þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Massachusetts | 04-2348234 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
One Technology Way, Norwood, MA | 02062-9106 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock $0.16 2/3 par value per share | Nasdaq Global Select Market |
Large accelerated filer | þ | Accelerated filer | ¨ | |||
Non-accelerated filer | o | Smaller reporting company | ¨ | |||
Emerging growth company | ¨ |
ITEM 1. | Financial Statements |
ANALOG DEVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in thousands, except per share amounts) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
May 4, 2019 | May 5, 2018 (2) | May 4, 2019 | May 5, 2018 (2) | ||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||
Cost of sales (1) | |||||||||||||||
Gross margin | |||||||||||||||
Operating expenses: | |||||||||||||||
Research and development (1) | |||||||||||||||
Selling, marketing, general and administrative (1) | |||||||||||||||
Amortization of intangibles | |||||||||||||||
Special charges | |||||||||||||||
Operating income | |||||||||||||||
Nonoperating expense (income): | |||||||||||||||
Interest expense | |||||||||||||||
Interest income | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Other, net | ( | ) | |||||||||||||
Income before income taxes | |||||||||||||||
Provision for income taxes | |||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Shares used to compute earnings per common share – basic | |||||||||||||||
Shares used to compute earnings per common share – diluted | |||||||||||||||
Basic earnings per common share | $ | $ | $ | $ | |||||||||||
Diluted earnings per common share | $ | $ | $ | $ | |||||||||||
(1) Includes stock-based compensation expense as follows: | |||||||||||||||
Cost of sales | $ | $ | $ | $ | |||||||||||
Research and development | $ | $ | $ | $ | |||||||||||
Selling, marketing, general and administrative | $ | $ | $ | $ |
ANALOG DEVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (in thousands) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
May 4, 2019 | May 5, 2018 (1) | May 4, 2019 | May 5, 2018 (1) | ||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | |||||||||
Change in fair value of available-for-sale securities | |||||||||||||||
Change in fair value of derivative instruments designated as cash flow hedges (net of taxes of $3,802, $771, $10,183 and $1,323, respectively) | ( | ) | ( | ) | ( | ) | |||||||||
Changes in pension plans including transition obligation, net actuarial loss and foreign currency translation adjustments (net of taxes of $63, $99, $126 and $202, respectively) | ( | ) | |||||||||||||
Other comprehensive (loss) income | ( | ) | ( | ) | ( | ) | |||||||||
Comprehensive income | $ | $ | $ | $ |
ANALOG DEVICES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except share and per share amounts) | |||||||
May 4, 2019 | November 3, 2018 (1) | ||||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | $ | |||||
Accounts receivable | |||||||
Inventories (2) | |||||||
Prepaid income tax | |||||||
Prepaid expenses and other current assets | |||||||
Total current assets | |||||||
Property, Plant and Equipment, at Cost | |||||||
Land and buildings | |||||||
Machinery and equipment | |||||||
Office equipment | |||||||
Leasehold improvements | |||||||
Less accumulated depreciation and amortization | |||||||
Net property, plant and equipment | |||||||
Other Assets | |||||||
Deferred compensation plan investments | |||||||
Other investments | |||||||
Goodwill | |||||||
Intangible assets, net | |||||||
Deferred tax assets | |||||||
Other assets | |||||||
Total other assets | |||||||
$ | $ | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current Liabilities | |||||||
Accounts payable | $ | $ | |||||
Income taxes payable | |||||||
Debt, current | |||||||
Accrued liabilities | |||||||
Total current liabilities | |||||||
Non-current liabilities | |||||||
Long-term debt | |||||||
Deferred income taxes | |||||||
Deferred compensation plan liability | |||||||
Income taxes payable | |||||||
Other non-current liabilities | |||||||
Total non-current liabilities | |||||||
Commitments and contingencies | |||||||
Shareholders’ Equity | |||||||
Preferred stock, $1.00 par value, 471,934 shares authorized, none outstanding | |||||||
Common stock, $0.16 2/3 par value, 1,200,000,000 shares authorized, 369,761,227 shares outstanding (370,159,553 on November 3, 2018) | |||||||
Capital in excess of par value | |||||||
Retained earnings | |||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Total shareholders’ equity | |||||||
$ | $ |
(1) | Balances have been restated to reflect the full retrospective adoption of Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (ASU 2014-09). See Note 1, Basis of Presentation, in the Notes to Condensed Consolidated Financial Statements. |
(2) | Includes $ |
Three Months Ended May 4, 2019 | ||||||||||||||||||
Capital in | Accumulated Other | |||||||||||||||||
Common Stock | Excess of | Retained | Comprehensive | |||||||||||||||
Shares | Amount | Par Value | Earnings | (Loss) Income | ||||||||||||||
BALANCE, FEBRUARY 2, 2019 | $ | $ | $ | $ | ( | ) | ||||||||||||
Net income | ||||||||||||||||||
Dividends declared and paid - $0.54 per share | ( | ) | ||||||||||||||||
Issuance of stock under stock plans and other | ||||||||||||||||||
Stock-based compensation expense | ||||||||||||||||||
Other comprehensive loss | ( | ) | ||||||||||||||||
Common stock repurchased | ( | ) | ( | ) | ( | ) | ||||||||||||
BALANCE, MAY 4, 2019 | $ | $ | $ | $ | ( | ) | ||||||||||||
Six Months Ended May 4, 2019 | ||||||||||||||||||
Capital in | Accumulated Other | |||||||||||||||||
Common Stock | Excess of | Retained | Comprehensive | |||||||||||||||
Shares | Amount | Par Value | Earnings | (Loss) Income | ||||||||||||||
BALANCE, NOVEMBER 3, 2018 (1) | $ | $ | $ | $ | ( | ) | ||||||||||||
Effect of Accounting Standards Update 2016-16 (see Note 1) | ||||||||||||||||||
Net income | ||||||||||||||||||
Dividends declared and paid - $1.02 per share | ( | ) | ||||||||||||||||
Issuance of stock under stock plans and other | ||||||||||||||||||
Stock-based compensation expense | ||||||||||||||||||
Other comprehensive loss | ( | ) | ||||||||||||||||
Common stock repurchased | ( | ) | ( | ) | ( | ) | ||||||||||||
BALANCE, MAY 4, 2019 | $ | $ | $ | $ | ( | ) |
(1) | Balances have been restated to reflect the full retrospective adoption of Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (ASU 2014-09). See Note 1, Basis of Presentation, in the Notes to Condensed Consolidated Financial Statements. |
Three Months Ended May 5, 2018 | ||||||||||||||||||
Capital in | Accumulated Other | |||||||||||||||||
Common Stock | Excess of | Retained | Comprehensive | |||||||||||||||
Shares | Amount | Par Value | Earnings | (Loss) Income | ||||||||||||||
BALANCE, FEBRUARY 3, 2018 (1) | $ | $ | $ | $ | ( | ) | ||||||||||||
Net income | ||||||||||||||||||
Dividends declared and paid - $0.48 per share | ( | ) | ||||||||||||||||
Issuance of stock under stock plans and other | ||||||||||||||||||
Stock-based compensation expense | ||||||||||||||||||
Other comprehensive loss | ( | ) | ||||||||||||||||
Common stock repurchased | ( | ) | ( | ) | ( | ) | ||||||||||||
BALANCE, MAY 5, 2018 | $ | $ | $ | $ | ( | ) | ||||||||||||
Six Months Ended May 5, 2018 | ||||||||||||||||||
Capital in | Accumulated Other | |||||||||||||||||
Common Stock | Excess of | Retained | Comprehensive | |||||||||||||||
Shares | Amount | Par Value | Earnings | (Loss) Income | ||||||||||||||
BALANCE, OCTOBER 28, 2017 (1) | $ | $ | $ | $ | ( | ) | ||||||||||||
Net income | ||||||||||||||||||
Dividends declared and paid - $0.93 per share | ( | ) | ||||||||||||||||
Issuance of stock under stock plans and other | ||||||||||||||||||
Stock-based compensation expense | ||||||||||||||||||
Other comprehensive income | ||||||||||||||||||
Common stock repurchased | ( | ) | ( | ) | ( | ) | ||||||||||||
BALANCE, MAY 5, 2018 | $ | $ | $ | $ | ( | ) |
(1) | Balances have been restated to reflect the full retrospective adoption of Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (ASU 2014-09). See Note 1, Basis of Presentation, in the Notes to Condensed Consolidated Financial Statements. |
Six Months Ended | |||||||
May 4, 2019 | May 5, 2018 (1) | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | $ | |||||
Adjustments to reconcile net income to net cash provided by operations: | |||||||
Depreciation | |||||||
Amortization of intangibles | |||||||
Stock-based compensation expense | |||||||
Non-cash portion of special charge | |||||||
Deferred income taxes | ( | ) | ( | ) | |||
Other non-cash activity | |||||||
Changes in operating assets and liabilities | ( | ) | |||||
Total adjustments | |||||||
Net cash provided by operating activities | |||||||
Cash flows from investing activities: | |||||||
Additions to property, plant and equipment | ( | ) | ( | ) | |||
Payments for acquisitions, net of cash acquired | ( | ) | |||||
Changes in other assets | ( | ) | ( | ) | |||
Net cash used for investing activities | ( | ) | ( | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from debt | |||||||
Proceeds from revolver | |||||||
Payments on revolver | ( | ) | |||||
Debt repayments | ( | ) | ( | ) | |||
Dividend payments to shareholders | ( | ) | ( | ) | |||
Repurchase of common stock | ( | ) | ( | ) | |||
Proceeds from employee stock plans | |||||||
Contingent consideration payment | ( | ) | ( | ) | |||
Changes in other financing activities | ( | ) | |||||
Net cash used for financing activities | ( | ) | ( | ) | |||
Effect of exchange rate changes on cash | |||||||
