimates of variable consideration related to distributor sales; accrued taxes; uncertain tax positions; deferred tax
including estimates of variable consideration related to distributor sales; accrued taxes; uncertain tax positions; deferred tax
valuation allowances; assumptions pertaining to stock-based compensation payments and defined benefit plans; and fair value
valuation allowances; assumptions pertaining to stock-based compensation payments and defined benefit plans; and fair value
of acquired assets and liabilities, including inventory, property, plant and equipment, goodwill, and acquired intangibles; and
of acquired assets and liabilities, including inventory, property, plant and equipment, goodwill, and acquired intangibles; and
other reserves. Actual results could differ from those estimates and such differences may be material to the financial statements.
other reserves. Actual results could differ from those estimates and such differences may be material to the financial statements.
l. Concentrations of Risk
l. Concentrations of Risk
investments and trade accounts receivable.
investments and trade accounts receivable.
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of
The Company maintains cash and cash equivalents with high credit quality counterparties, continuously monitors the
The Company maintains cash and cash equivalents with high credit quality counterparties, continuously monitors the
amount of credit exposure to any one issuer and diversifies its investments in order to minimize its credit risk.
amount of credit exposure to any one issuer and diversifies its investments in order to minimize its credit risk.
The Company sells its products to distributors and original equipment manufacturers (OEMs) involved in a variety of
The Company sells its products to distributors and original equipment manufacturers (OEMs) involved in a variety of
industries including industrial, communications, automotive and consumer end markets. The Company has adopted credit
industries including industrial, communications, automotive and consumer end markets. The Company has adopted credit
policies and standards to accommodate growth in these markets. The Company performs continuing credit evaluations of its
policies and standards to accommodate growth in these markets. The Company performs continuing credit evaluations of its
customers’ financial condition and although the Company generally does not require collateral, the Company may require
customers’ financial condition and although the Company generally does not require collateral, the Company may require
letters of credit from customers in certain circumstances. The Company provides reserves for estimated amounts of accounts
letters of credit from customers in certain circumstances. The Company provides reserves for estimated amounts of accounts
receivable that may not be collected.
receivable that may not be collected.
The Company's largest customer, which is a distributor rather than an end customer, accounted for approximately 22%,
The Company's largest customer, which is a distributor rather than an end customer, accounted for approximately 22%,
26%, and 29% of net revenues in fiscal 2022, fiscal 2021 and fiscal 2020, respectively. The Company's next largest customer,
26%, and 29% of net revenues in fiscal 2022, fiscal 2021 and fiscal 2020, respectively. The Company's next largest customer,
which is also a distributor, accounted for approximately 10% and 11% of net revenues in fiscal 2022 and fiscal 2021,
which is also a distributor, accounted for approximately 10% and 11% of net revenues in fiscal 2022 and fiscal 2021,
respectively. This next largest customer accounted for less than 10% of net revenues in fiscal 2020. No other customer
respectively. This next largest customer accounted for less than 10% of net revenues in fiscal 2020. No other customer
accounted for greater than 10% of revenue in any period presented.
accounted for greater than 10% of revenue in any period presented.
m. Concentration of Other Risks
m. Concentration of Other Risks
The semiconductor industry is characterized by rapid technological change, competitive pricing pressures and cyclical
The semiconductor industry is characterized by rapid technological change, competitive pricing pressures and cyclical
market patterns. The Company’s financial results are affected by a wide variety of factors, including general economic
market patterns. The Company’s financial results are affected by a wide variety of factors, including general economic
conditions worldwide, economic conditions specific to the semiconductor industry, the timely implementation of new
conditions worldwide, economic conditions specific to the semiconductor industry, the timely implementation of new
Government and institutional money market funds
Government and institutional money market funds
$
$
662,997 $
662,997 $
— $
— $
662,997
662,997
Assets
Assets
Cash equivalents:
Cash equivalents:
Available-for-sale:
Available-for-sale:
Other assets:
Other assets:
Deferred compensation investments
Deferred compensation investments
Total assets measured at fair value
Total assets measured at fair value
Liabilities
Liabilities
Forward foreign currency exchange contracts (1)
Forward foreign currency exchange contracts (1)
Total liabilities measured at fair value
Total liabilities measured at fair value
October 30, 2021
October 30, 2021
Fair Value measurement at
Fair Value measurement at
Reporting Date using:
Reporting Date using:
Quoted
Quoted
Prices in
Prices in
Active
Active
Markets
Markets
for
for
Identical
Identical
Assets
Assets
(Level 1)
(Level 1)
Significant
Significant
Other
Other
Observable
Observable
Inputs
Inputs
(Level 2)
(Level 2)
Total
Total
71,301
71,301
734,298 $
734,298 $
—
—
71,301
71,301
— $
— $
734,298
734,298
— $
— $
— $
— $
8,085 $
8,085 $
8,085 $
8,085 $
8,085
8,085
8,085
8,085
$
$
$
$
$
$
(1) The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 2i, Derivative
(1) The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 2i, Derivative
Instruments and Hedging Agreements, of the Notes to Consolidated Financial Statements for more information related to the
Instruments and Hedging Agreements, of the Notes to Consolidated Financial Statements for more information related to the
Company's master netting arrangements.
Company's master netting arrangements.
The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial
The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial
instruments:
instruments:
Cash equivalents — These investments are adjusted to fair value based on quoted market prices or are determined using
Cash equivalents — These investments are adjusted to fair value based on quoted market prices or are determined using
a yield curve model based on current market rates.
a yield curve model based on current market rates.
Deferred compensation plan investments — The fair value of these mutual fund, money market fund and equity
Deferred compensation plan investments — The fair value of these mutual fund, money market fund and equity
investments are based on quoted market prices.
investments are based on quoted market prices.
Forward foreign currency exchange contracts — The estimated fair value of forward foreign currency exchange
Forward foreign currency exchange contracts — The estimated fair value of forward foreign currency exchange
contracts, which includes derivatives that are accounted for as cash flow hedges and those that are not designated as cash flow
contracts, which includes derivatives that are accounted for as cash flow hedges and those that are not designated as cash flow
hedges, is based on the estimated amount the Company would receive if it sold these agreements at the reporting date taking
hedges, is based on the estimated amount the Company would receive if it sold these agreements at the reporting date taking
into consideration current exchange rates as well as the creditworthiness of the counterparty for assets and the Company’s
into consideration current exchange rates as well as the creditworthiness of the counterparty for assets and the Company’s
creditworthiness for liabilities. The fair value of these instruments is based upon valuation models using current market
creditworthiness for liabilities. The fair value of these instruments is based upon valuation models using current market
information such as strike price, spot rate, forward points, and maturity date.
information such as strike price, spot rate, forward points, and maturity date.
Financial Instruments Not Recorded at Fair Value on a Recurring Basis
Financial Instruments Not Recorded at Fair Value on a Recurring Basis
Santa Clara, California leased property asset group - As a result of a sublease transaction involving a leased property in
Santa Clara, California leased property asset group - As a result of a sublease transaction involving a leased property in
Santa Clara, California during the third quarter of 2022, the Company estimated the fair value of the sublease assets using
Santa Clara, California during the third quarter of 2022, the Company estimated the fair value of the sublease assets using
discounted cash flows from the estimated net sublease rental income discounted at a market rate and recorded an impairment
discounted cash flows from the estimated net sublease rental income discounted at a market rate and recorded an impairment
charge which represented the excess carrying value of the asset group associated with the Santa Clara, California leased
charge which represented the excess carrying value of the asset group associated with the Santa Clara, California leased
property over its estimated fair value. These assets are considered a Level 2 fair value measurement. See Note 5, Special
property over its estimated fair value. These assets are considered a Level 2 fair value measurement. See Note 5, Special
Charges, Net, of the Notes to Consolidated Financial Statements for additional information.
Charges, Net, of the Notes to Consolidated Financial Statements for additional information.
Debt — The table below presents the estimated fair value of certain financial instruments not recorded at fair value on a
Debt — The table below presents the estimated fair value of certain financial instruments not recorded at fair value on a
recurring basis. The fair values of the senior unsecured notes are obtained from broker prices and are classified as Level 1
recurring basis. The fair values of the senior unsecured notes are obtained from broker prices and are classified as Level 1
measurements according to the fair value hierarchy. See Note 14, Debt, of the Notes to Consolidated Financial Statements for
measurements according to the fair value hierarchy. See Note 14, Debt, of the Notes to Consolidated Financial Statements for
further discussion related to outstanding debt.
further discussion related to outstanding debt.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Maxim 2023 Notes, due March 2023
Maxim 2023 Notes, due March 2023
$
$
— $
— $
— $
— $
500,000 $
500,000 $
520,236
520,236
October 29, 2022
October 29, 2022
October 30, 2021
October 30, 2021
Principal
Principal
Amount
Amount
Outstanding
Outstanding
Fair Value
Fair Value
Principal
Principal
Amount
Amount
Outstanding
Outstanding
Fair Value
Fair Value
2024 Notes, due October 2024
2024 Notes, due October 2024
2025 Notes, due April 2025
2025 Notes, due April 2025
2026 Notes, due December 2026
2026 Notes, due December 2026
Maxim 2027 Notes, due June 2027
Maxim 2027 Notes, due June 2027
2027 Notes, due June 2027
2027 Notes, due June 2027
2028 Notes, due October 2028
2028 Notes, due October 2028
2031 Notes, due October 2031
2031 Notes, due October 2031
2032 Notes, due October 2032
2032 Notes, due October 2032
2036 Notes, due December 2036
2036 Notes, due December 2036
2041 Notes, due October 2041
2041 Notes, due October 2041
2045 Notes, due December 2045
2045 Notes, due December 2045
2051 Notes, due October 2051
2051 Notes, due October 2051
Total Debt
Total Debt
k. Use of Estimates
k. Use of Estimates
500,000
500,000
400,000
400,000
900,000
900,000
59,788
59,788
440,212
440,212
750,000
750,000
1,000,000
1,000,000
300,000
300,000
144,278
144,278
491,982
491,982
383,378
383,378
851,479
851,479
54,771
54,771
410,091
410,091
621,093
621,093
786,772
786,772
278,359
278,359
126,274
126,274
500,000
500,000
400,000
400,000
900,000
900,000
500,000
500,000
—
—
750,000
750,000
1,000,000
1,000,000
—
—
500,482
500,482
423,265
423,265
986,243
986,243
542,942
542,942
—
—
743,109
743,109
996,702
996,702
—
—
144,278
144,278
176,960
176,960
750,000
750,000
332,587
332,587
1,000,000
1,000,000
758,246
758,246
469,592
469,592
1,029,830
1,029,830
$ 6,576,865 $ 5,472,605 $ 6,776,865 $ 7,147,607
$ 6,576,865 $ 5,472,605 $ 6,776,865 $ 7,147,607
750,000
750,000
332,587
332,587
1,000,000
1,000,000
513,709
513,709
313,931
313,931
640,766
640,766
The preparation of financial statements in conformity with accounting principles generally accepted in the United States
The preparation of financial statements in conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingencies at the date of the financial statements and the reported amounts of revenue and expenses during the reporting
of contingencies at the date of the financial statements and the reported amounts of revenue and expenses during the reporting
period. Such estimates relate to the useful lives of fixed assets and identified intangible assets; allowances for doubtful accounts
period. Such estimates relate to the useful lives of fixed assets and identified intangible assets; allowances for doubtful accounts
and customer returns; the net realizable value of inventory; potential reserves relating to litigation matters; accrued liabilities,
and customer returns; the net realizable value of inventory; potential reserves relating to litigation matters; accrued liabilities,
including estimates of variable consideration related to distributor sales; accrued taxes; uncertain tax positions; deferred tax
including estimates of variable consideration related to distributor sales; accrued taxes; uncertain tax positions; deferred tax
valuation allowances; assumptions pertaining to stock-based compensation payments and defined benefit plans; and fair value
valuation allowances; assumptions pertaining to stock-based compensation payments and defined benefit plans; and fair value
of acquired assets and liabilities, including inventory, property, plant and equipment, goodwill, and acquired intangibles; and
of acquired assets and liabilities, including inventory, property, plant and equipment, goodwill, and acquired intangibles; and
other reserves. Actual results could differ from those estimates and such differences may be material to the financial statements.
other reserves. Actual results could differ from those estimates and such differences may be material to the financial statements.
l. Concentrations of Risk
l. Concentrations of Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of
investments and trade accounts receivable.
investments and trade accounts receivable.
The Company maintains cash and cash equivalents with high credit quality counterparties, continuously monitors the
The Company maintains cash and cash equivalents with high credit quality counterparties, continuously monitors the
amount of credit exposure to any one issuer and diversifies its investments in order to minimize its credit risk.
amount of credit exposure to any one issuer and diversifies its investments in order to minimize its credit risk.
The Company sells its products to distributors and original equipment manufacturers (OEMs) involved in a variety of
The Company sells its products to distributors and original equipment manufacturers (OEMs) involved in a variety of
industries including industrial, communications, automotive and consumer end markets. The Company has adopted credit
industries including industrial, communications, automotive and consumer end markets. The Company has adopted credit
policies and standards to accommodate growth in these markets. The Company performs continuing credit evaluations of its
policies and standards to accommodate growth in these markets. The Company performs continuing credit evaluations of its
customers’ financial condition and although the Company generally does not require collateral, the Company may require
customers’ financial condition and although the Company generally does not require collateral, the Company may require
letters of credit from customers in certain circumstances. The Company provides reserves for estimated amounts of accounts
letters of credit from customers in certain circumstances. The Company provides reserves for estimated amounts of accounts
receivable that may not be collected.
receivable that may not be collected.
The Company's largest customer, which is a distributor rather than an end customer, accounted for approximately 22%,
The Company's largest customer, which is a distributor rather than an end customer, accounted for approximately 22%,
26%, and 29% of net revenues in fiscal 2022, fiscal 2021 and fiscal 2020, respectively. The Company's next largest customer,
26%, and 29% of net revenues in fiscal 2022, fiscal 2021 and fiscal 2020, respectively. The Company's next largest customer,
which is also a distributor, accounted for approximately 10% and 11% of net revenues in fiscal 2022 and fiscal 2021,
which is also a distributor, accounted for approximately 10% and 11% of net revenues in fiscal 2022 and fiscal 2021,
respectively. This next largest customer accounted for less than 10% of net revenues in fiscal 2020. No other customer
respectively. This next largest customer accounted for less than 10% of net revenues in fiscal 2020. No other customer
accounted for greater than 10% of revenue in any period presented.
accounted for greater than 10% of revenue in any period presented.
m. Concentration of Other Risks
m. Concentration of Other Risks
The semiconductor industry is characterized by rapid technological change, competitive pricing pressures and cyclical
The semiconductor industry is characterized by rapid technological change, competitive pricing pressures and cyclical
market patterns. The Company’s financial results are affected by a wide variety of factors, including general economic
market patterns. The Company’s financial results are affected by a wide variety of factors, including general economic
conditions worldwide, economic conditions specific to the semiconductor industry, the timely implementation of new
conditions worldwide, economic conditions specific to the semiconductor industry, the timely implementation of new
57
57
58
58
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
manufacturing technologies, the ability to safeguard patents and intellectual property in a rapidly evolving market and reliance
manufacturing technologies, the ability to safeguard patents and intellectual property in a rapidly evolving market and reliance
on assembly and test subcontractors, third-party wafer fabricators and independent distributors. In addition, the semiconductor
on assembly and test subcontractors, third-party wafer fabricators and independent distributors. In addition, the semiconductor
market has historically been cyclical and subject to significant economic downturns at various times. The Company is exposed
market has historically been cyclical and subject to significant economic downturns at various times. The Company is exposed
to the risk of obsolescence of its inventory depending on the mix of future business. Additionally, more than half of the
to the risk of obsolescence of its inventory depending on the mix of future business. Additionally, more than half of the
Company’s purchases of external wafer and foundry services are from a limited number of suppliers, such as Taiwan
Company’s purchases of external wafer and foundry services are from a limited number of suppliers, such as Taiwan
Semiconductor Manufacturing Company (TSMC) and others. If these suppliers or any of the Company’s other key suppliers are
Semiconductor Manufacturing Company (TSMC) and others. If these suppliers or any of the Company’s other key suppliers are
unable or unwilling to manufacture and deliver sufficient quantities of components, on the time schedule and of the quality that
unable or unwilling to manufacture and deliver sufficient quantities of components, on the time schedule and of the quality that
the Company requires, the Company may be forced to engage additional or replacement suppliers, which could result in
the Company requires, the Company may be forced to engage additional or replacement suppliers, which could result in
significant expenses and disruptions or delays in manufacturing, product development and shipment of product to the
significant expenses and disruptions or delays in manufacturing, product development and shipment of product to the
Company’s customers. Given the current demand environment in the semiconductor industry, the Company expects to face a
Company’s customers. Given the current demand environment in the semiconductor industry, the Company expects to face a
constrained supply environment in the near term. Management is working to balance these constraints as it shifts the
constrained supply environment in the near term. Management is working to balance these constraints as it shifts the
Company's global resources and adds capacity where appropriate.
Company's global resources and adds capacity where appropriate.
n. Revenue Recognition
n. Revenue Recognition
Recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects
Recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects
the consideration to which the providing entity expects to be entitled in exchange for those goods or services. The Company
the consideration to which the providing entity expects to be entitled in exchange for those goods or services. The Company
recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the
recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the
consideration the Company expects to receive in exchange for those products or services. The Company recognizes revenue
consideration the Company expects to receive in exchange for those products or services. The Company recognizes revenue
when all of the following criteria are met: (1) the Company has entered into a binding agreement, (2) the performance
when all of the following criteria are met: (1) the Company has entered into a binding agreement, (2) the performance
obligations have been identified, (3) the transaction price to the customer has been determined, (4) the transaction price has
obligations have been identified, (3) the transaction price to the customer has been determined, (4) the transaction price has
been allocated to the performance obligations in the contract, and (5) the performance obligations have been satisfied. The
been allocated to the performance obligations in the contract, and (5) the performance obligations have been satisfied. The
majority of the Company's shipping terms permit the Company to recognize revenue at point of shipment or delivery. Certain
majority of the Company's shipping terms permit the Company to recognize revenue at point of shipment or delivery. Certain
shipping terms require the goods to be through customs or be received by the customer before title passes. In those instances,
shipping terms require the goods to be through customs or be received by the customer before title passes. In those instances,
the Company defers the revenue recognized until title has passed. Shipping costs are charged to selling, marketing, general and
the Company defers the revenue recognized until title has passed. Shipping costs are charged to selling, marketing, general and
administrative expense as incurred. Sales taxes are excluded from revenue.
administrative expense as incurred. Sales taxes are excluded from revenue.
Revenue from contracts with the United States government, government prime contractors and certain commercial
Revenue from contracts with the United States government, government prime contractors and certain commercial
customers is recorded over time using either units delivered or costs incurred as the measurement basis for progress toward
customers is recorded over time using either units delivered or costs incurred as the measurement basis for progress toward
completion. These measures are used to measure results directly and is generally the best measure of progress toward
completion. These measures are used to measure results directly and is generally the best measure of progress toward
completion in circumstances in which a reliable measure of output can be established. Estimated revenue in excess of amounts
completion in circumstances in which a reliable measure of output can be established. Estimated revenue in excess of amounts
billed is reported as unbilled receivables. Contract accounting requires judgment in estimating costs and assumptions related to
billed is reported as unbilled receivables. Contract accounting requires judgment in estimating costs and assumptions related to
technical issues and delivery schedule. Contract costs include material, subcontract costs, labor and an allocation of indirect
technical issues and delivery schedule. Contract costs include material, subcontract costs, labor and an allocation of indirect
costs. The estimation of costs at completion of a contract is subject to numerous variables involving contract costs and estimates
costs. The estimation of costs at completion of a contract is subject to numerous variables involving contract costs and estimates
as to the length of time to complete the contract. Changes in contract performance, estimated gross margin, including the impact
as to the length of time to complete the contract. Changes in contract performance, estimated gross margin, including the impact
of final contract settlements, and estimated losses are recognized in the period in which the changes or losses are determined.
of final contract settlements, and estimated losses are recognized in the period in which the changes or losses are determined.
Performance Obligations: Substantially all of the Company’s contracts with customers contain a single performance
Performance Obligations: Substantially all of the Company’s contracts with customers contain a single performance
obligation, the sale of mixed-signal integrated circuit products. Such sales represent a single performance obligation because the
obligation, the sale of mixed-signal integrated circuit products. Such sales represent a single performance obligation because the
sale is one type of good or includes multiple goods that are neither capable of being distinct nor separable from the other
sale is one type of good or includes multiple goods that are neither capable of being distinct nor separable from the other
promises in the contract. This performance obligation is satisfied when control of the product is transferred to the customer,
promises in the contract. This performance obligation is satisfied when control of the product is transferred to the customer,
which occurs upon shipment or delivery. Unsatisfied performance obligations primarily represent contracts for products with
which occurs upon shipment or delivery. Unsatisfied performance obligations primarily represent contracts for products with
future delivery dates and with an original expected duration of one year or less. The Company generally offers a twelve-month
future delivery dates and with an original expected duration of one year or less. The Company generally offers a twelve-month
warranty for its products. The Company’s warranty policy provides for replacement of defective products. Specific accruals are
warranty for its products. The Company’s warranty policy provides for replacement of defective products. Specific accruals are
recorded for known product warranty issues. Product warranty expenses during fiscal 2022, fiscal 2021 and fiscal 2020 were
recorded for known product warranty issues. Product warranty expenses during fiscal 2022, fiscal 2021 and fiscal 2020 were
not material.
not material.
Transaction Price: The transaction price reflects the Company’s expectations about the consideration it will be entitled to
Transaction Price: The transaction price reflects the Company’s expectations about the consideration it will be entitled to
receive from the customer and may include fixed or variable amounts. Fixed consideration primarily includes sales to direct
receive from the customer and may include fixed or variable amounts. Fixed consideration primarily includes sales to direct
customers and sales to distributors in which both the sale to the distributor and the sale to the end customer occur within the
customers and sales to distributors in which both the sale to the distributor and the sale to the end customer occur within the
same reporting period. Variable consideration includes sales in which the amount of consideration that the Company will
same reporting period. Variable consideration includes sales in which the amount of consideration that the Company will
receive is unknown as of the end of a reporting period. The vast majority of such consideration are credits issued to the
receive is unknown as of the end of a reporting period. The vast majority of such consideration are credits issued to the
distributor due to price protection, but also include sales made to distributors under agreements that allow certain rights of
distributor due to price protection, but also include sales made to distributors under agreements that allow certain rights of
return, referred to as stock rotation. Price protection represents price discounts granted to certain distributors to allow the
return, referred to as stock rotation. Price protection represents price discounts granted to certain distributors to allow the
distributor to earn an appropriate margin on sales negotiated with certain customers and in the event of a price decrease
distributor to earn an appropriate margin on sales negotiated with certain customers and in the event of a price decrease
subsequent to the date the product was shipped and billed to the distributor. Stock rotation allows distributors limited levels of
subsequent to the date the product was shipped and billed to the distributor. Stock rotation allows distributors limited levels of
returns in order to reduce the amounts of slow-moving, discontinued or obsolete product from their inventory. A liability for
returns in order to reduce the amounts of slow-moving, discontinued or obsolete product from their inventory. A liability for
distributor credits covering variable consideration is made based on the Company's estimate of historical experience rates as
distributor credits covering variable consideration is made based on the Company's estimate of historical experience rates as
well as considering economic conditions and contractual terms. To date, actual distributor claims activity has been materially
well as considering economic conditions and contractual terms. To date, actual distributor claims activity has been materially
consistent with the provisions the Company has made based on its historical estimates. For fiscal 2022 and fiscal 2021, sales to
consistent with the provisions the Company has made based on its historical estimates. For fiscal 2022 and fiscal 2021, sales to
distributors were approximately $7.5 billion and $4.6 billion, respectively, net of variable consideration for which the liability
distributors were approximately $7.5 billion and $4.6 billion, respectively, net of variable consideration for which the liability
balances as of October 29, 2022 and October 30, 2021 were $749.4 million and $664.2 million, respectively, and were recorded
balances as of October 29, 2022 and October 30, 2021 were $749.4 million and $664.2 million, respectively, and were recorded
in Accrued liabilities on the Consolidated Balance Sheets.
in Accrued liabilities on the Consolidated Balance Sheets.
Contract Balances: Accounts receivable represents the Company’s unconditional right to receive consideration from its
Contract Balances: Accounts receivable represents the Company’s unconditional right to receive consideration from its
customers. Payments are typically due within 30 to 45 days of invoicing and do not include a significant financing component.
customers. Payments are typically due within 30 to 45 days of invoicing and do not include a significant financing component.
To date, there have been no material credit losses on accounts receivable. There were no material contract assets or contract
To date, there have been no material credit losses on accounts receivable. There were no material contract assets or contract
liabilities recorded on the Consolidated Balance Sheets in any of the periods presented.
liabilities recorded on the Consolidated Balance Sheets in any of the periods presented.
o. Accumulated Other Comprehensive (Loss) Income
o. Accumulated Other Comprehensive (Loss) Income
AOCI includes certain transactions that have generally been reported in the Consolidated Statement of Shareholders’
AOCI includes certain transactions that have generally been reported in the Consolidated Statement of Shareholders’
Equity. The changes in components of AOCI at October 29, 2022 and October 30, 2021 consisted of the following:
Equity. The changes in components of AOCI at October 29, 2022 and October 30, 2021 consisted of the following:
October 30, 2021
October 30, 2021
$
$
(25,795) $ (123,754) $
(25,795) $ (123,754) $
(37,016) $
(37,016) $
(186,565)
(186,565)
Other comprehensive income before reclassifications
Other comprehensive income before reclassifications
(46,341)
(46,341)
(33,233)
(33,233)
36,035
36,035
Amounts reclassified out of other comprehensive loss
Amounts reclassified out of other comprehensive loss
Foreign
Foreign
currency
currency
translation
translation
adjustment
adjustment
Unrealized
Unrealized
holding
holding
gains/losses
gains/losses
on
on
derivatives
derivatives
Pension
Pension
plans
plans
Total
Total
—
—
—
—
39,526
39,526
2,334
2,334
(2,152)
(2,152)
(7,756)
(7,756)
(46,341)
(46,341)
4,141
4,141
30,613
30,613
(43,539)
(43,539)
41,860
41,860
(9,908)
(9,908)
(11,587)
(11,587)
$
$
(72,136) $ (119,613) $
(72,136) $ (119,613) $
(6,403) $
(6,403) $
(198,152)
(198,152)
The amounts reclassified out of AOCI into the Consolidated Statements of Income, with presentation location during each
The amounts reclassified out of AOCI into the Consolidated Statements of Income, with presentation location during each
Comprehensive Income Component
Comprehensive Income Component
2022
2022
2021
2021
Location
Location
Changes in unrealized holding gains/losses on derivatives
Changes in unrealized holding gains/losses on derivatives
Currency forwards
Currency forwards
$
$
9,474 $
9,474 $
(2,682) Cost of sales
(2,682) Cost of sales
Tax
Tax
Other comprehensive income
Other comprehensive income
October 29, 2022
October 29, 2022
period were as follows:
period were as follows:
Interest rate derivatives
Interest rate derivatives
5,637
5,637
(1,622) Research and development
(1,622) Research and development
Selling, marketing, general and
Selling, marketing, general and
9,492
9,492
14,923
14,923
39,526
39,526
(958)
(958)
administrative
administrative
12,550
12,550
Interest expense
Interest expense
7,288 Total before tax
7,288 Total before tax
(5,054)
(5,054)
(189) Tax
(189) Tax
$
$
34,472 $
34,472 $
7,099 Net of tax
7,099 Net of tax
Amortization of pension components included in the computation of net periodic benefit cost
Amortization of pension components included in the computation of net periodic benefit cost
Actuarial losses
Actuarial losses
2,334
2,334
(361)
(361)
2,979
2,979
(1)
(1)
339 Tax
339 Tax
1,973 $
1,973 $
3,318 Net of tax
3,318 Net of tax
$
$
$
$
Total amounts reclassified out of AOCI, net of tax
Total amounts reclassified out of AOCI, net of tax
36,445 $
36,445 $
10,417
10,417
_______________________________________
_______________________________________
(1) The amortization of pension components is included in the computation of net periodic benefit cost. See Note 11, Retirement Plans, of
(1) The amortization of pension components is included in the computation of net periodic benefit cost. See Note 11, Retirement Plans, of
the Notes to Consolidated Financial Statements for further information.
the Notes to Consolidated Financial Statements for further information.
59
59
60
60
manufacturing technologies, the ability to safeguard patents and intellectual property in a rapidly evolving market and reliance
manufacturing technologies, the ability to safeguard patents and intellectual property in a rapidly evolving market and reliance
on assembly and test subcontractors, third-party wafer fabricators and independent distributors. In addition, the semiconductor
on assembly and test subcontractors, third-party wafer fabricators and independent distributors. In addition, the semiconductor
market has historically been cyclical and subject to significant economic downturns at various times. The Company is exposed
market has historically been cyclical and subject to significant economic downturns at various times. The Company is exposed
to the risk of obsolescence of its inventory depending on the mix of future business. Additionally, more than half of the
to the risk of obsolescence of its inventory depending on the mix of future business. Additionally, more than half of the
Company’s purchases of external wafer and foundry services are from a limited number of suppliers, such as Taiwan
Company’s purchases of external wafer and foundry services are from a limited number of suppliers, such as Taiwan
Semiconductor Manufacturing Company (TSMC) and others. If these suppliers or any of the Company’s other key suppliers are
Semiconductor Manufacturing Company (TSMC) and others. If these suppliers or any of the Company’s other key suppliers are
unable or unwilling to manufacture and deliver sufficient quantities of components, on the time schedule and of the quality that
unable or unwilling to manufacture and deliver sufficient quantities of components, on the time schedule and of the quality that
the Company requires, the Company may be forced to engage additional or replacement suppliers, which could result in
the Company requires, the Company may be forced to engage additional or replacement suppliers, which could result in
significant expenses and disruptions or delays in manufacturing, product development and shipment of product to the
significant expenses and disruptions or delays in manufacturing, product development and shipment of product to the
Company’s customers. Given the current demand environment in the semiconductor industry, the Company expects to face a
Company’s customers. Given the current demand environment in the semiconductor industry, the Company expects to face a
constrained supply environment in the near term. Management is working to balance these constraints as it shifts the
constrained supply environment in the near term. Management is working to balance these constraints as it shifts the
Company's global resources and adds capacity where appropriate.
Company's global resources and adds capacity where appropriate.
n. Revenue Recognition
n. Revenue Recognition
Recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects
Recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects
the consideration to which the providing entity expects to be entitled in exchange for those goods or services. The Company
the consideration to which the providing entity expects to be entitled in exchange for those goods or services. The Company
recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the
recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the
consideration the Company expects to receive in exchange for those products or services. The Company recognizes revenue
consideration the Company expects to receive in exchange for those products or services. The Company recognizes revenue
when all of the following criteria are met: (1) the Company has entered into a binding agreement, (2) the performance
when all of the following criteria are met: (1) the Company has entered into a binding agreement, (2) the performance
obligations have been identified, (3) the transaction price to the customer has been determined, (4) the transaction price has
obligations have been identified, (3) the transaction price to the customer has been determined, (4) the transaction price has
been allocated to the performance obligations in the contract, and (5) the performance obligations have been satisfied. The
been allocated to the performance obligations in the contract, and (5) the performance obligations have been satisfied. The
majority of the Company's shipping terms permit the Company to recognize revenue at point of shipment or delivery. Certain
majority of the Company's shipping terms permit the Company to recognize revenue at point of shipment or delivery. Certain
shipping terms require the goods to be through customs or be received by the customer before title passes. In those instances,
shipping terms require the goods to be through customs or be received by the customer before title passes. In those instances,
the Company defers the revenue recognized until title has passed. Shipping costs are charged to selling, marketing, general and
the Company defers the revenue recognized until title has passed. Shipping costs are charged to selling, marketing, general and
administrative expense as incurred. Sales taxes are excluded from revenue.
administrative expense as incurred. Sales taxes are excluded from revenue.
Revenue from contracts with the United States government, government prime contractors and certain commercial
Revenue from contracts with the United States government, government prime contractors and certain commercial
customers is recorded over time using either units delivered or costs incurred as the measurement basis for progress toward
customers is recorded over time using either units delivered or costs incurred as the measurement basis for progress toward
completion. These measures are used to measure results directly and is generally the best measure of progress toward
completion. These measures are used to measure results directly and is generally the best measure of progress toward
completion in circumstances in which a reliable measure of output can be established. Estimated revenue in excess of amounts
completion in circumstances in which a reliable measure of output can be established. Estimated revenue in excess of amounts
billed is reported as unbilled receivables. Contract accounting requires judgment in estimating costs and assumptions related to
billed is reported as unbilled receivables. Contract accounting requires judgment in estimating costs and assumptions related to
technical issues and delivery schedule. Contract costs include material, subcontract costs, labor and an allocation of indirect
technical issues and delivery schedule. Contract costs include material, subcontract costs, labor and an allocation of indirect
costs. The estimation of costs at completion of a contract is subject to numerous variables involving contract costs and estimates
costs. The estimation of costs at completion of a contract is subject to numerous variables involving contract costs and estimates
as to the length of time to complete the contract. Changes in contract performance, estimated gross margin, including the impact
as to the length of time to complete the contract. Changes in contract performance, estimated gross margin, including the impact
of final contract settlements, and estimated losses are recognized in the period in which the changes or losses are determined.
of final contract settlements, and estimated losses are recognized in the period in which the changes or losses are determined.
Performance Obligations: Substantially all of the Company’s contracts with customers contain a single performance
Performance Obligations: Substantially all of the Company’s contracts with customers contain a single performance
obligation, the sale of mixed-signal integrated circuit products. Such sales represent a single performance obligation because the
obligation, the sale of mixed-signal integrated circuit products. Such sales represent a single performance obligation because the
sale is one type of good or includes multiple goods that are neither capable of being distinct nor separable from the other
sale is one type of good or includes multiple goods that are neither capable of being distinct nor separable from the other
promises in the contract. This performance obligation is satisfied when control of the product is transferred to the customer,
promises in the contract. This performance obligation is satisfied when control of the product is transferred to the customer,
which occurs upon shipment or delivery. Unsatisfied performance obligations primarily represent contracts for products with
which occurs upon shipment or delivery. Unsatisfied performance obligations primarily represent contracts for products with
future delivery dates and with an original expected duration of one year or less. The Company generally offers a twelve-month
future delivery dates and with an original expected duration of one year or less. The Company generally offers a twelve-month
warranty for its products. The Company’s warranty policy provides for replacement of defective products. Specific accruals are
warranty for its products. The Company’s warranty policy provides for replacement of defective products. Specific accruals are
recorded for known product warranty issues. Product warranty expenses during fiscal 2022, fiscal 2021 and fiscal 2020 were
recorded for known product warranty issues. Product warranty expenses during fiscal 2022, fiscal 2021 and fiscal 2020 were
not material.
not material.
Transaction Price: The transaction price reflects the Company’s expectations about the consideration it will be entitled to
Transaction Price: The transaction price reflects the Company’s expectations about the consideration it will be entitled to
receive from the customer and may include fixed or variable amounts. Fixed consideration primarily includes sales to direct
receive from the customer and may include fixed or variable amounts. Fixed consideration primarily includes sales to direct
customers and sales to distributors in which both the sale to the distributor and the sale to the end customer occur within the
customers and sales to distributors in which both the sale to the distributor and the sale to the end customer occur within the
same reporting period. Variable consideration includes sales in which the amount of consideration that the Company will
same reporting period. Variable consideration includes sales in which the amount of consideration that the Company will
receive is unknown as of the end of a reporting period. The vast majority of such consideration are credits issued to the
receive is unknown as of the end of a reporting period. The vast majority of such consideration are credits issued to the
distributor due to price protection, but also include sales made to distributors under agreements that allow certain rights of
distributor due to price protection, but also include sales made to distributors under agreements that allow certain rights of
return, referred to as stock rotation. Price protection represents price discounts granted to certain distributors to allow the
return, referred to as stock rotation. Price protection represents price discounts granted to certain distributors to allow the
distributor to earn an appropriate margin on sales negotiated with certain customers and in the event of a price decrease
distributor to earn an appropriate margin on sales negotiated with certain customers and in the event of a price decrease
subsequent to the date the product was shipped and billed to the distributor. Stock rotation allows distributors limited levels of
subsequent to the date the product was shipped and billed to the distributor. Stock rotation allows distributors limited levels of
returns in order to reduce the amounts of slow-moving, discontinued or obsolete product from their inventory. A liability for
returns in order to reduce the amounts of slow-moving, discontinued or obsolete product from their inventory. A liability for
distributor credits covering variable consideration is made based on the Company's estimate of historical experience rates as
distributor credits covering variable consideration is made based on the Company's estimate of historical experience rates as
well as considering economic conditions and contractual terms. To date, actual distributor claims activity has been materially
well as considering economic conditions and contractual terms. To date, actual distributor claims activity has been materially
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
consistent with the provisions the Company has made based on its historical estimates. For fiscal 2022 and fiscal 2021, sales to
consistent with the provisions the Company has made based on its historical estimates. For fiscal 2022 and fiscal 2021, sales to
distributors were approximately $7.5 billion and $4.6 billion, respectively, net of variable consideration for which the liability
distributors were approximately $7.5 billion and $4.6 billion, respectively, net of variable consideration for which the liability
balances as of October 29, 2022 and October 30, 2021 were $749.4 million and $664.2 million, respectively, and were recorded
balances as of October 29, 2022 and October 30, 2021 were $749.4 million and $664.2 million, respectively, and were recorded
in Accrued liabilities on the Consolidated Balance Sheets.
in Accrued liabilities on the Consolidated Balance Sheets.
Contract Balances: Accounts receivable represents the Company’s unconditional right to receive consideration from its
Contract Balances: Accounts receivable represents the Company’s unconditional right to receive consideration from its
customers. Payments are typically due within 30 to 45 days of invoicing and do not include a significant financing component.
customers. Payments are typically due within 30 to 45 days of invoicing and do not include a significant financing component.
To date, there have been no material credit losses on accounts receivable. There were no material contract assets or contract
To date, there have been no material credit losses on accounts receivable. There were no material contract assets or contract
liabilities recorded on the Consolidated Balance Sheets in any of the periods presented.
liabilities recorded on the Consolidated Balance Sheets in any of the periods presented.
o. Accumulated Other Comprehensive (Loss) Income
o. Accumulated Other Comprehensive (Loss) Income
AOCI includes certain transactions that have generally been reported in the Consolidated Statement of Shareholders’
AOCI includes certain transactions that have generally been reported in the Consolidated Statement of Shareholders’
Equity. The changes in components of AOCI at October 29, 2022 and October 30, 2021 consisted of the following:
Equity. The changes in components of AOCI at October 29, 2022 and October 30, 2021 consisted of the following:
October 30, 2021
October 30, 2021
Other comprehensive income before reclassifications
Other comprehensive income before reclassifications
Amounts reclassified out of other comprehensive loss
Amounts reclassified out of other comprehensive loss
Tax
Tax
Other comprehensive income
Other comprehensive income
October 29, 2022
October 29, 2022
Unrealized
Unrealized
holding
holding
gains/losses
gains/losses
on
on
derivatives
derivatives
Foreign
Foreign
currency
currency
translation
translation
adjustment
adjustment
$
$
(25,795) $ (123,754) $
(25,795) $ (123,754) $
(33,233)
(33,233)
(46,341)
(46,341)
39,526
39,526
(2,152)
(2,152)
4,141
4,141
(46,341)
(46,341)
(72,136) $ (119,613) $
(72,136) $ (119,613) $
—
—
—
—
$
$
Pension
Pension
plans
plans
(37,016) $
(37,016) $
36,035
36,035
2,334
2,334
(7,756)
(7,756)
30,613
30,613
(6,403) $
(6,403) $
Total
Total
(186,565)
(186,565)
(43,539)
(43,539)
41,860
41,860
(9,908)
(9,908)
(11,587)
(11,587)
(198,152)
(198,152)
The amounts reclassified out of AOCI into the Consolidated Statements of Income, with presentation location during each
The amounts reclassified out of AOCI into the Consolidated Statements of Income, with presentation location during each
period were as follows:
period were as follows:
Comprehensive Income Component
Comprehensive Income Component
2022
2022
2021
2021
Location
Location
Changes in unrealized holding gains/losses on derivatives
Changes in unrealized holding gains/losses on derivatives
Currency forwards
Currency forwards
Interest rate derivatives
Interest rate derivatives
$
$
$
$
9,474 $
9,474 $
5,637
5,637
(2,682) Cost of sales
(2,682) Cost of sales
(1,622) Research and development
(1,622) Research and development
9,492
9,492
14,923
14,923
39,526
39,526
(5,054)
(5,054)
34,472 $
34,472 $
Selling, marketing, general and
Selling, marketing, general and
administrative
(958)
(958)
administrative
12,550
Interest expense
Interest expense
12,550
7,288 Total before tax
7,288 Total before tax
(189) Tax
(189) Tax
7,099 Net of tax
7,099 Net of tax
Amortization of pension components included in the computation of net periodic benefit cost
Amortization of pension components included in the computation of net periodic benefit cost
Actuarial losses
Actuarial losses
Total amounts reclassified out of AOCI, net of tax
Total amounts reclassified out of AOCI, net of tax
2,334
2,334
(361)
(361)
2,979
2,979
(1)
(1)
339 Tax
339 Tax
1,973 $
1,973 $
3,318 Net of tax
3,318 Net of tax
36,445 $
36,445 $
10,417
10,417
$
$
$
$
_______________________________________
_______________________________________
(1) The amortization of pension components is included in the computation of net periodic benefit cost. See Note 11, Retirement Plans, of
(1) The amortization of pension components is included in the computation of net periodic benefit cost. See Note 11, Retirement Plans, of
the Notes to Consolidated Financial Statements for further information.
the Notes to Consolidated Financial Statements for further information.
59
59
60
60
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
p.
p.
Income Taxes
Income Taxes
The following table sets forth the computation of basic and diluted earnings per share:
The following table sets forth the computation of basic and diluted earnings per share:
The Company makes certain estimates and judgments in determining income tax expense for financial statement
The Company makes certain estimates and judgments in determining income tax expense for financial statement
purposes. These estimates and judgments occur in the calculation of income tax credits, benefits, and deductions, and in the
purposes. These estimates and judgments occur in the calculation of income tax credits, benefits, and deductions, and in the
calculation of certain tax assets and liabilities, which arise from differences in the timing of the recognition of certain expenses
calculation of certain tax assets and liabilities, which arise from differences in the timing of the recognition of certain expenses
for tax and financial statement purposes. The likelihood of the realization of deferred tax assets is assessed and a corresponding
for tax and financial statement purposes. The likelihood of the realization of deferred tax assets is assessed and a corresponding
valuation allowance is recorded as necessary if management determines those deferred tax assets may not be realized due to the
valuation allowance is recorded as necessary if management determines those deferred tax assets may not be realized due to the
uncertainty of the timing and amount to be realized of certain state and international tax credit carryovers. In reaching this
uncertainty of the timing and amount to be realized of certain state and international tax credit carryovers. In reaching this
conclusion, the Company evaluates certain relevant criteria including the existence of deferred tax liabilities that can be used to
conclusion, the Company evaluates certain relevant criteria including the existence of deferred tax liabilities that can be used to
realize deferred tax assets, the taxable income in prior carryback years in the impacted state and international jurisdictions that
realize deferred tax assets, the taxable income in prior carryback years in the impacted state and international jurisdictions that
can be used to absorb net operating losses and taxable income in future years. Judgments regarding future profitability may
can be used to absorb net operating losses and taxable income in future years. Judgments regarding future profitability may
change due to future market conditions, changes in U.S. or international tax laws and other factors. These changes, if any, may
change due to future market conditions, changes in U.S. or international tax laws and other factors. These changes, if any, may
require material adjustments to these deferred tax assets, which may result in an increase or decrease to the income tax
require material adjustments to these deferred tax assets, which may result in an increase or decrease to the income tax
provision in future periods.
provision in future periods.
The Company accounts for uncertain tax positions by first determining if it is “more likely than not” that a tax position
The Company accounts for uncertain tax positions by first determining if it is “more likely than not” that a tax position
will be sustained by the appropriate taxing authorities prior to recording any benefit in the Consolidated Financial Statements.
will be sustained by the appropriate taxing authorities prior to recording any benefit in the Consolidated Financial Statements.
An uncertain income tax position is not recognized if it has less than a 50% likelihood of being sustained. For those tax
An uncertain income tax position is not recognized if it has less than a 50% likelihood of being sustained. For those tax
positions where it is more likely than not that a tax position will be sustained, the Company has recorded the largest amount of
positions where it is more likely than not that a tax position will be sustained, the Company has recorded the largest amount of
tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full
tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full
knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will
knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will
be sustained, no tax benefit has been recognized in the financial statements. Management classifies interest and penalties related
be sustained, no tax benefit has been recognized in the financial statements. Management classifies interest and penalties related
to uncertain tax positions within the provision for (benefit from) income taxes line of the Consolidated Statements of Income.
to uncertain tax positions within the provision for (benefit from) income taxes line of the Consolidated Statements of Income.
Management reevaluates these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not
Management reevaluates these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not
limited to, changes in known facts or circumstances, changes in tax law, effectively settled issues under audit, and new
limited to, changes in known facts or circumstances, changes in tax law, effectively settled issues under audit, and new
guidance on legislative interpretations. A change in these factors could result in the recognition of an increase or decrease to the
guidance on legislative interpretations. A change in these factors could result in the recognition of an increase or decrease to the
Company's income tax provision which could materially impact its consolidated financial position and results of operations.
Company's income tax provision which could materially impact its consolidated financial position and results of operations.
In the ordinary course of global business, there are many transactions and calculations where the ultimate tax outcome is
In the ordinary course of global business, there are many transactions and calculations where the ultimate tax outcome is
uncertain. Some of these uncertainties arise as a consequence of cost reimbursement and royalty arrangements among related
uncertain. Some of these uncertainties arise as a consequence of cost reimbursement and royalty arrangements among related
entities. Although the Company believes its estimates are reasonable, no assurance can be given that the final tax outcome of
entities. Although the Company believes its estimates are reasonable, no assurance can be given that the final tax outcome of
these matters will not be different than that which is reflected in the historical income tax provisions and income tax liabilities.
these matters will not be different than that which is reflected in the historical income tax provisions and income tax liabilities.
In the event management's assumptions are incorrect, the differences could have a material impact on its income tax provision
In the event management's assumptions are incorrect, the differences could have a material impact on its income tax provision
and operating results in the period in which such determination is made. In addition to the factors described above, the current
and operating results in the period in which such determination is made. In addition to the factors described above, the current
and expected effective tax rate is based on then-current tax law. Significant changes in enacted tax law could affect these
and expected effective tax rate is based on then-current tax law. Significant changes in enacted tax law could affect these
estimates. See Note 12, Income Taxes, of the Notes to Consolidated Financial Statements for further information related to
estimates. See Note 12, Income Taxes, of the Notes to Consolidated Financial Statements for further information related to
income taxes.
income taxes.
q. Earnings Per Share of Common Stock
q. Earnings Per Share of Common Stock
Basic earnings per share is computed based only on the weighted average number of common shares outstanding during
Basic earnings per share is computed based only on the weighted average number of common shares outstanding during
the period. Diluted earnings per share is computed using the weighted average number of common shares outstanding during
the period. Diluted earnings per share is computed using the weighted average number of common shares outstanding during
the period, plus the dilutive effect of potential future issuances of common stock relating to stock option programs and other
the period, plus the dilutive effect of potential future issuances of common stock relating to stock option programs and other
potentially dilutive securities using the treasury stock method. In calculating diluted earnings per share, the dilutive effect of
potentially dilutive securities using the treasury stock method. In calculating diluted earnings per share, the dilutive effect of
stock options and restricted stock units is computed using the average market price for the respective period. In addition, the
stock options and restricted stock units is computed using the average market price for the respective period. In addition, the
assumed proceeds under the treasury stock method include the average unrecognized compensation expense of stock options
assumed proceeds under the treasury stock method include the average unrecognized compensation expense of stock options
that are in-the-money and restricted stock units. This results in the “assumed” buyback of additional shares, thereby reducing
that are in-the-money and restricted stock units. This results in the “assumed” buyback of additional shares, thereby reducing
the dilutive impact of in-the-money stock options. Potential shares related to certain of the Company’s outstanding stock
the dilutive impact of in-the-money stock options. Potential shares related to certain of the Company’s outstanding stock
options and restricted stock units were excluded because they were anti-dilutive. Those potential shares, determined based on
options and restricted stock units were excluded because they were anti-dilutive. Those potential shares, determined based on
the weighted average exercise prices during the respective periods, could be dilutive in the future.
the weighted average exercise prices during the respective periods, could be dilutive in the future.
In connection with the acquisition of Linear Technology Corporate (Linear), the Company granted restricted stock
In connection with the acquisition of Linear Technology Corporate (Linear), the Company granted restricted stock
awards to replace outstanding restricted stock awards of Linear employees. These restricted stock awards entitle recipients to
awards to replace outstanding restricted stock awards of Linear employees. These restricted stock awards entitle recipients to
voting and nonforfeitable dividend rights from the date of grant. These unvested stock-based compensation awards are
voting and nonforfeitable dividend rights from the date of grant. These unvested stock-based compensation awards are
considered participating securities and the two-class method is used for purposes of calculating earnings per share. Under
considered participating securities and the two-class method is used for purposes of calculating earnings per share. Under
the two-class method, a portion of net income is allocated to these participating securities and therefore is excluded from the
the two-class method, a portion of net income is allocated to these participating securities and therefore is excluded from the
calculation of earnings per share allocated to common stock, as shown in the table below. The difference between the income
calculation of earnings per share allocated to common stock, as shown in the table below. The difference between the income
allocated to participating securities under the basic and diluted two-class methods is not material.
allocated to participating securities under the basic and diluted two-class methods is not material.
Net income (1)
Net income (1)
Basic shares:
Basic shares:
2022
2022
2021
2021
2020
2020
$
$
2,748,561 $
2,748,561 $
1,390,422 $
1,390,422 $
1,220,761
1,220,761
Weighted-average shares outstanding
Weighted-average shares outstanding
Earnings per common share basic
Earnings per common share basic
519,226
519,226
397,462
397,462
$
$
5.29 $
5.29 $
3.50 $
3.50 $
368,633
368,633
3.31
3.31
Diluted shares:
Diluted shares:
Weighted-average shares outstanding
Weighted-average shares outstanding
Assumed exercise of common stock equivalents
Assumed exercise of common stock equivalents
Weighted-average common and common equivalent shares
Weighted-average common and common equivalent shares
Earnings per common share diluted
Earnings per common share diluted
Anti-dilutive shares related to:
Anti-dilutive shares related to:
Outstanding stock options
Outstanding stock options
_______________________________________
_______________________________________
r.
r.
Stock-Based Compensation
Stock-Based Compensation
(1) For all fiscal years presented, income allocated to participating securities is not material.
(1) For all fiscal years presented, income allocated to participating securities is not material.
519,226
519,226
3,952
3,952
523,178
523,178
397,462
397,462
3,826
3,826
401,288
401,288
$
$
5.25 $
5.25 $
3.46 $
3.46 $
368,633
368,633
3,340
3,340
371,973
371,973
3.28
3.28
608
608
424
424
460
460
Stock-based compensation is measured at the grant date based on the grant-date fair value of the awards ultimately
Stock-based compensation is measured at the grant date based on the grant-date fair value of the awards ultimately
expected to vest and is recognized as an expense on a straight-line basis over the vesting period, which is generally four years
expected to vest and is recognized as an expense on a straight-line basis over the vesting period, which is generally four years
for stock options and restricted stock units, or in annual installments of 25% on each of the first, second, third and fourth
for stock options and restricted stock units, or in annual installments of 25% on each of the first, second, third and fourth
anniversaries of the date of grant. Restricted stock units with service and performance or market conditions generally vest in
anniversaries of the date of grant. Restricted stock units with service and performance or market conditions generally vest in
one installment on the third anniversary of the date of grant. For grants issued prior to fiscal 2018, the vesting period was
one installment on the third anniversary of the date of grant. For grants issued prior to fiscal 2018, the vesting period was
generally five years for stock options, or in annual installments of 20% on each of the first, second, third, fourth and fifth
generally five years for stock options, or in annual installments of 20% on each of the first, second, third, fourth and fifth
anniversaries of the date of grant and in one installment on the third anniversary of the date of grant for restricted stock units/
anniversaries of the date of grant and in one installment on the third anniversary of the date of grant for restricted stock units/
awards. The maximum contractual term of all stock options is ten years.
awards. The maximum contractual term of all stock options is ten years.
Determining the amount of stock-based compensation expense to be recorded requires the Company to develop estimates
Determining the amount of stock-based compensation expense to be recorded requires the Company to develop estimates
used in calculating the grant-date fair value of awards. These estimates may be based on different valuation models depending
used in calculating the grant-date fair value of awards. These estimates may be based on different valuation models depending
upon the type of award and may include assumptions, such as expected volatility, expected term, risk-free interest rate,
upon the type of award and may include assumptions, such as expected volatility, expected term, risk-free interest rate,
expected dividend yield, forfeiture rate and others. The Company uses the Black-Scholes valuation model to calculate the grant-
expected dividend yield, forfeiture rate and others. The Company uses the Black-Scholes valuation model to calculate the grant-
date fair value of stock option awards. The grant-date fair value of restricted stock units with a service condition and restricted
date fair value of stock option awards. The grant-date fair value of restricted stock units with a service condition and restricted
stock units with both service and performance conditions is calculated using the value of the Company's common stock on the
stock units with both service and performance conditions is calculated using the value of the Company's common stock on the
date of grant, reduced by the present value of dividends expected to be paid on the Company's common stock prior to vesting.
date of grant, reduced by the present value of dividends expected to be paid on the Company's common stock prior to vesting.
For restricted stock units with both service and performance conditions, this grant-date fair value is also impacted by the
For restricted stock units with both service and performance conditions, this grant-date fair value is also impacted by the
number of units that are expected to vest during the performance period and is adjusted through the related stock-based
number of units that are expected to vest during the performance period and is adjusted through the related stock-based
compensation expense at each reporting period based on the probability of achievement of that performance condition. If the
compensation expense at each reporting period based on the probability of achievement of that performance condition. If the
Company determines that an award is unlikely to vest, any previously recorded stock-based compensation expense is reversed
Company determines that an award is unlikely to vest, any previously recorded stock-based compensation expense is reversed
in the period of that determination. The grant date fair value of restricted stock units and performance-based stock options with
in the period of that determination. The grant date fair value of restricted stock units and performance-based stock options with
both service and market conditions is calculated using the Monte Carlo simulation model to estimate the probability of
both service and market conditions is calculated using the Monte Carlo simulation model to estimate the probability of
satisfying the performance condition stipulated in the award grant, including the possibility that the market condition may not
satisfying the performance condition stipulated in the award grant, including the possibility that the market condition may not
be satisfied.
be satisfied.
The fair value of shares to be issued under the Company's employee stock purchase plan (ESPP) is computed using the
The fair value of shares to be issued under the Company's employee stock purchase plan (ESPP) is computed using the
Black-Scholes model at the commencement of an offering period in June and December of each year. Stock-based
Black-Scholes model at the commencement of an offering period in June and December of each year. Stock-based
compensation for the ESPP is expensed using an accelerated amortization model. Additionally, the Company estimates
compensation for the ESPP is expensed using an accelerated amortization model. Additionally, the Company estimates
forfeitures at least annually based on historical experience and revises the estimates of forfeiture in subsequent periods if actual
forfeitures at least annually based on historical experience and revises the estimates of forfeiture in subsequent periods if actual
forfeitures differ from those estimates.
forfeitures differ from those estimates.
See Note 3, Stock-Based Compensation and Shareholders' Equity, of the Notes to Consolidated Financial Statements for
See Note 3, Stock-Based Compensation and Shareholders' Equity, of the Notes to Consolidated Financial Statements for
additional information relating to stock-based compensation.
additional information relating to stock-based compensation.
61
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ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
p.
p.
Income Taxes
Income Taxes
The following table sets forth the computation of basic and diluted earnings per share:
The following table sets forth the computation of basic and diluted earnings per share:
The Company makes certain estimates and judgments in determining income tax expense for financial statement
The Company makes certain estimates and judgments in determining income tax expense for financial statement
purposes. These estimates and judgments occur in the calculation of income tax credits, benefits, and deductions, and in the
purposes. These estimates and judgments occur in the calculation of income tax credits, benefits, and deductions, and in the
calculation of certain tax assets and liabilities, which arise from differences in the timing of the recognition of certain expenses
calculation of certain tax assets and liabilities, which arise from differences in the timing of the recognition of certain expenses
for tax and financial statement purposes. The likelihood of the realization of deferred tax assets is assessed and a corresponding
for tax and financial statement purposes. The likelihood of the realization of deferred tax assets is assessed and a corresponding
valuation allowance is recorded as necessary if management determines those deferred tax assets may not be realized due to the
valuation allowance is recorded as necessary if management determines those deferred tax assets may not be realized due to the
uncertainty of the timing and amount to be realized of certain state and international tax credit carryovers. In reaching this
uncertainty of the timing and amount to be realized of certain state and international tax credit carryovers. In reaching this
conclusion, the Company evaluates certain relevant criteria including the existence of deferred tax liabilities that can be used to
conclusion, the Company evaluates certain relevant criteria including the existence of deferred tax liabilities that can be used to
realize deferred tax assets, the taxable income in prior carryback years in the impacted state and international jurisdictions that
realize deferred tax assets, the taxable income in prior carryback years in the impacted state and international jurisdictions that
can be used to absorb net operating losses and taxable income in future years. Judgments regarding future profitability may
can be used to absorb net operating losses and taxable income in future years. Judgments regarding future profitability may
change due to future market conditions, changes in U.S. or international tax laws and other factors. These changes, if any, may
change due to future market conditions, changes in U.S. or international tax laws and other factors. These changes, if any, may
require material adjustments to these deferred tax assets, which may result in an increase or decrease to the income tax
require material adjustments to these deferred tax assets, which may result in an increase or decrease to the income tax
provision in future periods.
provision in future periods.
The Company accounts for uncertain tax positions by first determining if it is “more likely than not” that a tax position
The Company accounts for uncertain tax positions by first determining if it is “more likely than not” that a tax position
will be sustained by the appropriate taxing authorities prior to recording any benefit in the Consolidated Financial Statements.
will be sustained by the appropriate taxing authorities prior to recording any benefit in the Consolidated Financial Statements.
An uncertain income tax position is not recognized if it has less than a 50% likelihood of being sustained. For those tax
An uncertain income tax position is not recognized if it has less than a 50% likelihood of being sustained. For those tax
positions where it is more likely than not that a tax position will be sustained, the Company has recorded the largest amount of
positions where it is more likely than not that a tax position will be sustained, the Company has recorded the largest amount of
tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full
tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full
knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will
knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will
be sustained, no tax benefit has been recognized in the financial statements. Management classifies interest and penalties related
be sustained, no tax benefit has been recognized in the financial statements. Management classifies interest and penalties related
to uncertain tax positions within the provision for (benefit from) income taxes line of the Consolidated Statements of Income.
to uncertain tax positions within the provision for (benefit from) income taxes line of the Consolidated Statements of Income.
