Summary of Significant Accounting Policies (Tables)

12 Months Ended

Oct. 28, 2017

Unrealized gains and losses on available-for-sale securities classified as short-term investments

Gross unrealized gains and losses on available-for-sale securities classified as short-term investments at October 28, 2017 and October 29, 2016 were as follows:



	2017			2016
Unrealized gains on securities classified as short-term investments	$	2		$	846
Unrealized losses on securities classified as short-term investments	(2		)	(294		)
Net unrealized gain on securities classified as short-term investments	$	—		$	552

Cash and cash equivalents and short term investments

The components of the Company’s cash and cash equivalents and short-term investments as of October 28, 2017 and October 29, 2016 were as follows:



	2017		2016
Cash and cash equivalents:
Cash	$	226,160	$	67,877
Available-for-sale	751,678		693,255
Held-to-maturity	70,000		160,000
Total cash and cash equivalents	$	1,047,838	$	921,132
Short-term investments:
Available-for-sale	$	—	$	3,110,011
Held-to-maturity (less than one year to maturity)	—		24,650
Total short-term investments	$	—	$	3,134,661

Supplemental cash flow statement Information



	2017		2016		2015
Cash paid during the fiscal year for:
Income taxes	$	868,492	$	77,918	$	142,931
Interest	$	183,117	$	41,701	$	25,625

Inventories

Inventories at October 28, 2017 and October 29, 2016 were as follows:



	2017		2016
Raw materials	$	35,436	$	20,263
Work in process	376,476		232,196
Finished goods	138,904		124,096
Total inventories	$	550,816	$	376,555

Useful lives of property, plant and equipment

Depreciation is based on the following ranges of estimated useful lives:



Buildings	Up to 30 years
Machinery & equipment	3-10 years
Office equipment	3-10 years

Changes in goodwill

The following table presents the changes in goodwill during fiscal 2017 and fiscal 2016:



	2017		2016
Balance at beginning of year	$	1,679,116	$	1,636,526
Acquisition of Linear (Note 6)	10,532,272		—
Goodwill adjustment related to other acquisitions (1)	4,198		44,046
Foreign currency translation adjustment	1,869		(1,456		)
Balance at end of year	$	12,217,455	$	1,679,116

(1) Represents goodwill related to other acquisitions that were not material to the Company on either an individual or aggregate basis.

Intangible Assets

As of October 28, 2017 and October 29, 2016, the Company’s intangible assets consisted of the following:



	October 28, 2017				October 29, 2016
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Customer relationships	$	4,683,461	$	449,369	$	649,159	$	158,979
Technology-based	1,097,025		101,920		38,731		9,958
Trade-name	72,800		6,906		600		60
Backlog	200		200		200		—
IPR&D	24,334		—		29,675		—
Total (1) (2)	$	5,877,820	$	558,395	$	718,365	$	168,997

________

(1) Foreign intangible asset carrying amounts are affected by foreign currency translation.

(2) Increases in intangible assets primarily relate to the Acquisition and other acquisitions. See Note 6, Acquisitions, of these Notes to Consolidated Financial Statements for further information.

Schedule of expected annual amortization expense

The Company expects annual amortization expense for intangible assets as follows:



Fiscal Year	Amortization Expense
2018	$	565,885
2019	$	562,696
2020	$	562,457
2021	$	562,037
2022	$	559,107

Fair value of hedging instruments

The fair values of forward foreign currency derivative instruments designated as hedging instruments in the Company’s consolidated balance sheets as of October 28, 2017 and October 29, 2016 were as follows:



		Fair Value At
	Balance Sheet Location	October 28, 2017		October 29, 2016
Forward foreign currency exchange contracts	Prepaid expenses and other current assets	$	257	$	—
Forward foreign currency exchange contracts	Accrued liabilities	$	—	$	5,260

Offsetting Assets Liabilities

The following table presents the gross amounts of the Company's derivative assets and liabilities and the net amounts recorded in the Company's consolidated balance sheet as of October 28, 2017 and October 29, 2016:



	October 28, 2017			October 29, 2016
Gross amount of recognized liabilities	$	(5,039	)	$	(5,788	)
Gross amounts of recognized assets offset in the consolidated balance sheet	3,512			557
Net liabilities presented in the consolidated balance sheet	$	(1,527	)	$	(5,231	)

Fair value of financial assets and liabilities

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 28, 2017 and October 29, 2016. 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 October 28, 2017 and October 29, 2016, the Company held $296.2 million and $252.5 million, respectively, of cash and held-to-maturity investments that were excluded from the tables below.