Net decrease in cash and cash equivalents | ( | ) | ( | ) | |||
Cash and cash equivalents at beginning of period | |||||||
Cash and cash equivalents at end of period | $ | $ |
Condensed Consolidated Statement of Income | Three Months Ended May 5, 2018 | ||||||||||
As Reported | Impact of Adoption | As Adjusted | |||||||||
Revenue | $ | $ | $ | ||||||||
Cost of sales | |||||||||||
Gross margin | |||||||||||
Operating expenses: | |||||||||||
Research and development | |||||||||||
Selling, marketing, general and administrative | |||||||||||
Amortization of intangibles | |||||||||||
Special charges | |||||||||||
Operating income | |||||||||||
Nonoperating expense (income): | |||||||||||
Interest expense | |||||||||||
Interest income | ( | ) | ( | ) | |||||||
Other, net | ( | ) | ( | ) | |||||||
Income before income taxes | |||||||||||
Provision for income taxes | |||||||||||
Net income | $ | $ | $ | ||||||||
Shares used to compute earnings per common share – basic | |||||||||||
Shares used to compute earnings per common share – diluted | |||||||||||
Basic earnings per common share | $ | $ | $ | ||||||||
Diluted earnings per common share | $ | $ | $ |
Condensed Consolidated Statement of Income | Six Months Ended May 5, 2018 | ||||||||||
As Reported | Impact of Adoption | As Adjusted | |||||||||
Revenue | $ | $ | $ | ||||||||
Cost of sales | |||||||||||
Gross margin | |||||||||||
Operating expenses: | |||||||||||
Research and development | |||||||||||
Selling, marketing, general and administrative | |||||||||||
Amortization of intangibles | |||||||||||
Special charges | |||||||||||
Operating income | |||||||||||
Nonoperating expense (income): | |||||||||||
Interest expense | |||||||||||
Interest income | ( | ) | ( | ) | |||||||
Other, net | |||||||||||
Income before income taxes | |||||||||||
Provision for income taxes | |||||||||||
Net income | $ | $ | $ | ||||||||
Shares used to compute earnings per common share – basic | |||||||||||
Shares used to compute earnings per common share – diluted | |||||||||||
Basic earnings per common share | $ | $ | $ | ||||||||
Diluted earnings per common share | $ | $ | $ |
November 3, 2018 | |||||||||||
As Reported | Impact of Adoption | As Adjusted | |||||||||
Deferred tax assets | $ | $ | ( | ) | $ | ||||||
Deferred income on shipments to distributors, net | $ | $ | ( | ) | $ | ||||||
Accrued liabilities | $ | $ | $ | ||||||||
Deferred income taxes | $ | $ | $ | ||||||||
Retained earnings | $ | $ | $ |
November 4, 2018 | |||||||||||
Beginning Balance November 3, 2018 as Adjusted | Impact of Adoption of ASU 2016-16 | Balance November 4, 2018 | |||||||||
Deferred tax assets | $ | $ | $ | ||||||||
Deferred income taxes | $ | $ | $ | ||||||||
Retained earnings | $ | $ | $ |
Activity during the Three Months Ended May 4, 2019 | Options Outstanding (in thousands) | Weighted- Average Exercise Price Per Share | Weighted- Average Remaining Contractual Term in Years | Aggregate Intrinsic Value | ||||||||
Options outstanding at February 2, 2019 | $ | |||||||||||
Options granted | $ | |||||||||||
Options exercised | ( | ) | $ | |||||||||
Options forfeited | ( | ) | $ | |||||||||
Options outstanding at May 4, 2019 | $ | $ | ||||||||||
Options exercisable at May 4, 2019 | $ | $ | ||||||||||
Options vested or expected to vest at May 4, 2019 (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 of options expected to vest is calculated by applying an estimated forfeiture rate to the unvested options. |
Activity during the Six Months Ended May 4, 2019 | Options Outstanding (in thousands) | Weighted- Average Exercise Price Per Share | ||||
Options outstanding at November 3, 2018 | $ | |||||
Options granted | $ | |||||
Options exercised | ( | ) | $ | |||
Options forfeited | ( | ) | $ | |||
Options expired | ( | ) | $ | |||
Options outstanding at May 4, 2019 | $ |
Activity during the Three Months Ended May 4, 2019 | Restricted Stock Units/Awards Outstanding (in thousands) | Weighted- Average Grant- Date Fair Value Per Share | ||||
Restricted stock units/awards outstanding at February 2, 2019 | $ | |||||
Units/Awards granted | $ | |||||
Restrictions lapsed | ( | ) | $ | |||
Forfeited | ( | ) | $ | |||
Restricted stock units/awards outstanding at May 4, 2019 | $ | |||||
Activity during the Six Months Ended May 4, 2019 | Restricted Stock Units/Awards Outstanding (in thousands) | Weighted- Average Grant- Date Fair Value Per Share | ||||
Restricted stock units/awards outstanding at November 3, 2018 | $ | |||||
Units/Awards granted | $ | |||||
Restrictions lapsed | ( | ) | $ | |||
Forfeited | ( | ) | $ | |||
Restricted stock units/awards outstanding at May 4, 2019 | $ |
Foreign currency translation adjustment | Unrealized holding gains (losses) on available for sale securities | Unrealized holding gains (losses) on derivatives | Pension plans | Total | |||||||||||||||
November 3, 2018 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Other comprehensive income (loss) before reclassifications | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Amounts reclassified out of other comprehensive income (loss) | |||||||||||||||||||
Tax effects | ( | ) | |||||||||||||||||
Other comprehensive income (loss) | ( | ) | ( | ) | ( | ) | |||||||||||||
May 4, 2019 | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Three Months Ended | Six Months Ended | |||||||||||||||||
Comprehensive Income Component | May 4, 2019 | May 5, 2018 | May 4, 2019 | May 5, 2018 | Location | |||||||||||||
Unrealized holding losses (gains) on derivatives | ||||||||||||||||||
Currency forwards | $ | $ | ( | ) | $ | $ | ( | ) | Cost of sales | |||||||||
( | ) | ( | ) | Research and development | ||||||||||||||
( | ) | ( | ) | Selling, marketing, general and administrative | ||||||||||||||
Interest rate derivatives | ( | ) | Interest expense | |||||||||||||||
( | ) | ( | ) | Total before tax | ||||||||||||||
( | ) | ( | ) | Tax | ||||||||||||||
$ | $ | ( | ) | $ | $ | ( | ) | Net of tax | ||||||||||
Amortization of pension components | ||||||||||||||||||
Transition obligation | $ | $ | $ | $ | (a) | |||||||||||||
Prior service credit | (a) | |||||||||||||||||
Actuarial losses | (a) | |||||||||||||||||
Total before tax | ||||||||||||||||||
( | ) | ( | ) | ( | ) | ( | ) | Tax | ||||||||||
$ | $ | $ | $ | Net of tax | ||||||||||||||
Total amounts reclassified out of accumulated other comprehensive income (loss), net of tax | $ | $ | ( | ) | $ | $ | ( | ) |
Three Months Ended | Six Months Ended | ||||||||||||||
May 4, 2019 | May 5, 2018 (1) | May 4, 2019 | May 5, 2018 (1) | ||||||||||||
Net Income | $ | $ | $ | $ | |||||||||||
Less: income allocated to participating securities | |||||||||||||||
Net income allocated to common stockholders | $ | $ | $ | $ | |||||||||||
Basic shares: | |||||||||||||||
Weighted-average shares outstanding | |||||||||||||||
Earnings per common share basic: | $ | $ | $ | $ | |||||||||||
Diluted shares: | |||||||||||||||
Weighted-average shares outstanding | |||||||||||||||
Assumed exercise of common stock equivalents | |||||||||||||||
Weighted-average common and common equivalent shares | |||||||||||||||
Earnings per common share diluted: | $ | $ | $ | $ | |||||||||||
Anti-dilutive shares related to: | |||||||||||||||
Outstanding share-based awards |
Accrued Restructuring | Closure of Manufacturing Facilities | Reduction of Operating Costs Action | Early Retirement Action | Repositioning Action | |||||||||||
Balance at November 3, 2018 | $ | $ | $ | $ | |||||||||||
First quarter fiscal 2019 special charges | |||||||||||||||
Severance and other payments | ( | ) | ( | ) | ( | ) | |||||||||
Non-cash impairment charge | ( | ) | |||||||||||||
Effect of foreign currency on accrual | ( | ) | ( | ) | |||||||||||
Balance at February 2, 2019 | $ | $ | $ | $ | |||||||||||
Second quarter fiscal 2019 special charges | |||||||||||||||
Severance and other payments | ( | ) | ( | ) | ( | ) | |||||||||
Effect of foreign currency on accrual | ( | ) | ( | ) | |||||||||||
Balance at May 4, 2019 | $ | $ | $ | $ | |||||||||||
Current - accrued liabilities | $ | $ | $ | $ | |||||||||||
Other non-current liabilities | $ | $ | $ | $ |
Three Months Ended | ||||||||||||||||
May 4, 2019 | May 5, 2018 | |||||||||||||||
Revenue | % of Revenue* | Y/Y% | Revenue (1) | % of Revenue* | ||||||||||||
Industrial | $ | % | ( | )% | $ | % | ||||||||||
Automotive | % | % | % | |||||||||||||
Consumer | % | ( | )% | % | ||||||||||||
Communications | % | % | % | |||||||||||||
Total revenue | $ | % | ( | )% | $ | % | ||||||||||
Six Months Ended | ||||||||||||||||
May 4, 2019 | May 5, 2018 | |||||||||||||||
Revenue | % of Revenue* | Y/Y% | Revenue (1) | % of Revenue* | ||||||||||||
Industrial | $ | % | ( | )% | $ | % | ||||||||||
Automotive | % | ( | )% | % | ||||||||||||
Consumer | % | ( | )% | % | ||||||||||||
Communications | % | % | % | |||||||||||||
Total revenue | $ | % | ( | )% | $ | % | ||||||||||
* The sum of the individual percentages may not equal the total due to rounding. | ||||||||||||||||
(1) Balances have been restated to reflect the full retrospective adoption of ASU 2014-09. See Note 1, Basis of Presentation, in these Notes to Condensed Consolidated Financial Statements. |
Three Months Ended | |||||||||||||
May 4, 2019 | May 5, 2018 | ||||||||||||
Channel | Revenue | % of Revenue* | Revenue (1) | % of Revenue* | |||||||||
Distributors | $ | % | $ | % | |||||||||
Direct customers | % | % | |||||||||||
Other | % | % | |||||||||||
Total revenue | $ | % | $ | % | |||||||||
Six Months Ended | |||||||||||||
May 4, 2019 | May 5, 2018 | ||||||||||||
Channel | Revenue | % of Revenue* | Revenue (1) | % of Revenue* | |||||||||
Distributors | $ | % | $ | % | |||||||||