Management reevaluates these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not
Management reevaluates these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not
limited to, changes in known facts or circumstances, changes in tax law, effectively settled issues under audit, and new
limited to, changes in known facts or circumstances, changes in tax law, effectively settled issues under audit, and new
guidance on legislative interpretations. A change in these factors could result in the recognition of an increase or decrease to the
guidance on legislative interpretations. A change in these factors could result in the recognition of an increase or decrease to the
Company's income tax provision which could materially impact its consolidated financial position and results of operations.
Company's income tax provision which could materially impact its consolidated financial position and results of operations.
In the ordinary course of global business, there are many transactions and calculations where the ultimate tax outcome is
In the ordinary course of global business, there are many transactions and calculations where the ultimate tax outcome is
uncertain. Some of these uncertainties arise as a consequence of cost reimbursement and royalty arrangements among related
uncertain. Some of these uncertainties arise as a consequence of cost reimbursement and royalty arrangements among related
entities. Although the Company believes its estimates are reasonable, no assurance can be given that the final tax outcome of
entities. Although the Company believes its estimates are reasonable, no assurance can be given that the final tax outcome of
these matters will not be different than that which is reflected in the historical income tax provisions and income tax liabilities.
these matters will not be different than that which is reflected in the historical income tax provisions and income tax liabilities.
In the event management's assumptions are incorrect, the differences could have a material impact on its income tax provision
In the event management's assumptions are incorrect, the differences could have a material impact on its income tax provision
and operating results in the period in which such determination is made. In addition to the factors described above, the current
and operating results in the period in which such determination is made. In addition to the factors described above, the current
and expected effective tax rate is based on then-current tax law. Significant changes in enacted tax law could affect these
and expected effective tax rate is based on then-current tax law. Significant changes in enacted tax law could affect these
estimates. See Note 12, Income Taxes, of the Notes to Consolidated Financial Statements for further information related to
estimates. See Note 12, Income Taxes, of the Notes to Consolidated Financial Statements for further information related to
income taxes.
income taxes.
q. Earnings Per Share of Common Stock
q. Earnings Per Share of Common Stock
Basic earnings per share is computed based only on the weighted average number of common shares outstanding during
Basic earnings per share is computed based only on the weighted average number of common shares outstanding during
the period. Diluted earnings per share is computed using the weighted average number of common shares outstanding during
the period. Diluted earnings per share is computed using the weighted average number of common shares outstanding during
the period, plus the dilutive effect of potential future issuances of common stock relating to stock option programs and other
the period, plus the dilutive effect of potential future issuances of common stock relating to stock option programs and other
potentially dilutive securities using the treasury stock method. In calculating diluted earnings per share, the dilutive effect of
potentially dilutive securities using the treasury stock method. In calculating diluted earnings per share, the dilutive effect of
stock options and restricted stock units is computed using the average market price for the respective period. In addition, the
stock options and restricted stock units is computed using the average market price for the respective period. In addition, the
assumed proceeds under the treasury stock method include the average unrecognized compensation expense of stock options
assumed proceeds under the treasury stock method include the average unrecognized compensation expense of stock options
that are in-the-money and restricted stock units. This results in the “assumed” buyback of additional shares, thereby reducing
that are in-the-money and restricted stock units. This results in the “assumed” buyback of additional shares, thereby reducing
the dilutive impact of in-the-money stock options. Potential shares related to certain of the Company’s outstanding stock
the dilutive impact of in-the-money stock options. Potential shares related to certain of the Company’s outstanding stock
options and restricted stock units were excluded because they were anti-dilutive. Those potential shares, determined based on
options and restricted stock units were excluded because they were anti-dilutive. Those potential shares, determined based on
the weighted average exercise prices during the respective periods, could be dilutive in the future.
the weighted average exercise prices during the respective periods, could be dilutive in the future.
In connection with the acquisition of Linear Technology Corporate (Linear), the Company granted restricted stock
In connection with the acquisition of Linear Technology Corporate (Linear), the Company granted restricted stock
awards to replace outstanding restricted stock awards of Linear employees. These restricted stock awards entitle recipients to
awards to replace outstanding restricted stock awards of Linear employees. These restricted stock awards entitle recipients to
voting and nonforfeitable dividend rights from the date of grant. These unvested stock-based compensation awards are
voting and nonforfeitable dividend rights from the date of grant. These unvested stock-based compensation awards are
considered participating securities and the two-class method is used for purposes of calculating earnings per share. Under
considered participating securities and the two-class method is used for purposes of calculating earnings per share. Under
the two-class method, a portion of net income is allocated to these participating securities and therefore is excluded from the
the two-class method, a portion of net income is allocated to these participating securities and therefore is excluded from the
calculation of earnings per share allocated to common stock, as shown in the table below. The difference between the income
calculation of earnings per share allocated to common stock, as shown in the table below. The difference between the income
allocated to participating securities under the basic and diluted two-class methods is not material.
allocated to participating securities under the basic and diluted two-class methods is not material.
Net income (1)
Net income (1)
Basic shares:
Basic shares:
2022
2022
2021
2021
2020
2020
$
$
2,748,561 $
2,748,561 $
1,390,422 $
1,390,422 $
1,220,761
1,220,761
Weighted-average shares outstanding
Weighted-average shares outstanding
Earnings per common share basic
Earnings per common share basic
519,226
519,226
397,462
397,462
$
$
5.29 $
5.29 $
3.50 $
3.50 $
368,633
368,633
3.31
3.31
Diluted shares:
Diluted shares:
Weighted-average shares outstanding
Weighted-average shares outstanding
Assumed exercise of common stock equivalents
Assumed exercise of common stock equivalents
Weighted-average common and common equivalent shares
Weighted-average common and common equivalent shares
Earnings per common share diluted
Earnings per common share diluted
Anti-dilutive shares related to:
Anti-dilutive shares related to:
Outstanding stock options
Outstanding stock options
519,226
519,226
3,952
3,952
523,178
523,178
397,462
397,462
3,826
3,826
401,288
401,288
$
$
5.25 $
5.25 $
3.46 $
3.46 $
368,633
368,633
3,340
3,340
371,973
371,973
3.28
3.28
608
608
424
424
460
460
_______________________________________
_______________________________________
(1) For all fiscal years presented, income allocated to participating securities is not material.
(1) For all fiscal years presented, income allocated to participating securities is not material.
r.
r.
Stock-Based Compensation
Stock-Based Compensation
Stock-based compensation is measured at the grant date based on the grant-date fair value of the awards ultimately
Stock-based compensation is measured at the grant date based on the grant-date fair value of the awards ultimately
expected to vest and is recognized as an expense on a straight-line basis over the vesting period, which is generally four years
expected to vest and is recognized as an expense on a straight-line basis over the vesting period, which is generally four years
for stock options and restricted stock units, or in annual installments of 25% on each of the first, second, third and fourth
for stock options and restricted stock units, or in annual installments of 25% on each of the first, second, third and fourth
anniversaries of the date of grant. Restricted stock units with service and performance or market conditions generally vest in
anniversaries of the date of grant. Restricted stock units with service and performance or market conditions generally vest in
one installment on the third anniversary of the date of grant. For grants issued prior to fiscal 2018, the vesting period was
one installment on the third anniversary of the date of grant. For grants issued prior to fiscal 2018, the vesting period was
generally five years for stock options, or in annual installments of 20% on each of the first, second, third, fourth and fifth
generally five years for stock options, or in annual installments of 20% on each of the first, second, third, fourth and fifth
anniversaries of the date of grant and in one installment on the third anniversary of the date of grant for restricted stock units/
anniversaries of the date of grant and in one installment on the third anniversary of the date of grant for restricted stock units/
awards. The maximum contractual term of all stock options is ten years.
awards. The maximum contractual term of all stock options is ten years.
Determining the amount of stock-based compensation expense to be recorded requires the Company to develop estimates
Determining the amount of stock-based compensation expense to be recorded requires the Company to develop estimates
used in calculating the grant-date fair value of awards. These estimates may be based on different valuation models depending
used in calculating the grant-date fair value of awards. These estimates may be based on different valuation models depending
upon the type of award and may include assumptions, such as expected volatility, expected term, risk-free interest rate,
upon the type of award and may include assumptions, such as expected volatility, expected term, risk-free interest rate,
expected dividend yield, forfeiture rate and others. The Company uses the Black-Scholes valuation model to calculate the grant-
expected dividend yield, forfeiture rate and others. The Company uses the Black-Scholes valuation model to calculate the grant-
date fair value of stock option awards. The grant-date fair value of restricted stock units with a service condition and restricted
date fair value of stock option awards. The grant-date fair value of restricted stock units with a service condition and restricted
stock units with both service and performance conditions is calculated using the value of the Company's common stock on the
stock units with both service and performance conditions is calculated using the value of the Company's common stock on the
date of grant, reduced by the present value of dividends expected to be paid on the Company's common stock prior to vesting.
date of grant, reduced by the present value of dividends expected to be paid on the Company's common stock prior to vesting.
For restricted stock units with both service and performance conditions, this grant-date fair value is also impacted by the
For restricted stock units with both service and performance conditions, this grant-date fair value is also impacted by the
number of units that are expected to vest during the performance period and is adjusted through the related stock-based
number of units that are expected to vest during the performance period and is adjusted through the related stock-based
compensation expense at each reporting period based on the probability of achievement of that performance condition. If the
compensation expense at each reporting period based on the probability of achievement of that performance condition. If the
Company determines that an award is unlikely to vest, any previously recorded stock-based compensation expense is reversed
Company determines that an award is unlikely to vest, any previously recorded stock-based compensation expense is reversed
in the period of that determination. The grant date fair value of restricted stock units and performance-based stock options with
in the period of that determination. The grant date fair value of restricted stock units and performance-based stock options with
both service and market conditions is calculated using the Monte Carlo simulation model to estimate the probability of
both service and market conditions is calculated using the Monte Carlo simulation model to estimate the probability of
satisfying the performance condition stipulated in the award grant, including the possibility that the market condition may not
satisfying the performance condition stipulated in the award grant, including the possibility that the market condition may not
be satisfied.
be satisfied.
The fair value of shares to be issued under the Company's employee stock purchase plan (ESPP) is computed using the
The fair value of shares to be issued under the Company's employee stock purchase plan (ESPP) is computed using the
Black-Scholes model at the commencement of an offering period in June and December of each year. Stock-based
Black-Scholes model at the commencement of an offering period in June and December of each year. Stock-based
compensation for the ESPP is expensed using an accelerated amortization model. Additionally, the Company estimates
compensation for the ESPP is expensed using an accelerated amortization model. Additionally, the Company estimates
forfeitures at least annually based on historical experience and revises the estimates of forfeiture in subsequent periods if actual
forfeitures at least annually based on historical experience and revises the estimates of forfeiture in subsequent periods if actual
forfeitures differ from those estimates.
forfeitures differ from those estimates.
See Note 3, Stock-Based Compensation and Shareholders' Equity, of the Notes to Consolidated Financial Statements for
See Note 3, Stock-Based Compensation and Shareholders' Equity, of the Notes to Consolidated Financial Statements for
additional information relating to stock-based compensation.
additional information relating to stock-based compensation.
61
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ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
s. New Accounting Pronouncements
s. New Accounting Pronouncements
Standards Implemented During Fiscal 2022
Standards Implemented During Fiscal 2022
Reference Rate Reform
Reference Rate Reform
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of
Reference Rate Reform on Financial Reporting, which provides optional guidance for accounting for contracts, hedging
Reference Rate Reform on Financial Reporting, which provides optional guidance for accounting for contracts, hedging
relationships, and other transactions affected by reference rate reform, if certain criteria are met. The provisions of this standard
relationships, and other transactions affected by reference rate reform, if certain criteria are met. The provisions of this standard
are available for election through December 31, 2022. The Company adopted this standard in the first quarter of fiscal 2022
are available for election through December 31, 2022. The Company adopted this standard in the first quarter of fiscal 2022
with no material impact on the Company's financial position and results of operations.
with no material impact on the Company's financial position and results of operations.
Standards to Be Implemented
Standards to Be Implemented
Acquired Contract Assets and Contract Liabilities
Acquired Contract Assets and Contract Liabilities
In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Acquired
In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Acquired
Contract Assets and Contract Liabilities. Under the new guidance (ASC 805-20-30-28), the acquirer should determine what
Contract Assets and Contract Liabilities. Under the new guidance (ASC 805-20-30-28), the acquirer should determine what
contract assets and/or contract liabilities it would have recorded under ASC 606 (the revenue guidance) as of the acquisition
contract assets and/or contract liabilities it would have recorded under ASC 606 (the revenue guidance) as of the acquisition
date, as if the acquirer had entered into the original contract at the same date and on the same terms as the acquiree. The
date, as if the acquirer had entered into the original contract at the same date and on the same terms as the acquiree. The
recognition and measurement of those contract assets and contract liabilities will likely be comparable to what the acquiree has
recognition and measurement of those contract assets and contract liabilities will likely be comparable to what the acquiree has
recorded on its books under ASC 606 as of the acquisition date. ASU 2021-08 is effective for fiscal years beginning after
recorded on its books under ASC 606 as of the acquisition date. ASU 2021-08 is effective for fiscal years beginning after
December 15, 2022, including interim periods within those fiscal years. ASU 2021-08 is effective for the Company in the first
December 15, 2022, including interim periods within those fiscal years. ASU 2021-08 is effective for the Company in the first
quarter of fiscal 2024. Early adoption is permitted, including in an interim period, for any period for which financial statements
quarter of fiscal 2024. Early adoption is permitted, including in an interim period, for any period for which financial statements
have not yet been issued. However, adoption in an interim period other than the first fiscal quarter requires an entity to apply
have not yet been issued. However, adoption in an interim period other than the first fiscal quarter requires an entity to apply
the new guidance to all prior business combinations that have occurred since the beginning of the annual period in which the
the new guidance to all prior business combinations that have occurred since the beginning of the annual period in which the
new guidance is adopted. The Company is currently evaluating the adoption date of ASU 2021-08 and the impact, if any,
new guidance is adopted. The Company is currently evaluating the adoption date of ASU 2021-08 and the impact, if any,
adoption will have on its financial position and results of operations.
adoption will have on its financial position and results of operations.
3. Stock-Based Compensation and Shareholders’ Equity
3. Stock-Based Compensation and Shareholders’ Equity
Equity Compensation Plans
Equity Compensation Plans
The Company grants, or has granted, stock options and other stock and stock-based awards under the Company's 2020
The Company grants, or has granted, stock options and other stock and stock-based awards under the Company's 2020
Equity Incentive Plan (2020 Plan), which was approved by shareholders in March 2020. The 2020 Plan provides for the grant
Equity Incentive Plan (2020 Plan), which was approved by shareholders in March 2020. The 2020 Plan provides for the grant
of up to 21.2 million shares of the Company’s common stock, which includes shares under the Company’s previous equity
of up to 21.2 million shares of the Company’s common stock, which includes shares under the Company’s previous equity
compensation plans, including the Amended and Restated 2006 Stock Incentive Plan and the Amended and Restated 2010
compensation plans, including the Amended and Restated 2006 Stock Incentive Plan and the Amended and Restated 2010
Equity Incentive Plan. The 2020 Plan provides for the grant of incentive stock options intended to qualify under Section 422 of
Equity Incentive Plan. The 2020 Plan provides for the grant of incentive stock options intended to qualify under Section 422 of
the Internal Revenue Code of 1986, as amended, non-statutory stock options, stock appreciation rights, restricted stock,
the Internal Revenue Code of 1986, as amended, non-statutory stock options, stock appreciation rights, restricted stock,
restricted stock units and other stock-based awards. Employees, officers, directors, consultants and advisors of the Company
restricted stock units and other stock-based awards. Employees, officers, directors, consultants and advisors of the Company
and its subsidiaries are eligible to be granted awards under the 2020 Plan. No award may be made under the 2020 Plan after
and its subsidiaries are eligible to be granted awards under the 2020 Plan. No award may be made under the 2020 Plan after
March 11, 2030, but awards previously granted may extend beyond that date. The Company does not intend to grant further
March 11, 2030, but awards previously granted may extend beyond that date. The Company does not intend to grant further
equity awards under any previous legacy equity compensation plans. In connection with the Acquisition, the Company
equity awards under any previous legacy equity compensation plans. In connection with the Acquisition, the Company
assumed the Maxim 1996 Stock Incentive Plan (1996 Plan) and may grant stock options and other stock and stock-based
assumed the Maxim 1996 Stock Incentive Plan (1996 Plan) and may grant stock options and other stock and stock-based
awards under the 1996 Plan. As of October 29, 2022, a total of 16.8 million common shares were available for future grant
awards under the 1996 Plan. As of October 29, 2022, a total of 16.8 million common shares were available for future grant
under the 2020 Plan and 8.7 million common shares were available for future grant under the 1996 Plan.
under the 2020 Plan and 8.7 million common shares were available for future grant under the 1996 Plan.
Maxim Replacement Awards
Maxim Replacement Awards
In connection with the Acquisition, the Company issued equity awards, consisting of restricted stock awards and restricted
In connection with the Acquisition, the Company issued equity awards, consisting of restricted stock awards and restricted
stock units (replacement awards), to certain Maxim employees in replacement of Maxim equity awards. The replacement
stock units (replacement awards), to certain Maxim employees in replacement of Maxim equity awards. The replacement
awards consist of restricted stock and restricted stock unit awards for approximately 3.7 million shares of the Company's
awards consist of restricted stock and restricted stock unit awards for approximately 3.7 million shares of the Company's
common stock with a weighted average grant date fair value of $161.63. The terms and intrinsic value of these replacement
common stock with a weighted average grant date fair value of $161.63. The terms and intrinsic value of these replacement
awards are substantially the same as the converted Maxim awards. The fair value of the replacement awards associated with
awards are substantially the same as the converted Maxim awards. The fair value of the replacement awards associated with
services rendered through the Acquisition Date was recognized as a component of the total acquisition consideration, and the
services rendered through the Acquisition Date was recognized as a component of the total acquisition consideration, and the
remaining fair value of the replacement awards associated with post-Acquisition services will be recognized as an expense on a
remaining fair value of the replacement awards associated with post-Acquisition services will be recognized as an expense on a
straight-line basis over the remaining vesting period.
straight-line basis over the remaining vesting period.
Modification of Awards
Modification of Awards
The Company has, from time to time, modified the terms of its equity awards to employees and directors. The
The Company has, from time to time, modified the terms of its equity awards to employees and directors. The
modifications made to the Company’s equity awards in fiscal 2022, fiscal 2021 and fiscal 2020 did not result in significant
modifications made to the Company’s equity awards in fiscal 2022, fiscal 2021 and fiscal 2020 did not result in significant
incremental compensation costs, either individually or in the aggregate.
incremental compensation costs, either individually or in the aggregate.
Grant-Date Fair Value of Stock Options
Grant-Date Fair Value of Stock Options
Information pertaining to the Company’s stock option awards and the related estimated weighted-average assumptions to
Information pertaining to the Company’s stock option awards and the related estimated weighted-average assumptions to
calculate the fair value of stock options using the Black-Scholes valuation model granted in fiscal 2021 and fiscal 2020 is
calculate the fair value of stock options using the Black-Scholes valuation model granted in fiscal 2021 and fiscal 2020 is
below. The Company did not grant stock option awards in fiscal 2022.
below. The Company did not grant stock option awards in fiscal 2022.
Options granted (in thousands)
Options granted (in thousands)
Weighted-average exercise price
Weighted-average exercise price
Weighted-average grant-date fair value
Weighted-average grant-date fair value
Assumptions:
Assumptions:
Weighted-average expected volatility
Weighted-average expected volatility
Weighted-average expected term (in years)
Weighted-average expected term (in years)
Weighted-average risk-free interest rate
Weighted-average risk-free interest rate
Weighted-average expected dividend yield
Weighted-average expected dividend yield
2021
2021
644
644
$145.04
$145.04
$33.35
$33.35
35.3 %
35.3 %
5.0
5.0
0.8 %
0.8 %
1.9 %
1.9 %
2020
2020
359
359
$94.41
$94.41
$18.81
$18.81
29.5 %
29.5 %
5.0
5.0
0.7 %
0.7 %
2.6 %
2.6 %
Expected volatility — The Company is responsible for estimating volatility and has considered a number of factors,
Expected volatility — The Company is responsible for estimating volatility and has considered a number of factors,
including third-party estimates. The Company currently believes that the exclusive use of implied volatility results in the best
including third-party estimates. The Company currently believes that the exclusive use of implied volatility results in the best
estimate of the grant-date fair value of employee stock options because it reflects the market’s current expectations of future
estimate of the grant-date fair value of employee stock options because it reflects the market’s current expectations of future
volatility. In evaluating the appropriateness of exclusively relying on implied volatility, the Company concluded that:
volatility. In evaluating the appropriateness of exclusively relying on implied volatility, the Company concluded that:
(1) options in the Company’s common stock are actively traded with sufficient volume on several exchanges; (2) the market
(1) options in the Company’s common stock are actively traded with sufficient volume on several exchanges; (2) the market
prices of both the traded options and the underlying shares are measured at a similar point in time to each other and on a date
prices of both the traded options and the underlying shares are measured at a similar point in time to each other and on a date
close to the grant date of the employee share options; (3) the traded options have exercise prices that are both near-the-money
close to the grant date of the employee share options; (3) the traded options have exercise prices that are both near-the-money
and close to the exercise price of the employee share options; and (4) the remaining maturities of the traded options used to
and close to the exercise price of the employee share options; and (4) the remaining maturities of the traded options used to
estimate volatility are at least one year.
estimate volatility are at least one year.
Expected term — The Company uses historical employee exercise and option expiration data to estimate the expected
Expected term — The Company uses historical employee exercise and option expiration data to estimate the expected
term assumption for the Black-Scholes grant-date valuation. The Company believes that this historical data is currently the best
term assumption for the Black-Scholes grant-date valuation. The Company believes that this historical data is currently the best
estimate of the expected term of a new option, and that generally its employees exhibit similar exercise behavior.
estimate of the expected term of a new option, and that generally its employees exhibit similar exercise behavior.
Risk-free interest rate — The yield on zero-coupon U.S. Treasury securities for a period that is commensurate with the
Risk-free interest rate — The yield on zero-coupon U.S. Treasury securities for a period that is commensurate with the
expected term assumption is used as the risk-free interest rate.
expected term assumption is used as the risk-free interest rate.
Expected dividend yield — Expected dividend yield is calculated by annualizing the cash dividend declared by the
Expected dividend yield — Expected dividend yield is calculated by annualizing the cash dividend declared by the
Company’s Board of Directors for the current quarter and dividing that result by the closing stock price on the date of grant.
Company’s Board of Directors for the current quarter and dividing that result by the closing stock price on the date of grant.
Until such time as the Company’s Board of Directors declares a cash dividend for an amount that is different from the current
Until such time as the Company’s Board of Directors declares a cash dividend for an amount that is different from the current
quarter’s cash dividend, the current dividend will be used in deriving this assumption. Cash dividends are not paid on options,
quarter’s cash dividend, the current dividend will be used in deriving this assumption. Cash dividends are not paid on options,
restricted stock, replacement awards or restricted stock units. In connection with the acquisition of Linear, the Company granted
restricted stock, replacement awards or restricted stock units. In connection with the acquisition of Linear, the Company granted
restricted stock awards to replace outstanding restricted stock awards of Linear employees. These restricted stock awards
restricted stock awards to replace outstanding restricted stock awards of Linear employees. These restricted stock awards
specific to legacy Linear awards entitle recipients to voting and nonforfeitable dividend rights from the date of grant.
specific to legacy Linear awards entitle recipients to voting and nonforfeitable dividend rights from the date of grant.
63
63
64
64
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
s. New Accounting Pronouncements
s. New Accounting Pronouncements
Standards Implemented During Fiscal 2022
Standards Implemented During Fiscal 2022
Reference Rate Reform
Reference Rate Reform
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of
Reference Rate Reform on Financial Reporting, which provides optional guidance for accounting for contracts, hedging
Reference Rate Reform on Financial Reporting, which provides optional guidance for accounting for contracts, hedging
relationships, and other transactions affected by reference rate reform, if certain criteria are met. The provisions of this standard
relationships, and other transactions affected by reference rate reform, if certain criteria are met. The provisions of this standard
are available for election through December 31, 2022. The Company adopted this standard in the first quarter of fiscal 2022
are available for election through December 31, 2022. The Company adopted this standard in the first quarter of fiscal 2022
with no material impact on the Company's financial position and results of operations.
with no material impact on the Company's financial position and results of operations.
Standards to Be Implemented
Standards to Be Implemented
Acquired Contract Assets and Contract Liabilities
Acquired Contract Assets and Contract Liabilities
In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Acquired
In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Acquired
Contract Assets and Contract Liabilities. Under the new guidance (ASC 805-20-30-28), the acquirer should determine what
Contract Assets and Contract Liabilities. Under the new guidance (ASC 805-20-30-28), the acquirer should determine what
contract assets and/or contract liabilities it would have recorded under ASC 606 (the revenue guidance) as of the acquisition
contract assets and/or contract liabilities it would have recorded under ASC 606 (the revenue guidance) as of the acquisition
date, as if the acquirer had entered into the original contract at the same date and on the same terms as the acquiree. The
date, as if the acquirer had entered into the original contract at the same date and on the same terms as the acquiree. The
recognition and measurement of those contract assets and contract liabilities will likely be comparable to what the acquiree has
recognition and measurement of those contract assets and contract liabilities will likely be comparable to what the acquiree has
recorded on its books under ASC 606 as of the acquisition date. ASU 2021-08 is effective for fiscal years beginning after
recorded on its books under ASC 606 as of the acquisition date. ASU 2021-08 is effective for fiscal years beginning after
December 15, 2022, including interim periods within those fiscal years. ASU 2021-08 is effective for the Company in the first
December 15, 2022, including interim periods within those fiscal years. ASU 2021-08 is effective for the Company in the first
quarter of fiscal 2024. Early adoption is permitted, including in an interim period, for any period for which financial statements
quarter of fiscal 2024. Early adoption is permitted, including in an interim period, for any period for which financial statements
have not yet been issued. However, adoption in an interim period other than the first fiscal quarter requires an entity to apply
have not yet been issued. However, adoption in an interim period other than the first fiscal quarter requires an entity to apply
the new guidance to all prior business combinations that have occurred since the beginning of the annual period in which the
the new guidance to all prior business combinations that have occurred since the beginning of the annual period in which the
new guidance is adopted. The Company is currently evaluating the adoption date of ASU 2021-08 and the impact, if any,
new guidance is adopted. The Company is currently evaluating the adoption date of ASU 2021-08 and the impact, if any,
adoption will have on its financial position and results of operations.
adoption will have on its financial position and results of operations.
3. Stock-Based Compensation and Shareholders’ Equity
3. Stock-Based Compensation and Shareholders’ Equity
Equity Compensation Plans
Equity Compensation Plans
The Company grants, or has granted, stock options and other stock and stock-based awards under the Company's 2020
The Company grants, or has granted, stock options and other stock and stock-based awards under the Company's 2020
Equity Incentive Plan (2020 Plan), which was approved by shareholders in March 2020. The 2020 Plan provides for the grant
Equity Incentive Plan (2020 Plan), which was approved by shareholders in March 2020. The 2020 Plan provides for the grant
of up to 21.2 million shares of the Company’s common stock, which includes shares under the Company’s previous equity
of up to 21.2 million shares of the Company’s common stock, which includes shares under the Company’s previous equity
compensation plans, including the Amended and Restated 2006 Stock Incentive Plan and the Amended and Restated 2010
compensation plans, including the Amended and Restated 2006 Stock Incentive Plan and the Amended and Restated 2010
Equity Incentive Plan. The 2020 Plan provides for the grant of incentive stock options intended to qualify under Section 422 of
Equity Incentive Plan. The 2020 Plan provides for the grant of incentive stock options intended to qualify under Section 422 of
the Internal Revenue Code of 1986, as amended, non-statutory stock options, stock appreciation rights, restricted stock,
the Internal Revenue Code of 1986, as amended, non-statutory stock options, stock appreciation rights, restricted stock,
restricted stock units and other stock-based awards. Employees, officers, directors, consultants and advisors of the Company
restricted stock units and other stock-based awards. Employees, officers, directors, consultants and advisors of the Company
and its subsidiaries are eligible to be granted awards under the 2020 Plan. No award may be made under the 2020 Plan after
and its subsidiaries are eligible to be granted awards under the 2020 Plan. No award may be made under the 2020 Plan after
March 11, 2030, but awards previously granted may extend beyond that date. The Company does not intend to grant further
March 11, 2030, but awards previously granted may extend beyond that date. The Company does not intend to grant further
equity awards under any previous legacy equity compensation plans. In connection with the Acquisition, the Company
equity awards under any previous legacy equity compensation plans. In connection with the Acquisition, the Company
assumed the Maxim 1996 Stock Incentive Plan (1996 Plan) and may grant stock options and other stock and stock-based
assumed the Maxim 1996 Stock Incentive Plan (1996 Plan) and may grant stock options and other stock and stock-based
awards under the 1996 Plan. As of October 29, 2022, a total of 16.8 million common shares were available for future grant
awards under the 1996 Plan. As of October 29, 2022, a total of 16.8 million common shares were available for future grant
under the 2020 Plan and 8.7 million common shares were available for future grant under the 1996 Plan.
under the 2020 Plan and 8.7 million common shares were available for future grant under the 1996 Plan.
Maxim Replacement Awards
Maxim Replacement Awards
In connection with the Acquisition, the Company issued equity awards, consisting of restricted stock awards and restricted
In connection with the Acquisition, the Company issued equity awards, consisting of restricted stock awards and restricted
stock units (replacement awards), to certain Maxim employees in replacement of Maxim equity awards. The replacement
stock units (replacement awards), to certain Maxim employees in replacement of Maxim equity awards. The replacement
awards consist of restricted stock and restricted stock unit awards for approximately 3.7 million shares of the Company's
awards consist of restricted stock and restricted stock unit awards for approximately 3.7 million shares of the Company's
common stock with a weighted average grant date fair value of $161.63. The terms and intrinsic value of these replacement
common stock with a weighted average grant date fair value of $161.63. The terms and intrinsic value of these replacement
awards are substantially the same as the converted Maxim awards. The fair value of the replacement awards associated with
awards are substantially the same as the converted Maxim awards. The fair value of the replacement awards associated with
services rendered through the Acquisition Date was recognized as a component of the total acquisition consideration, and the
services rendered through the Acquisition Date was recognized as a component of the total acquisition consideration, and the
remaining fair value of the replacement awards associated with post-Acquisition services will be recognized as an expense on a
remaining fair value of the replacement awards associated with post-Acquisition services will be recognized as an expense on a
straight-line basis over the remaining vesting period.
straight-line basis over the remaining vesting period.
Modification of Awards
Modification of Awards
The Company has, from time to time, modified the terms of its equity awards to employees and directors. The
The Company has, from time to time, modified the terms of its equity awards to employees and directors. The
modifications made to the Company’s equity awards in fiscal 2022, fiscal 2021 and fiscal 2020 did not result in significant
modifications made to the Company’s equity awards in fiscal 2022, fiscal 2021 and fiscal 2020 did not result in significant
incremental compensation costs, either individually or in the aggregate.
incremental compensation costs, either individually or in the aggregate.
Grant-Date Fair Value of Stock Options
Grant-Date Fair Value of Stock Options
Information pertaining to the Company’s stock option awards and the related estimated weighted-average assumptions to
Information pertaining to the Company’s stock option awards and the related estimated weighted-average assumptions to
calculate the fair value of stock options using the Black-Scholes valuation model granted in fiscal 2021 and fiscal 2020 is
calculate the fair value of stock options using the Black-Scholes valuation model granted in fiscal 2021 and fiscal 2020 is
below. The Company did not grant stock option awards in fiscal 2022.
below. The Company did not grant stock option awards in fiscal 2022.
Options granted (in thousands)
Options granted (in thousands)
Weighted-average exercise price
Weighted-average exercise price
Weighted-average grant-date fair value
Weighted-average grant-date fair value
Assumptions:
Assumptions:
Weighted-average expected volatility
Weighted-average expected volatility
Weighted-average expected term (in years)
Weighted-average expected term (in years)
Weighted-average risk-free interest rate
Weighted-average risk-free interest rate
Weighted-average expected dividend yield
Weighted-average expected dividend yield
2021
2021
644
644
$145.04
$145.04
$33.35
$33.35
35.3 %
35.3 %
5.0
5.0
0.8 %
0.8 %
1.9 %
1.9 %
2020
2020
359
359
$94.41
$94.41
$18.81
$18.81
29.5 %
29.5 %
5.0
5.0
0.7 %
0.7 %
2.6 %
2.6 %
Expected volatility — The Company is responsible for estimating volatility and has considered a number of factors,
Expected volatility — The Company is responsible for estimating volatility and has considered a number of factors,
including third-party estimates. The Company currently believes that the exclusive use of implied volatility results in the best
including third-party estimates. The Company currently believes that the exclusive use of implied volatility results in the best
estimate of the grant-date fair value of employee stock options because it reflects the market’s current expectations of future
estimate of the grant-date fair value of employee stock options because it reflects the market’s current expectations of future
volatility. In evaluating the appropriateness of exclusively relying on implied volatility, the Company concluded that:
volatility. In evaluating the appropriateness of exclusively relying on implied volatility, the Company concluded that:
(1) options in the Company’s common stock are actively traded with sufficient volume on several exchanges; (2) the market
(1) options in the Company’s common stock are actively traded with sufficient volume on several exchanges; (2) the market
prices of both the traded options and the underlying shares are measured at a similar point in time to each other and on a date
prices of both the traded options and the underlying shares are measured at a similar point in time to each other and on a date
close to the grant date of the employee share options; (3) the traded options have exercise prices that are both near-the-money
close to the grant date of the employee share options; (3) the traded options have exercise prices that are both near-the-money
and close to the exercise price of the employee share options; and (4) the remaining maturities of the traded options used to
and close to the exercise price of the employee share options; and (4) the remaining maturities of the traded options used to
estimate volatility are at least one year.
estimate volatility are at least one year.
Expected term — The Company uses historical employee exercise and option expiration data to estimate the expected
Expected term — The Company uses historical employee exercise and option expiration data to estimate the expected
term assumption for the Black-Scholes grant-date valuation. The Company believes that this historical data is currently the best
term assumption for the Black-Scholes grant-date valuation. The Company believes that this historical data is currently the best
estimate of the expected term of a new option, and that generally its employees exhibit similar exercise behavior.
estimate of the expected term of a new option, and that generally its employees exhibit similar exercise behavior.
Risk-free interest rate — The yield on zero-coupon U.S. Treasury securities for a period that is commensurate with the
Risk-free interest rate — The yield on zero-coupon U.S. Treasury securities for a period that is commensurate with the
expected term assumption is used as the risk-free interest rate.
expected term assumption is used as the risk-free interest rate.
Expected dividend yield — Expected dividend yield is calculated by annualizing the cash dividend declared by the
Expected dividend yield — Expected dividend yield is calculated by annualizing the cash dividend declared by the
Company’s Board of Directors for the current quarter and dividing that result by the closing stock price on the date of grant.
Company’s Board of Directors for the current quarter and dividing that result by the closing stock price on the date of grant.
Until such time as the Company’s Board of Directors declares a cash dividend for an amount that is different from the current
Until such time as the Company’s Board of Directors declares a cash dividend for an amount that is different from the current
quarter’s cash dividend, the current dividend will be used in deriving this assumption. Cash dividends are not paid on options,
quarter’s cash dividend, the current dividend will be used in deriving this assumption. Cash dividends are not paid on options,
restricted stock, replacement awards or restricted stock units. In connection with the acquisition of Linear, the Company granted
restricted stock, replacement awards or restricted stock units. In connection with the acquisition of Linear, the Company granted
restricted stock awards to replace outstanding restricted stock awards of Linear employees. These restricted stock awards
restricted stock awards to replace outstanding restricted stock awards of Linear employees. These restricted stock awards
specific to legacy Linear awards entitle recipients to voting and nonforfeitable dividend rights from the date of grant.
specific to legacy Linear awards entitle recipients to voting and nonforfeitable dividend rights from the date of grant.
63
63
64
64
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Employee Stock Purchase Plan (ESPP)
Employee Stock Purchase Plan (ESPP)
Beginning in fiscal 2022, the Company offers an ESPP to eligible employees, providing the opportunity to purchase
Beginning in fiscal 2022, the Company offers an ESPP to eligible employees, providing the opportunity to purchase
shares of the Company's common stock at a discount through payroll deductions. Offering periods begin in June and December
shares of the Company's common stock at a discount through payroll deductions. Offering periods begin in June and December
each year. U.S. employees are allowed to purchase the Company's common stock at the lesser of 85% of the fair market value
each year. U.S. employees are allowed to purchase the Company's common stock at the lesser of 85% of the fair market value
of the common stock at either the beginning or end of the offering period. Eligible employees outside of the U.S. are allowed to
of the common stock at either the beginning or end of the offering period. Eligible employees outside of the U.S. are allowed to
purchase the Company's common stock at the lesser of 80% of the fair market value of the common stock at either the
purchase the Company's common stock at the lesser of 80% of the fair market value of the common stock at either the
beginning or end of the offering period.
beginning or end of the offering period.
Stock-Based Compensation Expense
Stock-Based Compensation Expense
The amount of stock-based compensation expense recognized during a period is based on the value of the awards that are
The amount of stock-based compensation expense recognized during a period is based on the value of the awards that are
ultimately expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if
ultimately expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if
actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or “expirations” and
actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or “expirations” and
represents only the unvested portion of the surrendered stock-based award. Based on an analysis of its historical forfeitures, the
represents only the unvested portion of the surrendered stock-based award. Based on an analysis of its historical forfeitures, the
Company has applied an annual forfeiture rate of 5.0% to all unvested stock-based awards as of October 29, 2022. This analysis
Company has applied an annual forfeiture rate of 5.0% to all unvested stock-based awards as of October 29, 2022. This analysis
will be re-evaluated annually and the forfeiture rate will be adjusted as necessary. Ultimately, the actual expense recognized
will be re-evaluated annually and the forfeiture rate will be adjusted as necessary. Ultimately, the actual expense recognized
over the vesting period will only be for those awards that vest.
over the vesting period will only be for those awards that vest.
Total stock-based compensation expense recognized is as follows:
Total stock-based compensation expense recognized is as follows:
Common Stock Repurchases
Common Stock Repurchases
Cost of sales
Cost of sales
Research and development
Research and development
Selling, marketing, general and administrative
Selling, marketing, general and administrative
Special charges, net
Special charges, net
Total stock-based compensation expense
Total stock-based compensation expense
2022
2022
2021
2021
2020
2020
$
$
$
$
36,773 $
36,773 $
121,298
121,298
133,900
133,900
31,516
31,516
323,487 $
323,487 $
22,028 $
22,028 $
86,820
86,820
80,099
80,099
54,664
54,664
243,611 $
243,611 $
17,684
17,684
73,366
73,366
56,838
56,838
1,630
1,630
149,518
149,518
As of October 29, 2022 and October 30, 2021, the Company capitalized $13.1 million and $8.7 million, respectively, of
As of October 29, 2022 and October 30, 2021, the Company capitalized $13.1 million and $8.7 million, respectively, of
stock-based compensation in inventory.
stock-based compensation in inventory.
Stock-Based Compensation Activity
Stock-Based Compensation Activity
A summary of the activity under the Company’s stock option plans as of October 29, 2022 and changes during the fiscal
A summary of the activity under the Company’s stock option plans as of October 29, 2022 and changes during the fiscal
year then ended is presented below:
year then ended is presented below:
Options
Options
Outstanding
Outstanding
(in thousands)
(in thousands)
Weighted-
Weighted-
Average Exercise
Average Exercise
Price Per Share
Price Per Share
Weighted-
Weighted-
Average
Average
Remaining
Remaining
Contractual
Contractual
Term in Years
Term in Years
Aggregate
Aggregate
Intrinsic
Intrinsic
Value
Value
Options outstanding at October 30, 2021
Options outstanding at October 30, 2021
Options exercised
Options exercised
Options forfeited
Options forfeited
Options outstanding at October 29, 2022
Options outstanding at October 29, 2022
Options exercisable at October 29, 2022
Options exercisable at October 29, 2022
Options vested or expected to vest at October 29, 2022 (1)
Options vested or expected to vest at October 29, 2022 (1)
3,746
3,746
(545)
(545)
(7)
(7)
3,194
3,194
2,351
2,351
3,161
3,161
$85.22
$85.22
$62.16
$62.16
$97.94
$97.94
$89.13
$89.13
$73.93
$73.93
$88.67
$88.67
4.9 $178,511
4.9 $178,511
3.8 $166,927
3.8 $166,927
4.9 $178,134
4.9 $178,134
United States.
United States.
Analog Devices Foundation
Analog Devices Foundation
_______________________________________
_______________________________________
(1)
(1)
In addition to the vested options, the Company expects a portion of the unvested options to vest at some point in the future. The number
In addition to the vested options, the Company expects a portion of the unvested options to vest at some point in the future. The number
of options expected to vest is calculated by applying an estimated forfeiture rate to the unvested options.
of options expected to vest is calculated by applying an estimated forfeiture rate to the unvested options.
The total intrinsic value of options exercised (i.e., the difference between the market price at exercise and the price paid
The total intrinsic value of options exercised (i.e., the difference between the market price at exercise and the price paid
by the employee to exercise the options) during fiscal 2022, fiscal 2021 and fiscal 2020 was $56.2 million, $93.2 million and
by the employee to exercise the options) during fiscal 2022, fiscal 2021 and fiscal 2020 was $56.2 million, $93.2 million and
$76.3 million, respectively.
$76.3 million, respectively.
A summary of the Company’s restricted stock unit and award activity as of October 29, 2022 and changes during the
A summary of the Company’s restricted stock unit and award activity as of October 29, 2022 and changes during the
fiscal year then ended is presented below:
fiscal year then ended is presented below:
Restricted
Restricted
Stock Units/
Stock Units/
Awards
Awards
Outstanding
Outstanding
(in thousands)
(in thousands)
Weighted-
Weighted-
Average Grant-
Average Grant-
Date Fair Value
Date Fair Value
Per Share
Per Share
5,924
5,924
2,173
2,173
(2,156)
(2,156)
(619)
(619)
5,322
5,322
$132.59
$132.59
$154.46
$154.46
$128.19
$128.19
$139.12
$139.12
$142.54
$142.54
Restricted stock units/awards outstanding at October 30, 2021
Restricted stock units/awards outstanding at October 30, 2021
Units/Awards granted
Units/Awards granted
Restrictions lapsed
Restrictions lapsed
Forfeited
Forfeited
Restricted stock units/awards outstanding at October 29, 2022
Restricted stock units/awards outstanding at October 29, 2022
As of October 29, 2022, there was $545.2 million of total unrecognized compensation cost related to unvested stock-
As of October 29, 2022, there was $545.2 million of total unrecognized compensation cost related to unvested stock-
based awards comprised of stock options, restricted stock awards and restricted stock unit awards. That cost is expected to be
based awards comprised of stock options, restricted stock awards and restricted stock unit awards. That cost is expected to be
recognized over a weighted-average period of 1.4 years. The total grant-date fair value of awards that vested during fiscal 2022,
recognized over a weighted-average period of 1.4 years. The total grant-date fair value of awards that vested during fiscal 2022,
fiscal 2021 and fiscal 2020 was approximately $283.0 million, $207.0 million and $174.1 million, respectively.
fiscal 2021 and fiscal 2020 was approximately $283.0 million, $207.0 million and $174.1 million, respectively.
In fiscal 2021, the Company entered into accelerated share repurchase agreements (ASR) with third party financial
In fiscal 2021, the Company entered into accelerated share repurchase agreements (ASR) with third party financial
institutions, paid $2.5 billion and received an initial delivery of 12.3 million shares of common stock, which represented
institutions, paid $2.5 billion and received an initial delivery of 12.3 million shares of common stock, which represented
approximately 80% of the notional amount of the ASR. As of October 30, 2021, the Company recorded the remaining 20%, or
approximately 80% of the notional amount of the ASR. As of October 30, 2021, the Company recorded the remaining 20%, or
$500.0 million, within Prepaid expenses and other current assets on the Consolidated Balance Sheet, which was utilized during
$500.0 million, within Prepaid expenses and other current assets on the Consolidated Balance Sheet, which was utilized during
the first quarter of fiscal 2022. During the first quarter of fiscal 2022, the ASR was completed and an additional 2.1 million
the first quarter of fiscal 2022. During the first quarter of fiscal 2022, the ASR was completed and an additional 2.1 million
shares of common stock were received as final settlement of the ASR. In total, the Company repurchased 14.4 million shares of
shares of common stock were received as final settlement of the ASR. In total, the Company repurchased 14.4 million shares of
common stock under the ASR at an average price per share of $173.77.
common stock under the ASR at an average price per share of $173.77.
The Company’s share repurchase program has been in place since August 2004. In the aggregate, the Board of Directors
The Company’s share repurchase program has been in place since August 2004. In the aggregate, the Board of Directors
has authorized the Company to repurchase $16.7 billion of the Company’s common stock under the program, which includes
has authorized the Company to repurchase $16.7 billion of the Company’s common stock under the program, which includes
the $8.5 billion authorization approved by the Board of Directors on August 25, 2021. The Company may repurchase
the $8.5 billion authorization approved by the Board of Directors on August 25, 2021. The Company may repurchase
outstanding shares of its common stock from time to time in the open market and through privately negotiated transactions.
outstanding shares of its common stock from time to time in the open market and through privately negotiated transactions.
Unless terminated earlier by resolution of the Company’s Board of Directors, the repurchase program will expire when the
Unless terminated earlier by resolution of the Company’s Board of Directors, the repurchase program will expire when the
Company has repurchased all shares authorized under the program. As of October 29, 2022, the Company had repurchased a
Company has repurchased all shares authorized under the program. As of October 29, 2022, the Company had repurchased a
total of approximately 189.6 million shares of its common stock for approximately $11.7 billion under this program. An
total of approximately 189.6 million shares of its common stock for approximately $11.7 billion under this program. An
additional $4.9 billion remains available for repurchase of shares under the current authorized program. The repurchased shares
additional $4.9 billion remains available for repurchase of shares under the current authorized program. The repurchased shares
are held as authorized but unissued shares of common stock. Future repurchases of common stock will be dependent upon the
are held as authorized but unissued shares of common stock. Future repurchases of common stock will be dependent upon the
Company's financial position, results of operations, outlook, liquidity, and other factors deemed relevant by the Company.
Company's financial position, results of operations, outlook, liquidity, and other factors deemed relevant by the Company.
The Company also, from time to time, repurchases shares in settlement of employee tax withholding obligations due upon
The Company also, from time to time, repurchases shares in settlement of employee tax withholding obligations due upon
the vesting of restricted stock units/awards or the exercise of stock options. The withholding amount is based on the employee's
the vesting of restricted stock units/awards or the exercise of stock options. The withholding amount is based on the employee's
minimum statutory withholding requirement. Any future common stock repurchases will be dependent upon several factors,
minimum statutory withholding requirement. Any future common stock repurchases will be dependent upon several factors,
including the Company's financial performance, outlook, liquidity and the amount of cash the Company has available in the
including the Company's financial performance, outlook, liquidity and the amount of cash the Company has available in the
During the first quarter of fiscal 2020, the Company contributed 335,654 shares of its common stock to the Analog
During the first quarter of fiscal 2020, the Company contributed 335,654 shares of its common stock to the Analog
Devices Foundation. As of the date of the charitable contribution, the shares had a fair value of approximately $40.0 million.
Devices Foundation. As of the date of the charitable contribution, the shares had a fair value of approximately $40.0 million.
This expense was recorded in Selling, marketing, general and administrative expense in the Consolidated Statement of Income.
This expense was recorded in Selling, marketing, general and administrative expense in the Consolidated Statement of Income.
Preferred Stock
Preferred Stock
time of issuance.
time of issuance.
The Company has 471,934 authorized shares of $1.00 par value preferred stock, none of which is issued or outstanding.
The Company has 471,934 authorized shares of $1.00 par value preferred stock, none of which is issued or outstanding.
The Board of Directors is authorized to fix designations, relative rights, preferences and limitations on the preferred stock at the
The Board of Directors is authorized to fix designations, relative rights, preferences and limitations on the preferred stock at the
4.
4.
Industry, Segment and Geographic Information
Industry, Segment and Geographic Information
The Company operates and tracks its results in one reportable segment based on the aggregation of its operating
The Company operates and tracks its results in one reportable segment based on the aggregation of its operating
segments. The Company designs, develops, manufactures and markets a broad range of integrated circuits (ICs). The Chief
segments. The Company designs, develops, manufactures and markets a broad range of integrated circuits (ICs). The Chief
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Employee Stock Purchase Plan (ESPP)
Employee Stock Purchase Plan (ESPP)
Beginning in fiscal 2022, the Company offers an ESPP to eligible employees, providing the opportunity to purchase
Beginning in fiscal 2022, the Company offers an ESPP to eligible employees, providing the opportunity to purchase
shares of the Company's common stock at a discount through payroll deductions. Offering periods begin in June and December
shares of the Company's common stock at a discount through payroll deductions. Offering periods begin in June and December
each year. U.S. employees are allowed to purchase the Company's common stock at the lesser of 85% of the fair market value
each year. U.S. employees are allowed to purchase the Company's common stock at the lesser of 85% of the fair market value
of the common stock at either the beginning or end of the offering period. Eligible employees outside of the U.S. are allowed to
of the common stock at either the beginning or end of the offering period. Eligible employees outside of the U.S. are allowed to
purchase the Company's common stock at the lesser of 80% of the fair market value of the common stock at either the
purchase the Company's common stock at the lesser of 80% of the fair market value of the common stock at either the
beginning or end of the offering period.
beginning or end of the offering period.
Stock-Based Compensation Expense
Stock-Based Compensation Expense
The amount of stock-based compensation expense recognized during a period is based on the value of the awards that are
The amount of stock-based compensation expense recognized during a period is based on the value of the awards that are
ultimately expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if
ultimately expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if
actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or “expirations” and
actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or “expirations” and
represents only the unvested portion of the surrendered stock-based award. Based on an analysis of its historical forfeitures, the
represents only the unvested portion of the surrendered stock-based award. Based on an analysis of its historical forfeitures, the
Company has applied an annual forfeiture rate of 5.0% to all unvested stock-based awards as of October 29, 2022. This analysis
Company has applied an annual forfeiture rate of 5.0% to all unvested stock-based awards as of October 29, 2022. This analysis
will be re-evaluated annually and the forfeiture rate will be adjusted as necessary. Ultimately, the actual expense recognized
will be re-evaluated annually and the forfeiture rate will be adjusted as necessary. Ultimately, the actual expense recognized
over the vesting period will only be for those awards that vest.
over the vesting period will only be for those awards that vest.
Total stock-based compensation expense recognized is as follows:
Total stock-based compensation expense recognized is as follows:
2022
2022
2021
2021
2020
2020
$
$
36,773 $
36,773 $
22,028 $
22,028 $
121,298
121,298
133,900
133,900
31,516
31,516
86,820
86,820
80,099
80,099
54,664
54,664
17,684
17,684
73,366
73,366
56,838
56,838
1,630
1,630
Cost of sales
Cost of sales
Research and development
Research and development
Selling, marketing, general and administrative
Selling, marketing, general and administrative
Special charges, net
Special charges, net
stock-based compensation in inventory.
stock-based compensation in inventory.
Stock-Based Compensation Activity
Stock-Based Compensation Activity
year then ended is presented below:
year then ended is presented below:
Total stock-based compensation expense
Total stock-based compensation expense
$
$
323,487 $
323,487 $
243,611 $
243,611 $
149,518
149,518
As of October 29, 2022 and October 30, 2021, the Company capitalized $13.1 million and $8.7 million, respectively, of
As of October 29, 2022 and October 30, 2021, the Company capitalized $13.1 million and $8.7 million, respectively, of
A summary of the activity under the Company’s stock option plans as of October 29, 2022 and changes during the fiscal
A summary of the activity under the Company’s stock option plans as of October 29, 2022 and changes during the fiscal
Options
Options
Outstanding
Outstanding
(in thousands)
(in thousands)
Weighted-
Weighted-
Average Exercise
Average Exercise
Price Per Share
Price Per Share
Weighted-
Weighted-
Average
Average
Remaining
Remaining
Contractual
Contractual
Term in Years
Term in Years
Aggregate
Aggregate
Intrinsic
Intrinsic
Value
Value
3,746
3,746
(545)
(545)
(7)
(7)
3,194
3,194
2,351
2,351
3,161
3,161
$85.22
$85.22
$62.16
$62.16
$97.94
$97.94
$89.13
$89.13
$73.93
$73.93
$88.67
$88.67
4.9 $178,511
4.9 $178,511
3.8 $166,927
3.8 $166,927
4.9 $178,134
4.9 $178,134
Options outstanding at October 30, 2021
Options outstanding at October 30, 2021
Options exercised
Options exercised
Options forfeited
Options forfeited
Options outstanding at October 29, 2022
Options outstanding at October 29, 2022
Options exercisable at October 29, 2022
Options exercisable at October 29, 2022
Options vested or expected to vest at October 29, 2022 (1)
Options vested or expected to vest at October 29, 2022 (1)
_______________________________________
_______________________________________
$76.3 million, respectively.
$76.3 million, respectively.
(1)
(1)
In addition to the vested options, the Company expects a portion of the unvested options to vest at some point in the future. The number
In addition to the vested options, the Company expects a portion of the unvested options to vest at some point in the future. The number
of options expected to vest is calculated by applying an estimated forfeiture rate to the unvested options.
of options expected to vest is calculated by applying an estimated forfeiture rate to the unvested options.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
A summary of the Company’s restricted stock unit and award activity as of October 29, 2022 and changes during the
A summary of the Company’s restricted stock unit and award activity as of October 29, 2022 and changes during the
fiscal year then ended is presented below:
fiscal year then ended is presented below:
Restricted stock units/awards outstanding at October 30, 2021
Restricted stock units/awards outstanding at October 30, 2021
Units/Awards granted
Units/Awards granted
Restrictions lapsed
Restrictions lapsed
Forfeited
Forfeited
Restricted stock units/awards outstanding at October 29, 2022
Restricted stock units/awards outstanding at October 29, 2022
Restricted
Restricted
Stock Units/
Stock Units/
Awards
Awards
Outstanding
Outstanding
(in thousands)
(in thousands)
Weighted-
Weighted-
Average Grant-
Average Grant-
Date Fair Value
Date Fair Value
Per Share
Per Share
5,924
5,924
2,173
2,173
(2,156)
(2,156)
(619)
(619)
5,322
5,322
$132.59
$132.59
$154.46
$154.46
$128.19
$128.19
$139.12
$139.12
$142.54
$142.54
As of October 29, 2022, there was $545.2 million of total unrecognized compensation cost related to unvested stock-
As of October 29, 2022, there was $545.2 million of total unrecognized compensation cost related to unvested stock-
based awards comprised of stock options, restricted stock awards and restricted stock unit awards. That cost is expected to be
based awards comprised of stock options, restricted stock awards and restricted stock unit awards. That cost is expected to be
recognized over a weighted-average period of 1.4 years. The total grant-date fair value of awards that vested during fiscal 2022,
recognized over a weighted-average period of 1.4 years. The total grant-date fair value of awards that vested during fiscal 2022,
fiscal 2021 and fiscal 2020 was approximately $283.0 million, $207.0 million and $174.1 million, respectively.
fiscal 2021 and fiscal 2020 was approximately $283.0 million, $207.0 million and $174.1 million, respectively.
Common Stock Repurchases
Common Stock Repurchases
In fiscal 2021, the Company entered into accelerated share repurchase agreements (ASR) with third party financial
In fiscal 2021, the Company entered into accelerated share repurchase agreements (ASR) with third party financial
institutions, paid $2.5 billion and received an initial delivery of 12.3 million shares of common stock, which represented
institutions, paid $2.5 billion and received an initial delivery of 12.3 million shares of common stock, which represented
approximately 80% of the notional amount of the ASR. As of October 30, 2021, the Company recorded the remaining 20%, or
approximately 80% of the notional amount of the ASR. As of October 30, 2021, the Company recorded the remaining 20%, or
$500.0 million, within Prepaid expenses and other current assets on the Consolidated Balance Sheet, which was utilized during
$500.0 million, within Prepaid expenses and other current assets on the Consolidated Balance Sheet, which was utilized during
the first quarter of fiscal 2022. During the first quarter of fiscal 2022, the ASR was completed and an additional 2.1 million
the first quarter of fiscal 2022. During the first quarter of fiscal 2022, the ASR was completed and an additional 2.1 million
shares of common stock were received as final settlement of the ASR. In total, the Company repurchased 14.4 million shares of
shares of common stock were received as final settlement of the ASR. In total, the Company repurchased 14.4 million shares of
common stock under the ASR at an average price per share of $173.77.
common stock under the ASR at an average price per share of $173.77.
The Company’s share repurchase program has been in place since August 2004. In the aggregate, the Board of Directors
The Company’s share repurchase program has been in place since August 2004. In the aggregate, the Board of Directors
has authorized the Company to repurchase $16.7 billion of the Company’s common stock under the program, which includes
has authorized the Company to repurchase $16.7 billion of the Company’s common stock under the program, which includes
the $8.5 billion authorization approved by the Board of Directors on August 25, 2021. The Company may repurchase
the $8.5 billion authorization approved by the Board of Directors on August 25, 2021. The Company may repurchase
outstanding shares of its common stock from time to time in the open market and through privately negotiated transactions.
outstanding shares of its common stock from time to time in the open market and through privately negotiated transactions.
Unless terminated earlier by resolution of the Company’s Board of Directors, the repurchase program will expire when the
Unless terminated earlier by resolution of the Company’s Board of Directors, the repurchase program will expire when the
Company has repurchased all shares authorized under the program. As of October 29, 2022, the Company had repurchased a
Company has repurchased all shares authorized under the program. As of October 29, 2022, the Company had repurchased a
total of approximately 189.6 million shares of its common stock for approximately $11.7 billion under this program. An
total of approximately 189.6 million shares of its common stock for approximately $11.7 billion under this program. An
additional $4.9 billion remains available for repurchase of shares under the current authorized program. The repurchased shares
additional $4.9 billion remains available for repurchase of shares under the current authorized program. The repurchased shares
are held as authorized but unissued shares of common stock. Future repurchases of common stock will be dependent upon the
are held as authorized but unissued shares of common stock. Future repurchases of common stock will be dependent upon the
Company's financial position, results of operations, outlook, liquidity, and other factors deemed relevant by the Company.
Company's financial position, results of operations, outlook, liquidity, and other factors deemed relevant by the Company.