	October 28, 2017
	Fair Value measurement at Reporting Date using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total
Assets
Cash equivalents:
Available-for-sale:
Government and institutional money market funds	$	512,882	$	—	$	—	$	512,882
Corporate obligations (1)	—		238,796		—		238,796
Other assets:
Deferred compensation investments	33,510		—		—		33,510
Interest rate derivatives	—		2,966		—		2,966
Total assets measured at fair value	$	546,392	$	241,762	$	—	$	788,154
Liabilities
Contingent consideration	—		—		7,891		7,891
Forward foreign currency exchange contracts (2)	—		1,527		—		1,527
Total liabilities measured at fair value	$	—	$	1,527	$	7,891	$	9,418


(1)	The amortized cost of the Company’s investments classified as available-for-sale as of October 28, 2017 was $238.9 million.


(2)	The Company has netting arrangements by counterparty with respect to derivative contracts. See Note 2i, Derivative Instruments and Hedging Agreements, of these Notes to Consolidated Financial Statements for more information related to the Company's master netting arrangements.



	October 29, 2016
	Fair Value measurement at Reporting Date using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total
Assets
Cash equivalents:
Available-for-sale:
Institutional money market funds	$	277,595	$	—	$	—	$	277,595
Corporate obligations (1)	—		415,660		—		415,660
Short - term investments:
Available-for-sale:
Securities with one year or less to maturity:
Corporate obligations (1)	—		2,518,148		—		2,518,148
Floating rate notes, issued at par	—		29,989		—		29,989
Floating rate notes (1)	—		561,874		—		561,874
Other assets:
Deferred compensation investments	26,916		—		—		26,916
Total assets measured at fair value	$	304,511	$	3,525,671	$	—	$	3,830,182
Liabilities
Contingent consideration	—		—		7,555		7,555
Forward foreign currency exchange contracts (2)	—		5,231		—		5,231
Total liabilities measured at fair value	$	—	$	5,231	$	7,555	$	12,786


(1)	The amortized cost of the Company’s investments classified as available-for-sale as of October 29, 2016 was $3.5 billion.


(2)	The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 2i, Derivative Instruments and Hedging Agreements, of these Notes to Consolidated Financial Statements for more information related to the Company's master netting arrangements.

Schedule of fair value inputs

The fair value measurement of the contingent consideration encompasses the following significant unobservable inputs:



Unobservable Inputs	Range
Potential contingent consideration payments	$8,500
Discount rate	0% - 2%
Timing of cash flows	1 to 2 years
Probability of achievement	90% - 100%

Change in the fair value of the contingent consideration

The following table summarizes the change in the fair value of the contingent consideration measured using significant unobservable inputs (Level 3) from October 31, 2015 to October 28, 2017:



	Contingent Consideration
Balance as of October 31, 2015	$	2,843
Contingent consideration liability recorded	7,500
Payment made (1)	(1,489		)
Fair value adjustment (2)	(888		)
Effect of foreign currency	(411		)
Balance as of October 29, 2016	$	7,555
Contingent consideration liability recorded	2,000
Payment made (1)	(2,000		)
Fair value adjustment (2)	336
Balance as of October 28, 2017	$	7,891


(1)	The payment is reflected in the statements of cash flows as cash used in financing activities related to the liability recognized at fair value as of the acquisition date and as cash provided by operating activities related to the fair value adjustments previously recognized in earnings.


(2)	Recorded in research and development expense in the consolidated statements of income.

Components of accumulated other comprehensive (loss)

The components of accumulated other comprehensive loss at October 28, 2017 and October 29, 2016 consisted of the following, net of tax:



	Foreign currency translation adjustment			Unrealized holding gains on available for sale securities			Unrealized holding (losses) on available for sale securities			Unrealized holding Gains on Derivatives			Pension Plans			Total
October 29, 2016	$	(24,063	)	$	800		$	(281	)	$	(18,884	)	$	(31,386	)	$	(73,814	)
Other comprehensive income before reclassifications	16			(844		)	292			4,726			1,941			6,131
Amounts reclassified out of other comprehensive income	—			—			—			5,525			1,870			7,395
Tax effects	1,556			47			(12		)	(2,246		)	(416		)	(1,071		)
Other comprehensive income	1,572			(797		)	280			8,005			3,395			12,455
October 28, 2017	$	(22,491	)	$	3		$	(1	)	$	(10,879	)	$	(27,991	)	$	(61,359	)