Direct customers | % | % | |||||||||||
Other | % | % | |||||||||||
Total revenue | $ | % | $ | % | |||||||||
* The sum of the individual percentages may not equal the total due to rounding. | |||||||||||||
(1) Balances have been restated to reflect the full retrospective adoption of ASU 2014-09. See Note 1, Basis of Presentation, in these Notes to Condensed Consolidated Financial Statements. |
May 4, 2019 | |||||||||||
Fair Value measurement at Reporting Date using: | |||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Total | |||||||||
Assets | |||||||||||
Cash equivalents: | |||||||||||
Available-for-sale: | |||||||||||
Government and institutional money market funds | $ | $ | $ | ||||||||
Corporate obligations (1) | |||||||||||
Other assets: | |||||||||||
Deferred compensation investments | |||||||||||
Total assets measured at fair value | $ | $ | $ | ||||||||
Liabilities | |||||||||||
Forward foreign currency exchange contracts (2) | |||||||||||
Interest rate derivatives | |||||||||||
Total liabilities measured at fair value | $ | $ | $ |
(1) | The amortized cost of the Company’s investments classified as available-for-sale as of May 4, 2019 was $ |
(2) | The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 9, Derivatives, in these Notes to Condensed Consolidated Financial Statements for more information related to the Company's master netting arrangements. |
November 3, 2018 | |||||||||||
Fair Value measurement at Reporting Date using: | |||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Total | |||||||||
Assets | |||||||||||
Cash equivalents: | |||||||||||
Available-for-sale: | |||||||||||
Government and institutional money market funds | $ | $ | $ | ||||||||
Corporate obligations (1) | |||||||||||
Other assets: | |||||||||||
Deferred compensation investments | |||||||||||
Interest rate derivatives | |||||||||||
Total assets measured at fair value | $ | $ | $ | ||||||||
Liabilities | |||||||||||
Forward foreign currency exchange contracts (2) | |||||||||||
Total liabilities measured at fair value | $ | $ | $ |
(1) | The amortized cost of the Company’s investments classified as available-for-sale as of November 3, 2018 was $ |
(2) | The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 9, Derivatives, in these Notes to Condensed Consolidated Financial Statements for more information related to the Company's master netting arrangements. |
May 4, 2019 | November 3, 2018 | ||||||||||||||
Principal Amount Outstanding | Fair Value | Principal Amount Outstanding | Fair Value | ||||||||||||
3-Year term loan, due March 2020 | $ | $ | $ | $ | |||||||||||
5-Year term loan, due March 2022 | |||||||||||||||
2.85% Senior unsecured notes, due March 2020 | |||||||||||||||
2.90% Senior unsecured notes, due January 2021 | |||||||||||||||
2.50% Senior unsecured notes, due December 2021 | |||||||||||||||
2.875% Senior unsecured notes, due June 2023 | |||||||||||||||
3.125% Senior unsecured notes, due December 2023 | |||||||||||||||
3.90% Senior unsecured notes, due December 2025 | |||||||||||||||
3.50% Senior unsecured notes, due December 2026 | |||||||||||||||
4.50% Senior unsecured notes, due December 2036 | |||||||||||||||
5.30% Senior unsecured notes, due December 2045 | |||||||||||||||
Total debt | $ | $ | $ | $ |
Fair Value At | |||||||||
Balance Sheet Location | May 4, 2019 | November 3, 2018 | |||||||
Forward foreign currency exchange contracts | Accrued liabilities | $ | $ |
May 4, 2019 | November 3, 2018 | ||||||
Gross amount of recognized liabilities | $ | ( | ) | $ | ( | ) | |
Gross amounts of recognized assets offset in the condensed consolidated balance sheet | |||||||
Net liabilities presented in the condensed consolidated balance sheet | $ | ( | ) | $ | ( | ) |
May 4, 2019 | November 3, 2018 | ||||||
Raw materials | $ | $ | |||||
Work in process | |||||||
Finished goods | |||||||
Total inventories | $ | $ |
• | ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business. |
• | ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. |
• | ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. |
• | ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. |
• | ASU 2017-07, Improving the Presentation of Net Period Pension Cost and Net Period Postretirement Benefit Cost. |
ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended | ||||||||||||||
May 4, 2019 | May 5, 2018 (1) | $ Change | % Change | |||||||||||
Revenue | $ | 1,526,602 | $ | 1,563,502 | $ | (36,900 | ) | (2 | )% | |||||
Gross margin % | 67.7 | % | 68.6 | % | ||||||||||
Net income | $ | 367,937 | $ | 400,328 | $ | (32,391 | ) | (8 | )% | |||||
Net income as a % of revenue | 24.1 | % | 25.6 | % | ||||||||||
Diluted EPS | $ | 0.98 | $ | 1.06 | $ | (0.08 | ) | (8 | )% | |||||
Six Months Ended | ||||||||||||||
May 4, 2019 | May 5, 2018 (1) | $ Change | % Change | |||||||||||
Revenue | $ | 3,067,703 | $ | 3,130,372 | $ | (62,669 | ) | (2 | )% | |||||
Gross margin % | 67.6 | % | 68.5 | % | ||||||||||
Net income | $ | 722,943 | $ | 693,568 | $ | 29,375 | 4 | % | ||||||
Net income as a % of revenue | 23.6 | % | 22.2 | % | ||||||||||
Diluted EPS | $ | 1.93 | $ | 1.84 | $ | 0.09 | 5 | % |
Three Months Ended | ||||||||||||||||
May 4, 2019 | May 5, 2018 | |||||||||||||||
Revenue | % of Revenue* | Y/Y% | Revenue (1) | % of Revenue* | ||||||||||||
Industrial | $ | 763,455 | 50 | % | (6 | )% | $ | 810,732 | 52 | % | ||||||
Automotive | 249,765 | 16 | % | — | % | 250,919 | 16 | % | ||||||||
Consumer | 153,745 | 10 | % | (32 | )% | 227,077 | 15 | % | ||||||||
Communications | 359,637 | 24 | % | 31 | % | 274,774 | 18 | % | ||||||||
Total revenue | $ | 1,526,602 | 100 | % | (2 | )% | $ | 1,563,502 | 100 | % | ||||||
Six Months Ended | ||||||||||||||||
May 4, 2019 | May 5, 2018 | |||||||||||||||
Revenue | % of Revenue* | Y/Y% | Revenue (1) | % of Revenue* | ||||||||||||
Industrial | $ | 1,488,077 | 49 | % | (6 | )% | $ | 1,590,445 | 51 | % | ||||||
Automotive | 511,319 | 17 | % | (1 | )% | 515,791 | 16 | % | ||||||||
Consumer | 362,966 | 12 | % | (26 | )% | 491,711 | 16 | % | ||||||||
Communications | 705,341 | 23 | % | 32 | % | 532,425 | 17 | % | ||||||||
Total revenue | $ | 3,067,703 | 100 | % | (2 | )% | $ | 3,130,372 | 100 | % | ||||||
* The sum of the individual percentages may not equal the total due to rounding. | ||||||||||||||||
(1) Balances have been restated to reflect the full retrospective adoption ASU 2014-09. See Note 1, Basis of Presentation, in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q. |
Three Months Ended | |||||||||||
May 4, 2019 | May 5, 2018 | ||||||||||
Revenue | % of Revenue* | Revenue (1) | % of Revenue* | ||||||||
Channel | |||||||||||
Distributors | 871,510 | 57 | % | 869,277 | 56 | % | |||||
Direct customers | 638,277 | 42 | % | 675,188 | 43 | % | |||||
Other | 16,815 | 1 | % | 19,037 | 1 | % | |||||
Total revenue | 1,526,602 | 100 | % | 1,563,502 | 100 | % | |||||
Six Months Ended | |||||||||||
May 4, 2019 | May 5, 2018 | ||||||||||
Revenue | % of Revenue* | Revenue (1) | % of Revenue* | ||||||||
Channel | |||||||||||
Distributors | 1,700,753 | 55 | % | 1,734,289 | 55 | % | |||||
Direct customers | 1,333,766 | 43 | % | 1,348,591 | 43 | % | |||||
Other | 33,184 | 1 | % | 47,492 | 2 | % | |||||
Total revenue | 3,067,703 | 100 | % | 3,130,372 | 100 | % | |||||
* The sum of the individual percentages may not equal the total due to rounding. | |||||||||||
(1) Balances have been restated to reflect the full retrospective adoption of ASU 2014-09. See Note 1, Basis of Presentation, in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q. |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
May 4, 2019 | May 5, 2018 (1) | $ Change | % Change | May 4, 2019 | May 5, 2018 (1) | $ Change | % Change | ||||||||||||||||||||||
Gross margin | $ | 1,034,092 | $ | 1,072,390 | $ | (38,298 | ) | (4 | )% | $ | 2,073,748 | $ | 2,144,073 | $ | (70,325 | ) | (3 | )% | |||||||||||
Gross margin % | 67.7 | % | 68.6 | % | 67.6 | % | 68.5 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
May 4, 2019 | May 5, 2018 | $ Change | % Change | May 4, 2019 | May 5, 2018 | $ Change | % Change | ||||||||||||||||||||||
R&D expenses | $ | 285,846 | $ | 289,472 | $ | (3,626 | ) | (1 | )% | $ | 573,228 | $ | 578,069 | $ | (4,841 | ) | (1 | )% | |||||||||||
R&D expenses as a % of revenue | 18.7 | % | 18.5 | % | 18.7 | % | 18.5 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
May 4, 2019 | May 5, 2018 | $ Change | % Change | May 4, 2019 | May 5, 2018 | $ Change | % Change | ||||||||||||||||||||||
SMG&A expenses | $ | 163,128 | $ | 172,146 | $ | (9,018 | ) | (5 | )% | $ | 330,470 | $ | 349,054 | $ | (18,584 | ) | (5 | )% | |||||||||||
SMG&A expenses as a % of revenue | 10.7 | % | 11.0 | % | 10.8 | % | 11.2 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
May 4, 2019 | May 5, 2018 | $ Change | % Change | May 4, 2019 | May 5, 2018 | $ Change | % Change | ||||||||||||||||||||||
Operating income | $ | 469,695 | $ | 502,554 | $ | (32,859 | ) | (7 | )% | $ | 925,521 | $ | 944,395 | $ | (18,874 | ) | (2 | )% | |||||||||||
Operating income as a % of revenue | 30.8 | % | 32.1 | % | 30.2 | % | 30.2 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
May 4, 2019 | May 5, 2018 | $ Change | May 4, 2019 | May 5, 2018 | $ Change | ||||||||||||||||||
Interest expense | $ | 59,701 | $ | 64,792 | $ | (5,091 | ) | $ | 118,429 | $ | 132,822 | $ | (14,393 | ) | |||||||||
Interest income | (2,928 | ) | (1,912 | ) | (1,016 | ) | (5,616 | ) | (4,004 | ) | (1,612 | ) | |||||||||||
Other, net | 4,525 | (451 | ) | 4,976 | 4,365 | 105 | 4,260 | ||||||||||||||||
Total nonoperating expense (income) | $ | 61,298 | $ | 62,429 | $ | (1,131 | ) | $ | 117,178 | $ | 128,923 | $ | (11,745 | ) |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