The Company also, from time to time, repurchases shares in settlement of employee tax withholding obligations due upon
The Company also, from time to time, repurchases shares in settlement of employee tax withholding obligations due upon
the vesting of restricted stock units/awards or the exercise of stock options. The withholding amount is based on the employee's
the vesting of restricted stock units/awards or the exercise of stock options. The withholding amount is based on the employee's
minimum statutory withholding requirement. Any future common stock repurchases will be dependent upon several factors,
minimum statutory withholding requirement. Any future common stock repurchases will be dependent upon several factors,
including the Company's financial performance, outlook, liquidity and the amount of cash the Company has available in the
including the Company's financial performance, outlook, liquidity and the amount of cash the Company has available in the
United States.
United States.
Analog Devices Foundation
Analog Devices Foundation
During the first quarter of fiscal 2020, the Company contributed 335,654 shares of its common stock to the Analog
During the first quarter of fiscal 2020, the Company contributed 335,654 shares of its common stock to the Analog
Devices Foundation. As of the date of the charitable contribution, the shares had a fair value of approximately $40.0 million.
Devices Foundation. As of the date of the charitable contribution, the shares had a fair value of approximately $40.0 million.
This expense was recorded in Selling, marketing, general and administrative expense in the Consolidated Statement of Income.
This expense was recorded in Selling, marketing, general and administrative expense in the Consolidated Statement of Income.
The total intrinsic value of options exercised (i.e., the difference between the market price at exercise and the price paid
The total intrinsic value of options exercised (i.e., the difference between the market price at exercise and the price paid
by the employee to exercise the options) during fiscal 2022, fiscal 2021 and fiscal 2020 was $56.2 million, $93.2 million and
by the employee to exercise the options) during fiscal 2022, fiscal 2021 and fiscal 2020 was $56.2 million, $93.2 million and
Preferred Stock
Preferred Stock
The Company has 471,934 authorized shares of $1.00 par value preferred stock, none of which is issued or outstanding.
The Company has 471,934 authorized shares of $1.00 par value preferred stock, none of which is issued or outstanding.
The Board of Directors is authorized to fix designations, relative rights, preferences and limitations on the preferred stock at the
The Board of Directors is authorized to fix designations, relative rights, preferences and limitations on the preferred stock at the
time of issuance.
time of issuance.
4.
4.
Industry, Segment and Geographic Information
Industry, Segment and Geographic Information
The Company operates and tracks its results in one reportable segment based on the aggregation of its operating
The Company operates and tracks its results in one reportable segment based on the aggregation of its operating
segments. The Company designs, develops, manufactures and markets a broad range of integrated circuits (ICs). The Chief
segments. The Company designs, develops, manufactures and markets a broad range of integrated circuits (ICs). The Chief
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ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Executive Officer has been identified as the Company's Chief Operating Decision Maker. The Company has determined that all
Executive Officer has been identified as the Company's Chief Operating Decision Maker. The Company has determined that all
of the Company's operating segments share the following similar economic characteristics, and therefore meet the criteria
of the Company's operating segments share the following similar economic characteristics, and therefore meet the criteria
established for operating segments to be aggregated into one reportable segment, namely:
established for operating segments to be aggregated into one reportable segment, namely:
• The primary source of revenue for each operating segment is the sale of ICs.
• The primary source of revenue for each operating segment is the sale of ICs.
• The ICs sold by each of the Company's operating segments are manufactured using similar semiconductor
• The ICs sold by each of the Company's operating segments are manufactured using similar semiconductor
manufacturing processes and raw materials in either the Company’s own production facilities or by third-party wafer fabricators
manufacturing processes and raw materials in either the Company’s own production facilities or by third-party wafer fabricators
using proprietary processes.
using proprietary processes.
• The Company sells its products to tens of thousands of customers worldwide. Many of these customers use products
• The Company sells its products to tens of thousands of customers worldwide. Many of these customers use products
spanning all operating segments in a wide range of applications.
spanning all operating segments in a wide range of applications.
• The ICs marketed by each of the Company's operating segments are sold globally through a direct sales force, third-
• The ICs marketed by each of the Company's operating segments are sold globally through a direct sales force, third-
party distributors, independent sales representatives and via the Company's website to the same types of customers.
party distributors, independent sales representatives and via the Company's website to the same types of customers.
All of the Company's operating segments share a similar long-term financial model as they have similar economic
All of the Company's operating segments share a similar long-term financial model as they have similar economic
characteristics. The causes for variation in operating and financial performance are the same among the Company's operating
characteristics. The causes for variation in operating and financial performance are the same among the Company's operating
segments and include factors such as (i) life cycle and price and cost fluctuations, (ii) number of competitors, (iii) product
segments and include factors such as (i) life cycle and price and cost fluctuations, (ii) number of competitors, (iii) product
differentiation and (iv) size of market opportunity. Additionally, each operating segment is subject to the overall cyclical nature
differentiation and (iv) size of market opportunity. Additionally, each operating segment is subject to the overall cyclical nature
of the semiconductor industry. Lastly, the number and composition of employees and the amounts and types of tools and
of the semiconductor industry. Lastly, the number and composition of employees and the amounts and types of tools and
materials required for production of products are proportionally similar for each operating segment.
materials required for production of products are proportionally similar for each operating segment.
Revenue Trends by End Market
Revenue Trends by End Market
The following table summarizes revenue by end market. The categorization of revenue by end market is determined using
The following table summarizes revenue by end market. The categorization of revenue by end market is determined using
a variety of data points including the technical characteristics of the product, the “sold to” customer information, the "ship to"
a variety of data points including the technical characteristics of the product, the “sold to” customer information, the "ship to"
customer information and the end customer product or application into which the Company’s product will be incorporated. As
customer information and the end customer product or application into which the Company’s product will be incorporated. As
data systems for capturing and tracking this data and the Company's methodology evolves and improves, the categorization of
data systems for capturing and tracking this data and the Company's methodology evolves and improves, the categorization of
products by end market can vary over time. When this occurs, the Company reclassifies revenue by end market for prior
products by end market can vary over time. When this occurs, the Company reclassifies revenue by end market for prior
periods. Such reclassifications typically do not materially change the sizing of, or the underlying trends of results within each
periods. Such reclassifications typically do not materially change the sizing of, or the underlying trends of results within each
end market.
end market.
Industrial
Industrial
Automotive
Automotive
Communications
Communications
Consumer
Consumer
Total revenue
Total revenue
2022
2022
2021
2021
2020
2020
Revenue
Revenue
$
$
6,069,332
6,069,332
2,515,513
2,515,513
1,880,697
1,880,697
1,548,411
1,548,411
$ 12,013,953
$ 12,013,953
% of
% of
Total
Total
Revenue
Revenue
(1)
(1)
51 % $
51 % $
21 %
21 %
16 %
16 %
13 %
13 %
100 % $
100 % $
Revenue
Revenue
4,026,909
4,026,909
1,248,169
1,248,169
1,206,867
1,206,867
836,341
836,341
7,318,286
7,318,286
% of
% of
Total
Total
Revenue
Revenue
(1)
(1)
55 % $
55 % $
17 %
17 %
16 %
16 %
11 %
11 %
100 % $
100 % $
Revenue
Revenue
3,005,585
3,005,585
778,714
778,714
1,193,809
1,193,809
624,948
624,948
5,603,056
5,603,056
% of
% of
Total
Total
Revenue
Revenue
(1)
(1)
54 %
54 %
14 %
14 %
21 %
21 %
11 %
11 %
100 %
100 %
_______________________________________
_______________________________________
(1) The sum of the individual percentages may not equal the total due to rounding.
(1) The sum of the individual percentages may not equal the total due to rounding.
Revenue by Sales Channel
Revenue by Sales Channel
The following tables summarize revenue by sales channel. The Company sells its products globally through a direct sales
The following tables summarize revenue by sales channel. The Company sells its products globally through a direct sales
force, third party distributors, independent sales representatives and via its website. Distributors are customers that buy products
force, third party distributors, independent sales representatives and via its website. Distributors are customers that buy products
with the intention of reselling them. Direct customers are non-distributor customers and consist primarily of original equipment
with the intention of reselling them. Direct customers are non-distributor customers and consist primarily of original equipment
manufacturers (OEMs). Other customers include the U.S. government, government prime contractors and certain commercial
manufacturers (OEMs). Other customers include the U.S. government, government prime contractors and certain commercial
customers for which revenue is recorded over time.
customers for which revenue is recorded over time.
Distributors
Distributors
Direct customers
Direct customers
Other
Other
Total revenue
Total revenue
2022
2022
2021
2021
2020
2020
% of
% of
Total
Total
Revenue
Revenue
(1)
(1)
% of
% of
Total
Total
Revenue
Revenue
(1)
(1)
Revenue
Revenue
Revenue
Revenue
Revenue
Revenue
$
$
7,458,478
7,458,478
62 % $
62 % $
4,589,944
4,589,944
63 % $
63 % $
3,216,302
3,216,302
4,423,883
4,423,883
37 %
37 %
2,600,353
2,600,353
36 %
36 %
2,300,493
2,300,493
131,592
131,592
1 %
1 %
127,989
127,989
2 %
2 %
86,261
86,261
% of
% of
Total
Total
Revenue
Revenue
(1)
(1)
57 %
57 %
41 %
41 %
2 %
2 %
$ 12,013,953
$ 12,013,953
100 % $
100 % $
7,318,286
7,318,286
100 % $
100 % $
5,603,056
5,603,056
100 %
100 %
_______________________________________
_______________________________________
(1) The sum of the individual percentages may not equal the total due to rounding.
(1) The sum of the individual percentages may not equal the total due to rounding.
Geographic Information
Geographic Information
Geographic revenue information for fiscal 2022, fiscal 2021 and fiscal 2020 reflects the geographic location of the
Geographic revenue information for fiscal 2022, fiscal 2021 and fiscal 2020 reflects the geographic location of the
distributors or OEMs who purchased the Company's products. This may differ from the geographic location of the end
distributors or OEMs who purchased the Company's products. This may differ from the geographic location of the end
customers. In all periods presented, the predominant countries comprising “Rest of North and South America” are Canada and
customers. In all periods presented, the predominant countries comprising “Rest of North and South America” are Canada and
Mexico; the predominant countries comprising “Europe” are Germany, Sweden, and the Netherlands; and the predominant
Mexico; the predominant countries comprising “Europe” are Germany, Sweden, and the Netherlands; and the predominant
countries comprising “Rest of Asia” are Taiwan, Malaysia, South Korea and Singapore.
countries comprising “Rest of Asia” are Taiwan, Malaysia, South Korea and Singapore.
Rest of North and South America
Rest of North and South America
Subtotal all foreign countries
Subtotal all foreign countries
Total revenue
Total revenue
Property, plant and equipment
Property, plant and equipment
Revenue
Revenue
United States
United States
Europe
Europe
Japan
Japan
China
China
Rest of Asia
Rest of Asia
United States
United States
Ireland
Ireland
Philippines
Philippines
Thailand
Thailand
Singapore (1)
Singapore (1)
Malaysia
Malaysia
All other countries
All other countries
Subtotal all foreign countries
Subtotal all foreign countries
Total property, plant and equipment
Total property, plant and equipment
_______________________________________
_______________________________________
in fiscal 2021.
in fiscal 2021.
5.
5.
Special Charges, Net
Special Charges, Net
2022
2022
2021
2021
2020
2020
$
$
4,025,398 $
4,025,398 $
2,389,439 $
2,389,439 $
1,887,443
1,887,443
72,497
72,497
2,534,423
2,534,423
1,221,549
1,221,549
2,563,536
2,563,536
1,596,550
1,596,550
7,988,555
7,988,555
42,830
42,830
1,592,989
1,592,989
787,966
787,966
1,614,396
1,614,396
890,666
890,666
4,928,847
4,928,847
$
$
12,013,953 $
12,013,953 $
7,318,286 $
7,318,286 $
5,603,056
5,603,056
$
$
1,117,404 $
1,117,404 $
956,624 $
956,624 $
343,728
343,728
608,474
608,474
143,558
143,558
—
—
119,670
119,670
68,470
68,470
206,353
206,353
524,128
524,128
126,040
126,040
—
—
84,971
84,971
80,935
80,935
1,283,900
1,283,900
1,022,427
1,022,427
540,806
540,806
$
$
2,401,304 $
2,401,304 $
1,979,051 $
1,979,051 $
1,120,561
1,120,561
41,250
41,250
1,245,695
1,245,695
521,720
521,720
1,348,011
1,348,011
558,937
558,937
3,715,613
3,715,613
579,755
579,755
169,968
169,968
256,470
256,470
—
—
18,518
18,518
53,616
53,616
42,234
42,234
(1) As further discussed in Note 5, Special Charges, Net, of the Notes to Consolidated Financial Statements, the Company sold this facility
(1) As further discussed in Note 5, Special Charges, Net, of the Notes to Consolidated Financial Statements, the Company sold this facility
The Company monitors global macroeconomic conditions on an ongoing basis and continues to assess opportunities for
The Company monitors global macroeconomic conditions on an ongoing basis and continues to assess opportunities for
improved operational effectiveness and efficiency, as well as a better alignment of expenses with revenues. As a result of these
improved operational effectiveness and efficiency, as well as a better alignment of expenses with revenues. As a result of these
assessments, the Company has undertaken various actions resulting in special charges over the past several years.
assessments, the Company has undertaken various actions resulting in special charges over the past several years.
Liabilities related to special charges, net are presented in Accrued Liabilities in the Consolidated Balance Sheets. The
Liabilities related to special charges, net are presented in Accrued Liabilities in the Consolidated Balance Sheets. The
activity is detailed below:
activity is detailed below:
67
67
68
68
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Executive Officer has been identified as the Company's Chief Operating Decision Maker. The Company has determined that all
Executive Officer has been identified as the Company's Chief Operating Decision Maker. The Company has determined that all
of the Company's operating segments share the following similar economic characteristics, and therefore meet the criteria
of the Company's operating segments share the following similar economic characteristics, and therefore meet the criteria
established for operating segments to be aggregated into one reportable segment, namely:
established for operating segments to be aggregated into one reportable segment, namely:
• The primary source of revenue for each operating segment is the sale of ICs.
• The primary source of revenue for each operating segment is the sale of ICs.
• The ICs sold by each of the Company's operating segments are manufactured using similar semiconductor
• The ICs sold by each of the Company's operating segments are manufactured using similar semiconductor
manufacturing processes and raw materials in either the Company’s own production facilities or by third-party wafer fabricators
manufacturing processes and raw materials in either the Company’s own production facilities or by third-party wafer fabricators
using proprietary processes.
using proprietary processes.
• The Company sells its products to tens of thousands of customers worldwide. Many of these customers use products
• The Company sells its products to tens of thousands of customers worldwide. Many of these customers use products
spanning all operating segments in a wide range of applications.
spanning all operating segments in a wide range of applications.
• The ICs marketed by each of the Company's operating segments are sold globally through a direct sales force, third-
• The ICs marketed by each of the Company's operating segments are sold globally through a direct sales force, third-
party distributors, independent sales representatives and via the Company's website to the same types of customers.
party distributors, independent sales representatives and via the Company's website to the same types of customers.
All of the Company's operating segments share a similar long-term financial model as they have similar economic
All of the Company's operating segments share a similar long-term financial model as they have similar economic
characteristics. The causes for variation in operating and financial performance are the same among the Company's operating
characteristics. The causes for variation in operating and financial performance are the same among the Company's operating
segments and include factors such as (i) life cycle and price and cost fluctuations, (ii) number of competitors, (iii) product
segments and include factors such as (i) life cycle and price and cost fluctuations, (ii) number of competitors, (iii) product
differentiation and (iv) size of market opportunity. Additionally, each operating segment is subject to the overall cyclical nature
differentiation and (iv) size of market opportunity. Additionally, each operating segment is subject to the overall cyclical nature
of the semiconductor industry. Lastly, the number and composition of employees and the amounts and types of tools and
of the semiconductor industry. Lastly, the number and composition of employees and the amounts and types of tools and
materials required for production of products are proportionally similar for each operating segment.
materials required for production of products are proportionally similar for each operating segment.
Revenue Trends by End Market
Revenue Trends by End Market
The following table summarizes revenue by end market. The categorization of revenue by end market is determined using
The following table summarizes revenue by end market. The categorization of revenue by end market is determined using
a variety of data points including the technical characteristics of the product, the “sold to” customer information, the "ship to"
a variety of data points including the technical characteristics of the product, the “sold to” customer information, the "ship to"
customer information and the end customer product or application into which the Company’s product will be incorporated. As
customer information and the end customer product or application into which the Company’s product will be incorporated. As
data systems for capturing and tracking this data and the Company's methodology evolves and improves, the categorization of
data systems for capturing and tracking this data and the Company's methodology evolves and improves, the categorization of
products by end market can vary over time. When this occurs, the Company reclassifies revenue by end market for prior
products by end market can vary over time. When this occurs, the Company reclassifies revenue by end market for prior
periods. Such reclassifications typically do not materially change the sizing of, or the underlying trends of results within each
periods. Such reclassifications typically do not materially change the sizing of, or the underlying trends of results within each
end market.
end market.
Industrial
Industrial
Automotive
Automotive
Communications
Communications
Consumer
Consumer
Total revenue
Total revenue
2022
2022
2021
2021
2020
2020
% of
% of
Total
Total
Revenue
Revenue
(1)
(1)
% of
% of
Total
Total
Revenue
Revenue
(1)
(1)
Revenue
Revenue
Revenue
Revenue
Revenue
Revenue
$
$
6,069,332
6,069,332
51 % $
51 % $
4,026,909
4,026,909
55 % $
55 % $
3,005,585
3,005,585
2,515,513
2,515,513
1,880,697
1,880,697
1,548,411
1,548,411
21 %
21 %
16 %
16 %
13 %
13 %
1,248,169
1,248,169
1,206,867
1,206,867
836,341
836,341
17 %
17 %
16 %
16 %
11 %
11 %
778,714
778,714
1,193,809
1,193,809
624,948
624,948
% of
% of
Total
Total
Revenue
Revenue
(1)
(1)
54 %
54 %
14 %
14 %
21 %
21 %
11 %
11 %
$ 12,013,953
$ 12,013,953
100 % $
100 % $
7,318,286
7,318,286
100 % $
100 % $
5,603,056
5,603,056
100 %
100 %
_______________________________________
_______________________________________
(1) The sum of the individual percentages may not equal the total due to rounding.
(1) The sum of the individual percentages may not equal the total due to rounding.
Revenue by Sales Channel
Revenue by Sales Channel
The following tables summarize revenue by sales channel. The Company sells its products globally through a direct sales
The following tables summarize revenue by sales channel. The Company sells its products globally through a direct sales
force, third party distributors, independent sales representatives and via its website. Distributors are customers that buy products
force, third party distributors, independent sales representatives and via its website. Distributors are customers that buy products
with the intention of reselling them. Direct customers are non-distributor customers and consist primarily of original equipment
with the intention of reselling them. Direct customers are non-distributor customers and consist primarily of original equipment
manufacturers (OEMs). Other customers include the U.S. government, government prime contractors and certain commercial
manufacturers (OEMs). Other customers include the U.S. government, government prime contractors and certain commercial
customers for which revenue is recorded over time.
customers for which revenue is recorded over time.
Distributors
Distributors
Direct customers
Direct customers
Other
Other
Total revenue
Total revenue
2022
2022
2021
2021
2020
2020
% of
% of
Total
Total
Revenue
Revenue
(1)
(1)
% of
% of
Total
Total
Revenue
Revenue
(1)
(1)
Revenue
Revenue
Revenue
Revenue
Revenue
Revenue
$
$
7,458,478
7,458,478
62 % $
62 % $
4,589,944
4,589,944
63 % $
63 % $
3,216,302
3,216,302
4,423,883
4,423,883
37 %
37 %
2,600,353
2,600,353
36 %
36 %
2,300,493
2,300,493
131,592
131,592
1 %
1 %
127,989
127,989
2 %
2 %
86,261
86,261
% of
% of
Total
Total
Revenue
Revenue
(1)
(1)
57 %
57 %
41 %
41 %
2 %
2 %
$ 12,013,953
$ 12,013,953
100 % $
100 % $
7,318,286
7,318,286
100 % $
100 % $
5,603,056
5,603,056
100 %
100 %
_______________________________________
_______________________________________
(1) The sum of the individual percentages may not equal the total due to rounding.
(1) The sum of the individual percentages may not equal the total due to rounding.
Geographic Information
Geographic Information
Geographic revenue information for fiscal 2022, fiscal 2021 and fiscal 2020 reflects the geographic location of the
Geographic revenue information for fiscal 2022, fiscal 2021 and fiscal 2020 reflects the geographic location of the
distributors or OEMs who purchased the Company's products. This may differ from the geographic location of the end
distributors or OEMs who purchased the Company's products. This may differ from the geographic location of the end
customers. In all periods presented, the predominant countries comprising “Rest of North and South America” are Canada and
customers. In all periods presented, the predominant countries comprising “Rest of North and South America” are Canada and
Mexico; the predominant countries comprising “Europe” are Germany, Sweden, and the Netherlands; and the predominant
Mexico; the predominant countries comprising “Europe” are Germany, Sweden, and the Netherlands; and the predominant
countries comprising “Rest of Asia” are Taiwan, Malaysia, South Korea and Singapore.
countries comprising “Rest of Asia” are Taiwan, Malaysia, South Korea and Singapore.
Revenue
Revenue
United States
United States
Rest of North and South America
Rest of North and South America
Europe
Europe
Japan
Japan
China
China
Rest of Asia
Rest of Asia
Subtotal all foreign countries
Subtotal all foreign countries
Total revenue
Total revenue
Property, plant and equipment
Property, plant and equipment
United States
United States
Ireland
Ireland
Philippines
Philippines
Thailand
Thailand
Singapore (1)
Singapore (1)
Malaysia
Malaysia
All other countries
All other countries
Subtotal all foreign countries
Subtotal all foreign countries
Total property, plant and equipment
Total property, plant and equipment
2022
2022
2021
2021
2020
2020
$
$
$
$
$
$
4,025,398 $
4,025,398 $
72,497
72,497
2,534,423
2,534,423
1,221,549
1,221,549
2,563,536
2,563,536
1,596,550
1,596,550
7,988,555
7,988,555
12,013,953 $
12,013,953 $
1,117,404 $
1,117,404 $
343,728
343,728
608,474
608,474
143,558
143,558
—
—
119,670
119,670
68,470
68,470
2,389,439 $
2,389,439 $
42,830
42,830
1,592,989
1,592,989
787,966
787,966
1,614,396
1,614,396
890,666
890,666
4,928,847
4,928,847
7,318,286 $
7,318,286 $
956,624 $
956,624 $
206,353
206,353
524,128
524,128
126,040
126,040
—
—
84,971
84,971
80,935
80,935
1,283,900
1,283,900
1,022,427
1,022,427
1,887,443
1,887,443
41,250
41,250
1,245,695
1,245,695
521,720
521,720
1,348,011
1,348,011
558,937
558,937
3,715,613
3,715,613
5,603,056
5,603,056
579,755
579,755
169,968
169,968
256,470
256,470
—
—
18,518
18,518
53,616
53,616
42,234
42,234
540,806
540,806
$
$
2,401,304 $
2,401,304 $
1,979,051 $
1,979,051 $
1,120,561
1,120,561
_______________________________________
_______________________________________
(1) As further discussed in Note 5, Special Charges, Net, of the Notes to Consolidated Financial Statements, the Company sold this facility
(1) As further discussed in Note 5, Special Charges, Net, of the Notes to Consolidated Financial Statements, the Company sold this facility
in fiscal 2021.
in fiscal 2021.
5.
5.
Special Charges, Net
Special Charges, Net
The Company monitors global macroeconomic conditions on an ongoing basis and continues to assess opportunities for
The Company monitors global macroeconomic conditions on an ongoing basis and continues to assess opportunities for
improved operational effectiveness and efficiency, as well as a better alignment of expenses with revenues. As a result of these
improved operational effectiveness and efficiency, as well as a better alignment of expenses with revenues. As a result of these
assessments, the Company has undertaken various actions resulting in special charges over the past several years.
assessments, the Company has undertaken various actions resulting in special charges over the past several years.
Liabilities related to special charges, net are presented in Accrued Liabilities in the Consolidated Balance Sheets. The
Liabilities related to special charges, net are presented in Accrued Liabilities in the Consolidated Balance Sheets. The
activity is detailed below:
activity is detailed below:
67
67
68
68
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Accrued Special Charges
Accrued Special Charges
Balance at November 2, 2019
Balance at November 2, 2019
Employee severance and benefit costs
Employee severance and benefit costs
Facility closure costs
Facility closure costs
Severance and benefit payments
Severance and benefit payments
Facility closure cost payments
Facility closure cost payments
Effect of foreign currency on accrual
Effect of foreign currency on accrual
Balance at October 31, 2020
Balance at October 31, 2020
Employee severance and benefit costs
Employee severance and benefit costs
Facility closure costs
Facility closure costs
Severance and benefit payments
Severance and benefit payments
Facility closure cost payments
Facility closure cost payments
Effect of foreign currency on accrual
Effect of foreign currency on accrual
Balance at October 30, 2021
Balance at October 30, 2021
Employee severance and benefit costs
Employee severance and benefit costs
Facility closure costs
Facility closure costs
Severance and benefit payments
Severance and benefit payments
Facility closure cost payments
Facility closure cost payments
Effect of foreign currency on accrual
Effect of foreign currency on accrual
Balance at October 29, 2022
Balance at October 29, 2022
Closure of Manufacturing Facilities
Closure of Manufacturing Facilities
Closure of
Closure of
Manufacturing
Manufacturing
Facilities
Facilities
Global Repositioning
Global Repositioning
Actions
Actions
$
$
50,401 $
50,401 $
—
—
2,918
2,918
(5,098)
(5,098)
(2,969)
(2,969)
(76)
(76)
$
$
45,176 $
45,176 $
200
200
11,880
11,880
(19,602)
(19,602)
(11,880)
(11,880)
—
—
25,774 $
25,774 $
75
75
12,076
12,076
(22,805)
(22,805)
(12,491)
(12,491)
—
—
2,629 $
2,629 $
$
$
$
$
58,895
58,895
47,326
47,326
—
—
(85,301)
(85,301)
—
—
(146)
(146)
20,774
20,774
28,731
28,731
—
—
(28,604)
(28,604)
—
—
164
164
21,065
21,065
149,853
149,853
—
—
(118,567)
(118,567)
—
—
(281)
(281)
52,070
52,070
The Company recorded special charges of $63.8 million on a cumulative basis through October 29, 2022 as a result of its
The Company recorded special charges of $63.8 million on a cumulative basis through October 29, 2022 as a result of its
decision to consolidate certain wafer and test facility operations acquired as part of the acquisition of Linear.
decision to consolidate certain wafer and test facility operations acquired as part of the acquisition of Linear.
During the third quarter of fiscal 2022, the Company completed the sale of its Hillview wafer fabrication facility and
During the third quarter of fiscal 2022, the Company completed the sale of its Hillview wafer fabrication facility and
certain equipment located in Milpitas, California, which were previously classified as held for sale, for proceeds of
certain equipment located in Milpitas, California, which were previously classified as held for sale, for proceeds of
approximately $31.8 million, which resulted in a gain of $4.4 million. During fiscal 2021, the Company completed the sale of
approximately $31.8 million, which resulted in a gain of $4.4 million. During fiscal 2021, the Company completed the sale of
its facility and certain equipment in Singapore, which were previously classified as held for sale, for approximately
its facility and certain equipment in Singapore, which were previously classified as held for sale, for approximately
$35.7 million, which resulted in a gain of $13.6 million.
$35.7 million, which resulted in a gain of $13.6 million.
Global Repositioning Actions
Global Repositioning Actions
The Company recorded net special charges of $487.6 million on a cumulative basis through October 29, 2022, as part of
The Company recorded net special charges of $487.6 million on a cumulative basis through October 29, 2022, as part of
the integration of the Acquisition and continued organizational initiatives to consolidate its global footprint related to certain
the integration of the Acquisition and continued organizational initiatives to consolidate its global footprint related to certain
manufacturing, engineering, sales, marketing and administrative offices and to better align its global workforce with the
manufacturing, engineering, sales, marketing and administrative offices and to better align its global workforce with the
Company's long-term strategic plan. The special charges include severance and fringe benefit costs, in accordance with the
Company's long-term strategic plan. The special charges include severance and fringe benefit costs, in accordance with the
Company's ongoing benefit plan or statutory requirements at foreign locations, and the write-off of acquired intellectual
Company's ongoing benefit plan or statutory requirements at foreign locations, and the write-off of acquired intellectual
property due to the Company's decision to discontinue certain product development strategies.
property due to the Company's decision to discontinue certain product development strategies.
In connection with the Company’s decision during the third quarter of fiscal 2022 to transition its engineering, sales,
In connection with the Company’s decision during the third quarter of fiscal 2022 to transition its engineering, sales,
marketing and administrative activities from its leased property in Santa Clara, California to its owned property in San Jose,
marketing and administrative activities from its leased property in Santa Clara, California to its owned property in San Jose,
California, the Company entered into a sublease agreement for a portion of the leased property and intends to sublease the
California, the Company entered into a sublease agreement for a portion of the leased property and intends to sublease the
remainder of this property. As a result of the sublease transaction, the Company recorded an impairment charge of
remainder of this property. As a result of the sublease transaction, the Company recorded an impairment charge of
$91.9 million in net special charges which represented the excess carrying value of the associated asset group over its estimated
$91.9 million in net special charges which represented the excess carrying value of the associated asset group over its estimated
fair value. The Company estimated fair value using cash flows from the estimated net sublease rental income discounted at a
fair value. The Company estimated fair value using cash flows from the estimated net sublease rental income discounted at a
market rate. The Company allocated $60.6 million, $28.1 million and $3.2 million of the impairment charge to right of use
market rate. The Company allocated $60.6 million, $28.1 million and $3.2 million of the impairment charge to right of use
assets, leasehold improvements and office equipment, respectively.
assets, leasehold improvements and office equipment, respectively.
The Company also recorded special charges of $174.8 million in fiscal 2022 primarily consisting of $180.4 million of
The Company also recorded special charges of $174.8 million in fiscal 2022 primarily consisting of $180.4 million of
severance and benefit costs, as well as charges recorded from the acceleration of equity awards in connection with the
severance and benefit costs, as well as charges recorded from the acceleration of equity awards in connection with the
termination of certain employees in manufacturing, engineering and selling, marketing, general and administrative roles at sites
termination of certain employees in manufacturing, engineering and selling, marketing, general and administrative roles at sites
assumed related to the Acquisition and various locations throughout the world, partially offset by a gain of $8.3 million
assumed related to the Acquisition and various locations throughout the world, partially offset by a gain of $8.3 million
recognized upon the sale of a business.
recognized upon the sale of a business.
6.
6.
Acquisitions
Acquisitions
Maxim Integrated Products, Inc.
Maxim Integrated Products, Inc.
On the Acquisition Date, the Company completed its acquisition of all of the voting interests of Maxim, an independent
On the Acquisition Date, the Company completed its acquisition of all of the voting interests of Maxim, an independent
manufacturer of innovative analog and mixed-signal products and technologies. Under the terms of the agreement pursuant to
manufacturer of innovative analog and mixed-signal products and technologies. Under the terms of the agreement pursuant to
which the Company acquired Maxim (Merger Agreement), Maxim stockholders received, for each outstanding share of Maxim
which the Company acquired Maxim (Merger Agreement), Maxim stockholders received, for each outstanding share of Maxim
common stock, 0.6300 of a share of the Company's common stock at the closing. The Company believes the combination
common stock, 0.6300 of a share of the Company's common stock at the closing. The Company believes the combination
creates an expanded suite of top-performing mixed-signal and power management technology offerings and complements the
creates an expanded suite of top-performing mixed-signal and power management technology offerings and complements the
Company's legacy offerings. The results of operations of Maxim from the Acquisition Date are included in the Company’s
Company's legacy offerings. The results of operations of Maxim from the Acquisition Date are included in the Company’s
Consolidated Statement of Income, Consolidated Balance Sheet, Consolidated Statement of Cash Flows and Consolidated
Consolidated Statement of Income, Consolidated Balance Sheet, Consolidated Statement of Cash Flows and Consolidated
Statement of Shareholders’ Equity for fiscal 2021. The amount of revenue attributable to Maxim included in the Company's
Statement of Shareholders’ Equity for fiscal 2021. The amount of revenue attributable to Maxim included in the Company's
Consolidated Statement of Income for fiscal 2021 was $558.8 million. The amount of Maxim's earnings included in the
Consolidated Statement of Income for fiscal 2021 was $558.8 million. The amount of Maxim's earnings included in the
Consolidated Statement of Income for fiscal 2021 is impracticable to calculate.
Consolidated Statement of Income for fiscal 2021 is impracticable to calculate.
The Acquisition Date fair value of the consideration transferred in the Acquisition consisted of the following:
The Acquisition Date fair value of the consideration transferred in the Acquisition consisted of the following:
Fair value of partially vested restricted stock and restricted stock unit replacement awards (c)
Fair value of partially vested restricted stock and restricted stock unit replacement awards (c)
Cash consideration (a)
Cash consideration (a)
Issuance of common stock (b)
Issuance of common stock (b)
Total purchase consideration
Total purchase consideration
____________________
____________________
$
$
$
$
47
47
27,754,161
27,754,161
194,890
194,890
27,949,098
27,949,098
(a) This reflects the cash paid for fractional shares of the Company’s common stock in respect of shares of Maxim
(a) This reflects the cash paid for fractional shares of the Company’s common stock in respect of shares of Maxim
common stock outstanding.
common stock outstanding.
(b) The fair value is based on the issuance of approximately 169.2 million shares of the Company's common stock with a
(b) The fair value is based on the issuance of approximately 169.2 million shares of the Company's common stock with a
per share value of $164.00 on the Acquisition Date.
per share value of $164.00 on the Acquisition Date.
(c) In connection with the Acquisition, the Company issued equity awards, consisting of restricted stock and restricted
(c) In connection with the Acquisition, the Company issued equity awards, consisting of restricted stock and restricted
stock units, to certain Maxim employees in replacement of Maxim equity awards that were cancelled at closing. The
stock units, to certain Maxim employees in replacement of Maxim equity awards that were cancelled at closing. The
replacement awards consist of restricted stock and restricted stock unit awards for approximately 3.7 million shares of
replacement awards consist of restricted stock and restricted stock unit awards for approximately 3.7 million shares of
the Company's common stock with a weighted average grant date fair value of $161.63. This amount represents the
the Company's common stock with a weighted average grant date fair value of $161.63. This amount represents the
portion of the fair value of the replacement equity awards associated with services rendered through the Acquisition
portion of the fair value of the replacement equity awards associated with services rendered through the Acquisition
Date and has been included as a component of the total purchase consideration.
Date and has been included as a component of the total purchase consideration.
During fiscal 2022, the Company completed the acquisition accounting for the Acquisition. The following is a summary
During fiscal 2022, the Company completed the acquisition accounting for the Acquisition. The following is a summary
of the amounts recognized in accounting for the Acquisition:
of the amounts recognized in accounting for the Acquisition:
69
69
70
70
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Accrued Special Charges
Accrued Special Charges
Balance at November 2, 2019
Balance at November 2, 2019
Employee severance and benefit costs
Employee severance and benefit costs
Facility closure costs
Facility closure costs
Severance and benefit payments
Severance and benefit payments
Facility closure cost payments
Facility closure cost payments
Effect of foreign currency on accrual
Effect of foreign currency on accrual
Balance at October 31, 2020
Balance at October 31, 2020
Employee severance and benefit costs
Employee severance and benefit costs
Facility closure costs
Facility closure costs
Severance and benefit payments
Severance and benefit payments
Facility closure cost payments
Facility closure cost payments
Effect of foreign currency on accrual
Effect of foreign currency on accrual
Balance at October 30, 2021
Balance at October 30, 2021
Employee severance and benefit costs
Employee severance and benefit costs
Facility closure costs
Facility closure costs
Severance and benefit payments
Severance and benefit payments
Facility closure cost payments
Facility closure cost payments
Effect of foreign currency on accrual
Effect of foreign currency on accrual
Balance at October 29, 2022
Balance at October 29, 2022
Closure of Manufacturing Facilities
Closure of Manufacturing Facilities
Closure of
Closure of
Manufacturing
Manufacturing
Facilities
Facilities
Global Repositioning
Global Repositioning
Actions
Actions
$
$
50,401 $
50,401 $
$
$
45,176 $
45,176 $
$
$
25,774 $
25,774 $
—
—
2,918
2,918
(5,098)
(5,098)
(2,969)
(2,969)
(76)
(76)
200
200
11,880
11,880
(19,602)
(19,602)
(11,880)
(11,880)
—
—
75
75
12,076
12,076
(22,805)
(22,805)
(12,491)
(12,491)
—
—
58,895
58,895
47,326
47,326
—
—
(85,301)
(85,301)
—
—
(146)
(146)
20,774
20,774
28,731
28,731
—
—
(28,604)
(28,604)
—
—
164
164
21,065
21,065
149,853
149,853
—
—
(118,567)
(118,567)
—
—
(281)
(281)
$
$
2,629 $
2,629 $
52,070
52,070
The Company recorded special charges of $63.8 million on a cumulative basis through October 29, 2022 as a result of its
The Company recorded special charges of $63.8 million on a cumulative basis through October 29, 2022 as a result of its
decision to consolidate certain wafer and test facility operations acquired as part of the acquisition of Linear.
decision to consolidate certain wafer and test facility operations acquired as part of the acquisition of Linear.
During the third quarter of fiscal 2022, the Company completed the sale of its Hillview wafer fabrication facility and
During the third quarter of fiscal 2022, the Company completed the sale of its Hillview wafer fabrication facility and
certain equipment located in Milpitas, California, which were previously classified as held for sale, for proceeds of
certain equipment located in Milpitas, California, which were previously classified as held for sale, for proceeds of
approximately $31.8 million, which resulted in a gain of $4.4 million. During fiscal 2021, the Company completed the sale of
approximately $31.8 million, which resulted in a gain of $4.4 million. During fiscal 2021, the Company completed the sale of
its facility and certain equipment in Singapore, which were previously classified as held for sale, for approximately
its facility and certain equipment in Singapore, which were previously classified as held for sale, for approximately
$35.7 million, which resulted in a gain of $13.6 million.
$35.7 million, which resulted in a gain of $13.6 million.
Global Repositioning Actions
Global Repositioning Actions
The Company recorded net special charges of $487.6 million on a cumulative basis through October 29, 2022, as part of
The Company recorded net special charges of $487.6 million on a cumulative basis through October 29, 2022, as part of
the integration of the Acquisition and continued organizational initiatives to consolidate its global footprint related to certain
the integration of the Acquisition and continued organizational initiatives to consolidate its global footprint related to certain
manufacturing, engineering, sales, marketing and administrative offices and to better align its global workforce with the
manufacturing, engineering, sales, marketing and administrative offices and to better align its global workforce with the
Company's long-term strategic plan. The special charges include severance and fringe benefit costs, in accordance with the
Company's long-term strategic plan. The special charges include severance and fringe benefit costs, in accordance with the
Company's ongoing benefit plan or statutory requirements at foreign locations, and the write-off of acquired intellectual
Company's ongoing benefit plan or statutory requirements at foreign locations, and the write-off of acquired intellectual
property due to the Company's decision to discontinue certain product development strategies.
property due to the Company's decision to discontinue certain product development strategies.
In connection with the Company’s decision during the third quarter of fiscal 2022 to transition its engineering, sales,
In connection with the Company’s decision during the third quarter of fiscal 2022 to transition its engineering, sales,
marketing and administrative activities from its leased property in Santa Clara, California to its owned property in San Jose,
marketing and administrative activities from its leased property in Santa Clara, California to its owned property in San Jose,
California, the Company entered into a sublease agreement for a portion of the leased property and intends to sublease the
California, the Company entered into a sublease agreement for a portion of the leased property and intends to sublease the
remainder of this property. As a result of the sublease transaction, the Company recorded an impairment charge of
remainder of this property. As a result of the sublease transaction, the Company recorded an impairment charge of
$91.9 million in net special charges which represented the excess carrying value of the associated asset group over its estimated
$91.9 million in net special charges which represented the excess carrying value of the associated asset group over its estimated
fair value. The Company estimated fair value using cash flows from the estimated net sublease rental income discounted at a
fair value. The Company estimated fair value using cash flows from the estimated net sublease rental income discounted at a
market rate. The Company allocated $60.6 million, $28.1 million and $3.2 million of the impairment charge to right of use
market rate. The Company allocated $60.6 million, $28.1 million and $3.2 million of the impairment charge to right of use
assets, leasehold improvements and office equipment, respectively.
assets, leasehold improvements and office equipment, respectively.
The Company also recorded special charges of $174.8 million in fiscal 2022 primarily consisting of $180.4 million of
The Company also recorded special charges of $174.8 million in fiscal 2022 primarily consisting of $180.4 million of
severance and benefit costs, as well as charges recorded from the acceleration of equity awards in connection with the
severance and benefit costs, as well as charges recorded from the acceleration of equity awards in connection with the
termination of certain employees in manufacturing, engineering and selling, marketing, general and administrative roles at sites
termination of certain employees in manufacturing, engineering and selling, marketing, general and administrative roles at sites
assumed related to the Acquisition and various locations throughout the world, partially offset by a gain of $8.3 million
assumed related to the Acquisition and various locations throughout the world, partially offset by a gain of $8.3 million
recognized upon the sale of a business.
recognized upon the sale of a business.
6.
6.
Acquisitions
Acquisitions
Maxim Integrated Products, Inc.
Maxim Integrated Products, Inc.
On the Acquisition Date, the Company completed its acquisition of all of the voting interests of Maxim, an independent
On the Acquisition Date, the Company completed its acquisition of all of the voting interests of Maxim, an independent
manufacturer of innovative analog and mixed-signal products and technologies. Under the terms of the agreement pursuant to
manufacturer of innovative analog and mixed-signal products and technologies. Under the terms of the agreement pursuant to
which the Company acquired Maxim (Merger Agreement), Maxim stockholders received, for each outstanding share of Maxim
which the Company acquired Maxim (Merger Agreement), Maxim stockholders received, for each outstanding share of Maxim
common stock, 0.6300 of a share of the Company's common stock at the closing. The Company believes the combination
common stock, 0.6300 of a share of the Company's common stock at the closing. The Company believes the combination
creates an expanded suite of top-performing mixed-signal and power management technology offerings and complements the
creates an expanded suite of top-performing mixed-signal and power management technology offerings and complements the
Company's legacy offerings. The results of operations of Maxim from the Acquisition Date are included in the Company’s
Company's legacy offerings. The results of operations of Maxim from the Acquisition Date are included in the Company’s
Consolidated Statement of Income, Consolidated Balance Sheet, Consolidated Statement of Cash Flows and Consolidated
Consolidated Statement of Income, Consolidated Balance Sheet, Consolidated Statement of Cash Flows and Consolidated
Statement of Shareholders’ Equity for fiscal 2021. The amount of revenue attributable to Maxim included in the Company's
Statement of Shareholders’ Equity for fiscal 2021. The amount of revenue attributable to Maxim included in the Company's
Consolidated Statement of Income for fiscal 2021 was $558.8 million. The amount of Maxim's earnings included in the
Consolidated Statement of Income for fiscal 2021 was $558.8 million. The amount of Maxim's earnings included in the
Consolidated Statement of Income for fiscal 2021 is impracticable to calculate.
Consolidated Statement of Income for fiscal 2021 is impracticable to calculate.
The Acquisition Date fair value of the consideration transferred in the Acquisition consisted of the following:
The Acquisition Date fair value of the consideration transferred in the Acquisition consisted of the following:
Cash consideration (a)
Cash consideration (a)
Issuance of common stock (b)
Issuance of common stock (b)
Fair value of partially vested restricted stock and restricted stock unit replacement awards (c)
Fair value of partially vested restricted stock and restricted stock unit replacement awards (c)
Total purchase consideration
Total purchase consideration
$
$
$
$
47
47
27,754,161
27,754,161
194,890
194,890
27,949,098
27,949,098
____________________
____________________
(a) This reflects the cash paid for fractional shares of the Company’s common stock in respect of shares of Maxim
(a) This reflects the cash paid for fractional shares of the Company’s common stock in respect of shares of Maxim
common stock outstanding.
common stock outstanding.
(b) The fair value is based on the issuance of approximately 169.2 million shares of the Company's common stock with a
(b) The fair value is based on the issuance of approximately 169.2 million shares of the Company's common stock with a
per share value of $164.00 on the Acquisition Date.
per share value of $164.00 on the Acquisition Date.
(c) In connection with the Acquisition, the Company issued equity awards, consisting of restricted stock and restricted
(c) In connection with the Acquisition, the Company issued equity awards, consisting of restricted stock and restricted
stock units, to certain Maxim employees in replacement of Maxim equity awards that were cancelled at closing. The
stock units, to certain Maxim employees in replacement of Maxim equity awards that were cancelled at closing. The
replacement awards consist of restricted stock and restricted stock unit awards for approximately 3.7 million shares of
replacement awards consist of restricted stock and restricted stock unit awards for approximately 3.7 million shares of
the Company's common stock with a weighted average grant date fair value of $161.63. This amount represents the
the Company's common stock with a weighted average grant date fair value of $161.63. This amount represents the
portion of the fair value of the replacement equity awards associated with services rendered through the Acquisition
portion of the fair value of the replacement equity awards associated with services rendered through the Acquisition
Date and has been included as a component of the total purchase consideration.
Date and has been included as a component of the total purchase consideration.
During fiscal 2022, the Company completed the acquisition accounting for the Acquisition. The following is a summary
During fiscal 2022, the Company completed the acquisition accounting for the Acquisition. The following is a summary
of the amounts recognized in accounting for the Acquisition:
of the amounts recognized in accounting for the Acquisition:
69
69
70
70
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Cash and cash equivalents
Cash and cash equivalents
Accounts receivable
Accounts receivable
Inventories
Inventories
Prepaid expenses and other current assets
Prepaid expenses and other current assets
Property, plant and equipment
Property, plant and equipment
Intangible assets (Note 2f)
Intangible assets (Note 2f)
Goodwill (Note 2f)
Goodwill (Note 2f)
Other long-term assets
Other long-term assets
Total assets
Total assets
Accounts payable
Accounts payable
Income taxes payable
Income taxes payable
Accrued liabilities
Accrued liabilities
Long-term debt
Long-term debt
Deferred income taxes
Deferred income taxes
Other non-current liabilities
Other non-current liabilities
Total liabilities
Total liabilities
Total purchase consideration
Total purchase consideration
$
$
2,450,597
2,450,597
609,245
609,245
858,300
858,300
59,310
59,310
759,544
759,544
12,429,100
12,429,100
14,660,343
14,660,343
80,373
80,373
$
$
31,906,812
31,906,812
112,828
112,828
156,592
156,592
592,432
592,432
1,072,150
1,072,150
1,661,907
1,661,907
361,805
361,805
3,957,714
3,957,714
27,949,098
27,949,098
$
$
$
$
The acquired intangible assets consisted of the following, which are being amortized on a straight-line basis over their
The acquired intangible assets consisted of the following, which are being amortized on a straight-line basis over their
estimated useful lives or on an accelerated method of amortization that is expected to reflect the estimated pattern of economic
estimated useful lives or on an accelerated method of amortization that is expected to reflect the estimated pattern of economic
use.
use.
Customer relationships
Customer relationships
Developed technology
Developed technology
Backlog
Backlog
Total amortizable intangible assets
Total amortizable intangible assets
Fair Value
Fair Value
(in thousands)
(in thousands)
$
$
$
$
5,642,100
5,642,100
6,425,800
6,425,800
361,200
361,200
12,429,100
12,429,100
Weighted Average
Weighted Average
Useful Life
Useful Life
(in Years)
(in Years)
14
14
8
8
2
2
10
10
The goodwill recognized is attributable to synergies which are expected to enhance and expand the Company’s overall
The goodwill recognized is attributable to synergies which are expected to enhance and expand the Company’s overall
product portfolio and opportunities in new and existing markets, future technologies that have yet to be determined and
product portfolio and opportunities in new and existing markets, future technologies that have yet to be determined and
Maxim’s assembled workforce. Future technologies do not meet the criteria for recognition separately from goodwill because
Maxim’s assembled workforce. Future technologies do not meet the criteria for recognition separately from goodwill because
they are part of future development and growth of the business.
they are part of future development and growth of the business.
There were no significant contingencies assumed as part of the Acquisition.
There were no significant contingencies assumed as part of the Acquisition.
In aggregate, the Company recognized $166.9 million of transaction-related costs, including legal, accounting and other
In aggregate, the Company recognized $166.9 million of transaction-related costs, including legal, accounting and other
related fees that were expensed in fiscal 2022, fiscal 2021 and fiscal 2020. These costs are included in the Consolidated
related fees that were expensed in fiscal 2022, fiscal 2021 and fiscal 2020. These costs are included in the Consolidated
Statements of Income in operating expenses within Selling, marketing, general and administrative expenses (SMG&A).
Statements of Income in operating expenses within Selling, marketing, general and administrative expenses (SMG&A).
The following unaudited pro forma consolidated financial information for the twelve months ended October 30, 2021
The following unaudited pro forma consolidated financial information for the twelve months ended October 30, 2021
combines the results of the Company for fiscal 2021 and the unaudited results of Maxim for the corresponding period through
combines the results of the Company for fiscal 2021 and the unaudited results of Maxim for the corresponding period through
the Acquisition Date. The following unaudited pro forma consolidated financial information for the twelve months ended
the Acquisition Date. The following unaudited pro forma consolidated financial information for the twelve months ended
October 31, 2020 combines the results of the Company for fiscal 2020 and the unaudited results of Maxim for the
October 31, 2020 combines the results of the Company for fiscal 2020 and the unaudited results of Maxim for the
corresponding period. The unaudited pro forma consolidated financial information assumes that the Acquisition, which closed
corresponding period. The unaudited pro forma consolidated financial information assumes that the Acquisition, which closed
on August 26, 2021, was completed on November 3, 2019 (the first day of fiscal 2020). The pro forma consolidated financial
on August 26, 2021, was completed on November 3, 2019 (the first day of fiscal 2020). The pro forma consolidated financial
information has been calculated after applying the Company’s accounting policies and includes adjustments for amortization
information has been calculated after applying the Company’s accounting policies and includes adjustments for amortization
expense of acquired intangible assets, fair value adjustments for acquired inventory, property, plant and equipment and long-
expense of acquired intangible assets, fair value adjustments for acquired inventory, property, plant and equipment and long-
term debt and compensation expense for ongoing share-based compensation arrangements that were replaced in conjunction
term debt and compensation expense for ongoing share-based compensation arrangements that were replaced in conjunction
with the Acquisition, together with the consequential tax effects. For fiscal 2020, non-recurring pro forma adjustments directly
with the Acquisition, together with the consequential tax effects. For fiscal 2020, non-recurring pro forma adjustments directly
attributable to the Acquisition included pre-tax amounts of $602.5 million related to the acquisition accounting effect of
attributable to the Acquisition included pre-tax amounts of $602.5 million related to the acquisition accounting effect of
inventories acquired and $54.2 million of accelerated stock-based compensation expense, together with the consequential tax
inventories acquired and $54.2 million of accelerated stock-based compensation expense, together with the consequential tax
effects. Additionally, $309.0 million of pre-tax transaction costs, together with the consequential tax effects, that were incurred
effects. Additionally, $309.0 million of pre-tax transaction costs, together with the consequential tax effects, that were incurred
related to the Acquisition are reflected in the pro forma results for fiscal 2020. These pro forma results have been prepared for
related to the Acquisition are reflected in the pro forma results for fiscal 2020. These pro forma results have been prepared for
comparative purposes only and do not purport to be indicative of the operating results of the Company that would have been
comparative purposes only and do not purport to be indicative of the operating results of the Company that would have been
achieved had the Acquisition actually taken place on November 3, 2019. In addition, these results are not intended to be a
achieved had the Acquisition actually taken place on November 3, 2019. In addition, these results are not intended to be a
projection of future results and do not reflect events that may occur after the Acquisition, including but not limited to revenue
projection of future results and do not reflect events that may occur after the Acquisition, including but not limited to revenue
enhancements, cost savings or operating synergies that the combined Company may achieve as a result of the Acquisition.
enhancements, cost savings or operating synergies that the combined Company may achieve as a result of the Acquisition.
The Company has not provided pro forma results of operations for any other acquisitions completed in fiscal 2022, fiscal
The Company has not provided pro forma results of operations for any other acquisitions completed in fiscal 2022, fiscal
2021 or fiscal 2020 herein as they were not material to the Company on either an individual or an aggregate basis. The
2021 or fiscal 2020 herein as they were not material to the Company on either an individual or an aggregate basis. The
Company included the results of operations of each acquisition in its Consolidated Statements of Income from the closing date
Company included the results of operations of each acquisition in its Consolidated Statements of Income from the closing date
Other investments consist of interests in venture capital funds and other long-term investments. Investments are accounted
Other investments consist of interests in venture capital funds and other long-term investments. Investments are accounted
for using the equity method of accounting or cost, less any impairment, plus or minus changes resulting from observable price
for using the equity method of accounting or cost, less any impairment, plus or minus changes resulting from observable price
changes in orderly transactions for an identical or similar investment of the same issuer. For equity method investments,
changes in orderly transactions for an identical or similar investment of the same issuer. For equity method investments,
realized gains and losses are reflected in Other, net based upon the Company's ownership share of the investee's financial
realized gains and losses are reflected in Other, net based upon the Company's ownership share of the investee's financial
Accrued liabilities at October 29, 2022 and October 30, 2021 consisted of the following:
Accrued liabilities at October 29, 2022 and October 30, 2021 consisted of the following:
Distributor price adjustments and other revenue reserves
Distributor price adjustments and other revenue reserves
Revenue
Revenue
Net income (loss)
Net income (loss)
Basic net income (loss) per common share
Basic net income (loss) per common share
Diluted net income (loss) per common share
Diluted net income (loss) per common share
Other Acquisitions
Other Acquisitions
of each acquisition.
of each acquisition.
7.
7.
Other Investments
Other Investments
results.
results.
8.
8.
Accrued Liabilities
Accrued Liabilities
Accrued compensation and benefits
Accrued compensation and benefits
Accrued special charges
Accrued special charges
Lease liabilities
Lease liabilities
Accrued interest
Accrued interest
Accrued withholdings related to ESPP
Accrued withholdings related to ESPP
Accrued taxes
Accrued taxes
Accrued professional fees
Accrued professional fees
Other
Other
Total accrued liabilities
Total accrued liabilities
9.
9.
Leases
Leases
Pro Forma Twelve Months Ended
Pro Forma Twelve Months Ended
(unaudited)
(unaudited)
October 30, 2021 October 31, 2020
October 30, 2021 October 31, 2020
$
$
$
$
$
$
$
$
9,541,488 $
9,541,488 $
7,897,855
7,897,855
1,578,274 $
1,578,274 $
(144,198)
(144,198)
2.94 $
2.94 $
2.91 $
2.91 $
(0.27)
(0.27)
(0.27)
(0.27)
2022
2022
2021
2021
$
$
749,402 $
749,402 $
465,536
465,536
54,699
54,699
53,628
53,628
33,298
33,298
28,131
28,131
22,815
22,815
7,955
7,955
179,186
179,186
664,198
664,198
381,678
381,678
46,839
46,839
52,576
52,576
29,361
29,361
—
—
29,321
29,321
152,689
152,689
120,868
120,868
$
$
1,594,650 $
1,594,650 $
1,477,530
1,477,530
The Company enters into operating leases which primarily relate to certain facilities and, to a lesser extent, finance leases.
The Company enters into operating leases which primarily relate to certain facilities and, to a lesser extent, finance leases.
Finance leases were not a material component of the Company's lease portfolio in the periods presented. The Company
Finance leases were not a material component of the Company's lease portfolio in the periods presented. The Company
determines whether an arrangement is or contains a lease based on the unique facts and circumstances present at the inception
determines whether an arrangement is or contains a lease based on the unique facts and circumstances present at the inception
of an arrangement. Lease assets represent the Company's right to use underlying assets for the lease term, and lease liabilities
of an arrangement. Lease assets represent the Company's right to use underlying assets for the lease term, and lease liabilities
represent the obligation to make lease payments over the lease term. At lease commencement, leases are evaluated for
represent the obligation to make lease payments over the lease term. At lease commencement, leases are evaluated for
classification, and assets and liabilities are recognized based on the present value of lease payments over the lease term. The
classification, and assets and liabilities are recognized based on the present value of lease payments over the lease term. The
interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the appropriate
interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the appropriate
incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term at an amount equal
incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term at an amount equal
to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for
to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for
items such as initial direct costs paid or incentives received, such as construction allowances from landlords and/or rent
items such as initial direct costs paid or incentives received, such as construction allowances from landlords and/or rent
abatements subsequent to taking possession of the leased property. The Company has agreements with lease and non-lease
abatements subsequent to taking possession of the leased property. The Company has agreements with lease and non-lease
71
71
72
72
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Cash and cash equivalents
Cash and cash equivalents
Accounts receivable
Accounts receivable
Inventories
Inventories
Prepaid expenses and other current assets
Prepaid expenses and other current assets
Property, plant and equipment
Property, plant and equipment
Intangible assets (Note 2f)
Intangible assets (Note 2f)
Goodwill (Note 2f)
Goodwill (Note 2f)
Other long-term assets
Other long-term assets
Total assets
Total assets
Accounts payable
Accounts payable
Income taxes payable
Income taxes payable
Accrued liabilities
Accrued liabilities
Long-term debt
Long-term debt
Deferred income taxes
Deferred income taxes
Other non-current liabilities
Other non-current liabilities
Total liabilities
Total liabilities
Total purchase consideration
Total purchase consideration
use.
use.
Customer relationships
Customer relationships
Developed technology
Developed technology
Backlog
Backlog
Total amortizable intangible assets
Total amortizable intangible assets
$
$
2,450,597
2,450,597
$
$
31,906,812
31,906,812
609,245
609,245
858,300
858,300
59,310
59,310
759,544
759,544
12,429,100
12,429,100
14,660,343
14,660,343
80,373
80,373
112,828
112,828
156,592
156,592
592,432
592,432
1,072,150
1,072,150
1,661,907
1,661,907
361,805
361,805
3,957,714
3,957,714
27,949,098
27,949,098
$
$
$
$
Fair Value
Fair Value
(in thousands)
(in thousands)
Weighted Average
Weighted Average
Useful Life
Useful Life
(in Years)
(in Years)
$
$
$
$
5,642,100
5,642,100
6,425,800
6,425,800
361,200
361,200
12,429,100
12,429,100
14
14
8
8
2
2
10
10
The acquired intangible assets consisted of the following, which are being amortized on a straight-line basis over their
The acquired intangible assets consisted of the following, which are being amortized on a straight-line basis over their
estimated useful lives or on an accelerated method of amortization that is expected to reflect the estimated pattern of economic
estimated useful lives or on an accelerated method of amortization that is expected to reflect the estimated pattern of economic
The goodwill recognized is attributable to synergies which are expected to enhance and expand the Company’s overall
The goodwill recognized is attributable to synergies which are expected to enhance and expand the Company’s overall
product portfolio and opportunities in new and existing markets, future technologies that have yet to be determined and
product portfolio and opportunities in new and existing markets, future technologies that have yet to be determined and
Maxim’s assembled workforce. Future technologies do not meet the criteria for recognition separately from goodwill because
Maxim’s assembled workforce. Future technologies do not meet the criteria for recognition separately from goodwill because
they are part of future development and growth of the business.
they are part of future development and growth of the business.