Computation of basic and diluted earnings per share

The following table sets forth the computation of basic and diluted earnings per share:



	2017		2016		2015
Net Income	$	727,259	$	861,664	$	696,878
Less: income allocated to participating securities	2,243		—		—
Net income allocated to common shareholders	725,016		861,664		696,878

Basic shares:
Weighted-average shares outstanding	346,371		308,736		312,660
Earnings per common share basic	$	2.09	$	2.79	$	2.23

Diluted shares:
Weighted-average shares outstanding	346,371		308,736		312,660
Assumed exercise of common stock equivalents	4,113		3,572		4,212
Weighted-average common and common equivalent shares	350,484		312,308		316,872
Earnings per common share diluted	$	2.07	$	2.76	$	2.20
Anti-dilutive shares related to:
Outstanding stock options	1,527		3,077		2,089

Schedule of debt

The table below presents the estimated fair value of certain financial instruments not recorded at fair value on a recurring basis. The carrying amounts of the term loans approximate fair value. The term loans are classified as Level 2 measurements according to the fair value hierarchy. The fair values of the senior unsecured notes debt are obtained from broker prices and are classified as Level 1 measurements according to the fair value hierarchy. See Note 16, Debt, of these Notes to Consolidated Financial Statements for further discussion related outstanding debt.



	October 28, 2017			October 29, 2016
	Principal Amount Outstanding		Fair Value	Principal Amount Outstanding	Fair Value
3-Year term loan	$	1,950,000	1,950,000	—	—
5-Year term loan	2,100,000		2,100,000	—	—
2021 Notes, due December 2021	400,000		399,530	—	—
2023 Notes, due June 2023	500,000		498,582	500,000	501,307
2023 Notes, due December 2023	550,000		554,411	—	—
2025 Notes, due December 2025	850,000		884,861	850,000	901,523
2026 Notes, due December 2026	900,000		902,769	—	—
2036 Notes, due December 2036	250,000		259,442	—	—
2045 Notes, due December 2045	400,000		460,588	400,000	425,109

The Company’s debt consisted of the following as of October 28, 2017 and October 29, 2016:



	October 28, 2017				October 29, 2016
	Principal		Unamortized discount and debt issuance costs		Principal		Unamortized discount and debt issuance costs
3-Year term loan	$	1,650,000	$	3,270	$	—	$	—
5-Year term loan	2,100,000		4,727		—		—
2021 Notes, due December 2021	400,000		3,756		—		—
2023 Notes, due June 2023	500,000		3,434		500,000		4,047
2023 Notes, due December 2023	550,000		5,392		—		—
2025 Notes, due December 2025	850,000		7,154		850,000		8,034
2026 Notes, due December 2026	900,000		11,655		—		—
2036 Notes, due December 2036	250,000		3,983		—		—
2045 Notes, due December 2045	400,000		5,545		400,000		5,742
Total Long-Term Debt	$	7,600,000	$	48,916	$	1,750,000	$	17,823
3-Year term loan, current	300,000		—		—		—
Total Current Debt	$	300,000	$	—	$	—	$	—
Total Debt	$	7,900,000	$	48,916	$	1,750,000	$	17,823

Reclassification out of Accumulated Other Comprehensive Income [Table Text Block]

The amounts reclassified out of accumulated other comprehensive loss into the consolidated statement of income, with presentation location during each period were as follows:



	2017			2016
Comprehensive Income Component							Location
Unrealized holding (losses) gains on derivatives
Currency forwards	$	2,188		$	2,059		Cost of sales
	330			1,038			Research and development
	927			(579		)	Selling, marketing, general and administrative
Interest rate derivatives	2,080			1,969			Interest expense
	5,525			4,487			Total before tax
	(1,326		)	(1,050		)	Tax
	$	4,199		$	3,437		Net of tax

Amortization of pension components
Transition obligation	$	14		$	17		(a)
Prior service credit and curtailment recognition	(9		)	—			(a)
Actuarial losses and settlement recognition	1,865			830			(a)
	1,870			847			Total before tax
	(400		)	(228		)	Tax
	$	1,470		$	619		Net of tax

Total amounts reclassified out of accumulated other comprehensive income, net of tax	$	5,669		$	4,056

______________

a) The amortization of pension components is included in the computation of net periodic pension cost. See Note 13, Retirement Plans, of these Notes to Consolidated Financial Statements for further information.