May 4, 2019 | May 5, 2018 (1) | $ Change | May 4, 2019 | May 5, 2018 (1) | $ Change | ||||||||||||||||||
Provision for income taxes | $ | 40,460 | $ | 39,797 | $ | 663 | $ | 85,400 | $ | 121,904 | $ | (36,504 | ) | ||||||||||
Effective income tax rate | 9.9 | % | 9.0 | % | 10.6 | % | 14.9 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
May 4, 2019 | May 5, 2018 (1) | $ Change | % Change | May 4, 2019 | May 5, 2018 (1) | $ Change | % Change | ||||||||||||||||||||||
Net Income | $ | 367,937 | $ | 400,328 | $ | (32,391 | ) | (8 | )% | $ | 722,943 | $ | 693,568 | $ | 29,375 | 4 | % | ||||||||||||
Net Income as a % of revenue | 24.1 | % | 25.6 | % | 23.6 | % | 22.2 | % | |||||||||||||||||||||
Diluted EPS | $ | 0.98 | $ | 1.06 | $1.93 | $1.84 |
Six Months Ended | |||||||
May 4, 2019 | May 5, 2018 (1) | ||||||
Net cash provided by operating activities | $ | 1,042,649 | $ | 1,107,182 | |||
Net cash provided by operations as a % of revenue | 34.0 | % | 35.4 | % | |||
Net cash used for investing activities | $ | (170,787 | ) | $ | (170,490 | ) | |
Net cash used for financing activities | $ | (975,069 | ) | $ | (1,178,171 | ) |
May 4, 2019 | November 3, 2018 | $ Change | % Change | |||||||||||
Accounts receivable, net | $ | 685,978 | $ | 639,717 | $ | 46,261 | 7 | % | ||||||
Days sales outstanding* | 42 | 40 | ||||||||||||
Inventory | $ | 608,085 | $ | 586,760 | $ | 21,325 | 4 | % | ||||||
Days cost of sales in inventory* | 111 | 107 |
Principal Amount Outstanding | |||
3-Year term loan, due March 2020 | $ | 75,000 | |
5-Year term loan, due March 2022 | 1,350,000 | ||
2.85% Senior unsecured notes, due March 2020 | 300,000 | ||
2.90% Senior unsecured notes, due January 2021 | 450,000 | ||
2.50% Senior unsecured notes, due December 2021 | 400,000 | ||
2.875% Senior unsecured notes, due June 2023 | 500,000 | ||
3.125% Senior unsecured notes, due December 2023 | 550,000 | ||
3.90% Senior unsecured notes, due December 2025 | 850,000 | ||
3.50% Senior unsecured notes, due December 2026 | 900,000 | ||
4.50% Senior unsecured notes, due December 2036 | 250,000 | ||
5.30% Senior unsecured notes, due December 2045 | 400,000 | ||
Total debt | $ | 6,025,000 |
ITEM 3. | Quantitative and Qualitative Disclosures About Market Risk |
ITEM 4. | Controls and Procedures |
ITEM 1A. | Risk Factors |
• | the effects of adverse economic conditions in the markets in which we sell our products; |
• | changes in customer demand 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; |
• | fluctuations in customer order patterns and seasonality; |
• | our ability to accurately forecast distributor demand for our products; |
• | our ability to accurately estimate 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; |
• | changes in geographic, product or customer mix; |
• | 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 law, regulations or other restrictions, including executive orders, changes in import and export regulations, export classifications or changes in 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 acceptance of such products; |
• | pricing decisions and competitive pricing pressures; |
• | fluctuations in manufacturing yields, adequate availability of wafers and other raw materials, and manufacturing, assembly and test capacity; |
• | the ability of our third-party suppliers, subcontractors and manufacturers to supply us with sufficient quantities of raw materials, products and/or components; |
• | 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. government shutdown or delays in contract awards; |
• | any significant decline in our backlog; |
• | our ability to recruit, hire, retain and motivate adequate numbers of engineers and other qualified employees to meet the demands of our customers; |
• | 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 pension plan contributions and retirement benefits; |
• | our ability to utilize our manufacturing facilities at efficient levels; |
• | potential significant litigation-related costs or product warranty and/or indemnity claims, including those not covered by our suppliers or insurers; |
• | the difficulties inherent in forecasting future operating expense levels, including with respect to costs associated with labor, utilities, transportation and raw materials; |
• | the costs related to compliance with increasing worldwide government, environmental and social responsibility regulations; |
• | new accounting pronouncements or changes in existing accounting standards and practices; and |
• | the effects of public health emergencies, natural disasters, widespread travel disruptions, security risks, terrorist activities, international conflicts and other events beyond our control. |
• | the inability to successfully integrate Linear's business into our own in a manner that permits the combined company to achieve the cost savings and operating synergies anticipated to result from the Acquisition, which could result in the anticipated benefits of the Acquisition not being realized partly or wholly in the time frame currently anticipated or at all; |
• | integrating personnel, IT systems and corporate, finance and administrative infrastructures of the two companies while maintaining focus on providing consistent, high quality products and services; |
• | coordinating and integrating our internal operations, compensation and benefits programs, policies and procedures, and corporate structures; and |
• | servicing the substantial debt that we have incurred in connection with the Acquisition. |
• | seek additional financing in the debt or equity markets; |
• | refinance or restructure all or a portion of our indebtedness; |
• | borrow under our revolving credit facility; |
• | divert funds that would otherwise be invested in our operations; |
• | repatriate earnings as dividends from foreign locations, attracting foreign withholding and state and local income taxes; |
• | sell selected assets; or |
• | reduce or delay planned capital expenditures or operating expenditures. |
• | difficulty or delay integrating acquired technologies, operations and personnel with our existing businesses; |
• | diversion of management's attention in connection with both negotiating the transaction and integrating the assets; |
• | strain on managerial and operational resources as management tries to oversee larger or more complex operations; |
• | the future funding requirements for acquired companies, which may be significant; |
• | potential loss of key employees; |
• | 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 integration of assets; |
• | difficulty realizing synergies and growth prospects of an acquisition in a timely manner or at all; and |
• | increased risk of costly and time-consuming legal proceedings. |
• | political, legal and economic changes, crises or instability and civil unrest in foreign markets; |
• | currency conversion risks and exchange rate and interest rate fluctuations; |
• | trade policy, trade, travel, export or taxation disputes or restrictions, government sanctions, 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 we do business, particularly in China; |
• | complex, varying and changing government regulations and legal standards and requirements, particularly with respect to price protection, competition practices, export control regulations and restrictions, customs and tax requirements, immigration, anti-boycott regulations, data privacy, intellectual property, anti-corruption and environmental compliance, including U.S. customs and export regulations and restrictions, International Traffic in Arms Regulations and the Foreign Corrupt Practices Act; |
• | 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; |
• | 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; |
• | natural disasters or pandemics; |
• | transportation disruptions and delays and increases in labor and transportation costs; |
• | changes to foreign taxes, tariffs and freight rates; |
• | fluctuations in raw material costs and energy costs; |
• | greater difficulty in accounts receivable collections and longer collection periods; and |
• | costs associated with our foreign defined benefit pension plans. |
• | liability for damages and remediation; |
• | 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; |
• | 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 |
• | global economic conditions generally; |
• | crises in global credit, debt and financial markets; |
• | 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 publications or our failure to perform in line with those estimates or statements or our published guidance; |
• | financial results and prospects of our customers; |
• | U.S. and foreign government actions, including with respect to trade, travel, export and taxation; |
• | 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 companies in our industry; |
• | announcements by us, our customers or our competitors of significant new products, technical innovations, material transactions, acquisitions or dispositions, litigation, capital commitments or revised earnings estimates; |
• | departures of key personnel; |
• | alleged noncompliance with laws, regulations or ethics standards by us or any of our employees, officers or directors; and |
• | negative media publicity targeting us or our suppliers, customers or competitors. |
ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Period | Total Number of Shares Purchased (a) | Average Price Paid Per Share (b) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (c) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | |||||||||