There were no significant contingencies assumed as part of the Acquisition.
There were no significant contingencies assumed as part of the Acquisition.
In aggregate, the Company recognized $166.9 million of transaction-related costs, including legal, accounting and other
In aggregate, the Company recognized $166.9 million of transaction-related costs, including legal, accounting and other
related fees that were expensed in fiscal 2022, fiscal 2021 and fiscal 2020. These costs are included in the Consolidated
related fees that were expensed in fiscal 2022, fiscal 2021 and fiscal 2020. These costs are included in the Consolidated
Statements of Income in operating expenses within Selling, marketing, general and administrative expenses (SMG&A).
Statements of Income in operating expenses within Selling, marketing, general and administrative expenses (SMG&A).
The following unaudited pro forma consolidated financial information for the twelve months ended October 30, 2021
The following unaudited pro forma consolidated financial information for the twelve months ended October 30, 2021
combines the results of the Company for fiscal 2021 and the unaudited results of Maxim for the corresponding period through
combines the results of the Company for fiscal 2021 and the unaudited results of Maxim for the corresponding period through
the Acquisition Date. The following unaudited pro forma consolidated financial information for the twelve months ended
the Acquisition Date. The following unaudited pro forma consolidated financial information for the twelve months ended
October 31, 2020 combines the results of the Company for fiscal 2020 and the unaudited results of Maxim for the
October 31, 2020 combines the results of the Company for fiscal 2020 and the unaudited results of Maxim for the
corresponding period. The unaudited pro forma consolidated financial information assumes that the Acquisition, which closed
corresponding period. The unaudited pro forma consolidated financial information assumes that the Acquisition, which closed
on August 26, 2021, was completed on November 3, 2019 (the first day of fiscal 2020). The pro forma consolidated financial
on August 26, 2021, was completed on November 3, 2019 (the first day of fiscal 2020). The pro forma consolidated financial
information has been calculated after applying the Company’s accounting policies and includes adjustments for amortization
information has been calculated after applying the Company’s accounting policies and includes adjustments for amortization
expense of acquired intangible assets, fair value adjustments for acquired inventory, property, plant and equipment and long-
expense of acquired intangible assets, fair value adjustments for acquired inventory, property, plant and equipment and long-
term debt and compensation expense for ongoing share-based compensation arrangements that were replaced in conjunction
term debt and compensation expense for ongoing share-based compensation arrangements that were replaced in conjunction
with the Acquisition, together with the consequential tax effects. For fiscal 2020, non-recurring pro forma adjustments directly
with the Acquisition, together with the consequential tax effects. For fiscal 2020, non-recurring pro forma adjustments directly
attributable to the Acquisition included pre-tax amounts of $602.5 million related to the acquisition accounting effect of
attributable to the Acquisition included pre-tax amounts of $602.5 million related to the acquisition accounting effect of
inventories acquired and $54.2 million of accelerated stock-based compensation expense, together with the consequential tax
inventories acquired and $54.2 million of accelerated stock-based compensation expense, together with the consequential tax
effects. Additionally, $309.0 million of pre-tax transaction costs, together with the consequential tax effects, that were incurred
effects. Additionally, $309.0 million of pre-tax transaction costs, together with the consequential tax effects, that were incurred
related to the Acquisition are reflected in the pro forma results for fiscal 2020. These pro forma results have been prepared for
related to the Acquisition are reflected in the pro forma results for fiscal 2020. These pro forma results have been prepared for
comparative purposes only and do not purport to be indicative of the operating results of the Company that would have been
comparative purposes only and do not purport to be indicative of the operating results of the Company that would have been
achieved had the Acquisition actually taken place on November 3, 2019. In addition, these results are not intended to be a
achieved had the Acquisition actually taken place on November 3, 2019. In addition, these results are not intended to be a
projection of future results and do not reflect events that may occur after the Acquisition, including but not limited to revenue
projection of future results and do not reflect events that may occur after the Acquisition, including but not limited to revenue
enhancements, cost savings or operating synergies that the combined Company may achieve as a result of the Acquisition.
enhancements, cost savings or operating synergies that the combined Company may achieve as a result of the Acquisition.
Revenue
Revenue
Net income (loss)
Net income (loss)
Basic net income (loss) per common share
Basic net income (loss) per common share
Diluted net income (loss) per common share
Diluted net income (loss) per common share
Other Acquisitions
Other Acquisitions
Pro Forma Twelve Months Ended
Pro Forma Twelve Months Ended
(unaudited)
(unaudited)
October 30, 2021 October 31, 2020
October 30, 2021 October 31, 2020
$
$
$
$
$
$
$
$
9,541,488 $
9,541,488 $
1,578,274 $
1,578,274 $
2.94 $
2.94 $
2.91 $
2.91 $
7,897,855
7,897,855
(144,198)
(144,198)
(0.27)
(0.27)
(0.27)
(0.27)
The Company has not provided pro forma results of operations for any other acquisitions completed in fiscal 2022, fiscal
The Company has not provided pro forma results of operations for any other acquisitions completed in fiscal 2022, fiscal
2021 or fiscal 2020 herein as they were not material to the Company on either an individual or an aggregate basis. The
2021 or fiscal 2020 herein as they were not material to the Company on either an individual or an aggregate basis. The
Company included the results of operations of each acquisition in its Consolidated Statements of Income from the closing date
Company included the results of operations of each acquisition in its Consolidated Statements of Income from the closing date
of each acquisition.
of each acquisition.
7.
7.
Other Investments
Other Investments
Other investments consist of interests in venture capital funds and other long-term investments. Investments are accounted
Other investments consist of interests in venture capital funds and other long-term investments. Investments are accounted
for using the equity method of accounting or cost, less any impairment, plus or minus changes resulting from observable price
for using the equity method of accounting or cost, less any impairment, plus or minus changes resulting from observable price
changes in orderly transactions for an identical or similar investment of the same issuer. For equity method investments,
changes in orderly transactions for an identical or similar investment of the same issuer. For equity method investments,
realized gains and losses are reflected in Other, net based upon the Company's ownership share of the investee's financial
realized gains and losses are reflected in Other, net based upon the Company's ownership share of the investee's financial
results.
results.
8.
8.
Accrued Liabilities
Accrued Liabilities
Accrued liabilities at October 29, 2022 and October 30, 2021 consisted of the following:
Accrued liabilities at October 29, 2022 and October 30, 2021 consisted of the following:
Distributor price adjustments and other revenue reserves
Distributor price adjustments and other revenue reserves
Accrued compensation and benefits
Accrued compensation and benefits
Accrued special charges
Accrued special charges
Lease liabilities
Lease liabilities
Accrued interest
Accrued interest
Accrued withholdings related to ESPP
Accrued withholdings related to ESPP
Accrued taxes
Accrued taxes
Accrued professional fees
Accrued professional fees
Other
Other
Total accrued liabilities
Total accrued liabilities
9.
9.
Leases
Leases
$
$
2022
2022
2021
2021
749,402 $
749,402 $
465,536
465,536
54,699
54,699
53,628
53,628
33,298
33,298
28,131
28,131
22,815
22,815
7,955
7,955
179,186
179,186
664,198
664,198
381,678
381,678
46,839
46,839
52,576
52,576
29,361
29,361
—
—
29,321
29,321
152,689
152,689
120,868
120,868
$
$
1,594,650 $
1,594,650 $
1,477,530
1,477,530
The Company enters into operating leases which primarily relate to certain facilities and, to a lesser extent, finance leases.
The Company enters into operating leases which primarily relate to certain facilities and, to a lesser extent, finance leases.
Finance leases were not a material component of the Company's lease portfolio in the periods presented. The Company
Finance leases were not a material component of the Company's lease portfolio in the periods presented. The Company
determines whether an arrangement is or contains a lease based on the unique facts and circumstances present at the inception
determines whether an arrangement is or contains a lease based on the unique facts and circumstances present at the inception
of an arrangement. Lease assets represent the Company's right to use underlying assets for the lease term, and lease liabilities
of an arrangement. Lease assets represent the Company's right to use underlying assets for the lease term, and lease liabilities
represent the obligation to make lease payments over the lease term. At lease commencement, leases are evaluated for
represent the obligation to make lease payments over the lease term. At lease commencement, leases are evaluated for
classification, and assets and liabilities are recognized based on the present value of lease payments over the lease term. The
classification, and assets and liabilities are recognized based on the present value of lease payments over the lease term. The
interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the appropriate
interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the appropriate
incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term at an amount equal
incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term at an amount equal
to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for
to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for
items such as initial direct costs paid or incentives received, such as construction allowances from landlords and/or rent
items such as initial direct costs paid or incentives received, such as construction allowances from landlords and/or rent
abatements subsequent to taking possession of the leased property. The Company has agreements with lease and non-lease
abatements subsequent to taking possession of the leased property. The Company has agreements with lease and non-lease
71
71
72
72
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
components, which are accounted for as a single lease component. Non-lease components may include real estate taxes,
components, which are accounted for as a single lease component. Non-lease components may include real estate taxes,
insurance, maintenance, parking and other operating costs. If these costs are variable costs they are not included in the
insurance, maintenance, parking and other operating costs. If these costs are variable costs they are not included in the
measurement of the right-of-use assets and lease liabilities, but are expensed when the event determining the amount of variable
measurement of the right-of-use assets and lease liabilities, but are expensed when the event determining the amount of variable
consideration to be paid occurs. The Company’s leases have remaining lease terms of less than one year to approximately
consideration to be paid occurs. The Company’s leases have remaining lease terms of less than one year to approximately
twenty-three years, some of which may include options to extend the initial term of the lease. These options are included in
twenty-three years, some of which may include options to extend the initial term of the lease. These options are included in
determining the initial lease term at lease commencement only if the Company is reasonably certain to exercise the option.
determining the initial lease term at lease commencement only if the Company is reasonably certain to exercise the option.
Lease costs are recognized on a straight-line basis as lease expense over the lease term. For leases with terms of twelve months
Lease costs are recognized on a straight-line basis as lease expense over the lease term. For leases with terms of twelve months
or less the Company recognizes the related lease payments as expense either on a straight-line basis over the lease term or as
or less the Company recognizes the related lease payments as expense either on a straight-line basis over the lease term or as
incurred depending on whether the lease payments are fixed or variable. The Company subleases certain properties that are not
incurred depending on whether the lease payments are fixed or variable. The Company subleases certain properties that are not
used in its core business operations (See Note 5, Special Charges, Net, of the Notes to Consolidated Financial Statements).
used in its core business operations (See Note 5, Special Charges, Net, of the Notes to Consolidated Financial Statements).
Sublease income was not significant for the periods presented.
Sublease income was not significant for the periods presented.
The following table presents supplemental balance sheet information related to the Company's operating leases:
The following table presents supplemental balance sheet information related to the Company's operating leases:
October 29, 2022
October 29, 2022
October 30, 2021
October 30, 2021
defendants have meritorious defenses to these allegations; however, the Company is currently unable to determine the ultimate
defendants have meritorious defenses to these allegations; however, the Company is currently unable to determine the ultimate
Assets
Assets
Operating lease right-of-use assets in Other assets
Operating lease right-of-use assets in Other assets
Liabilities
Liabilities
Operating lease liabilities in Accrued liabilities
Operating lease liabilities in Accrued liabilities
Operating lease liabilities in Other non-current liabilities
Operating lease liabilities in Other non-current liabilities
Details of the Company's operating leases are as follows:
Details of the Company's operating leases are as follows:
$
$
$
$
$
$
262,997
262,997
$
$
279,542
279,542
53,628
53,628
337,279
337,279
$
$
$
$
52,576
52,576
295,782
295,782
October 29, 2022
October 29, 2022
October 30, 2021
October 30, 2021
Defined Contribution Plans
Defined Contribution Plans
Lease expense
Lease expense
Cash paid for amounts included in the measurement of operating lease liabilities
Cash paid for amounts included in the measurement of operating lease liabilities
$
$
60,660 $
60,660 $
50,799
50,799
Operating cash flows from operating leases
Operating cash flows from operating leases
Lease assets obtained in exchange for new lease liabilities
Lease assets obtained in exchange for new lease liabilities
Weighted average remaining lease term
Weighted average remaining lease term
Weighted average discount rate
Weighted average discount rate
$
$
$
$
61,915 $
61,915 $
107,631 $
107,631 $
7.6 years
7.6 years
3.3 %
3.3 %
53,724
53,724
25,946
25,946
7.9 years
7.9 years
2.9 %
2.9 %
The following table presents the maturities of the Company's operating lease liabilities as of October 29, 2022:
The following table presents the maturities of the Company's operating lease liabilities as of October 29, 2022:
Fiscal year
Fiscal year
2023
2023
2024
2024
2025
2025
2026
2026
2027
2027
Thereafter
Thereafter
Total future minimum operating lease payments
Total future minimum operating lease payments
Less: imputed interest
Less: imputed interest
Present value of operating lease liabilities
Present value of operating lease liabilities
$
$
$
$
The following table presents the future minimum cash receipts as a result of subleases as of October 29, 2022:
The following table presents the future minimum cash receipts as a result of subleases as of October 29, 2022:
Fiscal year
Fiscal year
2023
2023
2024
2024
2025
2025
2026
2026
2027
2027
Thereafter
Thereafter
Total future minimum cash receipts
Total future minimum cash receipts
$
$
$
$
31,199
31,199
68,433
68,433
63,065
63,065
59,156
59,156
54,027
54,027
178,663
178,663
454,543
454,543
(63,636)
(63,636)
390,907
390,907
1,928
1,928
12,664
12,664
13,843
13,843
14,259
14,259
14,687
14,687
42,734
42,734
100,115
100,115
73
73
74
74
10. Commitments and Contingencies
10. Commitments and Contingencies
From time to time, in the ordinary course of the Company’s business, various claims, charges and litigation are asserted
From time to time, in the ordinary course of the Company’s business, various claims, charges and litigation are asserted
or commenced against the Company arising from, or related to, among other things, contractual matters, acquisitions, patents,
or commenced against the Company arising from, or related to, among other things, contractual matters, acquisitions, patents,
trademarks, personal injury, environmental matters, product liability, insurance coverage, employment or employment benefits.
trademarks, personal injury, environmental matters, product liability, insurance coverage, employment or employment benefits.
As to such claims and litigation, the Company can give no assurance that it will prevail.
As to such claims and litigation, the Company can give no assurance that it will prevail.
On March 17, 2022, Walter E. Ryan and Ryan Asset Management, LLC, purported stockholders of Maxim, filed a
On March 17, 2022, Walter E. Ryan and Ryan Asset Management, LLC, purported stockholders of Maxim, filed a
putative class action in the Court of Chancery of the State of Delaware (C.A. No. 2022—0255) against the Company and the
putative class action in the Court of Chancery of the State of Delaware (C.A. No. 2022—0255) against the Company and the
former directors of Maxim. The complaint alleges breach of fiduciary duties by the individual defendants in connection with
former directors of Maxim. The complaint alleges breach of fiduciary duties by the individual defendants in connection with
Maxim’s agreement, as part of the merger negotiations with the Company, to suspend Maxim dividends for up to four quarters
Maxim’s agreement, as part of the merger negotiations with the Company, to suspend Maxim dividends for up to four quarters
prior to the closing of the Acquisition. The complaint further alleges that the Company aided and abetted that alleged breach of
prior to the closing of the Acquisition. The complaint further alleges that the Company aided and abetted that alleged breach of
fiduciary duties. The plaintiffs seek damages in an amount to be determined at trial, plaintiffs’ costs and disbursements,
fiduciary duties. The plaintiffs seek damages in an amount to be determined at trial, plaintiffs’ costs and disbursements,
including reasonable attorneys’ and experts’ fees, costs and other expenses. The Company believes that it and the other
including reasonable attorneys’ and experts’ fees, costs and other expenses. The Company believes that it and the other
outcome of this matter or determine an estimate, or a range of estimates, of potential losses, if any.
outcome of this matter or determine an estimate, or a range of estimates, of potential losses, if any.
The Company has a supplier commitment of approximately $428.4 million for the purchase of materials and supplies in
The Company has a supplier commitment of approximately $428.4 million for the purchase of materials and supplies in
advance or with minimum purchase quantities through 2031.
advance or with minimum purchase quantities through 2031.
11.
11.
Retirement Plans
Retirement Plans
The Company and its subsidiaries have various savings and retirement plans covering substantially all employees.
The Company and its subsidiaries have various savings and retirement plans covering substantially all employees.
The Company maintains a defined contribution plan for the benefit of its eligible U.S. employees. This plan provides for
The Company maintains a defined contribution plan for the benefit of its eligible U.S. employees. This plan provides for
Company contributions of up to 5% of each participant’s total eligible compensation. In addition, the Company contributes an
Company contributions of up to 5% of each participant’s total eligible compensation. In addition, the Company contributes an
amount equal to each participant’s pre-tax contribution, if any, up to a maximum of 3% of each participant’s total eligible
amount equal to each participant’s pre-tax contribution, if any, up to a maximum of 3% of each participant’s total eligible
compensation. The total expense related to the defined contribution plans for all eligible U.S. employees was $65.2 million in
compensation. The total expense related to the defined contribution plans for all eligible U.S. employees was $65.2 million in
fiscal 2022, $52.1 million in fiscal 2021 and $48.7 million in fiscal 2020.
fiscal 2022, $52.1 million in fiscal 2021 and $48.7 million in fiscal 2020.
Non-Qualified Deferred Compensation Plan
Non-Qualified Deferred Compensation Plan
The Deferred Compensation Plan (DCP) allows certain members of management and other highly-compensated
The Deferred Compensation Plan (DCP) allows certain members of management and other highly-compensated
employees and non-employee directors to defer receipt of all or any portion of their compensation. The DCP was established to
employees and non-employee directors to defer receipt of all or any portion of their compensation. The DCP was established to
provide participants with the opportunity to defer receiving all or a portion of their compensation, which includes salary, bonus,
provide participants with the opportunity to defer receiving all or a portion of their compensation, which includes salary, bonus,
commissions and director fees. Under the DCP, the Company provides all participants (other than non-employee directors) with
commissions and director fees. Under the DCP, the Company provides all participants (other than non-employee directors) with
Company contributions equal to 8% of eligible deferred contributions. The DCP is a non-qualified plan that is maintained in a
Company contributions equal to 8% of eligible deferred contributions. The DCP is a non-qualified plan that is maintained in a
rabbi trust. The fair value of the investments held in the rabbi trust are included within other investments, with the current
rabbi trust. The fair value of the investments held in the rabbi trust are included within other investments, with the current
portion of the investment included in prepaid expenses and other current assets in the Consolidated Balance Sheets. See
portion of the investment included in prepaid expenses and other current assets in the Consolidated Balance Sheets. See
Note 2j, Fair Value, of the Notes to Consolidated Financial Statements for further information on these investments. The
Note 2j, Fair Value, of the Notes to Consolidated Financial Statements for further information on these investments. The
deferred compensation obligation represents DCP participant accumulated deferrals and earnings thereon since the inception of
deferred compensation obligation represents DCP participant accumulated deferrals and earnings thereon since the inception of
the DCP net of withdrawals. The deferred compensation obligation is included within other non-current liabilities, with the
the DCP net of withdrawals. The deferred compensation obligation is included within other non-current liabilities, with the
current portion of the obligation in accrued liabilities in the Consolidated Balance Sheets. The Company’s liability under the
current portion of the obligation in accrued liabilities in the Consolidated Balance Sheets. The Company’s liability under the
DCP is an unsecured general obligation of the Company.
DCP is an unsecured general obligation of the Company.
Defined Benefit Pension and Post Retirement Benefit Plans
Defined Benefit Pension and Post Retirement Benefit Plans
The Company also has various defined benefit pension and other retirement plans for certain non-U.S. employees that are
The Company also has various defined benefit pension and other retirement plans for certain non-U.S. employees that are
consistent with local statutory requirements and practices. The total expense related to the various defined benefit pension,
consistent with local statutory requirements and practices. The total expense related to the various defined benefit pension,
contribution and other retirement plans for certain non-U.S. employees was $51.4 million in fiscal 2022, $45.9 million in fiscal
contribution and other retirement plans for certain non-U.S. employees was $51.4 million in fiscal 2022, $45.9 million in fiscal
2021 and $37.6 million in fiscal 2020.
2021 and $37.6 million in fiscal 2020.
The Company’s funding policy for its foreign defined benefit pension plans is consistent with the local requirements of
The Company’s funding policy for its foreign defined benefit pension plans is consistent with the local requirements of
each country. The plans’ assets consist primarily of U.S. and non-U.S. equity securities, bonds, property and cash. The
each country. The plans’ assets consist primarily of U.S. and non-U.S. equity securities, bonds, property and cash. The
Company has elected to measure defined benefit plan assets and obligations as of October 31, which is the month-end that is
Company has elected to measure defined benefit plan assets and obligations as of October 31, which is the month-end that is
closest to its fiscal year-ends, which were October 29, 2022 for fiscal 2022 and October 30, 2021 for fiscal 2021.
closest to its fiscal year-ends, which were October 29, 2022 for fiscal 2022 and October 30, 2021 for fiscal 2021.
As a result of the Acquisition, the Company acquired a postretirement plan that provides postretirement medical expenses
As a result of the Acquisition, the Company acquired a postretirement plan that provides postretirement medical expenses
to certain former employees of a Maxim acquired company and certain former Maxim executives in the U.S.
to certain former employees of a Maxim acquired company and certain former Maxim executives in the U.S.
components, which are accounted for as a single lease component. Non-lease components may include real estate taxes,
components, which are accounted for as a single lease component. Non-lease components may include real estate taxes,
insurance, maintenance, parking and other operating costs. If these costs are variable costs they are not included in the
insurance, maintenance, parking and other operating costs. If these costs are variable costs they are not included in the
measurement of the right-of-use assets and lease liabilities, but are expensed when the event determining the amount of variable
measurement of the right-of-use assets and lease liabilities, but are expensed when the event determining the amount of variable
consideration to be paid occurs. The Company’s leases have remaining lease terms of less than one year to approximately
consideration to be paid occurs. The Company’s leases have remaining lease terms of less than one year to approximately
twenty-three years, some of which may include options to extend the initial term of the lease. These options are included in
twenty-three years, some of which may include options to extend the initial term of the lease. These options are included in
determining the initial lease term at lease commencement only if the Company is reasonably certain to exercise the option.
determining the initial lease term at lease commencement only if the Company is reasonably certain to exercise the option.
Lease costs are recognized on a straight-line basis as lease expense over the lease term. For leases with terms of twelve months
Lease costs are recognized on a straight-line basis as lease expense over the lease term. For leases with terms of twelve months
or less the Company recognizes the related lease payments as expense either on a straight-line basis over the lease term or as
or less the Company recognizes the related lease payments as expense either on a straight-line basis over the lease term or as
incurred depending on whether the lease payments are fixed or variable. The Company subleases certain properties that are not
incurred depending on whether the lease payments are fixed or variable. The Company subleases certain properties that are not
used in its core business operations (See Note 5, Special Charges, Net, of the Notes to Consolidated Financial Statements).
used in its core business operations (See Note 5, Special Charges, Net, of the Notes to Consolidated Financial Statements).
Sublease income was not significant for the periods presented.
Sublease income was not significant for the periods presented.
The following table presents supplemental balance sheet information related to the Company's operating leases:
The following table presents supplemental balance sheet information related to the Company's operating leases:
October 29, 2022
October 29, 2022
October 30, 2021
October 30, 2021
Operating lease right-of-use assets in Other assets
Operating lease right-of-use assets in Other assets
262,997
262,997
$
$
279,542
279,542
Operating lease liabilities in Accrued liabilities
Operating lease liabilities in Accrued liabilities
Operating lease liabilities in Other non-current liabilities
Operating lease liabilities in Other non-current liabilities
Details of the Company's operating leases are as follows:
Details of the Company's operating leases are as follows:
Cash paid for amounts included in the measurement of operating lease liabilities
Cash paid for amounts included in the measurement of operating lease liabilities
Operating cash flows from operating leases
Operating cash flows from operating leases
Lease assets obtained in exchange for new lease liabilities
Lease assets obtained in exchange for new lease liabilities
Weighted average remaining lease term
Weighted average remaining lease term
Weighted average discount rate
Weighted average discount rate
October 29, 2022
October 29, 2022
October 30, 2021
October 30, 2021
60,660 $
60,660 $
50,799
50,799
61,915 $
61,915 $
107,631 $
107,631 $
7.6 years
7.6 years
3.3 %
3.3 %
53,724
53,724
25,946
25,946
7.9 years
7.9 years
2.9 %
2.9 %
The following table presents the maturities of the Company's operating lease liabilities as of October 29, 2022:
The following table presents the maturities of the Company's operating lease liabilities as of October 29, 2022:
$
$
$
$
$
$
$
$
$
$
$
$
Total future minimum operating lease payments
Total future minimum operating lease payments
Less: imputed interest
Less: imputed interest
Present value of operating lease liabilities
Present value of operating lease liabilities
The following table presents the future minimum cash receipts as a result of subleases as of October 29, 2022:
The following table presents the future minimum cash receipts as a result of subleases as of October 29, 2022:
Assets
Assets
Liabilities
Liabilities
Lease expense
Lease expense
Fiscal year
Fiscal year
2023
2023
2024
2024
2025
2025
2026
2026
2027
2027
Thereafter
Thereafter
Fiscal year
Fiscal year
2023
2023
2024
2024
2025
2025
2026
2026
2027
2027
Thereafter
Thereafter
Total future minimum cash receipts
Total future minimum cash receipts
$
$
$
$
$
$
$
$
31,199
31,199
68,433
68,433
63,065
63,065
59,156
59,156
54,027
54,027
178,663
178,663
454,543
454,543
(63,636)
(63,636)
390,907
390,907
1,928
1,928
12,664
12,664
13,843
13,843
14,259
14,259
14,687
14,687
42,734
42,734
100,115
100,115
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
10. Commitments and Contingencies
10. Commitments and Contingencies
From time to time, in the ordinary course of the Company’s business, various claims, charges and litigation are asserted
From time to time, in the ordinary course of the Company’s business, various claims, charges and litigation are asserted
or commenced against the Company arising from, or related to, among other things, contractual matters, acquisitions, patents,
or commenced against the Company arising from, or related to, among other things, contractual matters, acquisitions, patents,
trademarks, personal injury, environmental matters, product liability, insurance coverage, employment or employment benefits.
trademarks, personal injury, environmental matters, product liability, insurance coverage, employment or employment benefits.
As to such claims and litigation, the Company can give no assurance that it will prevail.
As to such claims and litigation, the Company can give no assurance that it will prevail.
On March 17, 2022, Walter E. Ryan and Ryan Asset Management, LLC, purported stockholders of Maxim, filed a
On March 17, 2022, Walter E. Ryan and Ryan Asset Management, LLC, purported stockholders of Maxim, filed a
putative class action in the Court of Chancery of the State of Delaware (C.A. No. 2022—0255) against the Company and the
putative class action in the Court of Chancery of the State of Delaware (C.A. No. 2022—0255) against the Company and the
former directors of Maxim. The complaint alleges breach of fiduciary duties by the individual defendants in connection with
former directors of Maxim. The complaint alleges breach of fiduciary duties by the individual defendants in connection with
Maxim’s agreement, as part of the merger negotiations with the Company, to suspend Maxim dividends for up to four quarters
Maxim’s agreement, as part of the merger negotiations with the Company, to suspend Maxim dividends for up to four quarters
prior to the closing of the Acquisition. The complaint further alleges that the Company aided and abetted that alleged breach of
prior to the closing of the Acquisition. The complaint further alleges that the Company aided and abetted that alleged breach of
fiduciary duties. The plaintiffs seek damages in an amount to be determined at trial, plaintiffs’ costs and disbursements,
fiduciary duties. The plaintiffs seek damages in an amount to be determined at trial, plaintiffs’ costs and disbursements,
including reasonable attorneys’ and experts’ fees, costs and other expenses. The Company believes that it and the other
including reasonable attorneys’ and experts’ fees, costs and other expenses. The Company believes that it and the other
defendants have meritorious defenses to these allegations; however, the Company is currently unable to determine the ultimate
defendants have meritorious defenses to these allegations; however, the Company is currently unable to determine the ultimate
outcome of this matter or determine an estimate, or a range of estimates, of potential losses, if any.
outcome of this matter or determine an estimate, or a range of estimates, of potential losses, if any.
The Company has a supplier commitment of approximately $428.4 million for the purchase of materials and supplies in
The Company has a supplier commitment of approximately $428.4 million for the purchase of materials and supplies in
advance or with minimum purchase quantities through 2031.
advance or with minimum purchase quantities through 2031.
53,628
53,628
337,279
337,279
$
$
$
$
52,576
52,576
295,782
295,782
11.
11.
Retirement Plans
Retirement Plans
The Company and its subsidiaries have various savings and retirement plans covering substantially all employees.
The Company and its subsidiaries have various savings and retirement plans covering substantially all employees.
Defined Contribution Plans
Defined Contribution Plans
The Company maintains a defined contribution plan for the benefit of its eligible U.S. employees. This plan provides for
The Company maintains a defined contribution plan for the benefit of its eligible U.S. employees. This plan provides for
Company contributions of up to 5% of each participant’s total eligible compensation. In addition, the Company contributes an
Company contributions of up to 5% of each participant’s total eligible compensation. In addition, the Company contributes an
amount equal to each participant’s pre-tax contribution, if any, up to a maximum of 3% of each participant’s total eligible
amount equal to each participant’s pre-tax contribution, if any, up to a maximum of 3% of each participant’s total eligible
compensation. The total expense related to the defined contribution plans for all eligible U.S. employees was $65.2 million in
compensation. The total expense related to the defined contribution plans for all eligible U.S. employees was $65.2 million in
fiscal 2022, $52.1 million in fiscal 2021 and $48.7 million in fiscal 2020.
fiscal 2022, $52.1 million in fiscal 2021 and $48.7 million in fiscal 2020.
Non-Qualified Deferred Compensation Plan
Non-Qualified Deferred Compensation Plan
The Deferred Compensation Plan (DCP) allows certain members of management and other highly-compensated
The Deferred Compensation Plan (DCP) allows certain members of management and other highly-compensated
employees and non-employee directors to defer receipt of all or any portion of their compensation. The DCP was established to
employees and non-employee directors to defer receipt of all or any portion of their compensation. The DCP was established to
provide participants with the opportunity to defer receiving all or a portion of their compensation, which includes salary, bonus,
provide participants with the opportunity to defer receiving all or a portion of their compensation, which includes salary, bonus,
commissions and director fees. Under the DCP, the Company provides all participants (other than non-employee directors) with
commissions and director fees. Under the DCP, the Company provides all participants (other than non-employee directors) with
Company contributions equal to 8% of eligible deferred contributions. The DCP is a non-qualified plan that is maintained in a
Company contributions equal to 8% of eligible deferred contributions. The DCP is a non-qualified plan that is maintained in a
rabbi trust. The fair value of the investments held in the rabbi trust are included within other investments, with the current
rabbi trust. The fair value of the investments held in the rabbi trust are included within other investments, with the current
portion of the investment included in prepaid expenses and other current assets in the Consolidated Balance Sheets. See
portion of the investment included in prepaid expenses and other current assets in the Consolidated Balance Sheets. See
Note 2j, Fair Value, of the Notes to Consolidated Financial Statements for further information on these investments. The
Note 2j, Fair Value, of the Notes to Consolidated Financial Statements for further information on these investments. The
deferred compensation obligation represents DCP participant accumulated deferrals and earnings thereon since the inception of
deferred compensation obligation represents DCP participant accumulated deferrals and earnings thereon since the inception of
the DCP net of withdrawals. The deferred compensation obligation is included within other non-current liabilities, with the
the DCP net of withdrawals. The deferred compensation obligation is included within other non-current liabilities, with the
current portion of the obligation in accrued liabilities in the Consolidated Balance Sheets. The Company’s liability under the
current portion of the obligation in accrued liabilities in the Consolidated Balance Sheets. The Company’s liability under the
DCP is an unsecured general obligation of the Company.
DCP is an unsecured general obligation of the Company.
Defined Benefit Pension and Post Retirement Benefit Plans
Defined Benefit Pension and Post Retirement Benefit Plans
The Company also has various defined benefit pension and other retirement plans for certain non-U.S. employees that are
The Company also has various defined benefit pension and other retirement plans for certain non-U.S. employees that are
consistent with local statutory requirements and practices. The total expense related to the various defined benefit pension,
consistent with local statutory requirements and practices. The total expense related to the various defined benefit pension,
contribution and other retirement plans for certain non-U.S. employees was $51.4 million in fiscal 2022, $45.9 million in fiscal
contribution and other retirement plans for certain non-U.S. employees was $51.4 million in fiscal 2022, $45.9 million in fiscal
2021 and $37.6 million in fiscal 2020.
2021 and $37.6 million in fiscal 2020.
The Company’s funding policy for its foreign defined benefit pension plans is consistent with the local requirements of
The Company’s funding policy for its foreign defined benefit pension plans is consistent with the local requirements of
each country. The plans’ assets consist primarily of U.S. and non-U.S. equity securities, bonds, property and cash. The
each country. The plans’ assets consist primarily of U.S. and non-U.S. equity securities, bonds, property and cash. The
Company has elected to measure defined benefit plan assets and obligations as of October 31, which is the month-end that is
Company has elected to measure defined benefit plan assets and obligations as of October 31, which is the month-end that is
closest to its fiscal year-ends, which were October 29, 2022 for fiscal 2022 and October 30, 2021 for fiscal 2021.
closest to its fiscal year-ends, which were October 29, 2022 for fiscal 2022 and October 30, 2021 for fiscal 2021.
As a result of the Acquisition, the Company acquired a postretirement plan that provides postretirement medical expenses
As a result of the Acquisition, the Company acquired a postretirement plan that provides postretirement medical expenses
to certain former employees of a Maxim acquired company and certain former Maxim executives in the U.S.
to certain former employees of a Maxim acquired company and certain former Maxim executives in the U.S.
73
73
74
74
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Components of Net Periodic Benefit Cost
Components of Net Periodic Benefit Cost
Net annual periodic benefit cost of the Company’s pension and postretirement benefit plans for fiscal 2022, fiscal 2021
Net annual periodic benefit cost of the Company’s pension and postretirement benefit plans for fiscal 2022, fiscal 2021
and fiscal 2020 is presented in the following table:
and fiscal 2020 is presented in the following table:
Reconciliation of Amounts Recognized in the Statement of Financial Position
Reconciliation of Amounts Recognized in the Statement of Financial Position
Service cost
Service cost
Interest cost
Interest cost
Expected return on plan assets
Expected return on plan assets
Recognized actuarial loss
Recognized actuarial loss
Subtotal
Subtotal
Curtailment impact
Curtailment impact
Settlement impact
Settlement impact
Net periodic benefit cost
Net periodic benefit cost
2022
2022
2021
2021
2020
2020
$
$
10,914 $
10,914 $
9,207 $
9,207 $
6,148
6,148
4,071
4,071
8,587
8,587
3,917
3,917
(4,540)
(4,540)
(3,759)
(3,759)
(5,296)
(5,296)
2,299
2,299
2,973
2,973
14,821 $
14,821 $
12,492 $
12,492 $
—
—
(35) $
(35) $
—
—
(6) $
(6) $
14,786 $
14,786 $
12,486 $
12,486 $
$
$
$
$
$
$
2,583
2,583
9,791
9,791
(203)
(203)
—
—
9,588
9,588
The service cost component of net periodic benefit cost above is recorded in Cost of sales, Research and development,
The service cost component of net periodic benefit cost above is recorded in Cost of sales, Research and development,
Selling, marketing, general and administrative expenses within the Consolidated Statements of Income, while the remaining
Selling, marketing, general and administrative expenses within the Consolidated Statements of Income, while the remaining
components are recorded to Other, net.
components are recorded to Other, net.
Benefit Obligations and Plan Assets
Benefit Obligations and Plan Assets
Obligation and asset data of the Company’s pension and postretirement benefit plans at October 29, 2022 and October 30,
Obligation and asset data of the Company’s pension and postretirement benefit plans at October 29, 2022 and October 30,
2021 is presented in the following table:
2021 is presented in the following table:
Change in Benefit Obligation
Change in Benefit Obligation
Benefit obligation at beginning of year
Benefit obligation at beginning of year
Service cost
Service cost
Interest cost
Interest cost
Acquisition of Maxim benefit obligation
Acquisition of Maxim benefit obligation
Settlement
Settlement
Actuarial gain
Actuarial gain
Benefits paid
Benefits paid
Exchange rate adjustment
Exchange rate adjustment
Benefit obligation at end of year
Benefit obligation at end of year
Change in Plan Assets
Change in Plan Assets
Fair value of plan assets at beginning of year
Fair value of plan assets at beginning of year
Actual return on plan assets
Actual return on plan assets
Employer contributions
Employer contributions
Settlements
Settlements
Benefits paid
Benefits paid
Acquisitions
Acquisitions
Exchange rate adjustment
Exchange rate adjustment
Fair value of plan assets at end of year
Fair value of plan assets at end of year
Reconciliation of Funded Status
Reconciliation of Funded Status
Funded status
Funded status
Amounts Recognized in the Balance Sheet
Amounts Recognized in the Balance Sheet
Non-current assets
Non-current assets
Current liabilities
Current liabilities
Non-current liabilities
Non-current liabilities
Net amount recognized
Net amount recognized
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
2022
2022
2021
2021
242,593 $
242,593 $
10,914
10,914
6,148
6,148
—
—
(1,052)
(1,052)
(68,806)
(68,806)
(3,596)
(3,596)
(28,471)
(28,471)
157,730 $
157,730 $
186,735
186,735
9,207
9,207
4,071
4,071
49,807
49,807
(885)
(885)
(4,005)
(4,005)
(3,983)
(3,983)
1,646
1,646
242,593
242,593
128,283 $
128,283 $
107,505
107,505
(34,231)
(34,231)
11,344
11,344
(1,052)
(1,052)
(3,596)
(3,596)
—
—
(16,719)
(16,719)
10,637
10,637
11,035
11,035
(885)
(885)
(3,983)
(3,983)
1,728
1,728
2,246
2,246
84,029 $
84,029 $
128,283
128,283
Discount rate
Discount rate
Rate of increase in compensation levels
Rate of increase in compensation levels
(73,701) $
(73,701) $
(114,310)
(114,310)
1,185 $
1,185 $
(2,638) $
(2,638) $
(72,248)
(72,248)
(73,701) $
(73,701) $
1,709
1,709
(2,730)
(2,730)
(113,289)
(113,289)
(114,310)
(114,310)
Discount rate
Discount rate
Expected long-term return on plan assets
Expected long-term return on plan assets
Rate of increase in compensation levels
Rate of increase in compensation levels
Net annual periodic benefit cost was determined using the following weighted average assumptions:
Net annual periodic benefit cost was determined using the following weighted average assumptions:
Prior service credit
Prior service credit
Net loss
Net loss
Accumulated other comprehensive loss
Accumulated other comprehensive loss
Accumulated contributions less than net periodic benefit cost
Accumulated contributions less than net periodic benefit cost
Net amount recognized
Net amount recognized
Changes Recognized in Other Comprehensive Income (Loss)
Changes Recognized in Other Comprehensive Income (Loss)
(loss)
(loss)
Net gain/loss arising during the year
Net gain/loss arising during the year
Effect of exchange rates on amounts included in AOCI
Effect of exchange rates on amounts included in AOCI
Amounts recognized as a component of net periodic benefit cost
Amounts recognized as a component of net periodic benefit cost
Amortization or settlement recognition of net loss
Amortization or settlement recognition of net loss
Total recognized in other comprehensive gain/loss
Total recognized in other comprehensive gain/loss
Changes in plan assets and benefit obligations recognized in other comprehensive income
Changes in plan assets and benefit obligations recognized in other comprehensive income
Total recognized in net periodic cost and other comprehensive loss
Total recognized in net periodic cost and other comprehensive loss
Estimated amounts that will be amortized from AOCI over the next fiscal year
Estimated amounts that will be amortized from AOCI over the next fiscal year
Net loss
Net loss
The accumulated benefit obligation for the Company’s pension and postretirement benefit plans was $111.3 million and
The accumulated benefit obligation for the Company’s pension and postretirement benefit plans was $111.3 million and
$178.2 million at October 29, 2022 and October 30, 2021, respectively.
$178.2 million at October 29, 2022 and October 30, 2021, respectively.
Information relating to the Company’s pension and postretirement benefit plans with projected benefit obligations in
Information relating to the Company’s pension and postretirement benefit plans with projected benefit obligations in
excess of plan assets and accumulated benefit obligations in excess of plan assets at October 29, 2022 and October 30, 2021 is
excess of plan assets and accumulated benefit obligations in excess of plan assets at October 29, 2022 and October 30, 2021 is
Plans with projected benefit obligations in excess of plan assets:
Plans with projected benefit obligations in excess of plan assets:
Plans with accumulated benefit obligations in excess of plan assets:
Plans with accumulated benefit obligations in excess of plan assets:
presented in the following table:
presented in the following table:
Projected benefit obligation
Projected benefit obligation
Fair value of plan assets
Fair value of plan assets
Projected benefit obligation
Projected benefit obligation
Accumulated benefit obligation
Accumulated benefit obligation
Fair value of plan assets
Fair value of plan assets
Assumptions
Assumptions
The range of assumptions used for the Company’s pension and postretirement benefit plans reflects the different
The range of assumptions used for the Company’s pension and postretirement benefit plans reflects the different
economic environments within the various countries as well as the differences in the attributes of the participants.
economic environments within the various countries as well as the differences in the attributes of the participants.
The projected benefit obligation was determined using the following weighted-average assumptions:
The projected benefit obligation was determined using the following weighted-average assumptions:
2022
2022
2021
2021
(29)
(29)
(5,302)
(5,302)
(5,331)
(5,331)
(68,370)
(68,370)
(38)
(38)
(43,662)
(43,662)
(43,700)
(43,700)
(70,610)
(70,610)
$
$
(73,701) $
(73,701) $
(114,310)
(114,310)
$
$
(31,223) $
(31,223) $
(10,884)
(10,884)
(4,882)
(4,882)
1,565
1,565
(2,264)
(2,264)
(2,967)
(2,967)
(38,369) $
(38,369) $
(12,286)
(12,286)
(23,583) $
(23,583) $
200
200
(1,067) $
(1,067) $
(2,413)
(2,413)
2022
2022
2021
2021
120,763 $
120,763 $
161,803
161,803
45,879 $
45,879 $
45,784
45,784
62,980 $
62,980 $
49,429 $
49,429 $
2,573 $
2,573 $
94,038
94,038
77,337
77,337
3,544
3,544
2022
2022
2021
2021
5.44 %
5.44 %
4.08 %
4.08 %
2.77 %
2.77 %
3.70 %
3.70 %
2022
2022
2021
2021
2.77 %
2.77 %
3.73 %
3.73 %
3.70 %
3.70 %
2.15 %
2.15 %
3.32 %
3.32 %
3.19 %
3.19 %
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
75
75
76
76
Components of Net Periodic Benefit Cost
Components of Net Periodic Benefit Cost
Service cost
Service cost
Interest cost
Interest cost
Expected return on plan assets
Expected return on plan assets
Recognized actuarial loss
Recognized actuarial loss
Subtotal
Subtotal
Curtailment impact
Curtailment impact
Settlement impact
Settlement impact
Net periodic benefit cost
Net periodic benefit cost
components are recorded to Other, net.
components are recorded to Other, net.
Benefit Obligations and Plan Assets
Benefit Obligations and Plan Assets
2021 is presented in the following table:
2021 is presented in the following table:
Change in Benefit Obligation
Change in Benefit Obligation
Benefit obligation at beginning of year
Benefit obligation at beginning of year
Acquisition of Maxim benefit obligation
Acquisition of Maxim benefit obligation
Service cost
Service cost
Interest cost
Interest cost
Settlement
Settlement
Actuarial gain
Actuarial gain
Benefits paid
Benefits paid
Settlements
Settlements
Benefits paid
Benefits paid
Acquisitions
Acquisitions
Exchange rate adjustment
Exchange rate adjustment
Benefit obligation at end of year
Benefit obligation at end of year
Change in Plan Assets
Change in Plan Assets
Fair value of plan assets at beginning of year
Fair value of plan assets at beginning of year
Actual return on plan assets
Actual return on plan assets
Employer contributions
Employer contributions
Exchange rate adjustment
Exchange rate adjustment
Fair value of plan assets at end of year
Fair value of plan assets at end of year
Reconciliation of Funded Status
Reconciliation of Funded Status
Funded status
Funded status
Amounts Recognized in the Balance Sheet
Amounts Recognized in the Balance Sheet
Non-current assets
Non-current assets
Current liabilities
Current liabilities
Non-current liabilities
Non-current liabilities
Net amount recognized
Net amount recognized
2022
2022
2021
2021
2020
2020
$
$
10,914 $
10,914 $
9,207 $
9,207 $
6,148
6,148
4,071
4,071
2,299
2,299
2,973
2,973
14,821 $
14,821 $
12,492 $
12,492 $
—
—
(35) $
(35) $
—
—
(6) $
(6) $
14,786 $
14,786 $
12,486 $
12,486 $
$
$
$
$
$
$
8,587
8,587
3,917
3,917
2,583
2,583
9,791
9,791
(203)
(203)
—
—
9,588
9,588
9,207
9,207
4,071
4,071
49,807
49,807
(885)
(885)
(4,005)
(4,005)
(3,983)
(3,983)
1,646
1,646
10,637
10,637
11,035
11,035
(885)
(885)
(3,983)
(3,983)
1,728
1,728
2,246
2,246
2022
2022
2021
2021
$
$
242,593 $
242,593 $
186,735
186,735
10,914
10,914
6,148
6,148
—
—
(1,052)
(1,052)
(68,806)
(68,806)
(3,596)
(3,596)
(28,471)
(28,471)
(34,231)
(34,231)
11,344
11,344
(1,052)
(1,052)
(3,596)
(3,596)
—
—
(16,719)
(16,719)
157,730 $
157,730 $
242,593
242,593
128,283 $
128,283 $
107,505
107,505
(73,701) $
(73,701) $
(114,310)
(114,310)
1,185 $
1,185 $
(2,638) $
(2,638) $
1,709
1,709
(2,730)
(2,730)
(72,248)
(72,248)
(113,289)
(113,289)
(73,701) $
(73,701) $
(114,310)
(114,310)
$
$
$
$
$
$
$
$
$
$
$
$
$
$
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Net annual periodic benefit cost of the Company’s pension and postretirement benefit plans for fiscal 2022, fiscal 2021
Net annual periodic benefit cost of the Company’s pension and postretirement benefit plans for fiscal 2022, fiscal 2021
and fiscal 2020 is presented in the following table:
and fiscal 2020 is presented in the following table:
Reconciliation of Amounts Recognized in the Statement of Financial Position
Reconciliation of Amounts Recognized in the Statement of Financial Position
(4,540)
(4,540)
(3,759)
(3,759)
(5,296)
(5,296)
Accumulated contributions less than net periodic benefit cost
Accumulated contributions less than net periodic benefit cost
Prior service credit
Prior service credit
Net loss
Net loss
Accumulated other comprehensive loss
Accumulated other comprehensive loss
The service cost component of net periodic benefit cost above is recorded in Cost of sales, Research and development,
The service cost component of net periodic benefit cost above is recorded in Cost of sales, Research and development,
Selling, marketing, general and administrative expenses within the Consolidated Statements of Income, while the remaining
Selling, marketing, general and administrative expenses within the Consolidated Statements of Income, while the remaining
Net amount recognized
Net amount recognized
Changes Recognized in Other Comprehensive Income (Loss)
Changes Recognized in Other Comprehensive Income (Loss)
Changes in plan assets and benefit obligations recognized in other comprehensive income
Changes in plan assets and benefit obligations recognized in other comprehensive income
(loss)
(loss)
Net gain/loss arising during the year
Net gain/loss arising during the year
Effect of exchange rates on amounts included in AOCI
Effect of exchange rates on amounts included in AOCI
Amounts recognized as a component of net periodic benefit cost
Amounts recognized as a component of net periodic benefit cost
Amortization or settlement recognition of net loss
Amortization or settlement recognition of net loss
Total recognized in other comprehensive gain/loss
Total recognized in other comprehensive gain/loss
Total recognized in net periodic cost and other comprehensive loss
Total recognized in net periodic cost and other comprehensive loss
Obligation and asset data of the Company’s pension and postretirement benefit plans at October 29, 2022 and October 30,
Obligation and asset data of the Company’s pension and postretirement benefit plans at October 29, 2022 and October 30,
Estimated amounts that will be amortized from AOCI over the next fiscal year
Estimated amounts that will be amortized from AOCI over the next fiscal year
Net loss
Net loss
2022
2022
2021
2021
(29)
(29)
(5,302)
(5,302)
(5,331)
(5,331)
(68,370)
(68,370)
(38)
(38)
(43,662)
(43,662)
(43,700)
(43,700)
(70,610)
(70,610)
$
$
(73,701) $
(73,701) $
(114,310)
(114,310)
$
$
(31,223) $
(31,223) $
(10,884)
(10,884)
(4,882)
(4,882)
1,565
1,565
(2,264)
(2,264)
(38,369) $
(38,369) $
(23,583) $
(23,583) $
(2,967)
(2,967)
(12,286)
(12,286)
200
200
(1,067) $
(1,067) $
(2,413)
(2,413)
$
$
$
$
$
$
The accumulated benefit obligation for the Company’s pension and postretirement benefit plans was $111.3 million and
The accumulated benefit obligation for the Company’s pension and postretirement benefit plans was $111.3 million and
$178.2 million at October 29, 2022 and October 30, 2021, respectively.
$178.2 million at October 29, 2022 and October 30, 2021, respectively.
Information relating to the Company’s pension and postretirement benefit plans with projected benefit obligations in
Information relating to the Company’s pension and postretirement benefit plans with projected benefit obligations in
excess of plan assets and accumulated benefit obligations in excess of plan assets at October 29, 2022 and October 30, 2021 is
excess of plan assets and accumulated benefit obligations in excess of plan assets at October 29, 2022 and October 30, 2021 is
presented in the following table:
presented in the following table:
Plans with projected benefit obligations in excess of plan assets:
Plans with projected benefit obligations in excess of plan assets:
Projected benefit obligation
Projected benefit obligation
Fair value of plan assets
Fair value of plan assets
Plans with accumulated benefit obligations in excess of plan assets:
Plans with accumulated benefit obligations in excess of plan assets:
Projected benefit obligation
Projected benefit obligation
Accumulated benefit obligation
Accumulated benefit obligation
Fair value of plan assets
Fair value of plan assets
Assumptions
Assumptions
2022
2022
2021
2021
$
$
$
$
$
$
$
$
$
$
120,763 $
120,763 $
45,879 $
45,879 $
161,803
161,803
45,784
45,784
62,980 $
62,980 $
49,429 $
49,429 $
2,573 $
2,573 $
94,038
94,038
77,337
77,337
3,544
3,544
The range of assumptions used for the Company’s pension and postretirement benefit plans reflects the different
The range of assumptions used for the Company’s pension and postretirement benefit plans reflects the different
economic environments within the various countries as well as the differences in the attributes of the participants.
economic environments within the various countries as well as the differences in the attributes of the participants.
The projected benefit obligation was determined using the following weighted-average assumptions:
The projected benefit obligation was determined using the following weighted-average assumptions:
84,029 $
84,029 $
128,283
128,283
Discount rate
Discount rate
Rate of increase in compensation levels
Rate of increase in compensation levels
2022
2022
2021
2021
5.44 %
5.44 %
4.08 %
4.08 %
2.77 %
2.77 %
3.70 %
3.70 %
Net annual periodic benefit cost was determined using the following weighted average assumptions:
Net annual periodic benefit cost was determined using the following weighted average assumptions:
Discount rate
Discount rate
Expected long-term return on plan assets
Expected long-term return on plan assets
Rate of increase in compensation levels
Rate of increase in compensation levels
2022
2022
2021
2021
2.77 %
2.77 %
3.73 %
3.73 %
3.70 %
3.70 %
2.15 %
2.15 %
3.32 %
3.32 %
3.19 %
3.19 %
75
75
76
76
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The expected long-term rate of return on assets is a weighted-average of the long-term rates of return selected for the
The expected long-term rate of return on assets is a weighted-average of the long-term rates of return selected for the
Estimated future cash flows
Estimated future cash flows
Expected fiscal 2023 Company contributions and estimated future benefit payments are as follows:
Expected fiscal 2023 Company contributions and estimated future benefit payments are as follows:
various countries where the Company has funded pension plans. The expected long-term rate of return on assets assumption is
various countries where the Company has funded pension plans. The expected long-term rate of return on assets assumption is
selected based on the facts and circumstances that exist as of the measurement date and the specific portfolio mix of plan assets.
selected based on the facts and circumstances that exist as of the measurement date and the specific portfolio mix of plan assets.
Management, in conjunction with its actuaries, reviewed anticipated future long-term performance of individual asset categories
Management, in conjunction with its actuaries, reviewed anticipated future long-term performance of individual asset categories
and considered the asset allocation strategy adopted by the Company and/or the trustees of the plans. While the review
and considered the asset allocation strategy adopted by the Company and/or the trustees of the plans. While the review
considered recent fund performance and historical returns, the assumption is primarily a long-term prospective rate.
considered recent fund performance and historical returns, the assumption is primarily a long-term prospective rate.
The Company’s investment strategy is based on an expectation that equity securities will outperform debt securities over
The Company’s investment strategy is based on an expectation that equity securities will outperform debt securities over
the long term. Investments within each asset class are diversified to reduce the impact of losses in single investments. The use
the long term. Investments within each asset class are diversified to reduce the impact of losses in single investments. The use
of derivative instruments is permitted where appropriate and necessary to achieve overall investment policy objectives and asset
of derivative instruments is permitted where appropriate and necessary to achieve overall investment policy objectives and asset
class targets. The Company establishes strategic asset allocation percentage targets and appropriate benchmarks for each
class targets. The Company establishes strategic asset allocation percentage targets and appropriate benchmarks for each
significant asset class to obtain a prudent balance between return and risk. The interaction between plan assets and benefit
significant asset class to obtain a prudent balance between return and risk. The interaction between plan assets and benefit
obligations is periodically studied by the Company and its actuaries to assist in the establishment of strategic asset allocation
obligations is periodically studied by the Company and its actuaries to assist in the establishment of strategic asset allocation
targets.
targets.
Fair value of plan assets
Fair value of plan assets
The following table presents plan assets measured at fair value on a recurring basis by investment categories as of
The following table presents plan assets measured at fair value on a recurring basis by investment categories as of
October 29, 2022 and October 30, 2021 using the same three-level hierarchy described in Note 2j, Fair Value, of the Notes to
October 29, 2022 and October 30, 2021 using the same three-level hierarchy described in Note 2j, Fair Value, of the Notes to
Consolidated Financial Statements:
Consolidated Financial Statements:
October 29, 2022
October 29, 2022
Fair Value Measurement at
Fair Value Measurement at
Reporting Date Using:
Reporting Date Using:
Quoted Prices
Quoted Prices
in Active
in Active
Markets for
Markets for
Identical Assets
Identical Assets
(Level 1)
(Level 1)
Significant
Significant
Other
Other
Observable
Observable
Inputs
Inputs
(Level 2)
(Level 2)
October 30, 2021
October 30, 2021
Fair Value Measurement at
Fair Value Measurement at
Reporting Date Using:
Reporting Date Using:
Quoted Prices
Quoted Prices
in Active
in Active
Markets for
Markets for
Identical Assets
Identical Assets
(Level 1)
(Level 1)
Significant
Significant
Other
Other
Observable
Observable
Inputs
Inputs
(Level 2)
(Level 2)
Total
Total
Total
Total
$
$
— $
— $
3,625
3,625
$
$
3,625 $
3,625 $
— $
— $
5,874 $
5,874 $
5,874
5,874
6,700
6,700
—
—
—
—
—
—
3,190
3,190
7,767
7,767
28,214
28,214
4,773
4,773
29,760
29,760
—
—
14,467
14,467
28,214
28,214
4,773
4,773
29,760
29,760
3,190
3,190
8,010
8,010
—
—
—
—
—
—
2,018
2,018
24,613
24,613
29,957
29,957
5,431
5,431
52,380
52,380
—
—
32,623
32,623
29,957
29,957
5,431
5,431
52,380
52,380
2,018
2,018
Unit trust funds(1)
Unit trust funds(1)
Equities(1)
Equities(1)
Fixed income securities(2)
Fixed income securities(2)
Property (3)
Property (3)
Investment Funds (4)
Investment Funds (4)
Cash and cash equivalents
Cash and cash equivalents
Total assets measured at fair value $
Total assets measured at fair value $
9,890 $
9,890 $
74,139
74,139
$
$
84,029 $
84,029 $
10,028 $
10,028 $
118,255 $
118,255 $
128,283
128,283
_______________________________________
_______________________________________
(1) The majority of the assets in these categories are invested in a mix of equities, including those from North America, Europe and Asia.
(1) The majority of the assets in these categories are invested in a mix of equities, including those from North America, Europe and Asia.
The funds are valued using the net asset value method in which an average of the market prices for underlying investments is used to
The funds are valued using the net asset value method in which an average of the market prices for underlying investments is used to
value the fund. Due to the nature of the underlying assets of these funds, changes in market conditions and the economic environment
value the fund. Due to the nature of the underlying assets of these funds, changes in market conditions and the economic environment
may significantly impact the net asset value of these investments and, consequently, the fair value of the investments. These investments
may significantly impact the net asset value of these investments and, consequently, the fair value of the investments. These investments
are redeemable at net asset value to the extent provided in the documentation governing the investments. However, these redemption
are redeemable at net asset value to the extent provided in the documentation governing the investments. However, these redemption
rights may be restricted in accordance with governing documents. Publicly traded securities are valued at the last trade or closing price
rights may be restricted in accordance with governing documents. Publicly traded securities are valued at the last trade or closing price
reported in the active market in which the individual securities are traded.
reported in the active market in which the individual securities are traded.
(2) Consists of funds primarily concentrated in non-U.S. debt instruments. The funds are valued using the net asset value method in which
(2) Consists of funds primarily concentrated in non-U.S. debt instruments. The funds are valued using the net asset value method in which
an average of the market prices for underlying investments is used to value the fund.
an average of the market prices for underlying investments is used to value the fund.