February 3, 2019 through March 2, 2019 | 46,582 | $ | 106.54 | 37,402 | $ | 2,393,976,912 | |||||||
March 3, 2019 through March 30, 2019 | 496,726 | $ | 107.03 | 186,056 | $ | 2,373,997,691 | |||||||
March 31, 2019 through May 4, 2019 | 381,298 | $ | 113.80 | 342,620 | $ | 2,335,008,817 | |||||||
Total | 924,606 | $ | 109.80 | 566,078 | $ | 2,335,008,817 |
(a) | Includes 358,528 shares withheld by us from employees to satisfy minimum employee tax obligations upon vesting of restricted stock units/awards granted to our employees under our equity compensation plans. |
(b) | 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. |
(c) | Shares repurchased pursuant to the stock repurchase program publicly announced on August 12, 2004. 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 in an aggregate amount of up to $8.2 billion. 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. |
ITEM 6. | Exhibits |
Exhibit No. | Description | |
10.1† | ||
10.2† | ||
31.1† | ||
31.2† | ||
32.1† | ||
32.2† | ||
101.INS | The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document.** | |
101.SCH | XBRL Schema Document.** | |
101.CAL | XBRL Calculation Linkbase Document.** | |
101.LAB | XBRL Labels Linkbase Document.** | |
101.PRE | XBRL Presentation Linkbase Document.** | |
101.DEF | XBRL Definition Linkbase Document.** | |
† | Filed or furnished herewith. | |
** | Submitted electronically herewith. |
ANALOG DEVICES, INC. | |||
Date: May 22, 2019 | By: | /s/ Vincent Roche | |
Vincent Roche | |||
President and Chief Executive Officer | |||
(Principal Executive Officer) | |||
Date: May 22, 2019 | By: | /s/ Prashanth Mahendra-Rajah | |
Prashanth Mahendra-Rajah | |||
Senior Vice President, Finance and Chief Financial Officer | |||
(Principal Financial Officer) |
1. | Performance Restricted Stock Unit. |
2. | Vesting and Conversion. |
(a) | Subject to the terms of the Plan and this Agreement, the Performance RSUs shall vest in accordance with the vesting conditions set forth in this Section 2 and the performance-based vesting conditions set forth in Appendix A. For purposes of this Agreement, Performance RSUs that have not vested as of the Vesting Date in accordance with this Section 2 and Appendix A are referred to as “Unvested Performance RSUs.” The shares of Common Stock that are issuable upon the vesting and conversion of the Performance RSUs are referred to in this Agreement as “Shares.” As soon as administratively practicable after the issuance of any Shares upon the vesting and conversion of Performance RSUs (and in any event within sixty (60) days of the vesting date or event, as applicable), and subject to the terms and conditions set forth in the Agreement, the Company shall deliver or cause to be delivered evidence (which may include a book entry by the Company’s transfer agent) of the Shares so issued in the name of the Participant to the brokerage firm designated by the Company to maintain the brokerage account established for the Participant or the Participant’s heirs, in the case of Section 2(c). Notwithstanding the foregoing, the Company shall not be obligated to issue Shares to or in the name of the Participant upon the vesting and conversion of any Performance RSUs unless the issuance of such Shares shall comply with all relevant provisions of law and other legal requirements including, without limitation, any applicable securities laws and the requirements of any stock exchange upon which shares of Common Stock may then be listed. |
(b) | In the event the Participant’s employment with the Company or the Employer (as defined in Section 2(e)) is terminated either by the Participant, the Company, or the Employer for any reason or no reason (other than due to death or Disability), then in each such case, all of the Unvested Performance RSUs as of the date of termination shall terminate and be cancelled immediately and automatically and the Participant shall have no further rights with respect to such Unvested Performance RSUs. |
(c) | In the event of the Participant’s death prior to the end of the Performance Period, the Unvested Performance RSUs shall vest immediately upon death with respect to the Initial Grant Number of Shares underlying the Performance RSUs, notwithstanding that the Participant was not employed as of the Vesting Date. In the event of the Participant’s death after the end of the Performance Period, the Unvested Performance RSUs shall vest with respect to the number of Shares underlying the Performance RSUs that would have vested in accordance with Appendix A had the Participant continued employment through the Vesting Date had he or she not died. |
(d) | In the event the Participant becomes Disabled prior to the end of the Performance Period, the Unvested Performance RSUs shall vest immediately as of the date the Participant is determined to be Disabled with respect to the Initial Grant Number of Shares underlying the Performance RSUs, regardless of whether the Participant terminates employment prior to the Vesting Date. In the event the Participant becomes Disabled after the end of the Performance Period, the Unvested Performance RSUs shall vest with respect to the number of Shares underlying the Performance RSUs that would have vested in accordance with Appendix A regardless of whether the Participant continues employment through the Vesting Date. “Disabled” with respect to the Participant means, when and if, as a result of disease, injury or mental disorder, the Participant is incapable of engaging in regular service or occupation with the Company or the Employer (as defined in paragraph e) which has lasted or can be expected to last for a continuous period of not less than 12 months, as determined by the Company. |
(e) | For purposes of this Agreement, employment shall include being an employee with the Company. Employment shall also include being an employee with any direct or indirect parent or subsidiary of the Company, or any successor to the Company or any such parent or subsidiary of the Company (the “Employer”). Should a Participant transfer employment to become a director, consultant or advisor to the Company or the Employer following the Date of Grant, he or she will still be considered employed for vesting purposes until he or she ceases to provide services to the Company or any direct or indirect parent or subsidiary of the Company, or any successor to the Company or any such parent or subsidiary of the Company. |
3. | Restrictions on Transfer. |
(a) | The Participant shall not sell, assign, transfer, pledge or otherwise encumber any Performance RSUs, either voluntarily or by operation of law. |
(b) | The Company shall not be required (i) to transfer on its books any of the Performance RSUs which have been transferred in violation of any of the provisions set forth herein or (ii) to treat as the owner of such Performance RSUs any transferee to whom such Performance RSUs have been transferred in violation of any of the provisions contained herein. |
4. | Not a Shareholder. The Performance RSUs represent an unfunded, unsecured promise by the Company to deliver Shares upon vesting and conversion of the Performance RSUs, and until vesting of the Performance RSUs and issuance of the Shares, the Participant shall not have any of the rights of a shareholder with respect to the Shares underlying the Performance RSUs. For the avoidance of doubt, the Participant shall have no right to receive any dividends and shall have no voting rights with respect to the Shares underlying the Performance RSUs for which the record date is on or before the date on which the Shares underlying the Performance RSUs are issued to the Participant. |
5. | Provisions of the Plan. The Performance RSUs and Shares, including the grant and issuance thereof, are subject to the provisions of the Plan. A copy of the Plan prospectus is available on the Company’s Intranet at https://thecircuit.web.analog.com/Pages/CircuitHome.aspx. (From The Circuit home page, click Knowledge Centers, HR, Employee Stock Programs. The related documents can be found in the right-hand column). If the Participant is unable to access this information via the Intranet, the Company’s Stock Plan Administrator can provide the Participant with copies (Stock_Plan_Admin@Analog.com). |
6. | Withholding Taxes. |
(a) | Regardless of any action the Company and/or the Employer, if different, takes with respect to any or all income tax (including U.S. federal, state and local taxes and/or non-U.S. taxes), social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related withholding (“Tax-Related Items”), the Participant acknowledges that the ultimate liability for all Tax-Related Items legally applicable to the Participant is and remains the Participant’s responsibility and may exceed the amount, if any, actually withheld by the Company or the Employer. The Participant further acknowledges that the Company and the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Performance RSUs, including the grant of the Performance RSUs, the vesting of the Performance RSUs, the subsequent sale of any Shares acquired pursuant to the Performance RSUs and the receipt of any dividends; and (ii) do not commit to structure the terms of the grant or any aspect of the Performance RSUs to reduce or eliminate the Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if the Participant becomes subject to Tax-Related Items in more than one jurisdiction between the Date of Grant and the date of any relevant taxable or tax withholding event, as applicable, the Participant acknowledges that the Company and/or the Employer may be required to withhold or account for Tax-Related Items in more than one jurisdiction. |
(b) | Prior to any relevant taxable or tax withholding event, as applicable, the Participant will pay or make adequate arrangements satisfactory to the Company to satisfy all Tax-Related Items. In this regard, the Participant authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the methods set forth below: |
(i) | the Company may withhold a sufficient number of whole Shares otherwise issuable upon the vesting of the Performance RSUs that have an aggregate Fair Market Value (as defined under the Plan) sufficient to pay the minimum Tax-Related |
(ii) | the Company may, in its discretion, withhold any amount necessary to pay the Tax-Related Items from the Participant’s salary or other amounts payable to the Participant; or |
(iii) | the Company may withhold from proceeds of the sale of Shares either through a voluntary sale or through a mandatory sale arranged by the Company (on the Participant’s behalf pursuant to this authorization). |
7. | Option of Company to Deliver Cash. Notwithstanding any of the other provisions of this Agreement, and except as set forth in Appendix B, where share settlement is otherwise prohibited under local law or may present adverse tax consequences to the Participant, at the time the Performance RSUs vest, the Company may elect, in the sole discretion of the Compensation Committee of the Board, to deliver by wire transfer to the Participant in lieu of Shares an equivalent amount of cash (determined by reference to the closing price of the Common Stock on the Nasdaq Global Select Market on the applicable vesting date). If the Company elects to deliver cash to the Participant, the Company is authorized to retain such amount as is sufficient in the opinion of the Company to satisfy the Tax-Related Items withholding obligations of the Company pursuant to Section 6 herein. |
8. | Repatriation and Other Legal Requirements. The Participant agrees as a condition of the grant of the Performance RSUs, as applicable, to repatriate all payments attributable to the Shares and/or cash acquired under the Plan (including, but not limited to, dividends and any proceeds derived from the sale of the Shares acquired pursuant to the Performance RSUs) in accordance with all foreign exchange rules and regulations applicable to the Participant. In addition, the Participant also agrees to take any and all actions, and consent to any and all actions taken by the Company and its subsidiaries, as may be required to allow the Company and its subsidiaries to comply with all laws, rules and regulations applicable to the Participant. Finally, the Participant agrees to take any and all actions as may be required to comply with the Participant’s personal legal and tax obligations under all laws, rules and regulations applicable to the Participant. |
9. | Miscellaneous. |
(a) | No Rights to Employment. The grant of the Performance RSUs shall not confer upon the Participant any right to continue in the employ of the Company or the Employer, nor limit in any way the right of the Company or the Employer to terminate the Participant’s employment at any time. Except in the event of disability or termination of employment due to death, the vesting of the Performance RSUs pursuant to Section 2 and Appendix A, is earned only by satisfaction of the performance-based vesting conditions and continuing service as an employee at the will of the Company or the Employer through the Vesting Date (not through the act of being hired or engaged or being granted the Performance RSUs hereunder). |
(b) | Discretionary Nature. The Participant acknowledges and agrees that the Plan is discretionary in nature and may be amended, cancelled, or terminated by the Company at any time, to the extend permitted under the Plan. The Participant’s participation in the Plan is voluntary. The grant of the Performance RSUs under the Plan is a one-time benefit and does not create any contractual or other right to receive a grant of Performance RSUs or any other award under the Plan or other benefits in lieu thereof in the future. Future grants, if any, will be at the sole discretion of the Company, including, but not limited to, the form and timing of any grant, the number of Shares subject to the grant, and the vesting provisions. Any amendment, modification or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Participant’s employment with the Company or the Employer. The Performance RSUs and income from such Performance RSUs shall not be included in any calculation of severance, resignation, redundancy, end of service payments, bonuses, long- |
(c) | Exclusion from Termination Indemnities and Other Benefits. This Section 9(c) applies if the Participant resides outside the U.S.: The value of the Performance RSUs and any other awards granted under the Plan is an extraordinary item of compensation outside the scope of the Participant’s employment with the Company or the Employer (and the Participant’s employment contract, if any). Any grant under the Plan, including the grant of the Performance RSUs and the income and value of same, is not part of normal or expected compensation or salary. Further, the Performance RSUs and the Shares, and the income and value of same, are not intended to replace any pension rights or compensation. |
(d) | No Entitlement. This Section 9(d) applies if the Participant resides outside the U.S. and/or the Company is not the Participant's employer: In consideration of the grant of Performance RSUs, no claim or entitlement to compensation or damages shall arise from forfeiture of the Performance RSUs resulting from termination of the Participant’s employment with the Company or the Employer (regardless of the reason for such termination and whether or not later to be found invalid or in breach of employment laws in the jurisdiction where the Participant is employed or the terms of the Participant’s employment contract, if any) and the Participant irrevocably releases the Company from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, the Participant shall be deemed irrevocably to have waived the Participant’s entitlement to pursue such claim. |
(e) | Exchange Rates. This Section 9(e) applies if the Participant resides outside the U.S.: The Participant acknowledges and agrees that neither the Company nor the Employer shall be liable for any foreign exchange rate fluctuation between the Participant’s local currency and the United States Dollar that may affect the value of the Performance RSUs or of any amounts due to the Participant pursuant to the vesting and settlement of the Performance RSUs or the subsequent sale of any Shares. |
(f) | Future Value of Shares. The future value of the underlying Shares is unknown, indeterminable, and cannot be predicted with certainty. |
(g) | Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law. |
(h) | Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Company and the Participant and his or her respective heirs, executors, administrators, legal representatives, successors and assigns, subject to the restrictions on transfer set forth in Section 3 of this Agreement. |
(i) | Notice. Each notice relating to this Award shall be in writing (which shall include electronic form) and delivered in person, electronically or by first class mail, postage prepaid, to the address as hereinafter provided. Each notice shall be deemed to have been given on the date it is received. Each notice to the Company shall be addressed to it at its offices at Analog Devices, Inc., One Technology Way, Norwood, Massachusetts, 02062, Attention: Chief Financial Officer. Each notice to the Participant shall be addressed to the Participant at the Participant’s last known mailing or email address, as applicable, on the records of the Company. |
(j) | Pronouns. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural, and vice versa. |
(k) | Entire Agreement. This Agreement and the Plan constitute the entire understanding between the parties, and supersede all prior agreements and understandings, relating to the subject matter of these documents. |
(l) | Governing Law. This Agreement shall be construed, interpreted and enforced in accordance with the internal laws of the Commonwealth of Massachusetts without regard to any applicable conflicts of laws. |
(m) | Compliance with Laws. Notwithstanding any other provision of the Plan or this Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the Shares, the Company shall not be required to deliver any Shares prior to the completion of any registration or qualification of the Shares under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and Exchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval the Company shall, in its absolute discretion, deem necessary or advisable. The Participant understands that the Company is under no obligation to register or qualify the Shares with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Shares. The Participant also understands and agrees that the Awards granted under the Plan, including the Performance RSUs and the underlying Shares, are subject to the listing standards of any national securities exchange or association on which the Company's securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, and any SEC regulations, as now or hereafter in effect. Further, the Participant agrees that the Company shall have unilateral authority to amend the Plan and the Agreement without the Participant’s consent to the extent necessary to comply with securities or other laws applicable to issuance of Shares. |