(3) Consists of funds that primarily invest in global real estate and infrastructure funds. The funds are valued using the net asset value
(3) Consists of funds that primarily invest in global real estate and infrastructure funds. The funds are valued using the net asset value
method in which an average of the market prices for underlying investments is used to value the fund.
method in which an average of the market prices for underlying investments is used to value the fund.
(4) Consists of liability driven investment funds that may hold a range of low-risk hedging instruments including but not limited to
(4) Consists of liability driven investment funds that may hold a range of low-risk hedging instruments including but not limited to
government bonds, interest rate and inflation swaps, physical inflation-linked and nominal gilts, synthetic gilts, cash and money market
government bonds, interest rate and inflation swaps, physical inflation-linked and nominal gilts, synthetic gilts, cash and money market
instruments. The investment funds are valued at the closing price reported if traded on an active market or at yields currently available
instruments. The investment funds are valued at the closing price reported if traded on an active market or at yields currently available
on comparable securities of issuers with similar credit ratings.
on comparable securities of issuers with similar credit ratings.
Expected Company Contributions
Expected Company Contributions
Expected Benefit Payments
Expected Benefit Payments
2023
2023
2024
2024
2025
2025
2026
2026
2027
2027
2028
2028
2029 through 2033
2029 through 2033
12.
12.
Income Taxes
Income Taxes
U.S. federal statutory tax rate
U.S. federal statutory tax rate
Income tax provision reconciliation:
Income tax provision reconciliation:
Tax at statutory rate
Tax at statutory rate
Net foreign income subject to lower tax rate
Net foreign income subject to lower tax rate
State income taxes, net of federal benefit
State income taxes, net of federal benefit
Valuation allowance
Valuation allowance
Federal research and development tax credits
Federal research and development tax credits
Change in uncertain tax positions
Change in uncertain tax positions
Amortization of purchased intangibles
Amortization of purchased intangibles
Acquisition and integration costs
Acquisition and integration costs
U.S. effects of international operations
U.S. effects of international operations
Windfalls (under ASU 2016-09)
Windfalls (under ASU 2016-09)
Intra-entity transfer of intangible assets
Intra-entity transfer of intangible assets
Other, net
Other, net
Income before income taxes (1)
Income before income taxes (1)
Domestic
Domestic
Foreign
Foreign
Income before income taxes
Income before income taxes
_______________________________________
_______________________________________
$
$
$
$
$
$
$
$
$
$
$
$
$
$
10,579
10,579
6,575
6,575
5,506
5,506
5,789
5,789
6,524
6,524
7,060
7,060
48,355
48,355
2022
2022
2021
2021
2020
2020
21.0 %
21.0 %
21.0 %
21.0 %
21.0 %
21.0 %
$
$
650,737
650,737
$
$
279,030
279,030
$
$
275,439
275,439
(358,725)
(358,725)
(227,470)
(227,470)
(225,937)
(225,937)
(15,615)
(15,615)
29,737
29,737
(58,625)
(58,625)
19,394
19,394
142,375
142,375
—
—
(47,665)
(47,665)
(16,717)
(16,717)
—
—
5,292
5,292
(28,052)
(28,052)
13,263
13,263
(37,902)
(37,902)
(1,061)
(1,061)
146,094
146,094
11,367
11,367
(24,624)
(24,624)
(26,365)
(26,365)
(188,804)
(188,804)
22,816
22,816
(23,537)
(23,537)
13,655
13,655
(31,055)
(31,055)
(13,304)
(13,304)
101,906
101,906
1,714
1,714
11,903
11,903
(16,240)
(16,240)
—
—
(3,688)
(3,688)
2022
2022
2021
2021
2020
2020
$
$
958,465 $
958,465 $
508,100 $
508,100 $
2,140,284
2,140,284
820,614
820,614
355,442
355,442
956,175
956,175
$
$
3,098,749 $
3,098,749 $
1,328,714 $
1,328,714 $
1,311,617
1,311,617
Total income tax provision (benefit)
Total income tax provision (benefit)
$
$
350,188
350,188
$
$
(61,708)
(61,708)
$
$
90,856
90,856
Income before income taxes for fiscal 2022, fiscal 2021 and fiscal 2020 includes the following components:
Income before income taxes for fiscal 2022, fiscal 2021 and fiscal 2020 includes the following components:
(1)
(1)
Income before income taxes reflects deemed intercompany royalties in all periods presented.
Income before income taxes reflects deemed intercompany royalties in all periods presented.
The Company's effective tax rate reflects the applicable tax rate in effect in the various tax jurisdictions around the world
The Company's effective tax rate reflects the applicable tax rate in effect in the various tax jurisdictions around the world
where the Company's income is earned. The reconciliation of income tax computed at the U.S. federal statutory rates to income
where the Company's income is earned. The reconciliation of income tax computed at the U.S. federal statutory rates to income
tax expense for fiscal 2022, fiscal 2021 and fiscal 2020 is as follows:
tax expense for fiscal 2022, fiscal 2021 and fiscal 2020 is as follows:
77
77
78
78
various countries where the Company has funded pension plans. The expected long-term rate of return on assets assumption is
various countries where the Company has funded pension plans. The expected long-term rate of return on assets assumption is
selected based on the facts and circumstances that exist as of the measurement date and the specific portfolio mix of plan assets.
selected based on the facts and circumstances that exist as of the measurement date and the specific portfolio mix of plan assets.
Management, in conjunction with its actuaries, reviewed anticipated future long-term performance of individual asset categories
Management, in conjunction with its actuaries, reviewed anticipated future long-term performance of individual asset categories
and considered the asset allocation strategy adopted by the Company and/or the trustees of the plans. While the review
and considered the asset allocation strategy adopted by the Company and/or the trustees of the plans. While the review
considered recent fund performance and historical returns, the assumption is primarily a long-term prospective rate.
considered recent fund performance and historical returns, the assumption is primarily a long-term prospective rate.
The Company’s investment strategy is based on an expectation that equity securities will outperform debt securities over
The Company’s investment strategy is based on an expectation that equity securities will outperform debt securities over
the long term. Investments within each asset class are diversified to reduce the impact of losses in single investments. The use
the long term. Investments within each asset class are diversified to reduce the impact of losses in single investments. The use
of derivative instruments is permitted where appropriate and necessary to achieve overall investment policy objectives and asset
of derivative instruments is permitted where appropriate and necessary to achieve overall investment policy objectives and asset
class targets. The Company establishes strategic asset allocation percentage targets and appropriate benchmarks for each
class targets. The Company establishes strategic asset allocation percentage targets and appropriate benchmarks for each
significant asset class to obtain a prudent balance between return and risk. The interaction between plan assets and benefit
significant asset class to obtain a prudent balance between return and risk. The interaction between plan assets and benefit
obligations is periodically studied by the Company and its actuaries to assist in the establishment of strategic asset allocation
obligations is periodically studied by the Company and its actuaries to assist in the establishment of strategic asset allocation
targets.
targets.
Fair value of plan assets
Fair value of plan assets
The following table presents plan assets measured at fair value on a recurring basis by investment categories as of
The following table presents plan assets measured at fair value on a recurring basis by investment categories as of
October 29, 2022 and October 30, 2021 using the same three-level hierarchy described in Note 2j, Fair Value, of the Notes to
October 29, 2022 and October 30, 2021 using the same three-level hierarchy described in Note 2j, Fair Value, of the Notes to
Consolidated Financial Statements:
Consolidated Financial Statements:
October 29, 2022
October 29, 2022
Fair Value Measurement at
Fair Value Measurement at
Reporting Date Using:
Reporting Date Using:
Quoted Prices
Quoted Prices
in Active
in Active
Markets for
Markets for
Identical Assets
Identical Assets
(Level 1)
(Level 1)
Significant
Significant
Other
Other
Observable
Observable
Inputs
Inputs
(Level 2)
(Level 2)
October 30, 2021
October 30, 2021
Fair Value Measurement at
Fair Value Measurement at
Reporting Date Using:
Reporting Date Using:
Quoted Prices
Quoted Prices
in Active
in Active
Markets for
Markets for
Identical Assets
Identical Assets
(Level 1)
(Level 1)
Significant
Significant
Other
Other
Observable
Observable
Inputs
Inputs
(Level 2)
(Level 2)
Unit trust funds(1)
Unit trust funds(1)
Equities(1)
Equities(1)
Fixed income securities(2)
Fixed income securities(2)
Property (3)
Property (3)
Investment Funds (4)
Investment Funds (4)
Cash and cash equivalents
Cash and cash equivalents
$
$
— $
— $
3,625
3,625
$
$
3,625 $
3,625 $
— $
— $
5,874 $
5,874 $
5,874
5,874
6,700
6,700
—
—
—
—
—
—
3,190
3,190
7,767
7,767
28,214
28,214
4,773
4,773
29,760
29,760
—
—
Total
Total
14,467
14,467
28,214
28,214
4,773
4,773
29,760
29,760
3,190
3,190
8,010
8,010
—
—
—
—
—
—
2,018
2,018
24,613
24,613
29,957
29,957
5,431
5,431
52,380
52,380
—
—
Total
Total
32,623
32,623
29,957
29,957
5,431
5,431
52,380
52,380
2,018
2,018
Total assets measured at fair value $
Total assets measured at fair value $
9,890 $
9,890 $
74,139
74,139
$
$
84,029 $
84,029 $
10,028 $
10,028 $
118,255 $
118,255 $
128,283
128,283
_______________________________________
_______________________________________
(1) The majority of the assets in these categories are invested in a mix of equities, including those from North America, Europe and Asia.
(1) The majority of the assets in these categories are invested in a mix of equities, including those from North America, Europe and Asia.
The funds are valued using the net asset value method in which an average of the market prices for underlying investments is used to
The funds are valued using the net asset value method in which an average of the market prices for underlying investments is used to
value the fund. Due to the nature of the underlying assets of these funds, changes in market conditions and the economic environment
value the fund. Due to the nature of the underlying assets of these funds, changes in market conditions and the economic environment
may significantly impact the net asset value of these investments and, consequently, the fair value of the investments. These investments
may significantly impact the net asset value of these investments and, consequently, the fair value of the investments. These investments
are redeemable at net asset value to the extent provided in the documentation governing the investments. However, these redemption
are redeemable at net asset value to the extent provided in the documentation governing the investments. However, these redemption
rights may be restricted in accordance with governing documents. Publicly traded securities are valued at the last trade or closing price
rights may be restricted in accordance with governing documents. Publicly traded securities are valued at the last trade or closing price
reported in the active market in which the individual securities are traded.
reported in the active market in which the individual securities are traded.
(2) Consists of funds primarily concentrated in non-U.S. debt instruments. The funds are valued using the net asset value method in which
(2) Consists of funds primarily concentrated in non-U.S. debt instruments. The funds are valued using the net asset value method in which
an average of the market prices for underlying investments is used to value the fund.
an average of the market prices for underlying investments is used to value the fund.
(3) Consists of funds that primarily invest in global real estate and infrastructure funds. The funds are valued using the net asset value
(3) Consists of funds that primarily invest in global real estate and infrastructure funds. The funds are valued using the net asset value
method in which an average of the market prices for underlying investments is used to value the fund.
method in which an average of the market prices for underlying investments is used to value the fund.
(4) Consists of liability driven investment funds that may hold a range of low-risk hedging instruments including but not limited to
(4) Consists of liability driven investment funds that may hold a range of low-risk hedging instruments including but not limited to
government bonds, interest rate and inflation swaps, physical inflation-linked and nominal gilts, synthetic gilts, cash and money market
government bonds, interest rate and inflation swaps, physical inflation-linked and nominal gilts, synthetic gilts, cash and money market
instruments. The investment funds are valued at the closing price reported if traded on an active market or at yields currently available
instruments. The investment funds are valued at the closing price reported if traded on an active market or at yields currently available
on comparable securities of issuers with similar credit ratings.
on comparable securities of issuers with similar credit ratings.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The expected long-term rate of return on assets is a weighted-average of the long-term rates of return selected for the
The expected long-term rate of return on assets is a weighted-average of the long-term rates of return selected for the
Estimated future cash flows
Estimated future cash flows
Expected fiscal 2023 Company contributions and estimated future benefit payments are as follows:
Expected fiscal 2023 Company contributions and estimated future benefit payments are as follows:
Expected Company Contributions
Expected Company Contributions
2023
2023
Expected Benefit Payments
Expected Benefit Payments
2024
2024
2025
2025
2026
2026
2027
2027
2028
2028
2029 through 2033
2029 through 2033
12.
12.
Income Taxes
Income Taxes
$
$
$
$
$
$
$
$
$
$
$
$
$
$
10,579
10,579
6,575
6,575
5,506
5,506
5,789
5,789
6,524
6,524
7,060
7,060
48,355
48,355
The Company's effective tax rate reflects the applicable tax rate in effect in the various tax jurisdictions around the world
The Company's effective tax rate reflects the applicable tax rate in effect in the various tax jurisdictions around the world
where the Company's income is earned. The reconciliation of income tax computed at the U.S. federal statutory rates to income
where the Company's income is earned. The reconciliation of income tax computed at the U.S. federal statutory rates to income
tax expense for fiscal 2022, fiscal 2021 and fiscal 2020 is as follows:
tax expense for fiscal 2022, fiscal 2021 and fiscal 2020 is as follows:
U.S. federal statutory tax rate
U.S. federal statutory tax rate
Income tax provision reconciliation:
Income tax provision reconciliation:
Tax at statutory rate
Tax at statutory rate
Net foreign income subject to lower tax rate
Net foreign income subject to lower tax rate
State income taxes, net of federal benefit
State income taxes, net of federal benefit
Valuation allowance
Valuation allowance
Federal research and development tax credits
Federal research and development tax credits
Change in uncertain tax positions
Change in uncertain tax positions
Amortization of purchased intangibles
Amortization of purchased intangibles
Acquisition and integration costs
Acquisition and integration costs
U.S. effects of international operations
U.S. effects of international operations
Windfalls (under ASU 2016-09)
Windfalls (under ASU 2016-09)
Intra-entity transfer of intangible assets
Intra-entity transfer of intangible assets
Other, net
Other, net
Total income tax provision (benefit)
Total income tax provision (benefit)
2022
2022
2021
2021
2020
2020
21.0 %
21.0 %
21.0 %
21.0 %
21.0 %
21.0 %
$
$
$
$
650,737
650,737
(358,725)
(358,725)
(15,615)
(15,615)
29,737
29,737
(58,625)
(58,625)
19,394
19,394
142,375
142,375
—
—
(47,665)
(47,665)
(16,717)
(16,717)
—
—
5,292
5,292
350,188
350,188
$
$
$
$
279,030
279,030
(227,470)
(227,470)
(28,052)
(28,052)
13,263
13,263
(37,902)
(37,902)
(1,061)
(1,061)
146,094
146,094
11,367
11,367
(24,624)
(24,624)
(26,365)
(26,365)
(188,804)
(188,804)
22,816
22,816
(61,708)
(61,708)
$
$
$
$
275,439
275,439
(225,937)
(225,937)
(23,537)
(23,537)
13,655
13,655
(31,055)
(31,055)
(13,304)
(13,304)
101,906
101,906
1,714
1,714
11,903
11,903
(16,240)
(16,240)
—
—
(3,688)
(3,688)
90,856
90,856
Income before income taxes for fiscal 2022, fiscal 2021 and fiscal 2020 includes the following components:
Income before income taxes for fiscal 2022, fiscal 2021 and fiscal 2020 includes the following components:
Income before income taxes (1)
Income before income taxes (1)
Domestic
Domestic
Foreign
Foreign
Income before income taxes
Income before income taxes
2022
2022
2021
2021
2020
2020
$
$
958,465 $
958,465 $
508,100 $
508,100 $
2,140,284
2,140,284
820,614
820,614
355,442
355,442
956,175
956,175
$
$
3,098,749 $
3,098,749 $
1,328,714 $
1,328,714 $
1,311,617
1,311,617
_______________________________________
_______________________________________
(1)
(1)
Income before income taxes reflects deemed intercompany royalties in all periods presented.
Income before income taxes reflects deemed intercompany royalties in all periods presented.
77
77
78
78
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The components of the provision for (benefit from) income taxes for fiscal 2022, fiscal 2021 and fiscal 2020 are as
The components of the provision for (benefit from) income taxes for fiscal 2022, fiscal 2021 and fiscal 2020 are as
The significant components of the Company’s deferred tax assets and liabilities for fiscal 2022 and fiscal 2021 are as
The significant components of the Company’s deferred tax assets and liabilities for fiscal 2022 and fiscal 2021 are as
follows:
follows:
Current:
Current:
Federal tax
Federal tax
State
State
Foreign
Foreign
Total current
Total current
Deferred:
Deferred:
Federal
Federal
State
State
Foreign
Foreign
Total deferred
Total deferred
Provision for (benefit from) income tax
Provision for (benefit from) income tax
2022
2022
2021
2021
2020
2020
$
$
304,556 $
304,556 $
134,652 $
134,652 $
13,214
13,214
359,173
359,173
7,772
7,772
202,790
202,790
676,943 $
676,943 $
345,214 $
345,214 $
64,876
64,876
4,882
4,882
135,046
135,046
204,804
204,804
(341,777) $
(341,777) $
515,541 $
515,541 $
(159,229)
(159,229)
(612)
(612)
(12,444)
(12,444)
15,634
15,634
(910,019)
(910,019)
(12,684)
(12,684)
57,965
57,965
(326,755) $
(326,755) $
(406,922) $
(406,922) $
(113,948)
(113,948)
350,188 $
350,188 $
(61,708) $
(61,708) $
90,856
90,856
$
$
$
$
$
$
$
$
U.S. tax legislation subjects a U.S. shareholder to tax on global intangible low-taxed income (GILTI). Under U.S.
U.S. tax legislation subjects a U.S. shareholder to tax on global intangible low-taxed income (GILTI). Under U.S.
GAAP, an accounting policy election can be made to either treat taxes due on the GILTI inclusion as a current period expense
GAAP, an accounting policy election can be made to either treat taxes due on the GILTI inclusion as a current period expense
or to recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years. The Company
or to recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years. The Company
elected the deferral method and recorded the corresponding GILTI deferred tax assets and liabilities on its Consolidated
elected the deferral method and recorded the corresponding GILTI deferred tax assets and liabilities on its Consolidated
Balance Sheets.
Balance Sheets.
The Company carries other outside basis differences in its subsidiaries, primarily arising from acquisition accounting
The Company carries other outside basis differences in its subsidiaries, primarily arising from acquisition accounting
adjustments and certain undistributed earnings that are considered indefinitely reinvested. As of October 29, 2022, the
adjustments and certain undistributed earnings that are considered indefinitely reinvested. As of October 29, 2022, the
Company has not recognized deferred income tax on $33.6 billion of outside basis differences because of its intent and ability
Company has not recognized deferred income tax on $33.6 billion of outside basis differences because of its intent and ability
to indefinitely reinvest these basis differences. These basis differences could be reversed through a sale of the subsidiaries or
to indefinitely reinvest these basis differences. These basis differences could be reversed through a sale of the subsidiaries or
the receipt of dividends from the subsidiaries, as well as various other events, none of which are considered probable at this
the receipt of dividends from the subsidiaries, as well as various other events, none of which are considered probable at this
time. Determination of the amount of unrecognized deferred income tax liability related to these outside basis differences is not
time. Determination of the amount of unrecognized deferred income tax liability related to these outside basis differences is not
practicable.
practicable.
79
79
80
80
follows:
follows:
Deferred tax assets:
Deferred tax assets:
Inventory reserves
Inventory reserves
Reserves for compensation and benefits
Reserves for compensation and benefits
Tax credit carryovers
Tax credit carryovers
Stock-based compensation
Stock-based compensation
Net operating losses
Net operating losses
Intangible assets
Intangible assets
Lease liability
Lease liability
Other
Other
Total gross deferred tax assets
Total gross deferred tax assets
Valuation allowance
Valuation allowance
Total deferred tax assets
Total deferred tax assets
Deferred tax liabilities:
Deferred tax liabilities:
Inventory reserves
Inventory reserves
Depreciation
Depreciation
Deferred GILTI tax liabilities
Deferred GILTI tax liabilities
Right of use asset
Right of use asset
Acquisition-related intangibles
Acquisition-related intangibles
Total gross deferred tax liabilities
Total gross deferred tax liabilities
Net deferred tax liabilities
Net deferred tax liabilities
2022
2022
2021
2021
$
$
16,584 $
16,584 $
60,871
60,871
327,671
327,671
25,059
25,059
43,696
43,696
76,709
76,709
248,796
248,796
—
—
64,274
64,274
295,345
295,345
26,541
26,541
62,876
62,876
60,954
60,954
248,075
248,075
1,975,096
1,975,096
2,002,041
2,002,041
2,774,482
2,774,482
2,760,106
2,760,106
(339,105)
(339,105)
(315,434)
(315,434)
2,435,377
2,435,377
2,444,672
2,444,672
—
—
(96,660)
(96,660)
(18,570)
(18,570)
(91,846)
(91,846)
(2,824,332)
(2,824,332)
(3,059,919)
(3,059,919)
(55,858)
(55,858)
(53,686)
(53,686)
(816,177)
(816,177)
(892,212)
(892,212)
(3,793,027)
(3,793,027)
(4,116,233)
(4,116,233)
$
$
(1,357,650) $
(1,357,650) $
(1,671,561)
(1,671,561)
The valuation allowances of $339.1 million and $315.4 million as of October 29, 2022 and October 30, 2021,
The valuation allowances of $339.1 million and $315.4 million as of October 29, 2022 and October 30, 2021,
respectively, are primarily for the Company’s state R&D credit carryforwards, foreign net operating loss and international
respectively, are primarily for the Company’s state R&D credit carryforwards, foreign net operating loss and international
credit carryforwards. The Company believes that it is more-likely-than-not that these credit carryovers will not be realized and
credit carryforwards. The Company believes that it is more-likely-than-not that these credit carryovers will not be realized and
as a result has recorded a partial valuation allowance.
as a result has recorded a partial valuation allowance.
The federal and state net operating losses of $142.4 million will begin to expire in fiscal 2023 while foreign net operating
The federal and state net operating losses of $142.4 million will begin to expire in fiscal 2023 while foreign net operating
loss carryovers of $144.8 million have no expiration date. There are also $312.7 million of state credit carryovers and
loss carryovers of $144.8 million have no expiration date. There are also $312.7 million of state credit carryovers and
$15.0 million of foreign investment tax credit carryovers that begin to expire in the fiscal year ending November 1, 2025.
$15.0 million of foreign investment tax credit carryovers that begin to expire in the fiscal year ending November 1, 2025.
As of October 29, 2022 and October 30, 2021, the Company had unrealized tax benefits, net of indirect tax benefits, of
As of October 29, 2022 and October 30, 2021, the Company had unrealized tax benefits, net of indirect tax benefits, of
$165.3 million and $132.5 million, respectively, which if settled in the Company's favor, would lower the Company's effective
$165.3 million and $132.5 million, respectively, which if settled in the Company's favor, would lower the Company's effective
tax rate in the period recorded. Liabilities for unrealized tax benefits are primarily classified as non-current because the
tax rate in the period recorded. Liabilities for unrealized tax benefits are primarily classified as non-current because the
Company believes that the ultimate payment or settlement of these liabilities will not occur within the next twelve months. As
Company believes that the ultimate payment or settlement of these liabilities will not occur within the next twelve months. As
of October 29, 2022 and October 30, 2021, the Company had liabilities of approximately $45.5 million and $38.0 million,
of October 29, 2022 and October 30, 2021, the Company had liabilities of approximately $45.5 million and $38.0 million,
respectively, for interest and penalties, which is included within the provision for (benefit from) income taxes in the
respectively, for interest and penalties, which is included within the provision for (benefit from) income taxes in the
Consolidated Statements of Income.
Consolidated Statements of Income.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The components of the provision for (benefit from) income taxes for fiscal 2022, fiscal 2021 and fiscal 2020 are as
The components of the provision for (benefit from) income taxes for fiscal 2022, fiscal 2021 and fiscal 2020 are as
The significant components of the Company’s deferred tax assets and liabilities for fiscal 2022 and fiscal 2021 are as
The significant components of the Company’s deferred tax assets and liabilities for fiscal 2022 and fiscal 2021 are as
follows:
follows:
Current:
Current:
Federal tax
Federal tax
State
State
Foreign
Foreign
Deferred:
Deferred:
Federal
Federal
State
State
Foreign
Foreign
Total current
Total current
Balance Sheets.
Balance Sheets.
practicable.
practicable.
2022
2022
2021
2021
2020
2020
$
$
304,556 $
304,556 $
134,652 $
134,652 $
13,214
13,214
359,173
359,173
7,772
7,772
202,790
202,790
676,943 $
676,943 $
345,214 $
345,214 $
64,876
64,876
4,882
4,882
135,046
135,046
204,804
204,804
(341,777) $
(341,777) $
515,541 $
515,541 $
(159,229)
(159,229)
(612)
(612)
(12,444)
(12,444)
15,634
15,634
(910,019)
(910,019)
(12,684)
(12,684)
57,965
57,965
(326,755) $
(326,755) $
(406,922) $
(406,922) $
(113,948)
(113,948)
350,188 $
350,188 $
(61,708) $
(61,708) $
90,856
90,856
$
$
$
$
$
$
$
$
Total deferred
Total deferred
Provision for (benefit from) income tax
Provision for (benefit from) income tax
U.S. tax legislation subjects a U.S. shareholder to tax on global intangible low-taxed income (GILTI). Under U.S.
U.S. tax legislation subjects a U.S. shareholder to tax on global intangible low-taxed income (GILTI). Under U.S.
GAAP, an accounting policy election can be made to either treat taxes due on the GILTI inclusion as a current period expense
GAAP, an accounting policy election can be made to either treat taxes due on the GILTI inclusion as a current period expense
or to recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years. The Company
or to recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years. The Company
elected the deferral method and recorded the corresponding GILTI deferred tax assets and liabilities on its Consolidated
elected the deferral method and recorded the corresponding GILTI deferred tax assets and liabilities on its Consolidated
The Company carries other outside basis differences in its subsidiaries, primarily arising from acquisition accounting
The Company carries other outside basis differences in its subsidiaries, primarily arising from acquisition accounting
adjustments and certain undistributed earnings that are considered indefinitely reinvested. As of October 29, 2022, the
adjustments and certain undistributed earnings that are considered indefinitely reinvested. As of October 29, 2022, the
Company has not recognized deferred income tax on $33.6 billion of outside basis differences because of its intent and ability
Company has not recognized deferred income tax on $33.6 billion of outside basis differences because of its intent and ability
to indefinitely reinvest these basis differences. These basis differences could be reversed through a sale of the subsidiaries or
to indefinitely reinvest these basis differences. These basis differences could be reversed through a sale of the subsidiaries or
the receipt of dividends from the subsidiaries, as well as various other events, none of which are considered probable at this
the receipt of dividends from the subsidiaries, as well as various other events, none of which are considered probable at this
time. Determination of the amount of unrecognized deferred income tax liability related to these outside basis differences is not
time. Determination of the amount of unrecognized deferred income tax liability related to these outside basis differences is not
follows:
follows:
Deferred tax assets:
Deferred tax assets:
Inventory reserves
Inventory reserves
Reserves for compensation and benefits
Reserves for compensation and benefits
Tax credit carryovers
Tax credit carryovers
Stock-based compensation
Stock-based compensation
Net operating losses
Net operating losses
Intangible assets
Intangible assets
Lease liability
Lease liability
Other
Other
Total gross deferred tax assets
Total gross deferred tax assets
Valuation allowance
Valuation allowance
Total deferred tax assets
Total deferred tax assets
Deferred tax liabilities:
Deferred tax liabilities:
Inventory reserves
Inventory reserves
Depreciation
Depreciation
Deferred GILTI tax liabilities
Deferred GILTI tax liabilities
Right of use asset
Right of use asset
Acquisition-related intangibles
Acquisition-related intangibles
Total gross deferred tax liabilities
Total gross deferred tax liabilities
Net deferred tax liabilities
Net deferred tax liabilities
2022
2022
2021
2021
$
$
16,584 $
16,584 $
60,871
60,871
327,671
327,671
25,059
25,059
43,696
43,696
—
—
64,274
64,274
295,345
295,345
26,541
26,541
62,876
62,876
1,975,096
1,975,096
2,002,041
2,002,041
76,709
76,709
248,796
248,796
60,954
60,954
248,075
248,075
2,774,482
2,774,482
2,760,106
2,760,106
(339,105)
(339,105)
(315,434)
(315,434)
2,435,377
2,435,377
2,444,672
2,444,672
—
—
(96,660)
(96,660)
(2,824,332)
(2,824,332)
(55,858)
(55,858)
(816,177)
(816,177)
(3,793,027)
(3,793,027)
(1,357,650) $
(1,357,650) $
(18,570)
(18,570)
(91,846)
(91,846)
(3,059,919)
(3,059,919)
(53,686)
(53,686)
(892,212)
(892,212)
(4,116,233)
(4,116,233)
(1,671,561)
(1,671,561)
$
$
The valuation allowances of $339.1 million and $315.4 million as of October 29, 2022 and October 30, 2021,
The valuation allowances of $339.1 million and $315.4 million as of October 29, 2022 and October 30, 2021,
respectively, are primarily for the Company’s state R&D credit carryforwards, foreign net operating loss and international
respectively, are primarily for the Company’s state R&D credit carryforwards, foreign net operating loss and international
credit carryforwards. The Company believes that it is more-likely-than-not that these credit carryovers will not be realized and
credit carryforwards. The Company believes that it is more-likely-than-not that these credit carryovers will not be realized and
as a result has recorded a partial valuation allowance.
as a result has recorded a partial valuation allowance.
The federal and state net operating losses of $142.4 million will begin to expire in fiscal 2023 while foreign net operating
The federal and state net operating losses of $142.4 million will begin to expire in fiscal 2023 while foreign net operating
loss carryovers of $144.8 million have no expiration date. There are also $312.7 million of state credit carryovers and
loss carryovers of $144.8 million have no expiration date. There are also $312.7 million of state credit carryovers and
$15.0 million of foreign investment tax credit carryovers that begin to expire in the fiscal year ending November 1, 2025.
$15.0 million of foreign investment tax credit carryovers that begin to expire in the fiscal year ending November 1, 2025.
As of October 29, 2022 and October 30, 2021, the Company had unrealized tax benefits, net of indirect tax benefits, of
As of October 29, 2022 and October 30, 2021, the Company had unrealized tax benefits, net of indirect tax benefits, of
$165.3 million and $132.5 million, respectively, which if settled in the Company's favor, would lower the Company's effective
$165.3 million and $132.5 million, respectively, which if settled in the Company's favor, would lower the Company's effective
tax rate in the period recorded. Liabilities for unrealized tax benefits are primarily classified as non-current because the
tax rate in the period recorded. Liabilities for unrealized tax benefits are primarily classified as non-current because the
Company believes that the ultimate payment or settlement of these liabilities will not occur within the next twelve months. As
Company believes that the ultimate payment or settlement of these liabilities will not occur within the next twelve months. As
of October 29, 2022 and October 30, 2021, the Company had liabilities of approximately $45.5 million and $38.0 million,
of October 29, 2022 and October 30, 2021, the Company had liabilities of approximately $45.5 million and $38.0 million,
respectively, for interest and penalties, which is included within the provision for (benefit from) income taxes in the
respectively, for interest and penalties, which is included within the provision for (benefit from) income taxes in the
Consolidated Statements of Income.
Consolidated Statements of Income.
79
79
80
80
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following table summarizes the changes in the total amounts of unrealized tax benefits for fiscal 2020 through fiscal
The following table summarizes the changes in the total amounts of unrealized tax benefits for fiscal 2020 through fiscal
Agreement) in effect. The Revolving Credit Agreement also contains a sustainability-linked pricing component which provides
Agreement) in effect. The Revolving Credit Agreement also contains a sustainability-linked pricing component which provides
2022:
2022:
Balance, November 2, 2019
Balance, November 2, 2019
Additions for tax positions related to current year
Additions for tax positions related to current year
Reductions for tax positions related to prior years
Reductions for tax positions related to prior years
Reductions due to lapse of applicable statute of limitations
Reductions due to lapse of applicable statute of limitations
Balance, October 31, 2020
Balance, October 31, 2020
Additions for tax positions related to current year
Additions for tax positions related to current year
Additions for tax positions related to prior years
Additions for tax positions related to prior years
Additions for tax positions related to the Acquisition
Additions for tax positions related to the Acquisition
Reductions due to lapse of applicable statute of limitations
Reductions due to lapse of applicable statute of limitations
Balance, October 30, 2021
Balance, October 30, 2021
Additions for tax positions related to the Acquisition
Additions for tax positions related to the Acquisition
Additions for tax positions related to current year
Additions for tax positions related to current year
Additions for tax positions related to prior years
Additions for tax positions related to prior years
Reductions due to lapse of applicable statute of limitations
Reductions due to lapse of applicable statute of limitations
Balance, October 29, 2022
Balance, October 29, 2022
Unrealized Tax Benefits
Unrealized Tax Benefits
$
$
$
$
$
$
$
$
34,343
34,343
3,270
3,270
(16,152)
(16,152)
(170)
(170)
21,291
21,291
4,713
4,713
19,790
19,790
91,179
91,179
(4,452)
(4,452)
132,521
132,521
15,267
15,267
11,800
11,800
9,704
9,704
(3,965)
(3,965)
165,327
165,327
In fiscal 2020, the Company released reserves of $18.6 million, which included accrued interest as a result of the
In fiscal 2020, the Company released reserves of $18.6 million, which included accrued interest as a result of the
resolution of the amended tax return that was previously under review by the Joint Committee on Taxation, combined with
resolution of the amended tax return that was previously under review by the Joint Committee on Taxation, combined with
other tax positions resolved by the closing of the Internal Revenue Service audit of Linear’s pre-acquisition federal income tax
other tax positions resolved by the closing of the Internal Revenue Service audit of Linear’s pre-acquisition federal income tax
returns for fiscal 2015 through fiscal 2017.
returns for fiscal 2015 through fiscal 2017.
In fiscal 2021, the Company acquired $125.5 million in reserves as part of the Acquisition consisting of $91.2 million in
In fiscal 2021, the Company acquired $125.5 million in reserves as part of the Acquisition consisting of $91.2 million in
tax and $34.3 million in accrued interest.
tax and $34.3 million in accrued interest.
In fiscal 2022, the Company continued to engage in discussions and negotiations with tax authorities regarding tax matters
In fiscal 2022, the Company continued to engage in discussions and negotiations with tax authorities regarding tax matters
in various jurisdictions. It is reasonably possible that the balance of unrealized tax benefits, including accrued interest and
in various jurisdictions. It is reasonably possible that the balance of unrealized tax benefits, including accrued interest and
penalties, could decrease by up to $127.0 million within the next twelve months due to the completion of federal tax audits,
penalties, could decrease by up to $127.0 million within the next twelve months due to the completion of federal tax audits,
including any administrative appeals. The $127.0 million primarily relates to matters involving federal taxation of international
including any administrative appeals. The $127.0 million primarily relates to matters involving federal taxation of international
income and cross-border transactions.
income and cross-border transactions.
The Company has numerous audits ongoing at any time throughout the world including: an IRS income tax audit for fiscal
The Company has numerous audits ongoing at any time throughout the world including: an IRS income tax audit for fiscal
2019 and fiscal 2018, a pre-Acquisition IRS income tax audit for Maxim's fiscal years ended June 27, 2015 through August 26,
2019 and fiscal 2018, a pre-Acquisition IRS income tax audit for Maxim's fiscal years ended June 27, 2015 through August 26,
2021, and various U.S. state and local tax audits and international audits. The Company’s U.S. federal tax returns prior to fiscal
2021, and various U.S. state and local tax audits and international audits. The Company’s U.S. federal tax returns prior to fiscal
2018 are no longer subject to examination, except for the applicable Maxim pre-Acquisition fiscal years noted above.
2018 are no longer subject to examination, except for the applicable Maxim pre-Acquisition fiscal years noted above.
13. Revolving Credit Facility
13. Revolving Credit Facility
On June 23, 2021, the Company entered into a Third Amended and Restated Credit Agreement (Revolving Credit
On June 23, 2021, the Company entered into a Third Amended and Restated Credit Agreement (Revolving Credit
Agreement) with Bank of America, N.A. as administrative agent and the other banks identified therein as lenders. The
Agreement) with Bank of America, N.A. as administrative agent and the other banks identified therein as lenders. The
Revolving Credit Agreement provides for a five year, unsecured, revolving credit facility in an aggregate principal amount not
Revolving Credit Agreement provides for a five year, unsecured, revolving credit facility in an aggregate principal amount not
to exceed $2.5 billion (subject to certain terms and conditions). In June 2022, the Company borrowed $400.0 million under this
to exceed $2.5 billion (subject to certain terms and conditions). In June 2022, the Company borrowed $400.0 million under this
revolving credit facility and utilized the proceeds for the repayment of existing indebtedness and working capital requirements.
revolving credit facility and utilized the proceeds for the repayment of existing indebtedness and working capital requirements.
The Company repaid the $400.0 million plus interest in July 2022. As of October 29, 2022, the Company had no outstanding
The Company repaid the $400.0 million plus interest in July 2022. As of October 29, 2022, the Company had no outstanding
borrowings under this revolving credit facility but may borrow in the future and use the proceeds for repayment of existing
borrowings under this revolving credit facility but may borrow in the future and use the proceeds for repayment of existing
indebtedness, stock repurchases, acquisitions, capital expenditures, working capital and other lawful corporate purposes.
indebtedness, stock repurchases, acquisitions, capital expenditures, working capital and other lawful corporate purposes.
Revolving loans under the Revolving Credit Agreement can be Eurocurrency Rate Loans or Base Rate Loans (each as
Revolving loans under the Revolving Credit Agreement can be Eurocurrency Rate Loans or Base Rate Loans (each as
defined in the Revolving Credit Agreement) at the Company's option. Each Eurocurrency Rate Loan will bear interest at a rate
defined in the Revolving Credit Agreement) at the Company's option. Each Eurocurrency Rate Loan will bear interest at a rate
per annum equal to the applicable Eurocurrency Rate plus a margin based on the Company's Debt Ratings (as defined in the
per annum equal to the applicable Eurocurrency Rate plus a margin based on the Company's Debt Ratings (as defined in the
Revolving Credit Agreement) from time to time of between 0.690% and 1.175%. Each Base Rate Loan will bear interest at a
Revolving Credit Agreement) from time to time of between 0.690% and 1.175%. Each Base Rate Loan will bear interest at a
rate per annum equal to the Base Rate plus a margin based on the Company's debt ratings from time to time of between 0.00%
rate per annum equal to the Base Rate plus a margin based on the Company's debt ratings from time to time of between 0.00%
and 0.175%. In addition, the Company has agreed to pay a facility fee based on the Company's Debt Ratings from time to time
and 0.175%. In addition, the Company has agreed to pay a facility fee based on the Company's Debt Ratings from time to time
of between 0.060% and 0.200% multiplied by the actual daily amount of the Commitments (as defined in the Revolving Credit
of between 0.060% and 0.200% multiplied by the actual daily amount of the Commitments (as defined in the Revolving Credit
for interest rate and facility fee reductions or increases based on the Company meeting or missing targets related to
for interest rate and facility fee reductions or increases based on the Company meeting or missing targets related to
environmental sustainability, specifically greenhouse gas emissions and renewable energy usage. For calendar year 2021, the
environmental sustainability, specifically greenhouse gas emissions and renewable energy usage. For calendar year 2021, the
Company did not achieve its greenhouse gas emissions reduction threshold goal related to this sustainability-linked pricing
Company did not achieve its greenhouse gas emissions reduction threshold goal related to this sustainability-linked pricing
component due in part to increased demand for product, which did not have a material impact on the Company's business, net
component due in part to increased demand for product, which did not have a material impact on the Company's business, net
income or financing costs. The Revolving Credit Agreement includes a multicurrency borrowing feature for certain specified
income or financing costs. The Revolving Credit Agreement includes a multicurrency borrowing feature for certain specified
foreign currencies. The Company will guarantee the obligations of each subsidiary that is named a Designated Borrower under
foreign currencies. The Company will guarantee the obligations of each subsidiary that is named a Designated Borrower under
The Revolving Credit Agreement contains customary representations and warranties, and affirmative and negative
The Revolving Credit Agreement contains customary representations and warranties, and affirmative and negative
covenants and events of default applicable to the Company and its subsidiaries. As of October 29, 2022, the Company was in
covenants and events of default applicable to the Company and its subsidiaries. As of October 29, 2022, the Company was in
the Revolving Credit Agreement.
the Revolving Credit Agreement.
compliance with these covenants.
compliance with these covenants.
14. Debt
14. Debt
On December 14, 2015, the Company issued $850.0 million aggregate principal amount of 3.9% senior unsecured notes
On December 14, 2015, the Company issued $850.0 million aggregate principal amount of 3.9% senior unsecured notes
due December 15, 2025 (the December 2025 Notes) and $400.0 million aggregate principal amount of 5.3% senior unsecured
due December 15, 2025 (the December 2025 Notes) and $400.0 million aggregate principal amount of 5.3% senior unsecured
notes due December 15, 2045 (the 2045 Notes) with semi-annual fixed interest payments due on June 15 and December 15 of
notes due December 15, 2045 (the 2045 Notes) with semi-annual fixed interest payments due on June 15 and December 15 of
each year, commencing June 15, 2016. The net proceeds of the offering were $1.2 billion, after discounts and issuance costs.
each year, commencing June 15, 2016. The net proceeds of the offering were $1.2 billion, after discounts and issuance costs.
On October 5, 2021 and October 7, 2021, $325.5 million, or 38.3%, of the $850.0 million aggregate principal amount of the
On October 5, 2021 and October 7, 2021, $325.5 million, or 38.3%, of the $850.0 million aggregate principal amount of the
December 2025 Notes at a price of $1,112.13 for each $1,000 principal amount of December 2025 Notes, and $67.4 million, or
December 2025 Notes at a price of $1,112.13 for each $1,000 principal amount of December 2025 Notes, and $67.4 million, or
16.85%, of the $400.0 million aggregate principal amount of the 2045 Notes at a price of $1,400.67 for each $1,000 principal
16.85%, of the $400.0 million aggregate principal amount of the 2045 Notes at a price of $1,400.67 for each $1,000 principal
amount of 2045 Notes, were tendered for repurchase and canceled. On October 20, 2021, the remaining December 2025 Notes
amount of 2045 Notes, were tendered for repurchase and canceled. On October 20, 2021, the remaining December 2025 Notes
were redeemed for cash at a redemption price equal to $1,103.81 for each $1,000 principal amount of the December 2025
were redeemed for cash at a redemption price equal to $1,103.81 for each $1,000 principal amount of the December 2025
Notes. Debt discounts and issuance costs will be amortized through interest expense over the term of the 2045 Notes. The 2045
Notes. Debt discounts and issuance costs will be amortized through interest expense over the term of the 2045 Notes. The 2045
Notes are subordinated to any future secured debt and to the other liabilities of the Company's subsidiaries. The 2045 Notes
Notes are subordinated to any future secured debt and to the other liabilities of the Company's subsidiaries. The 2045 Notes
were issued pursuant to a base indenture (the ADI Base Indenture) between the Company and The Bank of New York Mellon
were issued pursuant to a base indenture (the ADI Base Indenture) between the Company and The Bank of New York Mellon
Trust Company as trustee, as supplemented by a supplemental indenture, which contain certain covenants, events of default and
Trust Company as trustee, as supplemented by a supplemental indenture, which contain certain covenants, events of default and
other customary provisions. The covenants applicable to the 2045 Notes limit the Company's ability to incur, create, assume or
other customary provisions. The covenants applicable to the 2045 Notes limit the Company's ability to incur, create, assume or
guarantee any debt secured by a lien upon a principal property; enter into sale and lease-back transactions with respect to a
guarantee any debt secured by a lien upon a principal property; enter into sale and lease-back transactions with respect to a
principal property; and consolidate with or merge into, or transfer or lease all or substantially all of its assets to, any other party.
principal property; and consolidate with or merge into, or transfer or lease all or substantially all of its assets to, any other party.
As of October 29, 2022, the Company was in compliance with these covenants.
As of October 29, 2022, the Company was in compliance with these covenants.
On December 5, 2016, the Company issued $400.0 million aggregate principal amount of 2.5% senior unsecured notes
On December 5, 2016, the Company issued $400.0 million aggregate principal amount of 2.5% senior unsecured notes
due December 5, 2021 (the 2021 Notes), $550.0 million aggregate principal amount of 3.125% senior unsecured notes due
due December 5, 2021 (the 2021 Notes), $550.0 million aggregate principal amount of 3.125% senior unsecured notes due
December 5, 2023 (the December 2023 Notes), $900.0 million aggregate principal amount of 3.5% senior unsecured notes due
December 5, 2023 (the December 2023 Notes), $900.0 million aggregate principal amount of 3.5% senior unsecured notes due
December 5, 2026 (the 2026 Notes) and $250.0 million aggregate principal amount of 4.5% senior unsecured notes due
December 5, 2026 (the 2026 Notes) and $250.0 million aggregate principal amount of 4.5% senior unsecured notes due
December 5, 2036 (the 2036 Notes) with semi-annual fixed interest payments due on June 5 and December 5 of each year,
December 5, 2036 (the 2036 Notes) with semi-annual fixed interest payments due on June 5 and December 5 of each year,
commencing June 5, 2017. The net proceeds of the offering were $2.1 billion, after discounts and issuance costs. On October 5,
commencing June 5, 2017. The net proceeds of the offering were $2.1 billion, after discounts and issuance costs. On October 5,
2021, (i) $71.2 million, or 17.80%, of the $400.0 million aggregate principal amount of the 2021 Notes at a price of $1,001.77
2021, (i) $71.2 million, or 17.80%, of the $400.0 million aggregate principal amount of the 2021 Notes at a price of $1,001.77
for each $1,000 principal amount of 2021 Notes, (ii) $282.7 million, or 51.41%, of the $550.0 million aggregate principal
for each $1,000 principal amount of 2021 Notes, (ii) $282.7 million, or 51.41%, of the $550.0 million aggregate principal
amount of the December 2023 Notes at a price of $1,053.78 for each $1,000 principal amount of December 2023 Notes and (iii)
amount of the December 2023 Notes at a price of $1,053.78 for each $1,000 principal amount of December 2023 Notes and (iii)
$105.7 million, or 42.29%, of the $250.0 million aggregate principal amount of the 2036 Notes at a price of $1,239.96 for each
$105.7 million, or 42.29%, of the $250.0 million aggregate principal amount of the 2036 Notes at a price of $1,239.96 for each
$1,000 principal amount of 2036 Notes were tendered for redemption. On October 20, 2021, the remaining 2021 Notes and
$1,000 principal amount of 2036 Notes were tendered for redemption. On October 20, 2021, the remaining 2021 Notes and
December 2023 Notes were redeemed for cash at a redemption price equal to $1,000.98 for each $1,000 principal amount of
December 2023 Notes were redeemed for cash at a redemption price equal to $1,000.98 for each $1,000 principal amount of
2021 Notes and $1,050.17 for each $1,000 principal amount of December 2023 Notes. Debt discounts and issuance costs will
2021 Notes and $1,050.17 for each $1,000 principal amount of December 2023 Notes. Debt discounts and issuance costs will
be amortized through interest expense over the term of the respective notes. The 2026 Notes and 2036 Notes rank without
be amortized through interest expense over the term of the respective notes. The 2026 Notes and 2036 Notes rank without
preference or priority among themselves and equally in right of payment with all other existing and future senior unsecured
preference or priority among themselves and equally in right of payment with all other existing and future senior unsecured
debt and senior in right of payment to all of the Company's future subordinated debt. The 2026 Notes and 2036 Notes were
debt and senior in right of payment to all of the Company's future subordinated debt. The 2026 Notes and 2036 Notes were
issued pursuant to the ADI Base Indenture, as supplemented by a supplemental indenture, which contain covenants similar to
issued pursuant to the ADI Base Indenture, as supplemented by a supplemental indenture, which contain covenants similar to
those applicable to the 2045 Notes, events of default and other customary provisions. As of October 29, 2022, the Company
those applicable to the 2045 Notes, events of default and other customary provisions. As of October 29, 2022, the Company
was in compliance with these covenants.
was in compliance with these covenants.
81
81
82
82
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following table summarizes the changes in the total amounts of unrealized tax benefits for fiscal 2020 through fiscal
The following table summarizes the changes in the total amounts of unrealized tax benefits for fiscal 2020 through fiscal
2022:
2022:
Unrealized Tax Benefits
Unrealized Tax Benefits
Balance, November 2, 2019
Balance, November 2, 2019
Additions for tax positions related to current year
Additions for tax positions related to current year
Reductions for tax positions related to prior years
Reductions for tax positions related to prior years
Reductions due to lapse of applicable statute of limitations
Reductions due to lapse of applicable statute of limitations
Balance, October 31, 2020
Balance, October 31, 2020
Additions for tax positions related to current year
Additions for tax positions related to current year
Additions for tax positions related to prior years
Additions for tax positions related to prior years
Additions for tax positions related to the Acquisition
Additions for tax positions related to the Acquisition
Reductions due to lapse of applicable statute of limitations
Reductions due to lapse of applicable statute of limitations
Balance, October 30, 2021
Balance, October 30, 2021
Additions for tax positions related to the Acquisition
Additions for tax positions related to the Acquisition
Additions for tax positions related to current year
Additions for tax positions related to current year
Additions for tax positions related to prior years
Additions for tax positions related to prior years
Reductions due to lapse of applicable statute of limitations
Reductions due to lapse of applicable statute of limitations
Balance, October 29, 2022
Balance, October 29, 2022
$
$
$
$
$
$
$
$
34,343
34,343
3,270
3,270
(16,152)
(16,152)
(170)
(170)
21,291
21,291
4,713
4,713
19,790
19,790
91,179
91,179
(4,452)
(4,452)
132,521
132,521
15,267
15,267
11,800
11,800
9,704
9,704
(3,965)
(3,965)
165,327
165,327
In fiscal 2020, the Company released reserves of $18.6 million, which included accrued interest as a result of the
In fiscal 2020, the Company released reserves of $18.6 million, which included accrued interest as a result of the
resolution of the amended tax return that was previously under review by the Joint Committee on Taxation, combined with
resolution of the amended tax return that was previously under review by the Joint Committee on Taxation, combined with
other tax positions resolved by the closing of the Internal Revenue Service audit of Linear’s pre-acquisition federal income tax
other tax positions resolved by the closing of the Internal Revenue Service audit of Linear’s pre-acquisition federal income tax
returns for fiscal 2015 through fiscal 2017.
returns for fiscal 2015 through fiscal 2017.
tax and $34.3 million in accrued interest.
tax and $34.3 million in accrued interest.
In fiscal 2021, the Company acquired $125.5 million in reserves as part of the Acquisition consisting of $91.2 million in
In fiscal 2021, the Company acquired $125.5 million in reserves as part of the Acquisition consisting of $91.2 million in
In fiscal 2022, the Company continued to engage in discussions and negotiations with tax authorities regarding tax matters
In fiscal 2022, the Company continued to engage in discussions and negotiations with tax authorities regarding tax matters
in various jurisdictions. It is reasonably possible that the balance of unrealized tax benefits, including accrued interest and
in various jurisdictions. It is reasonably possible that the balance of unrealized tax benefits, including accrued interest and
penalties, could decrease by up to $127.0 million within the next twelve months due to the completion of federal tax audits,
penalties, could decrease by up to $127.0 million within the next twelve months due to the completion of federal tax audits,
including any administrative appeals. The $127.0 million primarily relates to matters involving federal taxation of international
including any administrative appeals. The $127.0 million primarily relates to matters involving federal taxation of international
income and cross-border transactions.
income and cross-border transactions.
The Company has numerous audits ongoing at any time throughout the world including: an IRS income tax audit for fiscal
The Company has numerous audits ongoing at any time throughout the world including: an IRS income tax audit for fiscal
2019 and fiscal 2018, a pre-Acquisition IRS income tax audit for Maxim's fiscal years ended June 27, 2015 through August 26,
2019 and fiscal 2018, a pre-Acquisition IRS income tax audit for Maxim's fiscal years ended June 27, 2015 through August 26,
2021, and various U.S. state and local tax audits and international audits. The Company’s U.S. federal tax returns prior to fiscal
2021, and various U.S. state and local tax audits and international audits. The Company’s U.S. federal tax returns prior to fiscal
2018 are no longer subject to examination, except for the applicable Maxim pre-Acquisition fiscal years noted above.
2018 are no longer subject to examination, except for the applicable Maxim pre-Acquisition fiscal years noted above.
13. Revolving Credit Facility
13. Revolving Credit Facility
On June 23, 2021, the Company entered into a Third Amended and Restated Credit Agreement (Revolving Credit
On June 23, 2021, the Company entered into a Third Amended and Restated Credit Agreement (Revolving Credit
Agreement) with Bank of America, N.A. as administrative agent and the other banks identified therein as lenders. The
Agreement) with Bank of America, N.A. as administrative agent and the other banks identified therein as lenders. The
Revolving Credit Agreement provides for a five year, unsecured, revolving credit facility in an aggregate principal amount not
Revolving Credit Agreement provides for a five year, unsecured, revolving credit facility in an aggregate principal amount not
to exceed $2.5 billion (subject to certain terms and conditions). In June 2022, the Company borrowed $400.0 million under this
to exceed $2.5 billion (subject to certain terms and conditions). In June 2022, the Company borrowed $400.0 million under this
revolving credit facility and utilized the proceeds for the repayment of existing indebtedness and working capital requirements.
revolving credit facility and utilized the proceeds for the repayment of existing indebtedness and working capital requirements.
The Company repaid the $400.0 million plus interest in July 2022. As of October 29, 2022, the Company had no outstanding
The Company repaid the $400.0 million plus interest in July 2022. As of October 29, 2022, the Company had no outstanding
borrowings under this revolving credit facility but may borrow in the future and use the proceeds for repayment of existing
borrowings under this revolving credit facility but may borrow in the future and use the proceeds for repayment of existing
indebtedness, stock repurchases, acquisitions, capital expenditures, working capital and other lawful corporate purposes.
indebtedness, stock repurchases, acquisitions, capital expenditures, working capital and other lawful corporate purposes.
Revolving loans under the Revolving Credit Agreement can be Eurocurrency Rate Loans or Base Rate Loans (each as
Revolving loans under the Revolving Credit Agreement can be Eurocurrency Rate Loans or Base Rate Loans (each as
defined in the Revolving Credit Agreement) at the Company's option. Each Eurocurrency Rate Loan will bear interest at a rate
defined in the Revolving Credit Agreement) at the Company's option. Each Eurocurrency Rate Loan will bear interest at a rate
per annum equal to the applicable Eurocurrency Rate plus a margin based on the Company's Debt Ratings (as defined in the
per annum equal to the applicable Eurocurrency Rate plus a margin based on the Company's Debt Ratings (as defined in the
Revolving Credit Agreement) from time to time of between 0.690% and 1.175%. Each Base Rate Loan will bear interest at a
Revolving Credit Agreement) from time to time of between 0.690% and 1.175%. Each Base Rate Loan will bear interest at a
rate per annum equal to the Base Rate plus a margin based on the Company's debt ratings from time to time of between 0.00%
rate per annum equal to the Base Rate plus a margin based on the Company's debt ratings from time to time of between 0.00%
and 0.175%. In addition, the Company has agreed to pay a facility fee based on the Company's Debt Ratings from time to time
and 0.175%. In addition, the Company has agreed to pay a facility fee based on the Company's Debt Ratings from time to time
of between 0.060% and 0.200% multiplied by the actual daily amount of the Commitments (as defined in the Revolving Credit
of between 0.060% and 0.200% multiplied by the actual daily amount of the Commitments (as defined in the Revolving Credit
Agreement) in effect. The Revolving Credit Agreement also contains a sustainability-linked pricing component which provides
Agreement) in effect. The Revolving Credit Agreement also contains a sustainability-linked pricing component which provides
for interest rate and facility fee reductions or increases based on the Company meeting or missing targets related to
for interest rate and facility fee reductions or increases based on the Company meeting or missing targets related to
environmental sustainability, specifically greenhouse gas emissions and renewable energy usage. For calendar year 2021, the
environmental sustainability, specifically greenhouse gas emissions and renewable energy usage. For calendar year 2021, the
Company did not achieve its greenhouse gas emissions reduction threshold goal related to this sustainability-linked pricing
Company did not achieve its greenhouse gas emissions reduction threshold goal related to this sustainability-linked pricing
component due in part to increased demand for product, which did not have a material impact on the Company's business, net
component due in part to increased demand for product, which did not have a material impact on the Company's business, net
income or financing costs. The Revolving Credit Agreement includes a multicurrency borrowing feature for certain specified
income or financing costs. The Revolving Credit Agreement includes a multicurrency borrowing feature for certain specified
foreign currencies. The Company will guarantee the obligations of each subsidiary that is named a Designated Borrower under
foreign currencies. The Company will guarantee the obligations of each subsidiary that is named a Designated Borrower under
the Revolving Credit Agreement.
the Revolving Credit Agreement.
The Revolving Credit Agreement contains customary representations and warranties, and affirmative and negative
The Revolving Credit Agreement contains customary representations and warranties, and affirmative and negative
covenants and events of default applicable to the Company and its subsidiaries. As of October 29, 2022, the Company was in
covenants and events of default applicable to the Company and its subsidiaries. As of October 29, 2022, the Company was in
compliance with these covenants.
compliance with these covenants.
14. Debt
14. Debt
On December 14, 2015, the Company issued $850.0 million aggregate principal amount of 3.9% senior unsecured notes
On December 14, 2015, the Company issued $850.0 million aggregate principal amount of 3.9% senior unsecured notes
due December 15, 2025 (the December 2025 Notes) and $400.0 million aggregate principal amount of 5.3% senior unsecured
due December 15, 2025 (the December 2025 Notes) and $400.0 million aggregate principal amount of 5.3% senior unsecured
notes due December 15, 2045 (the 2045 Notes) with semi-annual fixed interest payments due on June 15 and December 15 of
notes due December 15, 2045 (the 2045 Notes) with semi-annual fixed interest payments due on June 15 and December 15 of
each year, commencing June 15, 2016. The net proceeds of the offering were $1.2 billion, after discounts and issuance costs.
each year, commencing June 15, 2016. The net proceeds of the offering were $1.2 billion, after discounts and issuance costs.