(n) | Interpretation. The interpretation and construction of any terms or conditions of this Agreement or the Plan, or other matters related to the Plan, by the Compensation Committee of the Board shall be final and conclusive. |
(o) | Participant’s Acceptance. The Participant is urged to read this Agreement carefully and to consult with his or her own legal counsel regarding the terms and consequences of this Agreement and the legal and binding effect of this Agreement. By |
(p) | Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to the Performance RSUs or other awards granted to the Participant under the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. |
(q) | English Language. The Participant acknowledges and agrees that it is the Participant’s express intent that this Agreement, the Plan and all other documents, notices and legal proceedings entered into, given or instituted pursuant to the Performance RSUs, be drawn up in English. If the Participant has received this Agreement, the Plan or any other documents related to the Performance RSUs translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version shall control. |
(r) | Appendix B. Notwithstanding any provisions herein to the contrary, if the Participant transfers the Participant’s residence and/or employment to a country other than the United States, the Performance RSUs shall be subject to any special terms and conditions for such country as may be set forth in Appendix B to this Agreement. Moreover, if the Participant relocates to one of the countries included in Appendix B, the special terms and conditions for such country will apply to the Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable in order to comply with local law or facilitate the administration of the Plan. Appendix B constitutes part of this Agreement. |
(s) | Additional Requirements. The Company reserves the right to impose other requirements on the Performance RSUs, any Shares acquired pursuant to the Performance RSUs, and the Participant’s participation in the Plan, to the extent the Company determines, in its sole discretion, that such other requirements are necessary or advisable for legal or administrative reasons. Such requirements may include (but are not limited to) requiring the Participant to sign any agreements or undertakings that may be necessary to accomplish the foregoing. |
(t) | Private Placement. The Company has submitted filings in the United States in connection with the stock incentive plan under which this Award was made. The Company has not submitted any registration statement, prospectus or other filings with other local securities authorities (unless otherwise required under such local law), and the grant of the Award is not intended to be a public offering of securities in any other jurisdiction or subject to the supervision of other local securities authorities. |
(u) | Changes in Capitalization. In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any non-cash distribution to holders of Common Stock, the number of Performance RSUs, and Shares issuable upon vesting and conversion thereof, shall be appropriately adjusted in such manner as shall be determined by the Compensation Committee. |
(v) | No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Participant’s participation in the Plan, or the Participant’s acquisition or sale of Shares. The Participant is encouraged to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan. |
(w) | Insider Trading Restrictions/Market Abuse Laws. The Participant acknowledges that, depending on the Participant’s or the Participant’s broker’s country of residence or where the Common Stock is listed, the Participant may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions which may affect the Participant’s ability to accept, acquire, sell, or otherwise dispose of Common Stock, rights to Common Stock (e.g., Performance RSUs), or rights linked to the value of Common Stock (e.g., phantom awards, futures) under the Plan during such times as the Participant is considered to have “inside information” regarding the Company (as defined by the laws or regulations in the Participant’s country). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders the Participant placed before possessing inside information. Furthermore, the Participant could be prohibited from (i) disclosing the inside information to any third party (other than on a “need to know” basis) and (ii) “tipping” third parties or causing them otherwise to buy or sell securities. Keep in mind third parties includes fellow employees. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. The Participant acknowledges that it is his or her responsibility to comply with any applicable restrictions, and the Participant should speak to his or her personal advisor on this matter. |
(x) | Foreign Asset/Account, Exchange Control, and Tax Reporting. Depending on the Participant’s country, the Participant may be subject to foreign asset/account, exchange control and/or tax reporting requirements as a result of the vesting of the Performance RSUs, the acquisition, holding, and/or transfer of Shares or cash resulting from participation in the Plan and/or the opening and maintenance of a brokerage or bank account in connection with the Plan. The Participant may be required to report such assets, accounts, account balances and values and/or related transactions to the applicable authorities in his or her country. The Participant also may be required to repatriate sale proceeds or other funds received as a result of participation in the Plan to the Participant’s country through a designated broker or bank and/or within a certain time after receipt. The Participant acknowledges that he or she is responsible for ensuring compliance with any applicable foreign asset/account, exchange control and tax reporting requirements. The Participant further understands that he or she should consult the Participant’s personal legal advisor on these matters. |
(y) | Waiver. The Participant acknowledges that a waiver by the Company or breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by the Participant or any other participant. |
/s/ Ray Stata | /s/ Vincent Roche | |||
Ray Stata | Vincent Roche | |||
Chairman of the Board | President & Chief Executive Officer |
1. | Performance Period. The three-year period beginning on Grant Date and ending on Grant Custom 1 (the “Performance Period”). |
2. | Vesting Date. Cliff Vesting Date. |
3. | Determination Date: The date the Compensation Committee of the Board determines the level of attainment of the Performance Parameters. The Determination Date shall be a date as soon as possible following the end of the Performance Period but prior to the Vesting Date. |
4. | Performance-Based Vesting Terms. Subject to Section 2(a) through 2(d) of the Performance Restricted Stock Unit Agreement, the Participant shall vest on the Vesting Date in the number of Performance RSUs, if any, that the Compensation Committee of the Board shall determine to be vested based on the determination of the level of attainment of the Performance Parameters, provided the Participant continues to provide services to the Company or Employer or respective successor through the Vesting Date. |
5. | Performance Parameters. The Performance Parameters are based on the comparison of the TSR (as defined below) of the Company relative to the median TSR of the Peer Group (as defined below) during the Performance Period and are equal to 100% plus or minus one and a half times the difference between the Company’s TSR and the median Peer Group TSR. The number of Performance RSUs that shall vest shall be equal to a number of Performance RSUs that is between 0% and 200% of the Initial Grant Number, up to a maximum of 100% of the Initial Grant Number if the Company’s TSR is negative. Attainment among Performance Parameters is subject to interpolation on a linear basis. |
Payout Percent | Number of Potential Shares Attained | Performance Parameters |
0% | 0 | Company TSR minus Peer Group Median TSR is less than or equal to -66.67 |
100% | Number of Awards Granted | Company TSR minus Peer Group Median TSR equals 0 |
200% | Grant Custom 2 | Company TSR minus Peer Group Median TSR is greater than or equal to +66.67 |
(a) | Data Collection and Usage. The Company collects, processes and uses personal data of Participants, including, name, home address and telephone number, date of birth, social insurance number or other identification number, salary, citizenship, job title, any shares of stock or directorships held in the Company, and details of all Performance RSUs, canceled, vested, or outstanding in the Participant’s favor, which the Company receives from the Participant or the Employer. If the Company offers the Participant a grant of Performance RSUs under the Plan, then the Company will collect the Participant’s personal data for purposes of allocating stock and implementing, administering and managing the Plan. The Company’s legal basis for the processing of the Participant’s personal data would be his or her consent. |
(b) | Stock Plan Administration Service Providers. The Company transfers participant data to Fidelity, an independent service provider based in the United States, which assists the Company with the implementation, administration and management of the Plan. In the future, the Company may select a different service provider and share the Participant’s data with another company that serves in a similar manner. The Company’s service provider will open an account for the Participant to receive and trade shares of Common Stock. The Participant will be asked to agree on separate terms and data processing practices with the service provider, which is a condition to the Participant’s ability to participate in the Plan. |