On October 5, 2021 and October 7, 2021, $325.5 million, or 38.3%, of the $850.0 million aggregate principal amount of the
On October 5, 2021 and October 7, 2021, $325.5 million, or 38.3%, of the $850.0 million aggregate principal amount of the
December 2025 Notes at a price of $1,112.13 for each $1,000 principal amount of December 2025 Notes, and $67.4 million, or
December 2025 Notes at a price of $1,112.13 for each $1,000 principal amount of December 2025 Notes, and $67.4 million, or
16.85%, of the $400.0 million aggregate principal amount of the 2045 Notes at a price of $1,400.67 for each $1,000 principal
16.85%, of the $400.0 million aggregate principal amount of the 2045 Notes at a price of $1,400.67 for each $1,000 principal
amount of 2045 Notes, were tendered for repurchase and canceled. On October 20, 2021, the remaining December 2025 Notes
amount of 2045 Notes, were tendered for repurchase and canceled. On October 20, 2021, the remaining December 2025 Notes
were redeemed for cash at a redemption price equal to $1,103.81 for each $1,000 principal amount of the December 2025
were redeemed for cash at a redemption price equal to $1,103.81 for each $1,000 principal amount of the December 2025
Notes. Debt discounts and issuance costs will be amortized through interest expense over the term of the 2045 Notes. The 2045
Notes. Debt discounts and issuance costs will be amortized through interest expense over the term of the 2045 Notes. The 2045
Notes are subordinated to any future secured debt and to the other liabilities of the Company's subsidiaries. The 2045 Notes
Notes are subordinated to any future secured debt and to the other liabilities of the Company's subsidiaries. The 2045 Notes
were issued pursuant to a base indenture (the ADI Base Indenture) between the Company and The Bank of New York Mellon
were issued pursuant to a base indenture (the ADI Base Indenture) between the Company and The Bank of New York Mellon
Trust Company as trustee, as supplemented by a supplemental indenture, which contain certain covenants, events of default and
Trust Company as trustee, as supplemented by a supplemental indenture, which contain certain covenants, events of default and
other customary provisions. The covenants applicable to the 2045 Notes limit the Company's ability to incur, create, assume or
other customary provisions. The covenants applicable to the 2045 Notes limit the Company's ability to incur, create, assume or
guarantee any debt secured by a lien upon a principal property; enter into sale and lease-back transactions with respect to a
guarantee any debt secured by a lien upon a principal property; enter into sale and lease-back transactions with respect to a
principal property; and consolidate with or merge into, or transfer or lease all or substantially all of its assets to, any other party.
principal property; and consolidate with or merge into, or transfer or lease all or substantially all of its assets to, any other party.
As of October 29, 2022, the Company was in compliance with these covenants.
As of October 29, 2022, the Company was in compliance with these covenants.
On December 5, 2016, the Company issued $400.0 million aggregate principal amount of 2.5% senior unsecured notes
On December 5, 2016, the Company issued $400.0 million aggregate principal amount of 2.5% senior unsecured notes
due December 5, 2021 (the 2021 Notes), $550.0 million aggregate principal amount of 3.125% senior unsecured notes due
due December 5, 2021 (the 2021 Notes), $550.0 million aggregate principal amount of 3.125% senior unsecured notes due
December 5, 2023 (the December 2023 Notes), $900.0 million aggregate principal amount of 3.5% senior unsecured notes due
December 5, 2023 (the December 2023 Notes), $900.0 million aggregate principal amount of 3.5% senior unsecured notes due
December 5, 2026 (the 2026 Notes) and $250.0 million aggregate principal amount of 4.5% senior unsecured notes due
December 5, 2026 (the 2026 Notes) and $250.0 million aggregate principal amount of 4.5% senior unsecured notes due
December 5, 2036 (the 2036 Notes) with semi-annual fixed interest payments due on June 5 and December 5 of each year,
December 5, 2036 (the 2036 Notes) with semi-annual fixed interest payments due on June 5 and December 5 of each year,
commencing June 5, 2017. The net proceeds of the offering were $2.1 billion, after discounts and issuance costs. On October 5,
commencing June 5, 2017. The net proceeds of the offering were $2.1 billion, after discounts and issuance costs. On October 5,
2021, (i) $71.2 million, or 17.80%, of the $400.0 million aggregate principal amount of the 2021 Notes at a price of $1,001.77
2021, (i) $71.2 million, or 17.80%, of the $400.0 million aggregate principal amount of the 2021 Notes at a price of $1,001.77
for each $1,000 principal amount of 2021 Notes, (ii) $282.7 million, or 51.41%, of the $550.0 million aggregate principal
for each $1,000 principal amount of 2021 Notes, (ii) $282.7 million, or 51.41%, of the $550.0 million aggregate principal
amount of the December 2023 Notes at a price of $1,053.78 for each $1,000 principal amount of December 2023 Notes and (iii)
amount of the December 2023 Notes at a price of $1,053.78 for each $1,000 principal amount of December 2023 Notes and (iii)
$105.7 million, or 42.29%, of the $250.0 million aggregate principal amount of the 2036 Notes at a price of $1,239.96 for each
$105.7 million, or 42.29%, of the $250.0 million aggregate principal amount of the 2036 Notes at a price of $1,239.96 for each
$1,000 principal amount of 2036 Notes were tendered for redemption. On October 20, 2021, the remaining 2021 Notes and
$1,000 principal amount of 2036 Notes were tendered for redemption. On October 20, 2021, the remaining 2021 Notes and
December 2023 Notes were redeemed for cash at a redemption price equal to $1,000.98 for each $1,000 principal amount of
December 2023 Notes were redeemed for cash at a redemption price equal to $1,000.98 for each $1,000 principal amount of
2021 Notes and $1,050.17 for each $1,000 principal amount of December 2023 Notes. Debt discounts and issuance costs will
2021 Notes and $1,050.17 for each $1,000 principal amount of December 2023 Notes. Debt discounts and issuance costs will
be amortized through interest expense over the term of the respective notes. The 2026 Notes and 2036 Notes rank without
be amortized through interest expense over the term of the respective notes. The 2026 Notes and 2036 Notes rank without
preference or priority among themselves and equally in right of payment with all other existing and future senior unsecured
preference or priority among themselves and equally in right of payment with all other existing and future senior unsecured
debt and senior in right of payment to all of the Company's future subordinated debt. The 2026 Notes and 2036 Notes were
debt and senior in right of payment to all of the Company's future subordinated debt. The 2026 Notes and 2036 Notes were
issued pursuant to the ADI Base Indenture, as supplemented by a supplemental indenture, which contain covenants similar to
issued pursuant to the ADI Base Indenture, as supplemented by a supplemental indenture, which contain covenants similar to
those applicable to the 2045 Notes, events of default and other customary provisions. As of October 29, 2022, the Company
those applicable to the 2045 Notes, events of default and other customary provisions. As of October 29, 2022, the Company
was in compliance with these covenants.
was in compliance with these covenants.
81
81
82
82
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
On April 8, 2020, in an underwritten public offering of green bonds, the Company issued $400.0 million aggregate
On April 8, 2020, in an underwritten public offering of green bonds, the Company issued $400.0 million aggregate
principal amount of 2.95% senior unsecured notes due April 1, 2025 (the April 2025 Notes), with semi-annual fixed interest
principal amount of 2.95% senior unsecured notes due April 1, 2025 (the April 2025 Notes), with semi-annual fixed interest
payments due on April 1 and October 1 of each year, commencing on October 1, 2020. The Company used the net proceeds of
payments due on April 1 and October 1 of each year, commencing on October 1, 2020. The Company used the net proceeds of
$395.6 million from the green bond offering to finance or refinance new and existing eligible projects involving renewable
$395.6 million from the green bond offering to finance or refinance new and existing eligible projects involving renewable
energy, green buildings, and eco-efficient products, production technologies and processes. Debt discounts and underwriting
energy, green buildings, and eco-efficient products, production technologies and processes. Debt discounts and underwriting
fees will be amortized through interest expense over the term of the April 2025 Notes. At any time prior to March 1, 2025, the
fees will be amortized through interest expense over the term of the April 2025 Notes. At any time prior to March 1, 2025, the
Company may, at its option, redeem some or all of the April 2025 Notes at a redemption price equal to the greater of 100% of
Company may, at its option, redeem some or all of the April 2025 Notes at a redemption price equal to the greater of 100% of
the principal amount of the April 2025 Notes being redeemed and the make-whole premium, plus accrued and unpaid interest
the principal amount of the April 2025 Notes being redeemed and the make-whole premium, plus accrued and unpaid interest
on the April 2025 Notes being redeemed, if any, to but excluding the date of redemption. The April 2025 Notes are unsecured
on the April 2025 Notes being redeemed, if any, to but excluding the date of redemption. The April 2025 Notes are unsecured
and rank equally in right of payment with all of the Company's other existing and future unsecured senior indebtedness. The
and rank equally in right of payment with all of the Company's other existing and future unsecured senior indebtedness. The
April 2025 Notes were issued pursuant to the ADI Base Indenture, as supplemented by a supplemental indenture, which contain
April 2025 Notes were issued pursuant to the ADI Base Indenture, as supplemented by a supplemental indenture, which contain
covenants similar to those applicable to the 2045 Notes, events of default and other customary provisions. As of October 29,
covenants similar to those applicable to the 2045 Notes, events of default and other customary provisions. As of October 29,
2022, the Company was in compliance with these covenants.
2022, the Company was in compliance with these covenants.
In conjunction with the Acquisition, the Company recognized $500.0 million aggregate principal amount of Maxim’s
In conjunction with the Acquisition, the Company recognized $500.0 million aggregate principal amount of Maxim’s
3.375% senior unsecured and unsubordinated notes due March 15, 2023 (the Maxim 2023 Notes) and $500.0 million aggregate
3.375% senior unsecured and unsubordinated notes due March 15, 2023 (the Maxim 2023 Notes) and $500.0 million aggregate
principal amount of Maxim’s 3.45% senior unsecured and unsubordinated notes due June 15, 2027 (the Maxim 2027 Notes),
principal amount of Maxim’s 3.45% senior unsecured and unsubordinated notes due June 15, 2027 (the Maxim 2027 Notes),
which were recognized at fair value as of the Acquisition Date. On October 5, 2021, Maxim gave notice that it would redeem
which were recognized at fair value as of the Acquisition Date. On October 5, 2021, Maxim gave notice that it would redeem
the Maxim 2023 Notes, and in November 2021 (fiscal 2022), the Maxim 2023 Notes were redeemed for cash.
the Maxim 2023 Notes, and in November 2021 (fiscal 2022), the Maxim 2023 Notes were redeemed for cash.
On October 7, 2022, the Company completed an offer to exchange any and all outstanding Maxim 2027 Notes, for new
On October 7, 2022, the Company completed an offer to exchange any and all outstanding Maxim 2027 Notes, for new
3.450% Senior Notes due June 15, 2027 (the ADI 2027 Notes) to be issued by the Company and cash. Pursuant to the exchange
3.450% Senior Notes due June 15, 2027 (the ADI 2027 Notes) to be issued by the Company and cash. Pursuant to the exchange
offer, $440.2 million aggregate principal amount of the Maxim 2027 Notes were tendered and subsequently accepted for
offer, $440.2 million aggregate principal amount of the Maxim 2027 Notes were tendered and subsequently accepted for
exchange, and the Company retired and canceled all Maxim 2027 Notes accepted for exchange. In exchange for the tendered
exchange, and the Company retired and canceled all Maxim 2027 Notes accepted for exchange. In exchange for the tendered
Maxim 2027 Notes, the Company issued approximately $440.2 million aggregate principal amount of ADI 2027 Notes pursuant
Maxim 2027 Notes, the Company issued approximately $440.2 million aggregate principal amount of ADI 2027 Notes pursuant
to a private exchange offer exempt from, or not subject to, registration under the Securities Act of 1933, as amended and
to a private exchange offer exempt from, or not subject to, registration under the Securities Act of 1933, as amended and
$0.5 million in cash. The ADI 2027 Notes were issued pursuant to the ADI Base Indenture, as supplemented by a supplemental
$0.5 million in cash. The ADI 2027 Notes were issued pursuant to the ADI Base Indenture, as supplemented by a supplemental
indenture, which contain certain covenants similar to those applicable to the 2045 Notes, events of default and other customary
indenture, which contain certain covenants similar to those applicable to the 2045 Notes, events of default and other customary
provisions. The ADI 2027 Notes bear interest at a rate of 3.450% per annum, with semi-annual fixed interest payments due on
provisions. The ADI 2027 Notes bear interest at a rate of 3.450% per annum, with semi-annual fixed interest payments due on
June 15 and December 15 of each year, commencing on December 15, 2022 and will mature on June 15, 2027. As of October
June 15 and December 15 of each year, commencing on December 15, 2022 and will mature on June 15, 2027. As of October
29, 2022, the Company was in compliance with the covenants in the ADI 2027 Notes and the outstanding Maxim 2027 Notes.
29, 2022, the Company was in compliance with the covenants in the ADI 2027 Notes and the outstanding Maxim 2027 Notes.
The indenture and supplemental indentures with respect to the outstanding Maxim 2027 Notes have been modified to, among
The indenture and supplemental indentures with respect to the outstanding Maxim 2027 Notes have been modified to, among
other things, eliminate (i) substantially all of the restrictive covenants, (ii) certain of the events of default (other than for the
other things, eliminate (i) substantially all of the restrictive covenants, (ii) certain of the events of default (other than for the
failure to pay principal, premium or interest), (iii) the obligation to offer to repurchase the Maxim 2027 Notes upon certain
failure to pay principal, premium or interest), (iii) the obligation to offer to repurchase the Maxim 2027 Notes upon certain
change of control transactions and (iv) any restrictions on consolidating with or merging into any other person or conveying,
change of control transactions and (iv) any restrictions on consolidating with or merging into any other person or conveying,
transferring or leasing all or any of its properties and assets to any person. Following settlement of the exchange offer,
transferring or leasing all or any of its properties and assets to any person. Following settlement of the exchange offer,
$59.8 million aggregate principal amount of the Maxim 2027 Notes remain outstanding.
$59.8 million aggregate principal amount of the Maxim 2027 Notes remain outstanding.
On October 5, 2021, in an underwritten public offering, the Company issued $500.0 million aggregate principal amount of
On October 5, 2021, in an underwritten public offering, the Company issued $500.0 million aggregate principal amount of
floating rate senior notes due October 1, 2024 (the Floating Rate Notes), $750.0 million aggregate principal amount of 1.7%
floating rate senior notes due October 1, 2024 (the Floating Rate Notes), $750.0 million aggregate principal amount of 1.7%
sustainability-linked senior notes due October 1, 2028 (the Sustainability-Linked Senior Notes), $1.0 billion aggregate principal
sustainability-linked senior notes due October 1, 2028 (the Sustainability-Linked Senior Notes), $1.0 billion aggregate principal
amount of 2.1% senior notes due October 1, 2031 (the 2031 Notes), $750.0 million aggregate principal amount of 2.8% senior
amount of 2.1% senior notes due October 1, 2031 (the 2031 Notes), $750.0 million aggregate principal amount of 2.8% senior
notes due October 1, 2041 (the 2041 Notes), and $1.0 billion aggregate principal amount of 2.95% senior notes due October 1,
notes due October 1, 2041 (the 2041 Notes), and $1.0 billion aggregate principal amount of 2.95% senior notes due October 1,
2051 (the 2051 Notes, and, together with the Floating Rate Notes, the Sustainability-Linked Senior Notes, the 2031 Notes and
2051 (the 2051 Notes, and, together with the Floating Rate Notes, the Sustainability-Linked Senior Notes, the 2031 Notes and
the 2041 Notes, the Notes). The Floating Rate Notes bear interest at a floating annual rate equal to a benchmark rate, which
the 2041 Notes, the Notes). The Floating Rate Notes bear interest at a floating annual rate equal to a benchmark rate, which
initially is Compounded SOFR (as defined in the Supplemental Indenture) plus 25 basis points. As of October 29, 2022, the
initially is Compounded SOFR (as defined in the Supplemental Indenture) plus 25 basis points. As of October 29, 2022, the
interest rate on the Floating Rate Notes was 0.3% per annum. Interest payments on the Floating Rate Notes are due on January
interest rate on the Floating Rate Notes was 0.3% per annum. Interest payments on the Floating Rate Notes are due on January
1, April 1, July 1 and October 1 of each year, beginning on January 1, 2022. The Sustainability-Linked Senior Notes initially
1, April 1, July 1 and October 1 of each year, beginning on January 1, 2022. The Sustainability-Linked Senior Notes initially
bear interest at a rate of 1.7% per annum and are subject to an increase of an additional 30 basis points from April 1, 2026 to the
bear interest at a rate of 1.7% per annum and are subject to an increase of an additional 30 basis points from April 1, 2026 to the
maturity date unless the Sustainability Performance Target (as defined in the Sustainability-Linked Senior Notes) has been
maturity date unless the Sustainability Performance Target (as defined in the Sustainability-Linked Senior Notes) has been
satisfied. Semi-annual fixed interest payments on the Sustainability-Linked Senior Notes, the 2031 Notes, the 2041 Notes and
satisfied. Semi-annual fixed interest payments on the Sustainability-Linked Senior Notes, the 2031 Notes, the 2041 Notes and
the 2051 Notes are due on April 1 and October 1 of each year, beginning on April 1, 2022.
the 2051 Notes are due on April 1 and October 1 of each year, beginning on April 1, 2022.
At any time prior to August 1, 2028 in the case of the Sustainability-Linked Senior Notes, July 1, 2031 in the case of the
At any time prior to August 1, 2028 in the case of the Sustainability-Linked Senior Notes, July 1, 2031 in the case of the
2031 Notes, April 1, 2041 in the case of the 2041 Notes and April 1, 2051 in the case of the 2051 Notes (each, a Par Call Date),
2031 Notes, April 1, 2041 in the case of the 2041 Notes and April 1, 2051 in the case of the 2051 Notes (each, a Par Call Date),
the Company may, at its option, redeem some or all of the applicable series of Notes at a redemption price equal to the greater
the Company may, at its option, redeem some or all of the applicable series of Notes at a redemption price equal to the greater
of (i) 100% of the principal amount of such series of Notes being redeemed and (ii) the make-whole redemption price (as
of (i) 100% of the principal amount of such series of Notes being redeemed and (ii) the make-whole redemption price (as
described in the Supplemental Indenture). On and after the applicable Par Call Date, the Company may, at its option, redeem
described in the Supplemental Indenture). On and after the applicable Par Call Date, the Company may, at its option, redeem
some or all of the applicable series of Notes at a redemption price equal to 100% of the principal amount of the Notes being
some or all of the applicable series of Notes at a redemption price equal to 100% of the principal amount of the Notes being
redeemed. In each case, the Company will also pay the accrued and unpaid interest on the Notes being redeemed to, but
redeemed. In each case, the Company will also pay the accrued and unpaid interest on the Notes being redeemed to, but
excluding, the date of redemption. The Company may not redeem the Floating Rate Notes prior to their maturity. The Notes are
excluding, the date of redemption. The Company may not redeem the Floating Rate Notes prior to their maturity. The Notes are
unsecured and rank equally in right of payment with all of the Company’s other existing and future unsecured senior
unsecured and rank equally in right of payment with all of the Company’s other existing and future unsecured senior
indebtedness. Debt discounts and issuance costs will be amortized through interest expense over the term of the respective
indebtedness. Debt discounts and issuance costs will be amortized through interest expense over the term of the respective
Notes. The Notes were issued pursuant to an indenture, as supplemented by a supplemental indenture, and the indenture and
Notes. The Notes were issued pursuant to an indenture, as supplemented by a supplemental indenture, and the indenture and
supplemental indenture contain certain covenants, events of default and other customary provisions. As of October 29, 2022,
supplemental indenture contain certain covenants, events of default and other customary provisions. As of October 29, 2022,
the Company was in compliance with these covenants.
the Company was in compliance with these covenants.
On September 15, 2022, in an underwritten public offering, the Company issued $300.0 million aggregate principal
On September 15, 2022, in an underwritten public offering, the Company issued $300.0 million aggregate principal
amount of 4.250% senior notes due October 1, 2032 (the 2032 Notes) with semi-annual fixed interest payments due on April 1
amount of 4.250% senior notes due October 1, 2032 (the 2032 Notes) with semi-annual fixed interest payments due on April 1
and October 1 of each year, commencing April 1, 2023. The net proceeds of the offering were $296.1 million, after discounts
and October 1 of each year, commencing April 1, 2023. The net proceeds of the offering were $296.1 million, after discounts
and issuance costs. Prior to July 1, 2032 (three months prior to the maturity date), the Company may, at its option, redeem the
and issuance costs. Prior to July 1, 2032 (three months prior to the maturity date), the Company may, at its option, redeem the
2032 Notes, in whole or in part, at any time and from time to time, at a redemption price equal to the greater of: (1) (a) the sum
2032 Notes, in whole or in part, at any time and from time to time, at a redemption price equal to the greater of: (1) (a) the sum
of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date
of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date
(assuming the notes matured on July 1, 2032) on a semi-annual basis at the Treasury Rate plus 20 basis points less (b) interest
(assuming the notes matured on July 1, 2032) on a semi-annual basis at the Treasury Rate plus 20 basis points less (b) interest
accrued to the date of redemption, and (2) 100% of the principal amount of the notes to be redeemed, plus, in either case,
accrued to the date of redemption, and (2) 100% of the principal amount of the notes to be redeemed, plus, in either case,
accrued and unpaid interest thereon to the redemption date. On or after July 1, 2032, the Company may, at its option, redeem
accrued and unpaid interest thereon to the redemption date. On or after July 1, 2032, the Company may, at its option, redeem
the 2032 Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal
the 2032 Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal
amount of the 2032 Notes being redeemed plus accrued and unpaid interest thereon to the redemption date. The 2032 Notes are
amount of the 2032 Notes being redeemed plus accrued and unpaid interest thereon to the redemption date. The 2032 Notes are
unsecured and rank equally in right of payment with all of the Company’s other existing and future unsecured senior
unsecured and rank equally in right of payment with all of the Company’s other existing and future unsecured senior
indebtedness. The 2032 Notes were issued pursuant to the ADI Base Indenture, as supplemented by a supplemental indenture,
indebtedness. The 2032 Notes were issued pursuant to the ADI Base Indenture, as supplemented by a supplemental indenture,
which contain covenants similar to those applicable to the 2045 Notes, events of default and other customary provisions. As of
which contain covenants similar to those applicable to the 2045 Notes, events of default and other customary provisions. As of
October 29, 2022, the Company was in compliance with these covenants.
October 29, 2022, the Company was in compliance with these covenants.
The Company’s debt consisted of the following as of October 29, 2022 and October 30, 2021:
The Company’s debt consisted of the following as of October 29, 2022 and October 30, 2021:
October 29, 2022
October 29, 2022
October 30, 2021
October 30, 2021
Unamortized
Unamortized
discounts, debt
discounts, debt
issuance costs and
issuance costs and
fair value
fair value
adjustments
adjustments
Principal
Principal
Principal
Principal
$
$
500,000 $
500,000 $
1,973 $
1,973 $
500,000 $
500,000 $
Unamortized
Unamortized
discount and debt
discount and debt
issuance costs
issuance costs
400,000
400,000
900,000
900,000
59,788
59,788
440,212
440,212
750,000
750,000
1,000,000
1,000,000
300,000
300,000
144,278
144,278
750,000
750,000
332,587
332,587
1,000,000
1,000,000
2,145
2,145
5,258
5,258
(5,311)
(5,311)
(37,182)
(37,182)
8,795
8,795
12,381
12,381
3,822
3,822
1,696
1,696
12,868
12,868
3,787
3,787
18,008
18,008
400,000
400,000
900,000
900,000
500,000
500,000
—
—
750,000
750,000
1,000,000
1,000,000
—
—
144,278
144,278
750,000
750,000
332,587
332,587
1,000,000
1,000,000
$
$
$
$
$
$
6,576,865 $
6,576,865 $
28,240 $
28,240 $
6,276,865 $
6,276,865 $
—
—
— $
— $
—
—
500,000
500,000
— $
— $
500,000 $
500,000 $
6,576,865 $
6,576,865 $
28,240 $
28,240 $
6,776,865 $
6,776,865 $
3,091
3,091
3,029
3,029
6,534
6,534
(51,646)
(51,646)
—
—
10,419
10,419
13,956
13,956
—
—
1,814
1,814
13,690
13,690
3,952
3,952
18,814
18,814
23,653
23,653
(16,663)
(16,663)
(16,663)
(16,663)
6,990
6,990
2024 Notes, due October 2024
2024 Notes, due October 2024
2025 Notes, due April 2025
2025 Notes, due April 2025
2026 Notes, due December 2026
2026 Notes, due December 2026
Maxim 2027 Notes, due June 2027
Maxim 2027 Notes, due June 2027
2027 Notes, due June 2027
2027 Notes, due June 2027
2028 Notes, due October 2028
2028 Notes, due October 2028
2031 Notes, due October 2031
2031 Notes, due October 2031
2032 Notes, due October 2032
2032 Notes, due October 2032
2036 Notes, due December 2036
2036 Notes, due December 2036
2041 Notes, due October 2041
2041 Notes, due October 2041
2045 Notes, due December 2045
2045 Notes, due December 2045
2051 Notes, due October 2051
2051 Notes, due October 2051
Total Long-Term Debt
Total Long-Term Debt
Maxim 2023 Notes, due March 2023
Maxim 2023 Notes, due March 2023
Total Current Debt
Total Current Debt
Total Debt
Total Debt
15.
15.
Subsequent Events
Subsequent Events
On November 21, 2022, the Board of Directors of the Company declared a cash dividend of $0.76 per outstanding share
On November 21, 2022, the Board of Directors of the Company declared a cash dividend of $0.76 per outstanding share
of common stock. The dividend will be paid on December 15, 2022 to all shareholders of record at the close of business on
of common stock. The dividend will be paid on December 15, 2022 to all shareholders of record at the close of business on
December 5, 2022 and is expected to total approximately $387.1 million.
December 5, 2022 and is expected to total approximately $387.1 million.
83
83
84
84
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
On April 8, 2020, in an underwritten public offering of green bonds, the Company issued $400.0 million aggregate
On April 8, 2020, in an underwritten public offering of green bonds, the Company issued $400.0 million aggregate
principal amount of 2.95% senior unsecured notes due April 1, 2025 (the April 2025 Notes), with semi-annual fixed interest
principal amount of 2.95% senior unsecured notes due April 1, 2025 (the April 2025 Notes), with semi-annual fixed interest
payments due on April 1 and October 1 of each year, commencing on October 1, 2020. The Company used the net proceeds of
payments due on April 1 and October 1 of each year, commencing on October 1, 2020. The Company used the net proceeds of
$395.6 million from the green bond offering to finance or refinance new and existing eligible projects involving renewable
$395.6 million from the green bond offering to finance or refinance new and existing eligible projects involving renewable
energy, green buildings, and eco-efficient products, production technologies and processes. Debt discounts and underwriting
energy, green buildings, and eco-efficient products, production technologies and processes. Debt discounts and underwriting
fees will be amortized through interest expense over the term of the April 2025 Notes. At any time prior to March 1, 2025, the
fees will be amortized through interest expense over the term of the April 2025 Notes. At any time prior to March 1, 2025, the
Company may, at its option, redeem some or all of the April 2025 Notes at a redemption price equal to the greater of 100% of
Company may, at its option, redeem some or all of the April 2025 Notes at a redemption price equal to the greater of 100% of
the principal amount of the April 2025 Notes being redeemed and the make-whole premium, plus accrued and unpaid interest
the principal amount of the April 2025 Notes being redeemed and the make-whole premium, plus accrued and unpaid interest
on the April 2025 Notes being redeemed, if any, to but excluding the date of redemption. The April 2025 Notes are unsecured
on the April 2025 Notes being redeemed, if any, to but excluding the date of redemption. The April 2025 Notes are unsecured
and rank equally in right of payment with all of the Company's other existing and future unsecured senior indebtedness. The
and rank equally in right of payment with all of the Company's other existing and future unsecured senior indebtedness. The
April 2025 Notes were issued pursuant to the ADI Base Indenture, as supplemented by a supplemental indenture, which contain
April 2025 Notes were issued pursuant to the ADI Base Indenture, as supplemented by a supplemental indenture, which contain
covenants similar to those applicable to the 2045 Notes, events of default and other customary provisions. As of October 29,
covenants similar to those applicable to the 2045 Notes, events of default and other customary provisions. As of October 29,
2022, the Company was in compliance with these covenants.
2022, the Company was in compliance with these covenants.
In conjunction with the Acquisition, the Company recognized $500.0 million aggregate principal amount of Maxim’s
In conjunction with the Acquisition, the Company recognized $500.0 million aggregate principal amount of Maxim’s
3.375% senior unsecured and unsubordinated notes due March 15, 2023 (the Maxim 2023 Notes) and $500.0 million aggregate
3.375% senior unsecured and unsubordinated notes due March 15, 2023 (the Maxim 2023 Notes) and $500.0 million aggregate
principal amount of Maxim’s 3.45% senior unsecured and unsubordinated notes due June 15, 2027 (the Maxim 2027 Notes),
principal amount of Maxim’s 3.45% senior unsecured and unsubordinated notes due June 15, 2027 (the Maxim 2027 Notes),
which were recognized at fair value as of the Acquisition Date. On October 5, 2021, Maxim gave notice that it would redeem
which were recognized at fair value as of the Acquisition Date. On October 5, 2021, Maxim gave notice that it would redeem
the Maxim 2023 Notes, and in November 2021 (fiscal 2022), the Maxim 2023 Notes were redeemed for cash.
the Maxim 2023 Notes, and in November 2021 (fiscal 2022), the Maxim 2023 Notes were redeemed for cash.
On October 7, 2022, the Company completed an offer to exchange any and all outstanding Maxim 2027 Notes, for new
On October 7, 2022, the Company completed an offer to exchange any and all outstanding Maxim 2027 Notes, for new
3.450% Senior Notes due June 15, 2027 (the ADI 2027 Notes) to be issued by the Company and cash. Pursuant to the exchange
3.450% Senior Notes due June 15, 2027 (the ADI 2027 Notes) to be issued by the Company and cash. Pursuant to the exchange
offer, $440.2 million aggregate principal amount of the Maxim 2027 Notes were tendered and subsequently accepted for
offer, $440.2 million aggregate principal amount of the Maxim 2027 Notes were tendered and subsequently accepted for
exchange, and the Company retired and canceled all Maxim 2027 Notes accepted for exchange. In exchange for the tendered
exchange, and the Company retired and canceled all Maxim 2027 Notes accepted for exchange. In exchange for the tendered
Maxim 2027 Notes, the Company issued approximately $440.2 million aggregate principal amount of ADI 2027 Notes pursuant
Maxim 2027 Notes, the Company issued approximately $440.2 million aggregate principal amount of ADI 2027 Notes pursuant
to a private exchange offer exempt from, or not subject to, registration under the Securities Act of 1933, as amended and
to a private exchange offer exempt from, or not subject to, registration under the Securities Act of 1933, as amended and
$0.5 million in cash. The ADI 2027 Notes were issued pursuant to the ADI Base Indenture, as supplemented by a supplemental
$0.5 million in cash. The ADI 2027 Notes were issued pursuant to the ADI Base Indenture, as supplemented by a supplemental
indenture, which contain certain covenants similar to those applicable to the 2045 Notes, events of default and other customary
indenture, which contain certain covenants similar to those applicable to the 2045 Notes, events of default and other customary
provisions. The ADI 2027 Notes bear interest at a rate of 3.450% per annum, with semi-annual fixed interest payments due on
provisions. The ADI 2027 Notes bear interest at a rate of 3.450% per annum, with semi-annual fixed interest payments due on
June 15 and December 15 of each year, commencing on December 15, 2022 and will mature on June 15, 2027. As of October
June 15 and December 15 of each year, commencing on December 15, 2022 and will mature on June 15, 2027. As of October
29, 2022, the Company was in compliance with the covenants in the ADI 2027 Notes and the outstanding Maxim 2027 Notes.
29, 2022, the Company was in compliance with the covenants in the ADI 2027 Notes and the outstanding Maxim 2027 Notes.
The indenture and supplemental indentures with respect to the outstanding Maxim 2027 Notes have been modified to, among
The indenture and supplemental indentures with respect to the outstanding Maxim 2027 Notes have been modified to, among
other things, eliminate (i) substantially all of the restrictive covenants, (ii) certain of the events of default (other than for the
other things, eliminate (i) substantially all of the restrictive covenants, (ii) certain of the events of default (other than for the
failure to pay principal, premium or interest), (iii) the obligation to offer to repurchase the Maxim 2027 Notes upon certain
failure to pay principal, premium or interest), (iii) the obligation to offer to repurchase the Maxim 2027 Notes upon certain
change of control transactions and (iv) any restrictions on consolidating with or merging into any other person or conveying,
change of control transactions and (iv) any restrictions on consolidating with or merging into any other person or conveying,
transferring or leasing all or any of its properties and assets to any person. Following settlement of the exchange offer,
transferring or leasing all or any of its properties and assets to any person. Following settlement of the exchange offer,
$59.8 million aggregate principal amount of the Maxim 2027 Notes remain outstanding.
$59.8 million aggregate principal amount of the Maxim 2027 Notes remain outstanding.
On October 5, 2021, in an underwritten public offering, the Company issued $500.0 million aggregate principal amount of
On October 5, 2021, in an underwritten public offering, the Company issued $500.0 million aggregate principal amount of
floating rate senior notes due October 1, 2024 (the Floating Rate Notes), $750.0 million aggregate principal amount of 1.7%
floating rate senior notes due October 1, 2024 (the Floating Rate Notes), $750.0 million aggregate principal amount of 1.7%
sustainability-linked senior notes due October 1, 2028 (the Sustainability-Linked Senior Notes), $1.0 billion aggregate principal
sustainability-linked senior notes due October 1, 2028 (the Sustainability-Linked Senior Notes), $1.0 billion aggregate principal
amount of 2.1% senior notes due October 1, 2031 (the 2031 Notes), $750.0 million aggregate principal amount of 2.8% senior
amount of 2.1% senior notes due October 1, 2031 (the 2031 Notes), $750.0 million aggregate principal amount of 2.8% senior
notes due October 1, 2041 (the 2041 Notes), and $1.0 billion aggregate principal amount of 2.95% senior notes due October 1,
notes due October 1, 2041 (the 2041 Notes), and $1.0 billion aggregate principal amount of 2.95% senior notes due October 1,
2051 (the 2051 Notes, and, together with the Floating Rate Notes, the Sustainability-Linked Senior Notes, the 2031 Notes and
2051 (the 2051 Notes, and, together with the Floating Rate Notes, the Sustainability-Linked Senior Notes, the 2031 Notes and
the 2041 Notes, the Notes). The Floating Rate Notes bear interest at a floating annual rate equal to a benchmark rate, which
the 2041 Notes, the Notes). The Floating Rate Notes bear interest at a floating annual rate equal to a benchmark rate, which
initially is Compounded SOFR (as defined in the Supplemental Indenture) plus 25 basis points. As of October 29, 2022, the
initially is Compounded SOFR (as defined in the Supplemental Indenture) plus 25 basis points. As of October 29, 2022, the
interest rate on the Floating Rate Notes was 0.3% per annum. Interest payments on the Floating Rate Notes are due on January
interest rate on the Floating Rate Notes was 0.3% per annum. Interest payments on the Floating Rate Notes are due on January
1, April 1, July 1 and October 1 of each year, beginning on January 1, 2022. The Sustainability-Linked Senior Notes initially
1, April 1, July 1 and October 1 of each year, beginning on January 1, 2022. The Sustainability-Linked Senior Notes initially
bear interest at a rate of 1.7% per annum and are subject to an increase of an additional 30 basis points from April 1, 2026 to the
bear interest at a rate of 1.7% per annum and are subject to an increase of an additional 30 basis points from April 1, 2026 to the
maturity date unless the Sustainability Performance Target (as defined in the Sustainability-Linked Senior Notes) has been
maturity date unless the Sustainability Performance Target (as defined in the Sustainability-Linked Senior Notes) has been
satisfied. Semi-annual fixed interest payments on the Sustainability-Linked Senior Notes, the 2031 Notes, the 2041 Notes and
satisfied. Semi-annual fixed interest payments on the Sustainability-Linked Senior Notes, the 2031 Notes, the 2041 Notes and
the 2051 Notes are due on April 1 and October 1 of each year, beginning on April 1, 2022.
the 2051 Notes are due on April 1 and October 1 of each year, beginning on April 1, 2022.
At any time prior to August 1, 2028 in the case of the Sustainability-Linked Senior Notes, July 1, 2031 in the case of the
At any time prior to August 1, 2028 in the case of the Sustainability-Linked Senior Notes, July 1, 2031 in the case of the
2031 Notes, April 1, 2041 in the case of the 2041 Notes and April 1, 2051 in the case of the 2051 Notes (each, a Par Call Date),
2031 Notes, April 1, 2041 in the case of the 2041 Notes and April 1, 2051 in the case of the 2051 Notes (each, a Par Call Date),
the Company may, at its option, redeem some or all of the applicable series of Notes at a redemption price equal to the greater
the Company may, at its option, redeem some or all of the applicable series of Notes at a redemption price equal to the greater
of (i) 100% of the principal amount of such series of Notes being redeemed and (ii) the make-whole redemption price (as
of (i) 100% of the principal amount of such series of Notes being redeemed and (ii) the make-whole redemption price (as
described in the Supplemental Indenture). On and after the applicable Par Call Date, the Company may, at its option, redeem
described in the Supplemental Indenture). On and after the applicable Par Call Date, the Company may, at its option, redeem
some or all of the applicable series of Notes at a redemption price equal to 100% of the principal amount of the Notes being
some or all of the applicable series of Notes at a redemption price equal to 100% of the principal amount of the Notes being
redeemed. In each case, the Company will also pay the accrued and unpaid interest on the Notes being redeemed to, but
redeemed. In each case, the Company will also pay the accrued and unpaid interest on the Notes being redeemed to, but
excluding, the date of redemption. The Company may not redeem the Floating Rate Notes prior to their maturity. The Notes are
excluding, the date of redemption. The Company may not redeem the Floating Rate Notes prior to their maturity. The Notes are
unsecured and rank equally in right of payment with all of the Company’s other existing and future unsecured senior
unsecured and rank equally in right of payment with all of the Company’s other existing and future unsecured senior
indebtedness. Debt discounts and issuance costs will be amortized through interest expense over the term of the respective
indebtedness. Debt discounts and issuance costs will be amortized through interest expense over the term of the respective
Notes. The Notes were issued pursuant to an indenture, as supplemented by a supplemental indenture, and the indenture and
Notes. The Notes were issued pursuant to an indenture, as supplemented by a supplemental indenture, and the indenture and
supplemental indenture contain certain covenants, events of default and other customary provisions. As of October 29, 2022,
supplemental indenture contain certain covenants, events of default and other customary provisions. As of October 29, 2022,
the Company was in compliance with these covenants.
the Company was in compliance with these covenants.
On September 15, 2022, in an underwritten public offering, the Company issued $300.0 million aggregate principal
On September 15, 2022, in an underwritten public offering, the Company issued $300.0 million aggregate principal
amount of 4.250% senior notes due October 1, 2032 (the 2032 Notes) with semi-annual fixed interest payments due on April 1
amount of 4.250% senior notes due October 1, 2032 (the 2032 Notes) with semi-annual fixed interest payments due on April 1
and October 1 of each year, commencing April 1, 2023. The net proceeds of the offering were $296.1 million, after discounts
and October 1 of each year, commencing April 1, 2023. The net proceeds of the offering were $296.1 million, after discounts
and issuance costs. Prior to July 1, 2032 (three months prior to the maturity date), the Company may, at its option, redeem the
and issuance costs. Prior to July 1, 2032 (three months prior to the maturity date), the Company may, at its option, redeem the
2032 Notes, in whole or in part, at any time and from time to time, at a redemption price equal to the greater of: (1) (a) the sum
2032 Notes, in whole or in part, at any time and from time to time, at a redemption price equal to the greater of: (1) (a) the sum
of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date
of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date
(assuming the notes matured on July 1, 2032) on a semi-annual basis at the Treasury Rate plus 20 basis points less (b) interest
(assuming the notes matured on July 1, 2032) on a semi-annual basis at the Treasury Rate plus 20 basis points less (b) interest
accrued to the date of redemption, and (2) 100% of the principal amount of the notes to be redeemed, plus, in either case,
accrued to the date of redemption, and (2) 100% of the principal amount of the notes to be redeemed, plus, in either case,
accrued and unpaid interest thereon to the redemption date. On or after July 1, 2032, the Company may, at its option, redeem
accrued and unpaid interest thereon to the redemption date. On or after July 1, 2032, the Company may, at its option, redeem
the 2032 Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal
the 2032 Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal
amount of the 2032 Notes being redeemed plus accrued and unpaid interest thereon to the redemption date. The 2032 Notes are
amount of the 2032 Notes being redeemed plus accrued and unpaid interest thereon to the redemption date. The 2032 Notes are
unsecured and rank equally in right of payment with all of the Company’s other existing and future unsecured senior
unsecured and rank equally in right of payment with all of the Company’s other existing and future unsecured senior
indebtedness. The 2032 Notes were issued pursuant to the ADI Base Indenture, as supplemented by a supplemental indenture,
indebtedness. The 2032 Notes were issued pursuant to the ADI Base Indenture, as supplemented by a supplemental indenture,
which contain covenants similar to those applicable to the 2045 Notes, events of default and other customary provisions. As of
which contain covenants similar to those applicable to the 2045 Notes, events of default and other customary provisions. As of
October 29, 2022, the Company was in compliance with these covenants.
October 29, 2022, the Company was in compliance with these covenants.
The Company’s debt consisted of the following as of October 29, 2022 and October 30, 2021:
The Company’s debt consisted of the following as of October 29, 2022 and October 30, 2021:
October 29, 2022
October 29, 2022
October 30, 2021
October 30, 2021
Unamortized
Unamortized
discounts, debt
discounts, debt
issuance costs and
issuance costs and
fair value
fair value
adjustments
adjustments
Principal
Principal
Principal
Principal
Unamortized
Unamortized
discount and debt
discount and debt
issuance costs
issuance costs
$
$
$
$
$
$
$
$
500,000 $
500,000 $
400,000
400,000
900,000
900,000
59,788
59,788
440,212
440,212
750,000
750,000
1,000,000
1,000,000
300,000
300,000
144,278
144,278
750,000
750,000
332,587
332,587
1,000,000
1,000,000
1,973 $
1,973 $
2,145
2,145
5,258
5,258
(5,311)
(5,311)
(37,182)
(37,182)
8,795
8,795
12,381
12,381
3,822
3,822
1,696
1,696
12,868
12,868
3,787
3,787
18,008
18,008
500,000 $
500,000 $
400,000
400,000
900,000
900,000
500,000
500,000
—
—
750,000
750,000
1,000,000
1,000,000
—
—
144,278
144,278
750,000
750,000
332,587
332,587
1,000,000
1,000,000
6,576,865 $
6,576,865 $
28,240 $
28,240 $
6,276,865 $
6,276,865 $
—
—
— $
— $
—
—
500,000
500,000
— $
— $
500,000 $
500,000 $
6,576,865 $
6,576,865 $
28,240 $
28,240 $
6,776,865 $
6,776,865 $
3,091
3,091
3,029
3,029
6,534
6,534
(51,646)
(51,646)
—
—
10,419
10,419
13,956
13,956
—
—
1,814
1,814
13,690
13,690
3,952
3,952
18,814
18,814
23,653
23,653
(16,663)
(16,663)
(16,663)
(16,663)
6,990
6,990
2024 Notes, due October 2024
2024 Notes, due October 2024
2025 Notes, due April 2025
2025 Notes, due April 2025
2026 Notes, due December 2026
2026 Notes, due December 2026
Maxim 2027 Notes, due June 2027
Maxim 2027 Notes, due June 2027
2027 Notes, due June 2027
2027 Notes, due June 2027
2028 Notes, due October 2028
2028 Notes, due October 2028
2031 Notes, due October 2031
2031 Notes, due October 2031
2032 Notes, due October 2032
2032 Notes, due October 2032
2036 Notes, due December 2036
2036 Notes, due December 2036
2041 Notes, due October 2041
2041 Notes, due October 2041
2045 Notes, due December 2045
2045 Notes, due December 2045
2051 Notes, due October 2051
2051 Notes, due October 2051
Total Long-Term Debt
Total Long-Term Debt
Maxim 2023 Notes, due March 2023
Maxim 2023 Notes, due March 2023
Total Current Debt
Total Current Debt
Total Debt
Total Debt
15.
15.
Subsequent Events
Subsequent Events
On November 21, 2022, the Board of Directors of the Company declared a cash dividend of $0.76 per outstanding share
On November 21, 2022, the Board of Directors of the Company declared a cash dividend of $0.76 per outstanding share
of common stock. The dividend will be paid on December 15, 2022 to all shareholders of record at the close of business on
of common stock. The dividend will be paid on December 15, 2022 to all shareholders of record at the close of business on
December 5, 2022 and is expected to total approximately $387.1 million.
December 5, 2022 and is expected to total approximately $387.1 million.
83
83
84
84
ITEM 9.
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
FINANCIAL DISCLOSURE
(c) Attestation Report of the Registered Public Accounting Firm
(c) Attestation Report of the Registered Public Accounting Firm
Not applicable.
Not applicable.
ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our Chief Executive
(a) Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our Chief Executive
Officer and Chief Financial Officer, evaluated the effectiveness of Analog’s disclosure controls and procedures as of
Officer and Chief Financial Officer, evaluated the effectiveness of Analog’s disclosure controls and procedures as of
October 29, 2022. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the
October 29, 2022. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are
Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are
designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the
designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.
Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information
required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and
required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and
communicated to the company’s management, including its principal executive and principal financial officers, as appropriate
communicated to the company’s management, including its principal executive and principal financial officers, as appropriate
to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter
to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter
how well designed and operated, can provide only reasonable assurance of achieving their objectives and management
how well designed and operated, can provide only reasonable assurance of achieving their objectives and management
necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the
necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the
evaluation of our disclosure controls and procedures as of October 29, 2022, our Chief Executive Officer and Chief Financial
evaluation of our disclosure controls and procedures as of October 29, 2022, our Chief Executive Officer and Chief Financial
Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
(b) Management’s Report on Internal Control Over Financial Reporting.
(b) Management’s Report on Internal Control Over Financial Reporting.
Management’s Report on Internal Control Over Financial Reporting
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting.
Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange
Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange
Act of 1934 as a process designed by, or under the supervision of, the company’s principal executive and principal financial
Act of 1934 as a process designed by, or under the supervision of, the company’s principal executive and principal financial
officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance
officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles and includes those policies and procedures that:
with generally accepted accounting principles and includes those policies and procedures that:
•
•
•
•
•
•
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of the company;
dispositions of the assets of the company;
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company; and
company are being made only in accordance with authorizations of management and directors of the company; and
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the company’s assets that could have a material effect on the financial statements.
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial reporting as of October 29, 2022. In
Our management assessed the effectiveness of our internal control over financial reporting as of October 29, 2022. In
making this assessment, the company’s management used the criteria set forth by the Committee of Sponsoring Organizations
making this assessment, the company’s management used the criteria set forth by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO) in Internal Control-Integrated 2013 Framework.
of the Treadway Commission (COSO) in Internal Control-Integrated 2013 Framework.
Based on this assessment, our management concluded that, as of October 29, 2022, our internal control over financial
Based on this assessment, our management concluded that, as of October 29, 2022, our internal control over financial
reporting is effective based on those criteria.
reporting is effective based on those criteria.
Our independent registered public accounting firm that audited the financial statements included in this annual report has
Our independent registered public accounting firm that audited the financial statements included in this annual report has
issued an attestation report on our internal control over financial reporting. This report appears below.
issued an attestation report on our internal control over financial reporting. This report appears below.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Analog Devices, Inc.
To the Shareholders and the Board of Directors of Analog Devices, Inc.
Opinion on Internal Control Over Financial Reporting
Opinion on Internal Control Over Financial Reporting
We have audited Analog Devices, Inc.’s internal control over financial reporting as of October 29, 2022, based on criteria
We have audited Analog Devices, Inc.’s internal control over financial reporting as of October 29, 2022, based on criteria
established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (2013 framework) (the COSO criteria). In our opinion, Analog Devices, Inc. (the Company) maintained, in all
Commission (2013 framework) (the COSO criteria). In our opinion, Analog Devices, Inc. (the Company) maintained, in all
material respects, effective internal control over financial reporting as of October 29, 2022, based on the COSO criteria.
material respects, effective internal control over financial reporting as of October 29, 2022, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated balance sheets of Analog Devices, Inc. as of October 29, 2022 and October 30, 2021, the related
(PCAOB), the consolidated balance sheets of Analog Devices, Inc. as of October 29, 2022 and October 30, 2021, the related
consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in
consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in
the period ended October 29, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2)
the period ended October 29, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2)
and our report dated November 22, 2022 expressed an unqualified opinion thereon.
and our report dated November 22, 2022 expressed an unqualified opinion thereon.
Basis for Opinion
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report
on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control
on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control
over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be
over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects.
material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.
reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
/s/ Ernst & Young LLP
Boston, Massachusetts
Boston, Massachusetts
November 22, 2022
November 22, 2022
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ITEM 9.
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
(c) Attestation Report of the Registered Public Accounting Firm
(c) Attestation Report of the Registered Public Accounting Firm
FINANCIAL DISCLOSURE
FINANCIAL DISCLOSURE
Not applicable.
Not applicable.
ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our Chief Executive
(a) Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our Chief Executive
Officer and Chief Financial Officer, evaluated the effectiveness of Analog’s disclosure controls and procedures as of
Officer and Chief Financial Officer, evaluated the effectiveness of Analog’s disclosure controls and procedures as of
October 29, 2022. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the
October 29, 2022. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are
Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are
designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the
designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.
Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information
required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and
required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and
communicated to the company’s management, including its principal executive and principal financial officers, as appropriate
communicated to the company’s management, including its principal executive and principal financial officers, as appropriate
to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter
to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter
how well designed and operated, can provide only reasonable assurance of achieving their objectives and management
how well designed and operated, can provide only reasonable assurance of achieving their objectives and management
necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the
necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the
evaluation of our disclosure controls and procedures as of October 29, 2022, our Chief Executive Officer and Chief Financial
evaluation of our disclosure controls and procedures as of October 29, 2022, our Chief Executive Officer and Chief Financial
Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
(b) Management’s Report on Internal Control Over Financial Reporting.
(b) Management’s Report on Internal Control Over Financial Reporting.
Management’s Report on Internal Control Over Financial Reporting
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting.
Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange
Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange
Act of 1934 as a process designed by, or under the supervision of, the company’s principal executive and principal financial
Act of 1934 as a process designed by, or under the supervision of, the company’s principal executive and principal financial
officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance
officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles and includes those policies and procedures that:
with generally accepted accounting principles and includes those policies and procedures that:
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of the company;
dispositions of the assets of the company;
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company; and
company are being made only in accordance with authorizations of management and directors of the company; and
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the company’s assets that could have a material effect on the financial statements.
disposition of the company’s assets that could have a material effect on the financial statements.
•
•
•
•
•
•
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial reporting as of October 29, 2022. In
Our management assessed the effectiveness of our internal control over financial reporting as of October 29, 2022. In
making this assessment, the company’s management used the criteria set forth by the Committee of Sponsoring Organizations
making this assessment, the company’s management used the criteria set forth by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO) in Internal Control-Integrated 2013 Framework.
of the Treadway Commission (COSO) in Internal Control-Integrated 2013 Framework.
Based on this assessment, our management concluded that, as of October 29, 2022, our internal control over financial
Based on this assessment, our management concluded that, as of October 29, 2022, our internal control over financial
reporting is effective based on those criteria.
reporting is effective based on those criteria.
Our independent registered public accounting firm that audited the financial statements included in this annual report has
Our independent registered public accounting firm that audited the financial statements included in this annual report has
issued an attestation report on our internal control over financial reporting. This report appears below.
issued an attestation report on our internal control over financial reporting. This report appears below.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Analog Devices, Inc.
To the Shareholders and the Board of Directors of Analog Devices, Inc.
Opinion on Internal Control Over Financial Reporting
Opinion on Internal Control Over Financial Reporting
We have audited Analog Devices, Inc.’s internal control over financial reporting as of October 29, 2022, based on criteria
We have audited Analog Devices, Inc.’s internal control over financial reporting as of October 29, 2022, based on criteria
established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (2013 framework) (the COSO criteria). In our opinion, Analog Devices, Inc. (the Company) maintained, in all
Commission (2013 framework) (the COSO criteria). In our opinion, Analog Devices, Inc. (the Company) maintained, in all
material respects, effective internal control over financial reporting as of October 29, 2022, based on the COSO criteria.
material respects, effective internal control over financial reporting as of October 29, 2022, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated balance sheets of Analog Devices, Inc. as of October 29, 2022 and October 30, 2021, the related
(PCAOB), the consolidated balance sheets of Analog Devices, Inc. as of October 29, 2022 and October 30, 2021, the related
consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in
consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in
the period ended October 29, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2)
the period ended October 29, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2)
and our report dated November 22, 2022 expressed an unqualified opinion thereon.
and our report dated November 22, 2022 expressed an unqualified opinion thereon.
Basis for Opinion
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report
on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control
on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control
over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be
over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects.
material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.
reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
/s/ Ernst & Young LLP
Boston, Massachusetts
Boston, Massachusetts
November 22, 2022
November 22, 2022
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(d) Changes in Internal Controls over Financial Reporting. No change in our internal control over financial reporting (as
(d) Changes in Internal Controls over Financial Reporting. No change in our internal control over financial reporting (as
defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act) occurred during the fiscal quarter ended
defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act) occurred during the fiscal quarter ended
October 29, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial
October 29, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial
reporting.
reporting.
ITEM 9B. OTHER INFORMATION
ITEM 9B. OTHER INFORMATION
Not applicable.
Not applicable.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
Not applicable.
PART III
PART III
ITEM 10.
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information required by this item is contained in our 2023 proxy statement to be filed with the U.S. Securities and
Information required by this item is contained in our 2023 proxy statement to be filed with the U.S. Securities and
Exchange Commission (the SEC) within 120 days after October 29, 2022 and is incorporated herein by reference.
Exchange Commission (the SEC) within 120 days after October 29, 2022 and is incorporated herein by reference.
We have adopted a written code of business conduct and ethics that applies to our principal executive officer, principal
We have adopted a written code of business conduct and ethics that applies to our principal executive officer, principal
financial officer, principal accounting officer or controller, or persons performing similar functions and have posted it in the
financial officer, principal accounting officer or controller, or persons performing similar functions and have posted it in the
Corporate Governance section of our website which is located at www.analog.com. To the extent permitted by Nasdaq and
Corporate Governance section of our website which is located at www.analog.com. To the extent permitted by Nasdaq and
SEC regulations, we intend to satisfy any disclosure requirement under Item 5.05 of Form 8-K regarding any amendments to, or
SEC regulations, we intend to satisfy any disclosure requirement under Item 5.05 of Form 8-K regarding any amendments to, or
waivers from, our code of business conduct and ethics by posting such information on our website which is located at
waivers from, our code of business conduct and ethics by posting such information on our website which is located at
www.analog.com.
www.analog.com.
During fiscal 2022, we made no material change to the procedures by which shareholders may recommend nominees to
During fiscal 2022, we made no material change to the procedures by which shareholders may recommend nominees to
our Board of Directors, as described in our 2022 proxy statement.
our Board of Directors, as described in our 2022 proxy statement.
ITEM 11.
ITEM 11.
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
Information required by this item is contained in our 2023 proxy statement to be filed with the SEC within 120 days after
Information required by this item is contained in our 2023 proxy statement to be filed with the SEC within 120 days after
October 29, 2022 and is incorporated herein by reference.
October 29, 2022 and is incorporated herein by reference.
ITEM 12.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
RELATED STOCKHOLDER MATTERS
Information required by this item is contained in our 2023 proxy statement to be filed with the SEC within 120 days after
Information required by this item is contained in our 2023 proxy statement to be filed with the SEC within 120 days after
October 29, 2022 and is incorporated herein by reference.
October 29, 2022 and is incorporated herein by reference.
ITEM 13.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
INDEPENDENCE
Information required by this item is contained in our 2023 proxy statement to be filed with the SEC within 120 days after
Information required by this item is contained in our 2023 proxy statement to be filed with the SEC within 120 days after
October 29, 2022 and is incorporated herein by reference.
October 29, 2022 and is incorporated herein by reference.
ITEM 14.
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Our independent registered accounting firm is Ernst & Young, Boston, Massachusetts (PCAOB ID: 42).
Our independent registered accounting firm is Ernst & Young, Boston, Massachusetts (PCAOB ID: 42).
Information required by this item is contained in our 2023 proxy statement to be filed with the SEC within 120 days after
Information required by this item is contained in our 2023 proxy statement to be filed with the SEC within 120 days after
October 29, 2022 and is incorporated herein by reference.
October 29, 2022 and is incorporated herein by reference.
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(d) Changes in Internal Controls over Financial Reporting. No change in our internal control over financial reporting (as
(d) Changes in Internal Controls over Financial Reporting. No change in our internal control over financial reporting (as
defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act) occurred during the fiscal quarter ended
defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act) occurred during the fiscal quarter ended
October 29, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial
October 29, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial
reporting.
reporting.
ITEM 9B. OTHER INFORMATION
ITEM 9B. OTHER INFORMATION
Not applicable.
Not applicable.
Not applicable.
Not applicable.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
PART III
PART III
ITEM 10.
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information required by this item is contained in our 2023 proxy statement to be filed with the U.S. Securities and
Information required by this item is contained in our 2023 proxy statement to be filed with the U.S. Securities and
Exchange Commission (the SEC) within 120 days after October 29, 2022 and is incorporated herein by reference.
Exchange Commission (the SEC) within 120 days after October 29, 2022 and is incorporated herein by reference.
We have adopted a written code of business conduct and ethics that applies to our principal executive officer, principal
We have adopted a written code of business conduct and ethics that applies to our principal executive officer, principal
financial officer, principal accounting officer or controller, or persons performing similar functions and have posted it in the
financial officer, principal accounting officer or controller, or persons performing similar functions and have posted it in the
Corporate Governance section of our website which is located at www.analog.com. To the extent permitted by Nasdaq and
Corporate Governance section of our website which is located at www.analog.com. To the extent permitted by Nasdaq and
SEC regulations, we intend to satisfy any disclosure requirement under Item 5.05 of Form 8-K regarding any amendments to, or
SEC regulations, we intend to satisfy any disclosure requirement under Item 5.05 of Form 8-K regarding any amendments to, or
waivers from, our code of business conduct and ethics by posting such information on our website which is located at
waivers from, our code of business conduct and ethics by posting such information on our website which is located at
www.analog.com.
www.analog.com.
During fiscal 2022, we made no material change to the procedures by which shareholders may recommend nominees to
During fiscal 2022, we made no material change to the procedures by which shareholders may recommend nominees to
our Board of Directors, as described in our 2022 proxy statement.
our Board of Directors, as described in our 2022 proxy statement.
ITEM 11.
ITEM 11.
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
Information required by this item is contained in our 2023 proxy statement to be filed with the SEC within 120 days after
Information required by this item is contained in our 2023 proxy statement to be filed with the SEC within 120 days after
October 29, 2022 and is incorporated herein by reference.
October 29, 2022 and is incorporated herein by reference.
ITEM 12.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
RELATED STOCKHOLDER MATTERS
Information required by this item is contained in our 2023 proxy statement to be filed with the SEC within 120 days after
Information required by this item is contained in our 2023 proxy statement to be filed with the SEC within 120 days after
October 29, 2022 and is incorporated herein by reference.
October 29, 2022 and is incorporated herein by reference.
ITEM 13.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
INDEPENDENCE
Information required by this item is contained in our 2023 proxy statement to be filed with the SEC within 120 days after
Information required by this item is contained in our 2023 proxy statement to be filed with the SEC within 120 days after
October 29, 2022 and is incorporated herein by reference.
October 29, 2022 and is incorporated herein by reference.
ITEM 14.
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Our independent registered accounting firm is Ernst & Young, Boston, Massachusetts (PCAOB ID: 42).
Our independent registered accounting firm is Ernst & Young, Boston, Massachusetts (PCAOB ID: 42).
Information required by this item is contained in our 2023 proxy statement to be filed with the SEC within 120 days after
Information required by this item is contained in our 2023 proxy statement to be filed with the SEC within 120 days after
October 29, 2022 and is incorporated herein by reference.
October 29, 2022 and is incorporated herein by reference.
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PART IV
PART IV
Exhibit No.
Exhibit No.
Description
Description
ITEM 15.
ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following are filed as part of this Annual Report on Form 10-K:
(a) The following are filed as part of this Annual Report on Form 10-K:
1. Financial Statements
1. Financial Statements
The following consolidated financial statements are included in Item 8 of this Annual Report on Form 10-K:
The following consolidated financial statements are included in Item 8 of this Annual Report on Form 10-K:
—
—
Consolidated Statements of Income for the years ended October 29, 2022, October 30, 2021 and October 31, 2020
Consolidated Statements of Income for the years ended October 29, 2022, October 30, 2021 and October 31, 2020
—
—
Consolidated Statements of Comprehensive Income for the years ended October 29, 2022, October 30, 2021 and
Consolidated Statements of Comprehensive Income for the years ended October 29, 2022, October 30, 2021 and
October 31, 2020
October 31, 2020
—
—
Consolidated Balance Sheets as of October 29, 2022 and October 30, 2021
Consolidated Balance Sheets as of October 29, 2022 and October 30, 2021
—
—
Consolidated Statements of Shareholders’ Equity for the years ended October 29, 2022, October 30, 2021 and
Consolidated Statements of Shareholders’ Equity for the years ended October 29, 2022, October 30, 2021 and
October 31, 2020
October 31, 2020
—
—
Consolidated Statements of Cash Flows for the years ended October 29, 2022, October 30, 2021 and October 31, 2020
Consolidated Statements of Cash Flows for the years ended October 29, 2022, October 30, 2021 and October 31, 2020
2. Financial Statement Schedules
2. Financial Statement Schedules
Schedule II — Valuation and Qualifying Accounts
Schedule II — Valuation and Qualifying Accounts
All other schedules have been omitted since the required information is not present, or not present in amounts sufficient
All other schedules have been omitted since the required information is not present, or not present in amounts sufficient
to require submission of the schedule or because the information required is included in the Consolidated Financial Statements
to require submission of the schedule or because the information required is included in the Consolidated Financial Statements
or the Notes thereto.
or the Notes thereto.
3. Exhibits
3. Exhibits
Exhibit No.
2.1
Description
Description
Exhibit No.
2.1
Agreement and Plan of Merger, dated as of July 26, 2016, by and among Analog Devices, Inc., Linear
Agreement and Plan of Merger, dated as of July 26, 2016, by and among Analog Devices, Inc., Linear
Technology Corporation and Agreement and Plan of Merger, dated as of July 26, 2016, by and among Analog
Technology Corporation and Agreement and Plan of Merger, dated as of July 26, 2016, by and among Analog
Devices, Inc., Linear Technology Corporation and Tahoe Acquisition Corp., filed as exhibit 2.1 to the
Devices, Inc., Linear Technology Corporation and Tahoe Acquisition Corp., filed as exhibit 2.1 to the
Company’s Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on July 29, 2016 and
Company’s Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on July 29, 2016 and
incorporated herein by reference.
incorporated herein by reference.
2.2
Agreement and Plan of Merger, dated as of July 12, 2020, by and among Analog Devices, Inc., Maxim
Agreement and Plan of Merger, dated as of July 12, 2020, by and among Analog Devices, Inc., Maxim
Integrated Products, Inc. and Magneto Corp., filed as exhibit 2.1 to the Company’s Current Report on Form 8-K
Integrated Products, Inc. and Magneto Corp., filed as exhibit 2.1 to the Company’s Current Report on Form 8-K
(File No. 1-7819) as filed with the Commission on July 15, 2020 and incorporated herein by reference.
(File No. 1-7819) as filed with the Commission on July 15, 2020 and incorporated herein by reference.
2.2
3.1
3.2
3.3
4.1
4.2
4.3
4.4
3.1
Restated Articles of Organization of Analog Devices, Inc., as amended, filed as exhibit 3.1 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended May 3, 2008 (File No. 1-7819) as filed with the
Commission on May 20, 2008 and incorporated herein by reference.
Restated Articles of Organization of Analog Devices, Inc., as amended, filed as exhibit 3.1 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended May 3, 2008 (File No. 1-7819) as filed with the
Commission on May 20, 2008 and incorporated herein by reference.
Amendment to Restated Articles of Organization of Analog Devices, Inc., filed as exhibit 3.1 to the Company's
3.2
Amendment to Restated Articles of Organization of Analog Devices, Inc., filed as exhibit 3.1 to the Company's
Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on December 8, 2008 and
Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on December 8, 2008 and
incorporated herein by reference.
incorporated herein by reference.
3.3
Amended and Restated By-Laws of Analog Devices, Inc., filed as exhibit 3.1 to the Company's Current Report
on Form 8-K (File No. 1-7819) as filed with the Commission on December 17, 2018 and incorporated herein by
reference.
Amended and Restated By-Laws of Analog Devices, Inc., filed as exhibit 3.1 to the Company's Current Report
on Form 8-K (File No. 1-7819) as filed with the Commission on December 17, 2018 and incorporated herein by
reference.
4.1
Indenture, dated as of June 10, 2010, between Maxim Integrated Products, Inc. and Wells Fargo Bank, National
Association, as trustee, filed as exhibit 4.4 to Maxim Integrated Products, Inc.'s Registration Statement on Form
S-3 (File No. 1-34192) as filed with the Commission on June 10, 2010 and incorporated herein by reference.
Indenture, dated as of June 10, 2010, between Maxim Integrated Products, Inc. and Wells Fargo Bank, National
Association, as trustee, filed as exhibit 4.4 to Maxim Integrated Products, Inc.'s Registration Statement on Form
S-3 (File No. 1-34192) as filed with the Commission on June 10, 2010 and incorporated herein by reference.
Second Supplemental Indenture, dated as of March 18, 2013, between Maxim Integrated Products, Inc. and
4.2
Second Supplemental Indenture, dated as of March 18, 2013, between Maxim Integrated Products, Inc. and
Wells Fargo Bank, National Association, as trustee (including the form of note contained therein), filed as
Wells Fargo Bank, National Association, as trustee (including the form of note contained therein), filed as
exhibit 4.1 to Maxim Integrated Products, Inc.'s Current Report on Form 8-K (File No. 1-34192) as filed with the
exhibit 4.1 to Maxim Integrated Products, Inc.'s Current Report on Form 8-K (File No. 1-34192) as filed with the
Commission on March 21, 2013 and incorporated herein by reference.
Commission on March 21, 2013 and incorporated herein by reference.
4.3
Indenture, dated as of June 3, 2013, by and between Analog Devices, Inc. and The Bank of New York Mellon
Indenture, dated as of June 3, 2013, by and between Analog Devices, Inc. and The Bank of New York Mellon
Trust Company, N.A., as trustee, filed as exhibit 4.1 to the Company's Current Report on Form 8-K (File No.
Trust Company, N.A., as trustee, filed as exhibit 4.1 to the Company's Current Report on Form 8-K (File No.
1-7819) as filed with the Commission on June 3, 2013 and incorporated herein by reference.
1-7819) as filed with the Commission on June 3, 2013 and incorporated herein by reference.
4.4
Supplemental Indenture, dated as of June 3, 2013, by and between Analog Devices, Inc. and The Bank of New
York Mellon Trust Company, N.A., as trustee (including the form of note contained therein), filed as exhibit 4.2
to the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on June 3, 2013
and incorporated herein by reference.
Supplemental Indenture, dated as of June 3, 2013, by and between Analog Devices, Inc. and The Bank of New
York Mellon Trust Company, N.A., as trustee (including the form of note contained therein), filed as exhibit 4.2
to the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on June 3, 2013
and incorporated herein by reference.
89
89
90
4.5
4.6
4.5
Supplemental Indenture, dated December 14, 2015, between Analog Devices, Inc. and The Bank of New York
Supplemental Indenture, dated December 14, 2015, between Analog Devices, Inc. and The Bank of New York
Mellon Trust Company, N.A., as trustee (including the forms of note contained therein), filed as exhibit 4.2 to
Mellon Trust Company, N.A., as trustee (including the forms of note contained therein), filed as exhibit 4.2 to
the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on December 14,
the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on December 14,
2015 and incorporated herein by reference.
2015 and incorporated herein by reference.
4.6
Supplemental Indenture, dated December 5, 2016, between Analog Devices, Inc. and The Bank of New York
Supplemental Indenture, dated December 5, 2016, between Analog Devices, Inc. and The Bank of New York
Mellon Trust Company, N.A., as trustee (including the forms of note contained therein), filed as exhibit 4.2 to
Mellon Trust Company, N.A., as trustee (including the forms of note contained therein), filed as exhibit 4.2 to
the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on December 5,
the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on December 5,
2016 and incorporated herein by reference.
2016 and incorporated herein by reference.
4.7
4.7
Fourth Supplemental Indenture, dated as of June 15, 2017, between Maxim Integrated Products, Inc. and Wells
Fourth Supplemental Indenture, dated as of June 15, 2017, between Maxim Integrated Products, Inc. and Wells
Fargo Bank, National Association, as trustee (including the form of note contained therein), filed as exhibit 4.1
Fargo Bank, National Association, as trustee (including the form of note contained therein), filed as exhibit 4.1
to Maxim Integrated Products, Inc.'s Current Report on Form 8-K (File No. 1-34192) as filed with the
to Maxim Integrated Products, Inc.'s Current Report on Form 8-K (File No. 1-34192) as filed with the
Commission on June 20, 2017 and incorporated herein by reference.
Commission on June 20, 2017 and incorporated herein by reference.
4.8
4.8
Supplemental Indenture, dated March 12, 2018, between Analog Devices, Inc. and The Bank of New York
Supplemental Indenture, dated March 12, 2018, between Analog Devices, Inc. and The Bank of New York
Mellon Trust Company, N.A., as trustee (including the forms of note contained therein), filed as exhibit 4.2 to
Mellon Trust Company, N.A., as trustee (including the forms of note contained therein), filed as exhibit 4.2 to
the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on March 12, 2018
the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on March 12, 2018
and incorporated herein by reference.
and incorporated herein by reference.
4.9
4.9
Supplemental Indenture, dated April 8, 2020, between Analog Devices, Inc. and The Bank of New York Mellon
Supplemental Indenture, dated April 8, 2020, between Analog Devices, Inc. and The Bank of New York Mellon
Trust Company, N.A., as trustee (including the form of note contained therein), filed as exhibit 4.2 to the
Trust Company, N.A., as trustee (including the form of note contained therein), filed as exhibit 4.2 to the
Company’s Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on April 8, 2020 and
Company’s Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on April 8, 2020 and
incorporated herein by reference.
incorporated herein by reference.
4.10
4.10
Supplemental Indenture, dated October 5, 2021, between Analog Devices, Inc. and The Bank of New York
Supplemental Indenture, dated October 5, 2021, between Analog Devices, Inc. and The Bank of New York
Mellon Trust Company, N.A., as trustee (including the forms of note contained therein), filed as exhibit 4.2 to
Mellon Trust Company, N.A., as trustee (including the forms of note contained therein), filed as exhibit 4.2 to
the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on October 5, 2021
the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on October 5, 2021
and incorporated herein by reference.
and incorporated herein by reference.
4.11
4.11
Supplemental Indenture, dated September 15, 2022, between Analog Devices, Inc. and The Bank of New York
Supplemental Indenture, dated September 15, 2022, between Analog Devices, Inc. and The Bank of New York
Mellon Trust Company, N.A., as trustee (including the form of note contained therein), filed as exhibit 4.2 to the
Mellon Trust Company, N.A., as trustee (including the form of note contained therein), filed as exhibit 4.2 to the
Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on September 15, 2022
Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on September 15, 2022
and incorporated herein by reference.
and incorporated herein by reference.
4.12
4.12
Supplemental Indenture, dated as of October 7, 2022, between Analog Devices, Inc. and The Bank of New York
Supplemental Indenture, dated as of October 7, 2022, between Analog Devices, Inc. and The Bank of New York
Mellon Trust Company, N.A., as trustee (including the form of note contained therein), filed as exhibit 4.2 to the
Mellon Trust Company, N.A., as trustee (including the form of note contained therein), filed as exhibit 4.2 to the
Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on October 7, 2022 and
Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on October 7, 2022 and
incorporated herein by reference.
incorporated herein by reference.
4.13
4.13
Fifth Supplemental Indenture, dated as of October 7, 2022, between Maxim Integrated Products, Inc. and
Fifth Supplemental Indenture, dated as of October 7, 2022, between Maxim Integrated Products, Inc. and
Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as trustee, filed
Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as trustee, filed
as exhibit 4.4 to the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on
as exhibit 4.4 to the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on
October 7, 2022 and incorporated herein by reference.
October 7, 2022 and incorporated herein by reference.
4.14
4.14
Registration Rights Agreement, dated as of October 7, 2022, between Analog Devices, Inc. and TD Securities
Registration Rights Agreement, dated as of October 7, 2022, between Analog Devices, Inc. and TD Securities
(USA) LLC. filed as exhibit 4.5 to the Company's Current Report on Form 8-K (File No. 1-7819) as filed with
(USA) LLC. filed as exhibit 4.5 to the Company's Current Report on Form 8-K (File No. 1-7819) as filed with
the Commission on October 7, 2022, and incorporated herein by reference.
the Commission on October 7, 2022, and incorporated herein by reference.
4.15
4.15
Description of the Registrant's Securities, filed as exhibit 4.6 to the Company's Annual Report on Form 10-K for
Description of the Registrant's Securities, filed as exhibit 4.6 to the Company's Annual Report on Form 10-K for
the fiscal year ended November 2, 2019 (File No. 1-7819) as filed with the Commission on November 26, 2019
the fiscal year ended November 2, 2019 (File No. 1-7819) as filed with the Commission on November 26, 2019
and incorporated herein by reference.
and incorporated herein by reference.
*10.1
*10.1
Analog Devices, Inc. Amended and Restated Deferred Compensation Plan, filed as exhibit 10.1 to the
Analog Devices, Inc. Amended and Restated Deferred Compensation Plan, filed as exhibit 10.1 to the
Company's Current Report on Form 8-K as filed with the Commission on December 8, 2008 (File No. 1-7819)
Company's Current Report on Form 8-K as filed with the Commission on December 8, 2008 (File No. 1-7819)
and incorporated herein by reference.
and incorporated herein by reference.
*10.2
*10.2
First Amendment to the Analog Devices, Inc. Amended and Restated Deferred Compensation Plan, filed as
First Amendment to the Analog Devices, Inc. Amended and Restated Deferred Compensation Plan, filed as
exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 30, 2011 (File
exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 30, 2011 (File
No. 1-7819) as filed with the Commission on August 16, 2011 and incorporated herein by reference.
No. 1-7819) as filed with the Commission on August 16, 2011 and incorporated herein by reference.
*10.3
*10.3
Second Amendment to the Analog Devices, Inc. Amended and Restated Deferred Compensation Plan, filed as
Second Amendment to the Analog Devices, Inc. Amended and Restated Deferred Compensation Plan, filed as
exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended August 1, 2015 (File
exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended August 1, 2015 (File
No. 1-7819) as filed with the Commission on August 18, 2015 and incorporated herein by reference.
No. 1-7819) as filed with the Commission on August 18, 2015 and incorporated herein by reference.
*10.4
*10.4
Third Amendment to the Analog Devices, Inc. Amended and Restated Deferred Compensation Plan, filed as
Third Amendment to the Analog Devices, Inc. Amended and Restated Deferred Compensation Plan, filed as
exhibit 10.6 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 29, 2017
exhibit 10.6 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 29, 2017
(File No. 1-7819) as filed with the Commission on August 30, 2017 and incorporated herein by reference.
(File No. 1-7819) as filed with the Commission on August 30, 2017 and incorporated herein by reference.
*10.5
*10.5
Fourth Amendment to the Analog Devices, Inc. Amended and Restated Deferred Compensation Plan, filed as
Fourth Amendment to the Analog Devices, Inc. Amended and Restated Deferred Compensation Plan, filed as
exhibit 10.5 to the Company's Annual Report on Form 10-K for the fiscal year ended November 2, 2019 (File
exhibit 10.5 to the Company's Annual Report on Form 10-K for the fiscal year ended November 2, 2019 (File
No. 1-7819) as filed with the Commission on November 26, 2019 and incorporated herein by reference.
No. 1-7819) as filed with the Commission on November 26, 2019 and incorporated herein by reference.
*10.6
*10.6
Fifth Amendment to the Analog Devices, Inc. Amended and Restate Deferred Compensation Plan, filed as
Fifth Amendment to the Analog Devices, Inc. Amended and Restate Deferred Compensation Plan, filed as
exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2021 (File
exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2021 (File
No. 1-7819) as filed with the Commission on August 18, 2021 and incorporated herein by reference.
No. 1-7819) as filed with the Commission on August 18, 2021 and incorporated herein by reference.
PART IV
PART IV
ITEM 15.
ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following are filed as part of this Annual Report on Form 10-K:
(a) The following are filed as part of this Annual Report on Form 10-K:
1. Financial Statements
1. Financial Statements
The following consolidated financial statements are included in Item 8 of this Annual Report on Form 10-K:
The following consolidated financial statements are included in Item 8 of this Annual Report on Form 10-K:
—
—
Consolidated Statements of Income for the years ended October 29, 2022, October 30, 2021 and October 31, 2020
Consolidated Statements of Income for the years ended October 29, 2022, October 30, 2021 and October 31, 2020
—
—
Consolidated Statements of Comprehensive Income for the years ended October 29, 2022, October 30, 2021 and
Consolidated Statements of Comprehensive Income for the years ended October 29, 2022, October 30, 2021 and
October 31, 2020
October 31, 2020
October 31, 2020
October 31, 2020
—
—
Consolidated Balance Sheets as of October 29, 2022 and October 30, 2021
Consolidated Balance Sheets as of October 29, 2022 and October 30, 2021
—
—
Consolidated Statements of Shareholders’ Equity for the years ended October 29, 2022, October 30, 2021 and
Consolidated Statements of Shareholders’ Equity for the years ended October 29, 2022, October 30, 2021 and
—
—
Consolidated Statements of Cash Flows for the years ended October 29, 2022, October 30, 2021 and October 31, 2020
Consolidated Statements of Cash Flows for the years ended October 29, 2022, October 30, 2021 and October 31, 2020
2. Financial Statement Schedules
2. Financial Statement Schedules
Schedule II — Valuation and Qualifying Accounts
Schedule II — Valuation and Qualifying Accounts
All other schedules have been omitted since the required information is not present, or not present in amounts sufficient
All other schedules have been omitted since the required information is not present, or not present in amounts sufficient
to require submission of the schedule or because the information required is included in the Consolidated Financial Statements
to require submission of the schedule or because the information required is included in the Consolidated Financial Statements
or the Notes thereto.
or the Notes thereto.
3. Exhibits
3. Exhibits
Exhibit No.
Exhibit No.
Description
Description
2.1
2.1
Agreement and Plan of Merger, dated as of July 26, 2016, by and among Analog Devices, Inc., Linear
Agreement and Plan of Merger, dated as of July 26, 2016, by and among Analog Devices, Inc., Linear
Technology Corporation and Agreement and Plan of Merger, dated as of July 26, 2016, by and among Analog
Technology Corporation and Agreement and Plan of Merger, dated as of July 26, 2016, by and among Analog
Devices, Inc., Linear Technology Corporation and Tahoe Acquisition Corp., filed as exhibit 2.1 to the
Devices, Inc., Linear Technology Corporation and Tahoe Acquisition Corp., filed as exhibit 2.1 to the
Company’s Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on July 29, 2016 and
Company’s Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on July 29, 2016 and
incorporated herein by reference.
incorporated herein by reference.
2.2
2.2
Agreement and Plan of Merger, dated as of July 12, 2020, by and among Analog Devices, Inc., Maxim
Agreement and Plan of Merger, dated as of July 12, 2020, by and among Analog Devices, Inc., Maxim
Integrated Products, Inc. and Magneto Corp., filed as exhibit 2.1 to the Company’s Current Report on Form 8-K
Integrated Products, Inc. and Magneto Corp., filed as exhibit 2.1 to the Company’s Current Report on Form 8-K
(File No. 1-7819) as filed with the Commission on July 15, 2020 and incorporated herein by reference.
(File No. 1-7819) as filed with the Commission on July 15, 2020 and incorporated herein by reference.
3.1
3.1
Restated Articles of Organization of Analog Devices, Inc., as amended, filed as exhibit 3.1 to the Company's
Restated Articles of Organization of Analog Devices, Inc., as amended, filed as exhibit 3.1 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended May 3, 2008 (File No. 1-7819) as filed with the
Quarterly Report on Form 10-Q for the fiscal quarter ended May 3, 2008 (File No. 1-7819) as filed with the
Commission on May 20, 2008 and incorporated herein by reference.
Commission on May 20, 2008 and incorporated herein by reference.
3.2
3.2
Amendment to Restated Articles of Organization of Analog Devices, Inc., filed as exhibit 3.1 to the Company's
Amendment to Restated Articles of Organization of Analog Devices, Inc., filed as exhibit 3.1 to the Company's
Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on December 8, 2008 and
Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on December 8, 2008 and
incorporated herein by reference.
incorporated herein by reference.
3.3
Amended and Restated By-Laws of Analog Devices, Inc., filed as exhibit 3.1 to the Company's Current Report
Amended and Restated By-Laws of Analog Devices, Inc., filed as exhibit 3.1 to the Company's Current Report
on Form 8-K (File No. 1-7819) as filed with the Commission on December 17, 2018 and incorporated herein by
on Form 8-K (File No. 1-7819) as filed with the Commission on December 17, 2018 and incorporated herein by
reference.
reference.
4.1
Indenture, dated as of June 10, 2010, between Maxim Integrated Products, Inc. and Wells Fargo Bank, National
Indenture, dated as of June 10, 2010, between Maxim Integrated Products, Inc. and Wells Fargo Bank, National
Association, as trustee, filed as exhibit 4.4 to Maxim Integrated Products, Inc.'s Registration Statement on Form
Association, as trustee, filed as exhibit 4.4 to Maxim Integrated Products, Inc.'s Registration Statement on Form
S-3 (File No. 1-34192) as filed with the Commission on June 10, 2010 and incorporated herein by reference.
S-3 (File No. 1-34192) as filed with the Commission on June 10, 2010 and incorporated herein by reference.
4.2
Second Supplemental Indenture, dated as of March 18, 2013, between Maxim Integrated Products, Inc. and
Second Supplemental Indenture, dated as of March 18, 2013, between Maxim Integrated Products, Inc. and
Wells Fargo Bank, National Association, as trustee (including the form of note contained therein), filed as
Wells Fargo Bank, National Association, as trustee (including the form of note contained therein), filed as
exhibit 4.1 to Maxim Integrated Products, Inc.'s Current Report on Form 8-K (File No. 1-34192) as filed with the
exhibit 4.1 to Maxim Integrated Products, Inc.'s Current Report on Form 8-K (File No. 1-34192) as filed with the
Commission on March 21, 2013 and incorporated herein by reference.
Commission on March 21, 2013 and incorporated herein by reference.
4.3
Indenture, dated as of June 3, 2013, by and between Analog Devices, Inc. and The Bank of New York Mellon
Indenture, dated as of June 3, 2013, by and between Analog Devices, Inc. and The Bank of New York Mellon
Trust Company, N.A., as trustee, filed as exhibit 4.1 to the Company's Current Report on Form 8-K (File No.
Trust Company, N.A., as trustee, filed as exhibit 4.1 to the Company's Current Report on Form 8-K (File No.
1-7819) as filed with the Commission on June 3, 2013 and incorporated herein by reference.
1-7819) as filed with the Commission on June 3, 2013 and incorporated herein by reference.
4.4
Supplemental Indenture, dated as of June 3, 2013, by and between Analog Devices, Inc. and The Bank of New
Supplemental Indenture, dated as of June 3, 2013, by and between Analog Devices, Inc. and The Bank of New
York Mellon Trust Company, N.A., as trustee (including the form of note contained therein), filed as exhibit 4.2
York Mellon Trust Company, N.A., as trustee (including the form of note contained therein), filed as exhibit 4.2
to the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on June 3, 2013
to the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on June 3, 2013
and incorporated herein by reference.
and incorporated herein by reference.
3.3
4.1
4.2
4.3
4.4
Exhibit No.
4.5
Exhibit No.
4.5
Description
Supplemental Indenture, dated December 14, 2015, between Analog Devices, Inc. and The Bank of New York
Mellon Trust Company, N.A., as trustee (including the forms of note contained therein), filed as exhibit 4.2 to
the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on December 14,
2015 and incorporated herein by reference.
Description
Supplemental Indenture, dated December 14, 2015, between Analog Devices, Inc. and The Bank of New York
Mellon Trust Company, N.A., as trustee (including the forms of note contained therein), filed as exhibit 4.2 to
the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on December 14,
2015 and incorporated herein by reference.
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13
4.14
4.15
*10.1
*10.2
*10.3
*10.4
*10.5
*10.6
4.6
Supplemental Indenture, dated December 5, 2016, between Analog Devices, Inc. and The Bank of New York
Mellon Trust Company, N.A., as trustee (including the forms of note contained therein), filed as exhibit 4.2 to
the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on December 5,
2016 and incorporated herein by reference.
Supplemental Indenture, dated December 5, 2016, between Analog Devices, Inc. and The Bank of New York
Mellon Trust Company, N.A., as trustee (including the forms of note contained therein), filed as exhibit 4.2 to
the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on December 5,
2016 and incorporated herein by reference.
4.7
Fourth Supplemental Indenture, dated as of June 15, 2017, between Maxim Integrated Products, Inc. and Wells
Fourth Supplemental Indenture, dated as of June 15, 2017, between Maxim Integrated Products, Inc. and Wells
Fargo Bank, National Association, as trustee (including the form of note contained therein), filed as exhibit 4.1
Fargo Bank, National Association, as trustee (including the form of note contained therein), filed as exhibit 4.1
to Maxim Integrated Products, Inc.'s Current Report on Form 8-K (File No. 1-34192) as filed with the
to Maxim Integrated Products, Inc.'s Current Report on Form 8-K (File No. 1-34192) as filed with the
Commission on June 20, 2017 and incorporated herein by reference.
Commission on June 20, 2017 and incorporated herein by reference.
4.8
Supplemental Indenture, dated March 12, 2018, between Analog Devices, Inc. and The Bank of New York
Mellon Trust Company, N.A., as trustee (including the forms of note contained therein), filed as exhibit 4.2 to
the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on March 12, 2018
and incorporated herein by reference.
Supplemental Indenture, dated March 12, 2018, between Analog Devices, Inc. and The Bank of New York
Mellon Trust Company, N.A., as trustee (including the forms of note contained therein), filed as exhibit 4.2 to
the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on March 12, 2018
and incorporated herein by reference.
4.9
Supplemental Indenture, dated April 8, 2020, between Analog Devices, Inc. and The Bank of New York Mellon
Supplemental Indenture, dated April 8, 2020, between Analog Devices, Inc. and The Bank of New York Mellon
Trust Company, N.A., as trustee (including the form of note contained therein), filed as exhibit 4.2 to the
Trust Company, N.A., as trustee (including the form of note contained therein), filed as exhibit 4.2 to the
Company’s Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on April 8, 2020 and
Company’s Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on April 8, 2020 and
incorporated herein by reference.
incorporated herein by reference.
Supplemental Indenture, dated October 5, 2021, between Analog Devices, Inc. and The Bank of New York
Supplemental Indenture, dated October 5, 2021, between Analog Devices, Inc. and The Bank of New York
Mellon Trust Company, N.A., as trustee (including the forms of note contained therein), filed as exhibit 4.2 to
Mellon Trust Company, N.A., as trustee (including the forms of note contained therein), filed as exhibit 4.2 to
the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on October 5, 2021
the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on October 5, 2021
and incorporated herein by reference.
and incorporated herein by reference.
Supplemental Indenture, dated September 15, 2022, between Analog Devices, Inc. and The Bank of New York
Supplemental Indenture, dated September 15, 2022, between Analog Devices, Inc. and The Bank of New York
Mellon Trust Company, N.A., as trustee (including the form of note contained therein), filed as exhibit 4.2 to the
Mellon Trust Company, N.A., as trustee (including the form of note contained therein), filed as exhibit 4.2 to the
Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on September 15, 2022
Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on September 15, 2022
and incorporated herein by reference.
and incorporated herein by reference.
Supplemental Indenture, dated as of October 7, 2022, between Analog Devices, Inc. and The Bank of New York
Supplemental Indenture, dated as of October 7, 2022, between Analog Devices, Inc. and The Bank of New York
Mellon Trust Company, N.A., as trustee (including the form of note contained therein), filed as exhibit 4.2 to the
Mellon Trust Company, N.A., as trustee (including the form of note contained therein), filed as exhibit 4.2 to the
Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on October 7, 2022 and
Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on October 7, 2022 and
incorporated herein by reference.
incorporated herein by reference.
Fifth Supplemental Indenture, dated as of October 7, 2022, between Maxim Integrated Products, Inc. and
Fifth Supplemental Indenture, dated as of October 7, 2022, between Maxim Integrated Products, Inc. and
Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as trustee, filed
Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as trustee, filed
as exhibit 4.4 to the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on
as exhibit 4.4 to the Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on
October 7, 2022 and incorporated herein by reference.
October 7, 2022 and incorporated herein by reference.
4.10
4.11
4.12
4.13
4.14
Registration Rights Agreement, dated as of October 7, 2022, between Analog Devices, Inc. and TD Securities
(USA) LLC. filed as exhibit 4.5 to the Company's Current Report on Form 8-K (File No. 1-7819) as filed with
the Commission on October 7, 2022, and incorporated herein by reference.
Registration Rights Agreement, dated as of October 7, 2022, between Analog Devices, Inc. and TD Securities
(USA) LLC. filed as exhibit 4.5 to the Company's Current Report on Form 8-K (File No. 1-7819) as filed with
the Commission on October 7, 2022, and incorporated herein by reference.
4.15
Description of the Registrant's Securities, filed as exhibit 4.6 to the Company's Annual Report on Form 10-K for
Description of the Registrant's Securities, filed as exhibit 4.6 to the Company's Annual Report on Form 10-K for
the fiscal year ended November 2, 2019 (File No. 1-7819) as filed with the Commission on November 26, 2019
the fiscal year ended November 2, 2019 (File No. 1-7819) as filed with the Commission on November 26, 2019
and incorporated herein by reference.
and incorporated herein by reference.
Analog Devices, Inc. Amended and Restated Deferred Compensation Plan, filed as exhibit 10.1 to the
Analog Devices, Inc. Amended and Restated Deferred Compensation Plan, filed as exhibit 10.1 to the
Company's Current Report on Form 8-K as filed with the Commission on December 8, 2008 (File No. 1-7819)
Company's Current Report on Form 8-K as filed with the Commission on December 8, 2008 (File No. 1-7819)
and incorporated herein by reference.
and incorporated herein by reference.
*10.1
*10.2
First Amendment to the Analog Devices, Inc. Amended and Restated Deferred Compensation Plan, filed as
exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 30, 2011 (File
No. 1-7819) as filed with the Commission on August 16, 2011 and incorporated herein by reference.
First Amendment to the Analog Devices, Inc. Amended and Restated Deferred Compensation Plan, filed as
exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 30, 2011 (File
No. 1-7819) as filed with the Commission on August 16, 2011 and incorporated herein by reference.
*10.3
Second Amendment to the Analog Devices, Inc. Amended and Restated Deferred Compensation Plan, filed as
exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended August 1, 2015 (File
No. 1-7819) as filed with the Commission on August 18, 2015 and incorporated herein by reference.
Second Amendment to the Analog Devices, Inc. Amended and Restated Deferred Compensation Plan, filed as
exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended August 1, 2015 (File
No. 1-7819) as filed with the Commission on August 18, 2015 and incorporated herein by reference.
*10.4
Third Amendment to the Analog Devices, Inc. Amended and Restated Deferred Compensation Plan, filed as
exhibit 10.6 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 29, 2017
(File No. 1-7819) as filed with the Commission on August 30, 2017 and incorporated herein by reference.
Third Amendment to the Analog Devices, Inc. Amended and Restated Deferred Compensation Plan, filed as
exhibit 10.6 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 29, 2017
(File No. 1-7819) as filed with the Commission on August 30, 2017 and incorporated herein by reference.
*10.5
Fourth Amendment to the Analog Devices, Inc. Amended and Restated Deferred Compensation Plan, filed as
exhibit 10.5 to the Company's Annual Report on Form 10-K for the fiscal year ended November 2, 2019 (File
No. 1-7819) as filed with the Commission on November 26, 2019 and incorporated herein by reference.
Fourth Amendment to the Analog Devices, Inc. Amended and Restated Deferred Compensation Plan, filed as
exhibit 10.5 to the Company's Annual Report on Form 10-K for the fiscal year ended November 2, 2019 (File
No. 1-7819) as filed with the Commission on November 26, 2019 and incorporated herein by reference.
*10.6
Fifth Amendment to the Analog Devices, Inc. Amended and Restate Deferred Compensation Plan, filed as
exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2021 (File
No. 1-7819) as filed with the Commission on August 18, 2021 and incorporated herein by reference.
Fifth Amendment to the Analog Devices, Inc. Amended and Restate Deferred Compensation Plan, filed as
exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2021 (File
No. 1-7819) as filed with the Commission on August 18, 2021 and incorporated herein by reference.
89
89
90
Exhibit No.
*10.7
Exhibit No.
*10.7
Description
Description
Description
Description
Trust Agreement for Deferred Compensation Plan dated as of October 1, 2003 between Analog Devices, Inc.
and Fidelity Management Trust Company, filed as exhibit 10.28 to the Company's Annual Report on Form 10-K
for the fiscal year ended November 1, 2003 (File No. 1-7819) as filed with the Commission on December 23,
2003 and incorporated herein by reference.
Trust Agreement for Deferred Compensation Plan dated as of October 1, 2003 between Analog Devices, Inc.
and Fidelity Management Trust Company, filed as exhibit 10.28 to the Company's Annual Report on Form 10-K
for the fiscal year ended November 1, 2003 (File No. 1-7819) as filed with the Commission on December 23,
2003 and incorporated herein by reference.
*10.8
*10.9
*10.10
*10.11
*10.12
*10.13
*10.14
*10.15
*10.16
*10.17
*10.18
*10.19
*10.20
*10.21
*10.22
*10.8
First Amendment to Trust Agreement for Deferred Compensation Plan between Analog Devices, Inc. and
First Amendment to Trust Agreement for Deferred Compensation Plan between Analog Devices, Inc. and
Fidelity Management Trust Company dated as of January 1, 2005, filed as exhibit 10.3 to the Company's Annual
Fidelity Management Trust Company dated as of January 1, 2005, filed as exhibit 10.3 to the Company's Annual
Report on Form 10-K for the fiscal year ended October 28, 2006 (File No. 1-7819) as filed with the Commission
Report on Form 10-K for the fiscal year ended October 28, 2006 (File No. 1-7819) as filed with the Commission
on November 20, 2006 and incorporated herein by reference.
on November 20, 2006 and incorporated herein by reference.
*10.9
Second Amendment to Trust Agreement for Deferred Compensation Plan between Analog Devices, Inc. and
Fidelity Management Trust Company dated as of December 10, 2007, filed as exhibit 10.41 to the Company's
Annual Report on Form 10-K for the fiscal year ended November 1, 2008 (File No. 1-7819) as filed with the
Commission on November 25, 2008 and incorporated herein by reference.
Second Amendment to Trust Agreement for Deferred Compensation Plan between Analog Devices, Inc. and
Fidelity Management Trust Company dated as of December 10, 2007, filed as exhibit 10.41 to the Company's
Annual Report on Form 10-K for the fiscal year ended November 1, 2008 (File No. 1-7819) as filed with the
Commission on November 25, 2008 and incorporated herein by reference.
Amended and Restated 2006 Stock Incentive Plan of Analog Devices, Inc., filed as exhibit 10.1 to the
Amended and Restated 2006 Stock Incentive Plan of Analog Devices, Inc., filed as exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended February 1, 2014 (File No. 1-7819) as
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended February 1, 2014 (File No. 1-7819) as
filed with the Commission on February 18, 2014 and incorporated herein by reference.
filed with the Commission on February 18, 2014 and incorporated herein by reference.
*10.10
*10.11
Analog Devices, Inc. Amended and Restated 2010 Equity Incentive Plan, filed as Exhibit 4.2 to the Post-
Effective Amendment No. 1 on Form S-8 to the Company's Registration Statement on Form S-4 (File No.
333-213454) as filed with the Commission on March 15, 2017 and incorporated herein by reference.
Analog Devices, Inc. Amended and Restated 2010 Equity Incentive Plan, filed as Exhibit 4.2 to the Post-
Effective Amendment No. 1 on Form S-8 to the Company's Registration Statement on Form S-4 (File No.
333-213454) as filed with the Commission on March 15, 2017 and incorporated herein by reference.
*10.12
*10.13
Form of Global Non-Qualified Stock Option Agreement for Employees for usage under the Company's
Amended and Restated 2006 Stock Incentive Plan, filed as exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended February 2, 2019 (File No. 1-7819) as filed with the Commission on
February 20, 2019 and incorporated herein by reference.
Form of Non-Qualified Stock Option Agreement for Directors for usage under the Company's Amended and
Restated 2006 Stock Incentive Plan, filed as exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended January 28, 2017 (File No. 1-7819) as filed with the Commission on February 15, 2017
and incorporated herein by reference.
Form of Global Restricted Stock Unit Agreement for Employees for usage under the Company's Amended and
Restated 2006 Stock Incentive Plan, filed as exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended February 2, 2019 (File No. 1-7819) as filed with the Commission on February 20, 2019
and incorporated herein by reference.
Form of Performance Restricted Stock Unit Agreement for Employees for usage under the Company's Amended
and Restated 2006 Stock Incentive Plan, filed as exhibit 10.7 to the Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended February 3, 2018 (File No. 1-7819) as filed with the Commission on February 28,
2018 and incorporated herein by reference.
Form of Relative TSR Performance Restricted Stock Unit Agreement for Employees for usage under the
Company's Amended and Restated 2006 Stock Incentive Plan, filed as exhibit 10.1 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended May 4, 2019 (File No. 1-7819) as filed with the Commission
on May 22, 2019 and incorporated herein by reference.
Form of Financial Key Metric Performance Restricted Stock Unit Agreement for Employees for usage under the
Company's Amended and Restated 2006 Stock Incentive Plan, filed as Exhibit 10.2 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended May 4, 2019 (File No. 1-7819) as filed with the Commission
on May 22, 2019 and incorporated herein by reference.
Form of Restricted Stock Unit Agreement for Directors for usage under the Company's Amended and Restated
2006 Stock Incentive Plan, filed as exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended February 2, 2019 (File No. 1-7819) as filed with the Commission on February 20, 2019 and
incorporated herein by reference.
Form of Global Non-Qualified Stock Option Agreement for Employees for usage under the Company's
Amended and Restated 2006 Stock Incentive Plan, filed as exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended February 2, 2019 (File No. 1-7819) as filed with the Commission on
February 20, 2019 and incorporated herein by reference.
Form of Non-Qualified Stock Option Agreement for Directors for usage under the Company's Amended and
Restated 2006 Stock Incentive Plan, filed as exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended January 28, 2017 (File No. 1-7819) as filed with the Commission on February 15, 2017
and incorporated herein by reference.
Form of Global Restricted Stock Unit Agreement for Employees for usage under the Company's Amended and
Restated 2006 Stock Incentive Plan, filed as exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended February 2, 2019 (File No. 1-7819) as filed with the Commission on February 20, 2019
and incorporated herein by reference.
Form of Performance Restricted Stock Unit Agreement for Employees for usage under the Company's Amended
and Restated 2006 Stock Incentive Plan, filed as exhibit 10.7 to the Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended February 3, 2018 (File No. 1-7819) as filed with the Commission on February 28,
2018 and incorporated herein by reference.
Form of Relative TSR Performance Restricted Stock Unit Agreement for Employees for usage under the
Company's Amended and Restated 2006 Stock Incentive Plan, filed as exhibit 10.1 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended May 4, 2019 (File No. 1-7819) as filed with the Commission
on May 22, 2019 and incorporated herein by reference.
Form of Financial Key Metric Performance Restricted Stock Unit Agreement for Employees for usage under the
Company's Amended and Restated 2006 Stock Incentive Plan, filed as Exhibit 10.2 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended May 4, 2019 (File No. 1-7819) as filed with the Commission
on May 22, 2019 and incorporated herein by reference.
Form of Restricted Stock Unit Agreement for Directors for usage under the Company's Amended and Restated
2006 Stock Incentive Plan, filed as exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended February 2, 2019 (File No. 1-7819) as filed with the Commission on February 20, 2019 and
incorporated herein by reference.
*10.14
*10.15
*10.16
*10.17
*10.18
*10.19
Form of Linear Integration Performance Restricted Stock Unit Agreement for Employees for usage under the
Analog Devices, Inc. Amended and Restated 2006 Stock Incentive Plan, filed as Exhibit 10.1 to the Company's
Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on July 11, 2017 and incorporated
by herein reference.
Form of Linear Integration Performance Restricted Stock Unit Agreement for Employees for usage under the
Analog Devices, Inc. Amended and Restated 2006 Stock Incentive Plan, filed as Exhibit 10.1 to the Company's
Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on July 11, 2017 and incorporated
by herein reference.
*10.20
Analog Devices, Inc. 2020 Equity Incentive Plan, filed as Appendix B to the Company’s Definitive Proxy
Statement on Schedule 14A (File No. 1-7819), as filed with the Commission on January 24, 2020 and
incorporated herein by reference.
Analog Devices, Inc. 2020 Equity Incentive Plan, filed as Appendix B to the Company’s Definitive Proxy
Statement on Schedule 14A (File No. 1-7819), as filed with the Commission on January 24, 2020 and
incorporated herein by reference.
*10.21
Form of Financial Metric Performance Restricted Stock Unit Agreement for Employees for usage under the
Company's 2020 Equity Incentive Plan, filed as exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q
for the fiscal quarter ended February 1, 2020 (File No. 1-7819) as filed with the Commission on February 19,
2020 and incorporated herein by reference.
Form of Financial Metric Performance Restricted Stock Unit Agreement for Employees for usage under the
Company's 2020 Equity Incentive Plan, filed as exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q
for the fiscal quarter ended February 1, 2020 (File No. 1-7819) as filed with the Commission on February 19,
2020 and incorporated herein by reference.
Form of Global Non-Qualified Stock Option Agreement for Employees for usage under the Company's 2020
Equity Incentive Plan, filed as exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended February 1, 2020 (File No. 1-7819) as filed with the Commission on February 19, 2020 and
incorporated herein by reference.
Form of Global Non-Qualified Stock Option Agreement for Employees for usage under the Company's 2020
Equity Incentive Plan, filed as exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended February 1, 2020 (File No. 1-7819) as filed with the Commission on February 19, 2020 and
incorporated herein by reference.
*10.22
91
92
Exhibit No.
Exhibit No.
*10.23
*10.23
Form of Global Restricted Stock Unit Agreement for Employees for usage under the Company's 2020 Equity
Form of Global Restricted Stock Unit Agreement for Employees for usage under the Company's 2020 Equity
Incentive Plan, filed as exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter
Incentive Plan, filed as exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter
ended February 1, 2020 (File No. 1-7819) as filed with the Commission on February 19, 2020 and incorporated
ended February 1, 2020 (File No. 1-7819) as filed with the Commission on February 19, 2020 and incorporated
herein by reference.
herein by reference.
*10.24
*10.24
Form of Restricted Stock Unit Agreement for Directors for usage under the Company's 2020 Equity Incentive
Form of Restricted Stock Unit Agreement for Directors for usage under the Company's 2020 Equity Incentive
Plan, filed as exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
Plan, filed as exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
February 1, 2020 (File No. 1-7819) as filed with the Commission on February 19, 2020 and incorporated herein
February 1, 2020 (File No. 1-7819) as filed with the Commission on February 19, 2020 and incorporated herein
by reference.
by reference.
*10.25
*10.25
Form of Relative Total Shareholder Return Performance Restricted Stock Unit Agreement for Employees for
Form of Relative Total Shareholder Return Performance Restricted Stock Unit Agreement for Employees for
usage under the Company's 2020 Equity Incentive Plan, filed as exhibit 10.5 to the Company’s Quarterly Report
usage under the Company's 2020 Equity Incentive Plan, filed as exhibit 10.5 to the Company’s Quarterly Report
on Form 10-Q for the fiscal quarter ended February 1, 2020 (File No. 1-7819) as filed with the Commission on
on Form 10-Q for the fiscal quarter ended February 1, 2020 (File No. 1-7819) as filed with the Commission on
February 19, 2020 and incorporated herein by reference.
February 19, 2020 and incorporated herein by reference.
*10.26
*10.26
Non-Qualified Performance Stock Option Agreement – CEO Performance Stock Option Award, filed as Exhibit
Non-Qualified Performance Stock Option Agreement – CEO Performance Stock Option Award, filed as Exhibit
10.1 to the Company’s Current Report on Form 8-K (File No. 001-07819) as filed with the Commission on
10.1 to the Company’s Current Report on Form 8-K (File No. 001-07819) as filed with the Commission on
December 17, 2020 and incorporated herein by reference.
December 17, 2020 and incorporated herein by reference.
*10.27
*10.27
Form of Performance Restricted Stock Unit Agreement – Integration Award, filed as Exhibit 10.2 to the
Form of Performance Restricted Stock Unit Agreement – Integration Award, filed as Exhibit 10.2 to the
Company’s Current Report on Form 8-K (File No. 001-07819) as filed with the Commission on December 17,
Company’s Current Report on Form 8-K (File No. 001-07819) as filed with the Commission on December 17,
2020 and incorporated herein by reference.
2020 and incorporated herein by reference.
*10.28
*10.28
Form of Restricted Stock Unit Agreement for Non-Employee Directors for usage under the Company’s 2020
Form of Restricted Stock Unit Agreement for Non-Employee Directors for usage under the Company’s 2020
Equity Incentive Plan adopted December 8, 2020, filed as exhibit 10.3 to the Company's Quarterly Report on
Equity Incentive Plan adopted December 8, 2020, filed as exhibit 10.3 to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as filed with the Commission on
Form 10-Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as filed with the Commission on
February 17, 2021 and incorporated herein by reference.
February 17, 2021 and incorporated herein by reference.
*10.29
*10.29
Form of Global Non-Qualified Stock Option Agreement for Employees for usage under the Company’s 2020
Form of Global Non-Qualified Stock Option Agreement for Employees for usage under the Company’s 2020
Equity Incentive Plan adopted December 8, 2020, filed as exhibit 10.4 to the Company's Quarterly Report on
Equity Incentive Plan adopted December 8, 2020, filed as exhibit 10.4 to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as filed with the Commission on
Form 10-Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as filed with the Commission on
February 17, 2021 and incorporated herein by reference.
February 17, 2021 and incorporated herein by reference.
*10.30
*10.30
Form of Global Restricted Stock Unit Agreement for Employees for usage under the Company’s 2020 Equity
Form of Global Restricted Stock Unit Agreement for Employees for usage under the Company’s 2020 Equity
Incentive Plan adopted December 8, 2020, filed as exhibit 10.5 to the Company's Quarterly Report on Form 10-
Incentive Plan adopted December 8, 2020, filed as exhibit 10.5 to the Company's Quarterly Report on Form 10-
Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as filed with the Commission on February 17,
Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as filed with the Commission on February 17,
2021 and incorporated herein by reference.
2021 and incorporated herein by reference.
*10.31
*10.31
Form of Relative Total Shareholder Return Performance Restricted Stock Unit Agreement for Employees for
Form of Relative Total Shareholder Return Performance Restricted Stock Unit Agreement for Employees for
usage under the Company's 2020 Equity Incentive Plan adopted December 8, 2020, filed as exhibit 10.6 to the
usage under the Company's 2020 Equity Incentive Plan adopted December 8, 2020, filed as exhibit 10.6 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as
filed with the Commission on February 17, 2021 and incorporated herein by reference.
filed with the Commission on February 17, 2021 and incorporated herein by reference.
*10.32
*10.32
Form of Financial Metric Performance Restricted Stock Unit Agreement for Employees for usage under the
Form of Financial Metric Performance Restricted Stock Unit Agreement for Employees for usage under the
2020 Equity Incentive Plan adopted December 8, 2020, filed as exhibit 10.7 to the Company's Quarterly Report
2020 Equity Incentive Plan adopted December 8, 2020, filed as exhibit 10.7 to the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as filed with the Commission on
on Form 10-Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as filed with the Commission on
February 17, 2021 and incorporated herein by reference.
February 17, 2021 and incorporated herein by reference.
*10.33
*10.33
Form of Financial Metric Performance Restricted Stock Unit Agreement for China Employees for usage under
Form of Financial Metric Performance Restricted Stock Unit Agreement for China Employees for usage under
the 2020 Equity Stock Incentive Plan adopted December 8, 2020, filed as exhibit 10.8 to the Company's
the 2020 Equity Stock Incentive Plan adopted December 8, 2020, filed as exhibit 10.8 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as filed with the
Quarterly Report on Form 10-Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as filed with the
Commission on February 17, 2021 and incorporated herein by reference.
Commission on February 17, 2021 and incorporated herein by reference.
*10.34
*10.34
Form of Restricted Stock Unit Agreement for Non-Employee Directors for usage under the Company’s 2020
Form of Restricted Stock Unit Agreement for Non-Employee Directors for usage under the Company’s 2020
Equity Incentive Plan adopted December 7, 2021, filed as exhibit 10.1 to the Company's Quarterly Report on
Equity Incentive Plan adopted December 7, 2021, filed as exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended January 29, 2022 (File No. 1-7819) as filed with the Commission on
Form 10-Q for the fiscal quarter ended January 29, 2022 (File No. 1-7819) as filed with the Commission on
February 16, 2022 and incorporated herein by reference.
February 16, 2022 and incorporated herein by reference.
*10.35
*10.35
Form of Global Restricted Stock Unit Agreement for Employees for usage under the Company’s 2020 Equity
Form of Global Restricted Stock Unit Agreement for Employees for usage under the Company’s 2020 Equity
Incentive Plan adopted December 7, 2021, filed as exhibit 10.2 to the Company's Quarterly Report on Form 10-
Incentive Plan adopted December 7, 2021, filed as exhibit 10.2 to the Company's Quarterly Report on Form 10-
Q for the fiscal quarter ended January 29, 2022 (File No. 1-7819) as filed with the Commission on February 16,
Q for the fiscal quarter ended January 29, 2022 (File No. 1-7819) as filed with the Commission on February 16,
2022 and incorporated herein by reference.
2022 and incorporated herein by reference.
*10.36
*10.36
Form of Relative Total Shareholder Return Performance Restricted Stock Unit Agreement for Employees for
Form of Relative Total Shareholder Return Performance Restricted Stock Unit Agreement for Employees for
usage under the Company's 2020 Equity Incentive Plan adopted December 7, 2021, filed as exhibit 10.4 to the
usage under the Company's 2020 Equity Incentive Plan adopted December 7, 2021, filed as exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended January 29, 2022 (File No. 1-7819) as
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended January 29, 2022 (File No. 1-7819) as
filed with the Commission on February 16, 2022 and incorporated herein by reference.
filed with the Commission on February 16, 2022 and incorporated herein by reference.
*10.37
*10.37
Form of Financial Metric Performance Restricted Stock Unit Agreement for Employees for usage under the
Form of Financial Metric Performance Restricted Stock Unit Agreement for Employees for usage under the
Company's 2020 Equity Incentive Plan adopted December 7, 2021, filed as exhibit 10.5 to the Company’s
Company's 2020 Equity Incentive Plan adopted December 7, 2021, filed as exhibit 10.5 to the Company’s
Quarterly Report on Form 10-Q for the fiscal quarter ended January 29, 2022 (File No. 1-7819) as filed with the
Quarterly Report on Form 10-Q for the fiscal quarter ended January 29, 2022 (File No. 1-7819) as filed with the
Commission on February 16, 2022 and incorporated herein by reference.
Commission on February 16, 2022 and incorporated herein by reference.
Description
Description
Exhibit No.
*10.23
Exhibit No.
*10.23
Form of Global Restricted Stock Unit Agreement for Employees for usage under the Company's 2020 Equity
Incentive Plan, filed as exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter
ended February 1, 2020 (File No. 1-7819) as filed with the Commission on February 19, 2020 and incorporated
herein by reference.
Form of Global Restricted Stock Unit Agreement for Employees for usage under the Company's 2020 Equity
Incentive Plan, filed as exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter
ended February 1, 2020 (File No. 1-7819) as filed with the Commission on February 19, 2020 and incorporated
herein by reference.
Exhibit No.
Exhibit No.
Description
Description
*10.7
*10.7
Trust Agreement for Deferred Compensation Plan dated as of October 1, 2003 between Analog Devices, Inc.
Trust Agreement for Deferred Compensation Plan dated as of October 1, 2003 between Analog Devices, Inc.
and Fidelity Management Trust Company, filed as exhibit 10.28 to the Company's Annual Report on Form 10-K
and Fidelity Management Trust Company, filed as exhibit 10.28 to the Company's Annual Report on Form 10-K
for the fiscal year ended November 1, 2003 (File No. 1-7819) as filed with the Commission on December 23,
for the fiscal year ended November 1, 2003 (File No. 1-7819) as filed with the Commission on December 23,
2003 and incorporated herein by reference.
2003 and incorporated herein by reference.
*10.8
*10.8
First Amendment to Trust Agreement for Deferred Compensation Plan between Analog Devices, Inc. and
First Amendment to Trust Agreement for Deferred Compensation Plan between Analog Devices, Inc. and
Fidelity Management Trust Company dated as of January 1, 2005, filed as exhibit 10.3 to the Company's Annual
Fidelity Management Trust Company dated as of January 1, 2005, filed as exhibit 10.3 to the Company's Annual
Report on Form 10-K for the fiscal year ended October 28, 2006 (File No. 1-7819) as filed with the Commission
Report on Form 10-K for the fiscal year ended October 28, 2006 (File No. 1-7819) as filed with the Commission
on November 20, 2006 and incorporated herein by reference.
on November 20, 2006 and incorporated herein by reference.
*10.9
*10.9
Second Amendment to Trust Agreement for Deferred Compensation Plan between Analog Devices, Inc. and
Second Amendment to Trust Agreement for Deferred Compensation Plan between Analog Devices, Inc. and
Fidelity Management Trust Company dated as of December 10, 2007, filed as exhibit 10.41 to the Company's
Fidelity Management Trust Company dated as of December 10, 2007, filed as exhibit 10.41 to the Company's
Annual Report on Form 10-K for the fiscal year ended November 1, 2008 (File No. 1-7819) as filed with the
Annual Report on Form 10-K for the fiscal year ended November 1, 2008 (File No. 1-7819) as filed with the
Commission on November 25, 2008 and incorporated herein by reference.
Commission on November 25, 2008 and incorporated herein by reference.
*10.10
*10.10
Amended and Restated 2006 Stock Incentive Plan of Analog Devices, Inc., filed as exhibit 10.1 to the
Amended and Restated 2006 Stock Incentive Plan of Analog Devices, Inc., filed as exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended February 1, 2014 (File No. 1-7819) as
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended February 1, 2014 (File No. 1-7819) as
filed with the Commission on February 18, 2014 and incorporated herein by reference.
filed with the Commission on February 18, 2014 and incorporated herein by reference.
*10.11
*10.11
Analog Devices, Inc. Amended and Restated 2010 Equity Incentive Plan, filed as Exhibit 4.2 to the Post-
Analog Devices, Inc. Amended and Restated 2010 Equity Incentive Plan, filed as Exhibit 4.2 to the Post-
Effective Amendment No. 1 on Form S-8 to the Company's Registration Statement on Form S-4 (File No.
Effective Amendment No. 1 on Form S-8 to the Company's Registration Statement on Form S-4 (File No.
333-213454) as filed with the Commission on March 15, 2017 and incorporated herein by reference.
333-213454) as filed with the Commission on March 15, 2017 and incorporated herein by reference.
*10.12
*10.12
Form of Global Non-Qualified Stock Option Agreement for Employees for usage under the Company's
Form of Global Non-Qualified Stock Option Agreement for Employees for usage under the Company's
Amended and Restated 2006 Stock Incentive Plan, filed as exhibit 10.1 to the Company's Quarterly Report on
Amended and Restated 2006 Stock Incentive Plan, filed as exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended February 2, 2019 (File No. 1-7819) as filed with the Commission on
Form 10-Q for the fiscal quarter ended February 2, 2019 (File No. 1-7819) as filed with the Commission on
February 20, 2019 and incorporated herein by reference.
February 20, 2019 and incorporated herein by reference.
*10.13
*10.13
Form of Non-Qualified Stock Option Agreement for Directors for usage under the Company's Amended and
Form of Non-Qualified Stock Option Agreement for Directors for usage under the Company's Amended and
Restated 2006 Stock Incentive Plan, filed as exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for
Restated 2006 Stock Incentive Plan, filed as exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended January 28, 2017 (File No. 1-7819) as filed with the Commission on February 15, 2017
the fiscal quarter ended January 28, 2017 (File No. 1-7819) as filed with the Commission on February 15, 2017
and incorporated herein by reference.
and incorporated herein by reference.
*10.14
*10.14
Form of Global Restricted Stock Unit Agreement for Employees for usage under the Company's Amended and
Form of Global Restricted Stock Unit Agreement for Employees for usage under the Company's Amended and
Restated 2006 Stock Incentive Plan, filed as exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for
Restated 2006 Stock Incentive Plan, filed as exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended February 2, 2019 (File No. 1-7819) as filed with the Commission on February 20, 2019
the fiscal quarter ended February 2, 2019 (File No. 1-7819) as filed with the Commission on February 20, 2019
and incorporated herein by reference.
and incorporated herein by reference.
*10.15
*10.15
Form of Performance Restricted Stock Unit Agreement for Employees for usage under the Company's Amended
Form of Performance Restricted Stock Unit Agreement for Employees for usage under the Company's Amended
and Restated 2006 Stock Incentive Plan, filed as exhibit 10.7 to the Company's Quarterly Report on Form 10-Q
and Restated 2006 Stock Incentive Plan, filed as exhibit 10.7 to the Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended February 3, 2018 (File No. 1-7819) as filed with the Commission on February 28,
for the fiscal quarter ended February 3, 2018 (File No. 1-7819) as filed with the Commission on February 28,
2018 and incorporated herein by reference.
2018 and incorporated herein by reference.
*10.16
*10.16
Form of Relative TSR Performance Restricted Stock Unit Agreement for Employees for usage under the
Form of Relative TSR Performance Restricted Stock Unit Agreement for Employees for usage under the
Company's Amended and Restated 2006 Stock Incentive Plan, filed as exhibit 10.1 to the Company's Quarterly
Company's Amended and Restated 2006 Stock Incentive Plan, filed as exhibit 10.1 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended May 4, 2019 (File No. 1-7819) as filed with the Commission
Report on Form 10-Q for the fiscal quarter ended May 4, 2019 (File No. 1-7819) as filed with the Commission
on May 22, 2019 and incorporated herein by reference.
on May 22, 2019 and incorporated herein by reference.
*10.17
*10.17
Form of Financial Key Metric Performance Restricted Stock Unit Agreement for Employees for usage under the
Form of Financial Key Metric Performance Restricted Stock Unit Agreement for Employees for usage under the
Company's Amended and Restated 2006 Stock Incentive Plan, filed as Exhibit 10.2 to the Company's Quarterly
Company's Amended and Restated 2006 Stock Incentive Plan, filed as Exhibit 10.2 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended May 4, 2019 (File No. 1-7819) as filed with the Commission
Report on Form 10-Q for the fiscal quarter ended May 4, 2019 (File No. 1-7819) as filed with the Commission
on May 22, 2019 and incorporated herein by reference.
on May 22, 2019 and incorporated herein by reference.
*10.18
*10.18
Form of Restricted Stock Unit Agreement for Directors for usage under the Company's Amended and Restated
Form of Restricted Stock Unit Agreement for Directors for usage under the Company's Amended and Restated
2006 Stock Incentive Plan, filed as exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the fiscal
2006 Stock Incentive Plan, filed as exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended February 2, 2019 (File No. 1-7819) as filed with the Commission on February 20, 2019 and
quarter ended February 2, 2019 (File No. 1-7819) as filed with the Commission on February 20, 2019 and
incorporated herein by reference.
incorporated herein by reference.
*10.19
*10.19
Form of Linear Integration Performance Restricted Stock Unit Agreement for Employees for usage under the
Form of Linear Integration Performance Restricted Stock Unit Agreement for Employees for usage under the
Analog Devices, Inc. Amended and Restated 2006 Stock Incentive Plan, filed as Exhibit 10.1 to the Company's
Analog Devices, Inc. Amended and Restated 2006 Stock Incentive Plan, filed as Exhibit 10.1 to the Company's
Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on July 11, 2017 and incorporated
Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on July 11, 2017 and incorporated
by herein reference.
by herein reference.
*10.20
*10.20
Analog Devices, Inc. 2020 Equity Incentive Plan, filed as Appendix B to the Company’s Definitive Proxy
Analog Devices, Inc. 2020 Equity Incentive Plan, filed as Appendix B to the Company’s Definitive Proxy
Statement on Schedule 14A (File No. 1-7819), as filed with the Commission on January 24, 2020 and
Statement on Schedule 14A (File No. 1-7819), as filed with the Commission on January 24, 2020 and
incorporated herein by reference.
incorporated herein by reference.
*10.21
*10.21
Form of Financial Metric Performance Restricted Stock Unit Agreement for Employees for usage under the
Form of Financial Metric Performance Restricted Stock Unit Agreement for Employees for usage under the
Company's 2020 Equity Incentive Plan, filed as exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q
Company's 2020 Equity Incentive Plan, filed as exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q
for the fiscal quarter ended February 1, 2020 (File No. 1-7819) as filed with the Commission on February 19,
for the fiscal quarter ended February 1, 2020 (File No. 1-7819) as filed with the Commission on February 19,
2020 and incorporated herein by reference.
2020 and incorporated herein by reference.
*10.22
*10.22
Form of Global Non-Qualified Stock Option Agreement for Employees for usage under the Company's 2020
Form of Global Non-Qualified Stock Option Agreement for Employees for usage under the Company's 2020
Equity Incentive Plan, filed as exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal
Equity Incentive Plan, filed as exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended February 1, 2020 (File No. 1-7819) as filed with the Commission on February 19, 2020 and
quarter ended February 1, 2020 (File No. 1-7819) as filed with the Commission on February 19, 2020 and
incorporated herein by reference.
incorporated herein by reference.
*10.24
*10.25
*10.26
*10.27
*10.28
*10.29
*10.30
*10.31
*10.32
*10.33
*10.34
*10.35
*10.36
*10.37
*10.24
Form of Restricted Stock Unit Agreement for Directors for usage under the Company's 2020 Equity Incentive
Form of Restricted Stock Unit Agreement for Directors for usage under the Company's 2020 Equity Incentive
Plan, filed as exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
Plan, filed as exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
February 1, 2020 (File No. 1-7819) as filed with the Commission on February 19, 2020 and incorporated herein
February 1, 2020 (File No. 1-7819) as filed with the Commission on February 19, 2020 and incorporated herein
by reference.
by reference.
*10.25
Form of Relative Total Shareholder Return Performance Restricted Stock Unit Agreement for Employees for
usage under the Company's 2020 Equity Incentive Plan, filed as exhibit 10.5 to the Company’s Quarterly Report
on Form 10-Q for the fiscal quarter ended February 1, 2020 (File No. 1-7819) as filed with the Commission on
February 19, 2020 and incorporated herein by reference.
Form of Relative Total Shareholder Return Performance Restricted Stock Unit Agreement for Employees for
usage under the Company's 2020 Equity Incentive Plan, filed as exhibit 10.5 to the Company’s Quarterly Report
on Form 10-Q for the fiscal quarter ended February 1, 2020 (File No. 1-7819) as filed with the Commission on
February 19, 2020 and incorporated herein by reference.
*10.26
Non-Qualified Performance Stock Option Agreement – CEO Performance Stock Option Award, filed as Exhibit
10.1 to the Company’s Current Report on Form 8-K (File No. 001-07819) as filed with the Commission on
December 17, 2020 and incorporated herein by reference.
Non-Qualified Performance Stock Option Agreement – CEO Performance Stock Option Award, filed as Exhibit
10.1 to the Company’s Current Report on Form 8-K (File No. 001-07819) as filed with the Commission on
December 17, 2020 and incorporated herein by reference.
*10.27
Form of Performance Restricted Stock Unit Agreement – Integration Award, filed as Exhibit 10.2 to the
Company’s Current Report on Form 8-K (File No. 001-07819) as filed with the Commission on December 17,
2020 and incorporated herein by reference.
Form of Performance Restricted Stock Unit Agreement – Integration Award, filed as Exhibit 10.2 to the
Company’s Current Report on Form 8-K (File No. 001-07819) as filed with the Commission on December 17,
2020 and incorporated herein by reference.
*10.28
*10.29
*10.30
*10.31
Form of Restricted Stock Unit Agreement for Non-Employee Directors for usage under the Company’s 2020
Form of Restricted Stock Unit Agreement for Non-Employee Directors for usage under the Company’s 2020
Equity Incentive Plan adopted December 8, 2020, filed as exhibit 10.3 to the Company's Quarterly Report on
Equity Incentive Plan adopted December 8, 2020, filed as exhibit 10.3 to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as filed with the Commission on
Form 10-Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as filed with the Commission on
February 17, 2021 and incorporated herein by reference.
February 17, 2021 and incorporated herein by reference.
Form of Global Non-Qualified Stock Option Agreement for Employees for usage under the Company’s 2020
Form of Global Non-Qualified Stock Option Agreement for Employees for usage under the Company’s 2020
Equity Incentive Plan adopted December 8, 2020, filed as exhibit 10.4 to the Company's Quarterly Report on
Equity Incentive Plan adopted December 8, 2020, filed as exhibit 10.4 to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as filed with the Commission on
Form 10-Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as filed with the Commission on
February 17, 2021 and incorporated herein by reference.
February 17, 2021 and incorporated herein by reference.
Form of Global Restricted Stock Unit Agreement for Employees for usage under the Company’s 2020 Equity
Form of Global Restricted Stock Unit Agreement for Employees for usage under the Company’s 2020 Equity
Incentive Plan adopted December 8, 2020, filed as exhibit 10.5 to the Company's Quarterly Report on Form 10-
Incentive Plan adopted December 8, 2020, filed as exhibit 10.5 to the Company's Quarterly Report on Form 10-
Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as filed with the Commission on February 17,
Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as filed with the Commission on February 17,
2021 and incorporated herein by reference.
2021 and incorporated herein by reference.
Form of Relative Total Shareholder Return Performance Restricted Stock Unit Agreement for Employees for
Form of Relative Total Shareholder Return Performance Restricted Stock Unit Agreement for Employees for
usage under the Company's 2020 Equity Incentive Plan adopted December 8, 2020, filed as exhibit 10.6 to the
usage under the Company's 2020 Equity Incentive Plan adopted December 8, 2020, filed as exhibit 10.6 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as
filed with the Commission on February 17, 2021 and incorporated herein by reference.
filed with the Commission on February 17, 2021 and incorporated herein by reference.
Form of Financial Metric Performance Restricted Stock Unit Agreement for Employees for usage under the
Form of Financial Metric Performance Restricted Stock Unit Agreement for Employees for usage under the
2020 Equity Incentive Plan adopted December 8, 2020, filed as exhibit 10.7 to the Company's Quarterly Report
2020 Equity Incentive Plan adopted December 8, 2020, filed as exhibit 10.7 to the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as filed with the Commission on
on Form 10-Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as filed with the Commission on
February 17, 2021 and incorporated herein by reference.
February 17, 2021 and incorporated herein by reference.
Form of Financial Metric Performance Restricted Stock Unit Agreement for China Employees for usage under
Form of Financial Metric Performance Restricted Stock Unit Agreement for China Employees for usage under
the 2020 Equity Stock Incentive Plan adopted December 8, 2020, filed as exhibit 10.8 to the Company's
the 2020 Equity Stock Incentive Plan adopted December 8, 2020, filed as exhibit 10.8 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as filed with the
Quarterly Report on Form 10-Q for the fiscal quarter ended January 30, 2021 (File No. 1-7819) as filed with the
Commission on February 17, 2021 and incorporated herein by reference.
Commission on February 17, 2021 and incorporated herein by reference.
Form of Restricted Stock Unit Agreement for Non-Employee Directors for usage under the Company’s 2020
Form of Restricted Stock Unit Agreement for Non-Employee Directors for usage under the Company’s 2020
Equity Incentive Plan adopted December 7, 2021, filed as exhibit 10.1 to the Company's Quarterly Report on
Equity Incentive Plan adopted December 7, 2021, filed as exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended January 29, 2022 (File No. 1-7819) as filed with the Commission on
Form 10-Q for the fiscal quarter ended January 29, 2022 (File No. 1-7819) as filed with the Commission on
February 16, 2022 and incorporated herein by reference.
February 16, 2022 and incorporated herein by reference.
*10.32
*10.33
*10.34
*10.35
Form of Global Restricted Stock Unit Agreement for Employees for usage under the Company’s 2020 Equity
Incentive Plan adopted December 7, 2021, filed as exhibit 10.2 to the Company's Quarterly Report on Form 10-
Q for the fiscal quarter ended January 29, 2022 (File No. 1-7819) as filed with the Commission on February 16,
2022 and incorporated herein by reference.
Form of Global Restricted Stock Unit Agreement for Employees for usage under the Company’s 2020 Equity
Incentive Plan adopted December 7, 2021, filed as exhibit 10.2 to the Company's Quarterly Report on Form 10-
Q for the fiscal quarter ended January 29, 2022 (File No. 1-7819) as filed with the Commission on February 16,
2022 and incorporated herein by reference.
*10.36
Form of Relative Total Shareholder Return Performance Restricted Stock Unit Agreement for Employees for
usage under the Company's 2020 Equity Incentive Plan adopted December 7, 2021, filed as exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended January 29, 2022 (File No. 1-7819) as
filed with the Commission on February 16, 2022 and incorporated herein by reference.
Form of Relative Total Shareholder Return Performance Restricted Stock Unit Agreement for Employees for
usage under the Company's 2020 Equity Incentive Plan adopted December 7, 2021, filed as exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended January 29, 2022 (File No. 1-7819) as
filed with the Commission on February 16, 2022 and incorporated herein by reference.
*10.37
Form of Financial Metric Performance Restricted Stock Unit Agreement for Employees for usage under the
Company's 2020 Equity Incentive Plan adopted December 7, 2021, filed as exhibit 10.5 to the Company’s
Quarterly Report on Form 10-Q for the fiscal quarter ended January 29, 2022 (File No. 1-7819) as filed with the
Commission on February 16, 2022 and incorporated herein by reference.
Form of Financial Metric Performance Restricted Stock Unit Agreement for Employees for usage under the
Company's 2020 Equity Incentive Plan adopted December 7, 2021, filed as exhibit 10.5 to the Company’s
Quarterly Report on Form 10-Q for the fiscal quarter ended January 29, 2022 (File No. 1-7819) as filed with the
Commission on February 16, 2022 and incorporated herein by reference.
91
92
Exhibit No.
*10.38
Exhibit No.
*10.38
Description
Description
Exhibit No.
Exhibit No.
Description
Description
Form of EVP Global Restricted Stock Unit Agreement for Employees for usage under the Company’s 2020
Equity Incentive Plan adopted March 7, 2022, filed as exhibit 10.1 to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended April 30, 2022 (File No. 1-7819) as filed with the Commission on May 18,
2022 and incorporated herein by reference.
Form of EVP Global Restricted Stock Unit Agreement for Employees for usage under the Company’s 2020
Equity Incentive Plan adopted March 7, 2022, filed as exhibit 10.1 to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended April 30, 2022 (File No. 1-7819) as filed with the Commission on May 18,
2022 and incorporated herein by reference.
*10.39
*10.40
*10.41
*10.42
*10.43
*10.44
*10.45
*10.46
*10.47
*10.48
*10.49
*10.50
*10.51
*10.39
Form of EVP Performance Restricted Stock Unit Agreement for Employees for usage under the Company's 2020
Equity Incentive Plan adopted March 7, 2022, filed as exhibit 10.2 to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended April 30, 2022 (File No. 1-7819) as filed with the Commission on May 18,
2022 and incorporated herein by reference.
Form of EVP Performance Restricted Stock Unit Agreement for Employees for usage under the Company's 2020
Equity Incentive Plan adopted March 7, 2022, filed as exhibit 10.2 to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended April 30, 2022 (File No. 1-7819) as filed with the Commission on May 18,
2022 and incorporated herein by reference.
*10.40
Form of Relative Total Shareholder Return Performance Restricted Stock Unit Agreement for Employees for
Form of Relative Total Shareholder Return Performance Restricted Stock Unit Agreement for Employees for
usage under the Company's 2020 Equity Incentive Plan adopted April 4, 2022, filed as exhibit 10.3 to the
usage under the Company's 2020 Equity Incentive Plan adopted April 4, 2022, filed as exhibit 10.3 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2022 (File No. 1-7819) as filed
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2022 (File No. 1-7819) as filed
with the Commission on May 18, 2022 and incorporated herein by reference.
with the Commission on May 18, 2022 and incorporated herein by reference.
*10.41
ADI Executive Performance Incentive Plan, filed as exhibit 10.6 to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended April 30, 2022 (File No. 1-7819) as filed with the Commission on May 18,
2022 and incorporated herein by reference.
ADI Executive Performance Incentive Plan, filed as exhibit 10.6 to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended April 30, 2022 (File No. 1-7819) as filed with the Commission on May 18,
2022 and incorporated herein by reference.
*10.42
Form of Executive Relative Total Shareholder Return Performance Restricted Stock Unit Agreement for
Employees for usage under the Company's 2020 Equity Incentive Plan adopted June 6, 2022, filed as exhibit
10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 30, 2022 (File No.
1-7819) as filed with the Commission on August 17, 2022 and incorporated herein by reference.
Form of Executive Relative Total Shareholder Return Performance Restricted Stock Unit Agreement for
Employees for usage under the Company's 2020 Equity Incentive Plan adopted June 6, 2022, filed as exhibit
10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 30, 2022 (File No.
1-7819) as filed with the Commission on August 17, 2022 and incorporated herein by reference.
Form of Executive Financial Performance Restricted Stock Unit Agreement for Employees for usage under the
Company's 2020 Equity Incentive Plan adopted June 6, 2022, filed as exhibit 10.2 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended July 30, 2022 (File No. 1-7819) as filed with the Commission
on August 17, 2022 and incorporated herein by reference.
Form of Executive Financial Performance Restricted Stock Unit Agreement for Employees for usage under the
Company's 2020 Equity Incentive Plan adopted June 6, 2022, filed as exhibit 10.2 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended July 30, 2022 (File No. 1-7819) as filed with the Commission
on August 17, 2022 and incorporated herein by reference.
*10.43
*10.44
*10.45
Amended and Restated 1996 Stock Incentive Plan, filed as exhibit 10.36 to the Company's Annual Report on
Form 10-K for the fiscal year ended October 30, 2021 (File No. 1-7819) as filed with the Commission on
December 3, 2021 and incorporated herein by reference.
Form of Global Restricted Stock Unit Agreement for usage under the Amended and Restated 1996 Stock
Incentive Plan, filed as exhibit 10.37 to the Company's Annual Report on Form 10-K for the fiscal year ended
October 30, 2021 (File No. 1-7819) as filed with the Commission on December 3, 2021 and incorporated herein
by reference.
Form of Global Non-Qualified Stock Option Agreement for usage under the Amended and Restated 1996 Stock
Incentive Plan, filed as exhibit 10.38 to the Company's Annual Report on Form 10-K for the fiscal year ended
October 30, 2021 (File No. 1-7819) as filed with the Commission on December 3, 2021 and incorporated herein
by reference.
Form of Global Restricted Stock Unit Agreement for Employees for usage under the Company’s 1996 Stock
Incentive Plan adopted December 7, 2021, filed as exhibit 10.3 to the Company's Quarterly Report on Form 10-
Q for the fiscal quarter ended January 29, 2022 (File No. 1-7819) as filed with the Commission on February 16,
2022 and incorporated herein by reference.
Amended and Restated 1996 Stock Incentive Plan, filed as exhibit 10.36 to the Company's Annual Report on
Form 10-K for the fiscal year ended October 30, 2021 (File No. 1-7819) as filed with the Commission on
December 3, 2021 and incorporated herein by reference.
Form of Global Restricted Stock Unit Agreement for usage under the Amended and Restated 1996 Stock
Incentive Plan, filed as exhibit 10.37 to the Company's Annual Report on Form 10-K for the fiscal year ended
October 30, 2021 (File No. 1-7819) as filed with the Commission on December 3, 2021 and incorporated herein
by reference.
Form of Global Non-Qualified Stock Option Agreement for usage under the Amended and Restated 1996 Stock
Incentive Plan, filed as exhibit 10.38 to the Company's Annual Report on Form 10-K for the fiscal year ended
October 30, 2021 (File No. 1-7819) as filed with the Commission on December 3, 2021 and incorporated herein
by reference.
Form of Global Restricted Stock Unit Agreement for Employees for usage under the Company’s 1996 Stock
Incentive Plan adopted December 7, 2021, filed as exhibit 10.3 to the Company's Quarterly Report on Form 10-
Q for the fiscal quarter ended January 29, 2022 (File No. 1-7819) as filed with the Commission on February 16,
2022 and incorporated herein by reference.
*10.46
*10.47
*10.48
Form of Employee Retention Agreement, filed as exhibit 10.1 to the Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended May 5, 2012 (File No. 1-7819) as filed with the Commission on May 22, 2012 and
incorporated herein by reference.
Form of Employee Retention Agreement, filed as exhibit 10.1 to the Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended May 5, 2012 (File No. 1-7819) as filed with the Commission on May 22, 2012 and
incorporated herein by reference.
*10.49
Employee Change in Control Severance Policy of Analog Devices, Inc., as amended, filed as exhibit 10.20 to the
Company's Annual Report on Form 10-K for the fiscal year ended October 30, 1999 (File No. 1-7819) as filed
with the Commission on January 28, 2000 and incorporated herein by reference.
Employee Change in Control Severance Policy of Analog Devices, Inc., as amended, filed as exhibit 10.20 to the
Company's Annual Report on Form 10-K for the fiscal year ended October 30, 1999 (File No. 1-7819) as filed
with the Commission on January 28, 2000 and incorporated herein by reference.
*10.50
Senior Management Change in Control Severance Policy of Analog Devices, Inc., as amended, filed as exhibit
10.21 to the Company's Annual Report on Form 10-K for the fiscal year ended October 30, 1999 (File No.
1-7819) as filed with the Commission on January 28, 2000 and incorporated herein by reference.
Offer Letter for Prashanth Mahendra-Rajah, dated August 4, 2017, filed as exhibit 10.28 to the Company's
Annual Report on Form 10-K for the fiscal year ended October 28, 2017 (File No. 1-7819) as filed with the
Commission on November 22, 2017 and incorporated herein by reference.
Senior Management Change in Control Severance Policy of Analog Devices, Inc., as amended, filed as exhibit
10.21 to the Company's Annual Report on Form 10-K for the fiscal year ended October 30, 1999 (File No.
1-7819) as filed with the Commission on January 28, 2000 and incorporated herein by reference.
Offer Letter for Prashanth Mahendra-Rajah, dated August 4, 2017, filed as exhibit 10.28 to the Company's
Annual Report on Form 10-K for the fiscal year ended October 28, 2017 (File No. 1-7819) as filed with the
Commission on November 22, 2017 and incorporated herein by reference.
*10.51
*10.52 Maxim Integrated Products, Inc. Amended and Restated Change in Control Employee Severance Plan for U.S.
*10.52 Maxim Integrated Products, Inc. Amended and Restated Change in Control Employee Severance Plan for U.S.
*10.53
*10.53
Based Employees, filed as exhibit 10.1 to Maxim Integrated Products, Inc.'s Quarterly Report on Form 10-Q for
the fiscal quarter ended December 26, 2020 (File No. 1-34192) as filed with the Commission on January 27,
2021 and incorporated herein by reference.
Based Employees, filed as exhibit 10.1 to Maxim Integrated Products, Inc.'s Quarterly Report on Form 10-Q for
the fiscal quarter ended December 26, 2020 (File No. 1-34192) as filed with the Commission on January 27,
2021 and incorporated herein by reference.
Form of Indemnification Agreement for Directors and Officers, filed as exhibit 10.30 to the Company's Annual
Report on Form 10-K for the fiscal year ended November 1, 2008 (File No. 1-7819) as filed with the
Commission on November 25, 2008 and incorporated herein by reference.
Form of Indemnification Agreement for Directors and Officers, filed as exhibit 10.30 to the Company's Annual
Report on Form 10-K for the fiscal year ended November 1, 2008 (File No. 1-7819) as filed with the
Commission on November 25, 2008 and incorporated herein by reference.
93
94
*10.54
*10.54
Credit Agreement, dated as of June 28, 2019, among Analog Devices, Inc., as Borrower, JPMorgan Chase Bank,
Credit Agreement, dated as of June 28, 2019, among Analog Devices, Inc., as Borrower, JPMorgan Chase Bank,
N.A. as Administrative Agent and each lender from time to time party thereto, filed as exhibit 10.1 to the
N.A. as Administrative Agent and each lender from time to time party thereto, filed as exhibit 10.1 to the
Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on July 1, 2019 and
Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on July 1, 2019 and
incorporated herein by reference.
incorporated herein by reference.
*10.55
*10.55
Third Amended and Restated Credit Agreement, dated as of June 23, 2021, among Analog Devices, Inc., as
Third Amended and Restated Credit Agreement, dated as of June 23, 2021, among Analog Devices, Inc., as
Borrower, Bank of America, N.A. as Administrative Agent, Swing Line Lender and L/C Issuer, and each lender
Borrower, Bank of America, N.A. as Administrative Agent, Swing Line Lender and L/C Issuer, and each lender
from time to time party thereto, filed as exhibit 10.1 to the Company's Current Report on Form 8-K (File No.
from time to time party thereto, filed as exhibit 10.1 to the Company's Current Report on Form 8-K (File No.
1-7819) as filed with the Commission on June 23, 2021 and incorporated herein by reference.
1-7819) as filed with the Commission on June 23, 2021 and incorporated herein by reference.
*10.56
*10.56
Analog Devices, Inc. 2022 Employee Stock Purchase Plan, included as Appendix B to the Company’s definitive
Analog Devices, Inc. 2022 Employee Stock Purchase Plan, included as Appendix B to the Company’s definitive
proxy statement on Schedule 14A (File No. 001-07819) as filed with the Securities and Exchange Commission
proxy statement on Schedule 14A (File No. 001-07819) as filed with the Securities and Exchange Commission
on January 21, 2022 and incorporated herein by reference.
on January 21, 2022 and incorporated herein by reference.
*10.57
*10.57
Offer Letter for Gregory Bryant dated December 14, 2021 filed as exhibit 10.4 to the Company's Quarterly
Offer Letter for Gregory Bryant dated December 14, 2021 filed as exhibit 10.4 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended April 30, 2022 (File No. 1-7819) as filed with the Commission
Report on Form 10-Q for the fiscal quarter ended April 30, 2022 (File No. 1-7819) as filed with the Commission
on May 18, 2022 and incorporated herein by reference.
on May 18, 2022 and incorporated herein by reference.
*10.58
*10.58
2022 First and Second Fiscal Quarters Executive Performance Incentive Plan filed as exhibit 10.40 to the
2022 First and Second Fiscal Quarters Executive Performance Incentive Plan filed as exhibit 10.40 to the
Company's Annual Report on Form 10-K for the fiscal year ended October 30, 2021 (File No. 1-7819) as filed
Company's Annual Report on Form 10-K for the fiscal year ended October 30, 2021 (File No. 1-7819) as filed
with the Commission on December 3, 2021 and incorporated herein by reference.
with the Commission on December 3, 2021 and incorporated herein by reference.
†21
Subsidiaries of the Company.
Subsidiaries of the Company.
†21
†23
†23
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
†31.1
†31.1
Certification Pursuant to Rule 13a-14(a) and 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302
Certification Pursuant to Rule 13a-14(a) and 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).
of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).
†31.2
†31.2
Certification Pursuant to Rule 13a-14(a) and 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302
Certification Pursuant to Rule 13a-14(a) and 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).
of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).
†32.1
†32.1
Certification Pursuant to 18 U.S.C. Section 1350 (Chief Executive Officer).
Certification Pursuant to 18 U.S.C. Section 1350 (Chief Executive Officer).
†32.2
†32.2
Certification Pursuant to 18 U.S.C. Section 1350 (Chief Financial Officer).
Certification Pursuant to 18 U.S.C. Section 1350 (Chief Financial Officer).
101. INS
101. INS
The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within
The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within
the inline XBRL document.**
the inline XBRL document.**
101. SCH Inline XBRL Schema Document.**
101. SCH Inline XBRL Schema Document.**
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101. CAL Inline XBRL Calculation Linkbase Document.**
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101. LAB Inline XBRL Labels Linkbase Document.**
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101. PRE
Inline XBRL Presentation Linkbase Document.**
Inline XBRL Presentation Linkbase Document.**
101. DEF
101. DEF
Inline XBRL Definition Linkbase Document**
Inline XBRL Definition Linkbase Document**
contained in Exhibits 101).
contained in Exhibits 101).
_______________________________________
_______________________________________
Filed herewith.
Filed herewith.
†
*
†
*
Item 15(b) of Form 10-K.
Item 15(b) of Form 10-K.
**
**
Submitted electronically herewith.
Submitted electronically herewith.
104
104
Cover page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information
Cover page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information
Management contracts and compensatory plan or arrangements required to be filed as an Exhibit pursuant to
Management contracts and compensatory plan or arrangements required to be filed as an Exhibit pursuant to
Attached as Exhibit 101 to this report are the following formatted in iXBRL (Inline Extensible Business Reporting Language):
Attached as Exhibit 101 to this report are the following formatted in iXBRL (Inline Extensible Business Reporting Language):
(i) Consolidated Statements of Income for the years ended October 29, 2022, October 30, 2021 and October 31, 2020,
(i) Consolidated Statements of Income for the years ended October 29, 2022, October 30, 2021 and October 31, 2020,
(ii) Consolidated Balance Sheets as of October 29, 2022 and October 30, 2021, (iii) Consolidated Statements of Shareholders’
(ii) Consolidated Balance Sheets as of October 29, 2022 and October 30, 2021, (iii) Consolidated Statements of Shareholders’
Equity for the years ended October 29, 2022, October 30, 2021 and October 31, 2020, (iv) Consolidated Statements of
Equity for the years ended October 29, 2022, October 30, 2021 and October 31, 2020, (iv) Consolidated Statements of
Comprehensive Income for the years ended October 29, 2022, October 30, 2021 and October 31, 2020, (v) Consolidated
Comprehensive Income for the years ended October 29, 2022, October 30, 2021 and October 31, 2020, (v) Consolidated
Statements of Cash Flows for the years ended October 29, 2022, October 30, 2021 and October 31, 2020 and (vi) Notes to
Statements of Cash Flows for the years ended October 29, 2022, October 30, 2021 and October 31, 2020 and (vi) Notes to
Consolidated Financial Statements for the years ended October 29, 2022, October 30, 2021 and October 31, 2020.
Consolidated Financial Statements for the years ended October 29, 2022, October 30, 2021 and October 31, 2020.
Exhibit No.
Exhibit No.
*10.38
*10.38
Description
Description
Form of EVP Global Restricted Stock Unit Agreement for Employees for usage under the Company’s 2020
Form of EVP Global Restricted Stock Unit Agreement for Employees for usage under the Company’s 2020
Equity Incentive Plan adopted March 7, 2022, filed as exhibit 10.1 to the Company's Quarterly Report on Form
Equity Incentive Plan adopted March 7, 2022, filed as exhibit 10.1 to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended April 30, 2022 (File No. 1-7819) as filed with the Commission on May 18,
10-Q for the fiscal quarter ended April 30, 2022 (File No. 1-7819) as filed with the Commission on May 18,
2022 and incorporated herein by reference.
2022 and incorporated herein by reference.
*10.39
*10.39
Form of EVP Performance Restricted Stock Unit Agreement for Employees for usage under the Company's 2020
Form of EVP Performance Restricted Stock Unit Agreement for Employees for usage under the Company's 2020
Equity Incentive Plan adopted March 7, 2022, filed as exhibit 10.2 to the Company's Quarterly Report on Form
Equity Incentive Plan adopted March 7, 2022, filed as exhibit 10.2 to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended April 30, 2022 (File No. 1-7819) as filed with the Commission on May 18,
10-Q for the fiscal quarter ended April 30, 2022 (File No. 1-7819) as filed with the Commission on May 18,
2022 and incorporated herein by reference.
2022 and incorporated herein by reference.
*10.40
*10.40
Form of Relative Total Shareholder Return Performance Restricted Stock Unit Agreement for Employees for
Form of Relative Total Shareholder Return Performance Restricted Stock Unit Agreement for Employees for
usage under the Company's 2020 Equity Incentive Plan adopted April 4, 2022, filed as exhibit 10.3 to the
usage under the Company's 2020 Equity Incentive Plan adopted April 4, 2022, filed as exhibit 10.3 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2022 (File No. 1-7819) as filed
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2022 (File No. 1-7819) as filed
with the Commission on May 18, 2022 and incorporated herein by reference.
with the Commission on May 18, 2022 and incorporated herein by reference.
*10.41
*10.41
ADI Executive Performance Incentive Plan, filed as exhibit 10.6 to the Company's Quarterly Report on Form
ADI Executive Performance Incentive Plan, filed as exhibit 10.6 to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended April 30, 2022 (File No. 1-7819) as filed with the Commission on May 18,
10-Q for the fiscal quarter ended April 30, 2022 (File No. 1-7819) as filed with the Commission on May 18,
2022 and incorporated herein by reference.
2022 and incorporated herein by reference.
*10.42
*10.42
Form of Executive Relative Total Shareholder Return Performance Restricted Stock Unit Agreement for
Form of Executive Relative Total Shareholder Return Performance Restricted Stock Unit Agreement for
Employees for usage under the Company's 2020 Equity Incentive Plan adopted June 6, 2022, filed as exhibit
Employees for usage under the Company's 2020 Equity Incentive Plan adopted June 6, 2022, filed as exhibit
10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 30, 2022 (File No.
10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 30, 2022 (File No.
1-7819) as filed with the Commission on August 17, 2022 and incorporated herein by reference.
1-7819) as filed with the Commission on August 17, 2022 and incorporated herein by reference.
*10.43
*10.43
Form of Executive Financial Performance Restricted Stock Unit Agreement for Employees for usage under the
Form of Executive Financial Performance Restricted Stock Unit Agreement for Employees for usage under the
Company's 2020 Equity Incentive Plan adopted June 6, 2022, filed as exhibit 10.2 to the Company's Quarterly
Company's 2020 Equity Incentive Plan adopted June 6, 2022, filed as exhibit 10.2 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended July 30, 2022 (File No. 1-7819) as filed with the Commission
Report on Form 10-Q for the fiscal quarter ended July 30, 2022 (File No. 1-7819) as filed with the Commission
on August 17, 2022 and incorporated herein by reference.
on August 17, 2022 and incorporated herein by reference.
*10.44
*10.44
Amended and Restated 1996 Stock Incentive Plan, filed as exhibit 10.36 to the Company's Annual Report on
Amended and Restated 1996 Stock Incentive Plan, filed as exhibit 10.36 to the Company's Annual Report on
Form 10-K for the fiscal year ended October 30, 2021 (File No. 1-7819) as filed with the Commission on
Form 10-K for the fiscal year ended October 30, 2021 (File No. 1-7819) as filed with the Commission on
December 3, 2021 and incorporated herein by reference.
December 3, 2021 and incorporated herein by reference.
*10.45
*10.45
Form of Global Restricted Stock Unit Agreement for usage under the Amended and Restated 1996 Stock
Form of Global Restricted Stock Unit Agreement for usage under the Amended and Restated 1996 Stock
Incentive Plan, filed as exhibit 10.37 to the Company's Annual Report on Form 10-K for the fiscal year ended
Incentive Plan, filed as exhibit 10.37 to the Company's Annual Report on Form 10-K for the fiscal year ended
October 30, 2021 (File No. 1-7819) as filed with the Commission on December 3, 2021 and incorporated herein
October 30, 2021 (File No. 1-7819) as filed with the Commission on December 3, 2021 and incorporated herein
by reference.
by reference.
by reference.
by reference.
*10.46
*10.46
Form of Global Non-Qualified Stock Option Agreement for usage under the Amended and Restated 1996 Stock
Form of Global Non-Qualified Stock Option Agreement for usage under the Amended and Restated 1996 Stock
Incentive Plan, filed as exhibit 10.38 to the Company's Annual Report on Form 10-K for the fiscal year ended
Incentive Plan, filed as exhibit 10.38 to the Company's Annual Report on Form 10-K for the fiscal year ended
October 30, 2021 (File No. 1-7819) as filed with the Commission on December 3, 2021 and incorporated herein
October 30, 2021 (File No. 1-7819) as filed with the Commission on December 3, 2021 and incorporated herein
*10.47
*10.47
Form of Global Restricted Stock Unit Agreement for Employees for usage under the Company’s 1996 Stock
Form of Global Restricted Stock Unit Agreement for Employees for usage under the Company’s 1996 Stock
Incentive Plan adopted December 7, 2021, filed as exhibit 10.3 to the Company's Quarterly Report on Form 10-
Incentive Plan adopted December 7, 2021, filed as exhibit 10.3 to the Company's Quarterly Report on Form 10-
Q for the fiscal quarter ended January 29, 2022 (File No. 1-7819) as filed with the Commission on February 16,
Q for the fiscal quarter ended January 29, 2022 (File No. 1-7819) as filed with the Commission on February 16,
2022 and incorporated herein by reference.
2022 and incorporated herein by reference.
*10.48
*10.48
Form of Employee Retention Agreement, filed as exhibit 10.1 to the Company's Quarterly Report on Form 10-Q
Form of Employee Retention Agreement, filed as exhibit 10.1 to the Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended May 5, 2012 (File No. 1-7819) as filed with the Commission on May 22, 2012 and
for the fiscal quarter ended May 5, 2012 (File No. 1-7819) as filed with the Commission on May 22, 2012 and
incorporated herein by reference.
incorporated herein by reference.
*10.49
*10.49
Employee Change in Control Severance Policy of Analog Devices, Inc., as amended, filed as exhibit 10.20 to the
Employee Change in Control Severance Policy of Analog Devices, Inc., as amended, filed as exhibit 10.20 to the
Company's Annual Report on Form 10-K for the fiscal year ended October 30, 1999 (File No. 1-7819) as filed
Company's Annual Report on Form 10-K for the fiscal year ended October 30, 1999 (File No. 1-7819) as filed
with the Commission on January 28, 2000 and incorporated herein by reference.
with the Commission on January 28, 2000 and incorporated herein by reference.
*10.50
*10.50
Senior Management Change in Control Severance Policy of Analog Devices, Inc., as amended, filed as exhibit
Senior Management Change in Control Severance Policy of Analog Devices, Inc., as amended, filed as exhibit
10.21 to the Company's Annual Report on Form 10-K for the fiscal year ended October 30, 1999 (File No.
10.21 to the Company's Annual Report on Form 10-K for the fiscal year ended October 30, 1999 (File No.
1-7819) as filed with the Commission on January 28, 2000 and incorporated herein by reference.
1-7819) as filed with the Commission on January 28, 2000 and incorporated herein by reference.
*10.51
*10.51
Offer Letter for Prashanth Mahendra-Rajah, dated August 4, 2017, filed as exhibit 10.28 to the Company's
Offer Letter for Prashanth Mahendra-Rajah, dated August 4, 2017, filed as exhibit 10.28 to the Company's
Annual Report on Form 10-K for the fiscal year ended October 28, 2017 (File No. 1-7819) as filed with the
Annual Report on Form 10-K for the fiscal year ended October 28, 2017 (File No. 1-7819) as filed with the
Commission on November 22, 2017 and incorporated herein by reference.
Commission on November 22, 2017 and incorporated herein by reference.
*10.52 Maxim Integrated Products, Inc. Amended and Restated Change in Control Employee Severance Plan for U.S.
*10.52 Maxim Integrated Products, Inc. Amended and Restated Change in Control Employee Severance Plan for U.S.
Based Employees, filed as exhibit 10.1 to Maxim Integrated Products, Inc.'s Quarterly Report on Form 10-Q for
Based Employees, filed as exhibit 10.1 to Maxim Integrated Products, Inc.'s Quarterly Report on Form 10-Q for
the fiscal quarter ended December 26, 2020 (File No. 1-34192) as filed with the Commission on January 27,
the fiscal quarter ended December 26, 2020 (File No. 1-34192) as filed with the Commission on January 27,
2021 and incorporated herein by reference.
2021 and incorporated herein by reference.
*10.53
*10.53
Form of Indemnification Agreement for Directors and Officers, filed as exhibit 10.30 to the Company's Annual
Form of Indemnification Agreement for Directors and Officers, filed as exhibit 10.30 to the Company's Annual
Report on Form 10-K for the fiscal year ended November 1, 2008 (File No. 1-7819) as filed with the
Report on Form 10-K for the fiscal year ended November 1, 2008 (File No. 1-7819) as filed with the
Commission on November 25, 2008 and incorporated herein by reference.
Commission on November 25, 2008 and incorporated herein by reference.
*10.55
*10.56
*10.57
*10.58
†21
†23
†31.1
†31.2
Exhibit No.
*10.54
Exhibit No.
*10.54
Description
Description
Credit Agreement, dated as of June 28, 2019, among Analog Devices, Inc., as Borrower, JPMorgan Chase Bank,
Credit Agreement, dated as of June 28, 2019, among Analog Devices, Inc., as Borrower, JPMorgan Chase Bank,
N.A. as Administrative Agent and each lender from time to time party thereto, filed as exhibit 10.1 to the
N.A. as Administrative Agent and each lender from time to time party thereto, filed as exhibit 10.1 to the
Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on July 1, 2019 and
Company's Current Report on Form 8-K (File No. 1-7819) as filed with the Commission on July 1, 2019 and
incorporated herein by reference.
incorporated herein by reference.
*10.55
Third Amended and Restated Credit Agreement, dated as of June 23, 2021, among Analog Devices, Inc., as
Third Amended and Restated Credit Agreement, dated as of June 23, 2021, among Analog Devices, Inc., as
Borrower, Bank of America, N.A. as Administrative Agent, Swing Line Lender and L/C Issuer, and each lender
Borrower, Bank of America, N.A. as Administrative Agent, Swing Line Lender and L/C Issuer, and each lender
from time to time party thereto, filed as exhibit 10.1 to the Company's Current Report on Form 8-K (File No.
from time to time party thereto, filed as exhibit 10.1 to the Company's Current Report on Form 8-K (File No.
1-7819) as filed with the Commission on June 23, 2021 and incorporated herein by reference.
1-7819) as filed with the Commission on June 23, 2021 and incorporated herein by reference.
*10.56
Analog Devices, Inc. 2022 Employee Stock Purchase Plan, included as Appendix B to the Company’s definitive
proxy statement on Schedule 14A (File No. 001-07819) as filed with the Securities and Exchange Commission
on January 21, 2022 and incorporated herein by reference.
Analog Devices, Inc. 2022 Employee Stock Purchase Plan, included as Appendix B to the Company’s definitive
proxy statement on Schedule 14A (File No. 001-07819) as filed with the Securities and Exchange Commission
on January 21, 2022 and incorporated herein by reference.
*10.57
Offer Letter for Gregory Bryant dated December 14, 2021 filed as exhibit 10.4 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended April 30, 2022 (File No. 1-7819) as filed with the Commission
on May 18, 2022 and incorporated herein by reference.
Offer Letter for Gregory Bryant dated December 14, 2021 filed as exhibit 10.4 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended April 30, 2022 (File No. 1-7819) as filed with the Commission
on May 18, 2022 and incorporated herein by reference.
*10.58
2022 First and Second Fiscal Quarters Executive Performance Incentive Plan filed as exhibit 10.40 to the
Company's Annual Report on Form 10-K for the fiscal year ended October 30, 2021 (File No. 1-7819) as filed
with the Commission on December 3, 2021 and incorporated herein by reference.
2022 First and Second Fiscal Quarters Executive Performance Incentive Plan filed as exhibit 10.40 to the
Company's Annual Report on Form 10-K for the fiscal year ended October 30, 2021 (File No. 1-7819) as filed
with the Commission on December 3, 2021 and incorporated herein by reference.
†21
†23
†31.1
†31.2
Subsidiaries of the Company.
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
Certification Pursuant to Rule 13a-14(a) and 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).
Certification Pursuant to Rule 13a-14(a) and 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).
Certification Pursuant to 18 U.S.C. Section 1350 (Chief Executive Officer).
Subsidiaries of the Company.
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
Certification Pursuant to Rule 13a-14(a) and 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).
Certification Pursuant to Rule 13a-14(a) and 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).
Certification Pursuant to 18 U.S.C. Section 1350 (Chief Executive Officer).
Certification Pursuant to 18 U.S.C. Section 1350 (Chief Financial Officer).
The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within
the inline XBRL document.**
Certification Pursuant to 18 U.S.C. Section 1350 (Chief Financial Officer).
The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within
the inline XBRL document.**
†32.1
†32.2
101. INS
†32.1
†32.2
101. INS
101. SCH Inline XBRL Schema Document.**
101. SCH Inline XBRL Schema Document.**
101. CAL Inline XBRL Calculation Linkbase Document.**
101. CAL Inline XBRL Calculation Linkbase Document.**
101. LAB Inline XBRL Labels Linkbase Document.**
101. LAB Inline XBRL Labels Linkbase Document.**
101. PRE
101. PRE
Inline XBRL Presentation Linkbase Document.**
101. DEF
101. DEF
Inline XBRL Definition Linkbase Document**
104
104
Cover page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information
contained in Exhibits 101).
Inline XBRL Presentation Linkbase Document.**
Inline XBRL Definition Linkbase Document**
Cover page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information
contained in Exhibits 101).
_______________________________________
_______________________________________
†
*
**
Filed herewith.
Management contracts and compensatory plan or arrangements required to be filed as an Exhibit pursuant to
Item 15(b) of Form 10-K.
†
Filed herewith.
*
Management contracts and compensatory plan or arrangements required to be filed as an Exhibit pursuant to
Item 15(b) of Form 10-K.
**
Submitted electronically herewith.
Submitted electronically herewith.
Attached as Exhibit 101 to this report are the following formatted in iXBRL (Inline Extensible Business Reporting Language):
Attached as Exhibit 101 to this report are the following formatted in iXBRL (Inline Extensible Business Reporting Language):
(i) Consolidated Statements of Income for the years ended October 29, 2022, October 30, 2021 and October 31, 2020,
(i) Consolidated Statements of Income for the years ended October 29, 2022, October 30, 2021 and October 31, 2020,
(ii) Consolidated Balance Sheets as of October 29, 2022 and October 30, 2021, (iii) Consolidated Statements of Shareholders’
(ii) Consolidated Balance Sheets as of October 29, 2022 and October 30, 2021, (iii) Consolidated Statements of Shareholders’
Equity for the years ended October 29, 2022, October 30, 2021 and October 31, 2020, (iv) Consolidated Statements of
Equity for the years ended October 29, 2022, October 30, 2021 and October 31, 2020, (iv) Consolidated Statements of
Comprehensive Income for the years ended October 29, 2022, October 30, 2021 and October 31, 2020, (v) Consolidated
Comprehensive Income for the years ended October 29, 2022, October 30, 2021 and October 31, 2020, (v) Consolidated
Statements of Cash Flows for the years ended October 29, 2022, October 30, 2021 and October 31, 2020 and (vi) Notes to
Statements of Cash Flows for the years ended October 29, 2022, October 30, 2021 and October 31, 2020 and (vi) Notes to
Consolidated Financial Statements for the years ended October 29, 2022, October 30, 2021 and October 31, 2020.
Consolidated Financial Statements for the years ended October 29, 2022, October 30, 2021 and October 31, 2020.
93
94
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
(dollar amounts in thousands)
(dollar amounts in thousands)
Balance at
Balance at
Beginning of
Beginning of
Period
Period
Additions
Additions
(Reductions)
(Reductions)
Charged to
Charged to
Income
Income
Statement
Statement
Other
Other
Deductions
Deductions
Balance at
Balance at
End of Period
End of Period
Description
Description
Asset:
Asset:
Valuation Allowance for Deferred Tax
Valuation Allowance for Deferred Tax
Year ended October 31, 2020
Year ended October 31, 2020
Year ended October 30, 2021
Year ended October 30, 2021
Year ended October 29, 2022
Year ended October 29, 2022
$
$
$
$
$
$
116,349 $
116,349 $
37,622 $
37,622 $
159
159
154,130 $
154,130 $
13,714 $
13,714 $
147,590 (1) $
147,590 (1) $
315,434 $
315,434 $
29,738 $
29,738 $
(6,067)
(6,067)
$
$
$
$
— $
— $
— $
— $
— $
— $
154,130
154,130
315,434
315,434
339,105
339,105
_______________________________________
_______________________________________
(1) Represents balances assumed as part of the Acquisition.
(1) Represents balances assumed as part of the Acquisition.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANNUAL REPORT ON FORM 10-K
ANNUAL REPORT ON FORM 10-K
YEAR ENDED OCTOBER 29, 2022
YEAR ENDED OCTOBER 29, 2022
FINANCIAL STATEMENT SCHEDULE
FINANCIAL STATEMENT SCHEDULE
95
95
96
96
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
Years ended October 29, 2022, October 30, 2021 and October 31, 2020
(dollar amounts in thousands)
(dollar amounts in thousands)
Balance at
Balance at
Beginning of
Beginning of
Period
Period
Additions
Additions
(Reductions)
(Reductions)
Charged to
Charged to
Income
Income
Statement
Statement
Other
Other
Deductions
Deductions
Balance at
Balance at
End of Period
End of Period
Description
Description
Valuation Allowance for Deferred Tax
Valuation Allowance for Deferred Tax
Asset:
Asset:
159
159
$
$
147,590 (1) $
147,590 (1) $
$
$
(6,067)
(6,067)
— $
— $
— $
— $
— $
— $
154,130
154,130
315,434
315,434
339,105
339,105
Year ended October 31, 2020
Year ended October 31, 2020
Year ended October 30, 2021
Year ended October 30, 2021
Year ended October 29, 2022
Year ended October 29, 2022
$
$
$
$
$
$
116,349 $
116,349 $
37,622 $
37,622 $
154,130 $
154,130 $
315,434 $
315,434 $
13,714 $
13,714 $
29,738 $
29,738 $
_______________________________________
_______________________________________
(1) Represents balances assumed as part of the Acquisition.
(1) Represents balances assumed as part of the Acquisition.
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
ANNUAL REPORT ON FORM 10-K
ANNUAL REPORT ON FORM 10-K
YEAR ENDED OCTOBER 29, 2022
YEAR ENDED OCTOBER 29, 2022
FINANCIAL STATEMENT SCHEDULE
FINANCIAL STATEMENT SCHEDULE
95
95
96
96
ITEM 16.
ITEM 16.
FORM 10-K SUMMARY
FORM 10-K SUMMARY
None.
None.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
SIGNATURES
Date: November 22, 2022
Date: November 22, 2022
By:
By:
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
/s/ Vincent Roche
/s/ Vincent Roche
Vincent Roche
Vincent Roche
Chief Executive Officer and Chair of the Board of Directors
Chief Executive Officer and Chair of the Board of Directors
(Principal Executive Officer)
(Principal Executive Officer)
Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following
Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.
persons on behalf of the registrant and in the capacities and on the dates indicated.
Name
Name
Title
Title
Date
Date
/s/ Vincent Roche
/s/ Vincent Roche
Vincent Roche
Vincent Roche
Chief Executive Officer and Chair of
Chief Executive Officer and Chair of
November 22, 2022
November 22, 2022
the Board of Directors
the Board of Directors
(Principal Executive Officer)
(Principal Executive Officer)
/s/ Prashanth Mahendra-Rajah
/s/ Prashanth Mahendra-Rajah
Prashanth Mahendra-Rajah
Prashanth Mahendra-Rajah
Executive Vice President, Finance and
Executive Vice President, Finance and
November 22, 2022
November 22, 2022
Chief Financial Officer
Chief Financial Officer
(Principal Financial Officer)
(Principal Financial Officer)
/s/ Michael Sondel
/s/ Michael Sondel
Michael Sondel
Michael Sondel
/s/ André Andonian
/s/ André Andonian
André Andonian
André Andonian
/s/ James A. Champy
/s/ James A. Champy
James A. Champy
James A. Champy
/s/ Anantha P. Chandrakasan
/s/ Anantha P. Chandrakasan
Anantha P. Chandrakasan
Anantha P. Chandrakasan
/s/ Tunç Doluca
/s/ Tunç Doluca
Tunç Doluca
Tunç Doluca
/s/ Bruce R. Evans
/s/ Bruce R. Evans
Bruce R. Evans
Bruce R. Evans
/s/ Edward H. Frank
/s/ Edward H. Frank
Edward H. Frank
Edward H. Frank
/s/ Laurie H. Glimcher
/s/ Laurie H. Glimcher
Laurie H. Glimcher
Laurie H. Glimcher
/s/ Karen M. Golz
/s/ Karen M. Golz
Karen M. Golz
Karen M. Golz
Corporate Vice President and Chief
Corporate Vice President and Chief
November 22, 2022
November 22, 2022
Accounting Officer
Accounting Officer
(Principal Accounting Officer)
(Principal Accounting Officer)
Director
Director
November 22, 2022
November 22, 2022
Director
Director
November 22, 2022
November 22, 2022
Director
Director
November 22, 2022
November 22, 2022
Director
Director
November 22, 2022
November 22, 2022
Director
Director
November 22, 2022
November 22, 2022
Director
Director
November 22, 2022
November 22, 2022
Director
Director
November 22, 2022
November 22, 2022
Director
Director
November 22, 2022
November 22, 2022
97
97
98
98
ITEM 16.
ITEM 16.
FORM 10-K SUMMARY
FORM 10-K SUMMARY
None.
None.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
SIGNATURES
Date: November 22, 2022
Date: November 22, 2022
By:
By:
/s/ Vincent Roche
/s/ Vincent Roche
ANALOG DEVICES, INC.
ANALOG DEVICES, INC.
Vincent Roche
Vincent Roche
Chief Executive Officer and Chair of the Board of Directors
Chief Executive Officer and Chair of the Board of Directors
(Principal Executive Officer)
(Principal Executive Officer)
Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following
Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.
persons on behalf of the registrant and in the capacities and on the dates indicated.
Name
Name
Title
Title
Date
Date
/s/ Vincent Roche
/s/ Vincent Roche
Vincent Roche
Vincent Roche
Chief Executive Officer and Chair of
Chief Executive Officer and Chair of
the Board of Directors
the Board of Directors
(Principal Executive Officer)
(Principal Executive Officer)
November 22, 2022
November 22, 2022
/s/ Prashanth Mahendra-Rajah
/s/ Prashanth Mahendra-Rajah
Prashanth Mahendra-Rajah
Prashanth Mahendra-Rajah
Executive Vice President, Finance and
Executive Vice President, Finance and
Chief Financial Officer
Chief Financial Officer
(Principal Financial Officer)
(Principal Financial Officer)
November 22, 2022
November 22, 2022
/s/ Michael Sondel
/s/ Michael Sondel
Michael Sondel
Michael Sondel
/s/ André Andonian
/s/ André Andonian
André Andonian
André Andonian
/s/ James A. Champy
/s/ James A. Champy
James A. Champy
James A. Champy
/s/ Anantha P. Chandrakasan
/s/ Anantha P. Chandrakasan
Anantha P. Chandrakasan
Anantha P. Chandrakasan
/s/ Tunç Doluca
/s/ Tunç Doluca
Tunç Doluca
Tunç Doluca
/s/ Bruce R. Evans
/s/ Bruce R. Evans
Bruce R. Evans
Bruce R. Evans
/s/ Edward H. Frank
/s/ Edward H. Frank
Edward H. Frank
Edward H. Frank
/s/ Laurie H. Glimcher
/s/ Laurie H. Glimcher
Laurie H. Glimcher
Laurie H. Glimcher
/s/ Karen M. Golz
/s/ Karen M. Golz
Karen M. Golz
Karen M. Golz
Corporate Vice President and Chief
Corporate Vice President and Chief
Accounting Officer
Accounting Officer
(Principal Accounting Officer)
(Principal Accounting Officer)
November 22, 2022
November 22, 2022
Director
Director
November 22, 2022
November 22, 2022
Director
Director
November 22, 2022
November 22, 2022
Director
Director
November 22, 2022
November 22, 2022
Director
Director
November 22, 2022
November 22, 2022
Director
Director
November 22, 2022
November 22, 2022
Director
Director
November 22, 2022
November 22, 2022
Director
Director
November 22, 2022
November 22, 2022
Director
Director
November 22, 2022
November 22, 2022
97
97
98
98
Name
/s/ Mercedes Johnson
Mercedes Johnson
/s/ Kenton J. Sicchitano
Kenton J. Sicchitano
/s/ Ray Stata
Ray Stata
/s/ Susie Wee
Susie Wee
Title
Director
Date
November 22, 2022
Director
November 22, 2022
Director
November 22, 2022
Director
November 22, 2022
99
Name
/s/ Mercedes Johnson
Mercedes Johnson
/s/ Kenton J. Sicchitano
Kenton J. Sicchitano
/s/ Ray Stata
Ray Stata
/s/ Susie Wee
Susie Wee
Title
Director
Date
November 22, 2022
Director
November 22, 2022
Director
November 22, 2022
Director
November 22, 2022
Notes
99
BOARD OF DIRECTORS
Nominees at the Annual Meeting
Anantha P. Chandrakasan, Ph.D.
Dean of the MIT School of
Engineering and Vannevar Bush
Professor of Electrical Engineering
and Computer Science
Dr. Laurie H. Glimcher
Professor of Medicine at Harvard
Medical School and President and
Chief Executive Officer of the
Dana-Farber Cancer Institute
Edward H. Frank, Ph.D.
Executive Chair of Gradient
Technologies
Karen M. Golz
Former Global Vice Chair of Ernst
& Young
Mercedes Johnson
Former Chief Financial Officer
of Avago Technologies (now
Broadcom Inc.)
Vincent Roche
Chief Executive Officer and
Chair of the Board of Directors
of Analog Devices, Inc.
James A. Champy
Former Vice President of the
Dell/Perot Systems business unit
of Dell, Inc.
André Andonian
Chief Executive Officer of
Andonian Advisory Pte. Ltd.
and Senior Partner Emeritus at
McKinsey & Company
Kenton J. Sicchitano
Former Global Managing Partner
of PricewaterhouseCoopers LLP
Ray Stata
Co-Founder and Former Chair of
the Board of Directors of Analog
Devices, Inc.
Susie Wee, Ph.D.
Vice President, Google
Vincent Roche
Chief Executive Officer and Chair of
the Board of Directors
Janene Asgeirsson
Senior Vice President, Chief Legal
Officer, Chief Risk Officer and
Secretary
Gregory Bryant
Executive Vice President and
President of Business Units
LEADERSHIP TEAM
John Hassett
Senior Vice President and Chief
Operating Officer, Maxim Business
Vivek Jain
Executive Vice President, Global
Operations & Technology
Prashanth Mahendra-Rajah
Executive Vice President, Finance
and Chief Financial Officer
Anelise Sacks
Senior Vice President and Chief
Customer Officer
Mariya Trickett
Senior Vice President and Chief People
Officer
Independent Registered Public
Accounting Firm
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116
Transfer Agent
Computershare
P.O. Box 43006
Providence, RI 02940-3006
(877) 282-1168 (U.S.)
(781) 575-2715 (Outside U.S.)
computershare.com/investor
Shareholder Inquiries
Shareholders of record should
contact Computershare with
inquiries about their holdings,
dividends, transfers of
ownership, address changes or
account consolidations.
Stock Trading
Analog Devices’ common
stock trades on The Nasdaq
Global Select Market under the
symbol ADI.
Other Information
To obtain a free copy of the 2022
Annual Report on Form 10-K,
Corporate Governance Guidelines,
Code of Business Conduct and
Ethics, or additional information,
visit investor.analog.com or
write to:
Analog Devices, Inc.
Investor Relations
One Analog Way
Wilmington, MA 01887
Email: investor.relations@analog.com
Annual Meeting
Analog Devices will hold its
Annual Shareholders’ Meeting
at 9:00 a.m. (local time) on
Wednesday, March 8, 2023 at
125 Summer Street
Boston, MA 02110.
Analog Devices and the Analog Devices logo are registered trademarks of Analog Devices, Inc. All other marks are trademarks of their
respective owners.