(c) | International Data Transfers. The Company and its service providers are based in the United States. If the Participant is outside the United States, the Participant should note that his or her country has enacted data privacy laws that are different from the United States. For example, the European Commission has issued a limited adequacy finding with respect to the United States that applies only to the extent companies register for the EU-U.S. Privacy Shield program. The Company’s legal basis for the transfer of the Employee’s personal data is his or her consent. |
(d) | Data Retention. The Company will use the Participant’s personal data only as long as is necessary to implement, administer and manage the Participant’s participation in the Plan or as required to comply with legal or regulatory obligations, including under tax and security laws. When the Company no longer needs the Participant’s personal data, which will generally be seven years after the Participant is granted Performance RSUs under the Plan, the Company will remove it from it from its systems. If the Company keeps data longer, it would be to satisfy legal or regulatory obligations and the Company’s legal basis would be relevant laws or regulations. |
(e) | Voluntariness and Consequences of Consent Denial or Withdrawal. The Participant’s participation in the Plan and the Participant’s grant of consent is purely voluntary. The Participant may deny or withdraw his or her consent at any time. If the Participant does not consent, or if the Participant withdraws his or her consent, the Participant cannot participate in the Plan. This would not affect the Participant’s salary as an employee or his or her career; the Participant would merely forfeit the opportunities associated with the Plan. |
(f) | Data Subject Rights. The Participant has a number of rights under data privacy laws in his or her country. Depending on where the Participant is based, the Participant’s rights may include the right to (a) request access or copies of personal data the Company processes, (b) rectification of incorrect data, (c) deletion of data, (d) restrictions on processing, (e) portability of data, (f) to lodge complaints with competent authorities in the Participant’s country, and/or (g) a list with the names and addresses of any potential recipients of the Participant’s personal data. To receive clarification regarding the Participant’s rights or to exercise the Participant’s rights please contact the Company at Analog Devices, Inc., One Technology Way, Norwood, Massachusetts, 02062 U.S.A., Attention: Stock Plan Administrator. |
1. | Performance Restricted Stock Unit. |
2. | Vesting and Conversion. |
(a) | Subject to the terms of the Plan and this Agreement, the Performance RSUs shall vest in accordance with the vesting conditions set forth in this Section 2 and the performance-based vesting conditions set forth in Appendix A. For purposes of this Agreement, Performance RSUs that have not vested as of the Vesting Date in accordance with this Section 2 and Appendix A are referred to as “Unvested Performance RSUs.” The shares of Common Stock that are issuable upon the vesting and conversion of the Performance RSUs are referred to in this Agreement as “Shares.” As soon as administratively practicable after the vesting and conversion of Performance RSUs (and in any event within sixty (60) days of the vesting date or event, as applicable), and subject to the terms and conditions set forth in the Agreement, the Company shall deliver or cause to be delivered evidence (which may include a book entry by the Company’s transfer agent) of the Shares so issued in the name of the Participant to the brokerage firm designated by the Company to maintain the brokerage account established for the Participant or the Participant’s heirs, in the case of Section 2(c). Notwithstanding the foregoing, the Company shall not be obligated to issue Shares to or in the name of the Participant upon the vesting and conversion of any Performance RSUs unless the issuance of such Shares shall comply with all relevant provisions of law and other legal requirements including, without limitation, any applicable securities laws and the requirements of any stock exchange upon which shares of Common Stock may then be listed. |
(b) | In the event the Participant’s employment with the Company or the Employer (as defined in Section 2(e)) is terminated either by the Participant, the Company, or the Employer for any reason or no reason (other than due to death or Disability), then in each such |
(c) | In the event of the Participant’s death prior to the end of the Performance Period, the Unvested Performance RSUs shall vest immediately upon death based on the following attainment levels for each of the Performance Measurement Periods: (i) if the death occurs following the last day of a Performance Measurement Period, an attainment level based on the actual attainment level determined by the Compensation Committee of the Board for each of the Performance Measurement Periods ending prior to the Participant’s death; and (ii) if the termination occurs prior to the last day of a Performance Measurement Period, an attainment level equal to 100% for each of the Performance Measurement Periods that end subsequent to the Participant’s death. In the event of the Participant’s death after the end of the Performance Period but prior to the Vesting Date, the Unvested Performance RSUs shall vest, on the date that the attainment level is determined, with respect to the number of Shares underlying the Performance RSUs that become eligible to vest based on the attainment level determined by the Compensation Committee of the Board. |
(d) | In the event the Participant becomes Disabled prior to the end of the Performance Period, the Unvested Performance RSUs shall vest immediately as of the date the Participant is determined to be Disabled (regardless of whether the Participant terminates employment prior to the Vesting Date) based on the following attainment levels for each of the Performance Periods: (i) if the Participant is determined to be Disabled following the last day of a Performance Measurement Period, an attainment level based on the actual attainment level determined by the Compensation Committee of the Board for each of the Performance Measurement Periods ending prior to the date that the Participant is determined to be Disabled; and (ii) if the Participant is determined to be Disabled prior to the last day of a Performance Measurement Period, an attainment level equal to 100% for each of the Performance Measurement Periods that end subsequent to the date that the Participants is determined to be Disabled. In the event the Participant is determined to be Disabled after the end of the Performance Period but prior to the Vesting Date, the Unvested Performance RSUs shall vest, on the date that the attainment level is determined, with respect to the number of Shares underlying the Performance RSUs that become eligible to vest based on the attainment level determined by the Compensation Committee of the Board. “Disabled” with respect to the Participant means, when and if, as a result of disease, injury or mental disorder, the Participant is incapable of engaging in regular service or occupation with the Company or the Employer (as defined in paragraph e) which has lasted or can be expected to last for a continuous period of not less than 12 months, as determined by the Company. |
(e) | For purposes of this Agreement, employment shall include being an employee with the Company. Employment shall also include being an employee with any direct or indirect parent or subsidiary of the Company, or any successor to the Company or any such parent or subsidiary of the Company (the “Employer”). Should a Participant transfer employment to become a director, consultant or advisor to the Company or the Employer following the Date of Grant, he or she will still be considered employed for vesting purposes until he or she ceases to provide services to the Company or any direct or indirect parent or subsidiary of the Company, or any successor to the Company or any such parent or subsidiary of the Company. |
3. | Restrictions on Transfer. |
(a) | The Participant shall not sell, assign, transfer, pledge or otherwise encumber any Performance RSUs, either voluntarily or by operation of law. |
(b) | The Company shall not be required (i) to transfer on its books any of the Performance RSUs which have been transferred in violation of any of the provisions set forth herein or (ii) to treat as the owner of such Performance RSUs any transferee to whom such Performance RSUs have been transferred in violation of any of the provisions contained herein. |
4. | Not a Shareholder. The Performance RSUs represent an unfunded, unsecured promise by the Company to deliver Shares upon vesting and conversion of the Performance RSUs, and until vesting of the Performance RSUs and issuance of the Shares, the Participant shall not have any of the rights of a shareholder with respect to the Shares underlying the Performance RSUs. For the avoidance of doubt, the Participant shall have no right to receive any dividends and shall have no voting rights with respect to the Shares underlying the Performance RSUs for which the record date is on or before the date on which the Shares underlying the Performance RSUs are issued to the Participant. |
5. | Provisions of the Plan. The Performance RSUs and Shares, including the grant and issuance thereof, are subject to the provisions of the Plan. A copy of the Plan prospectus is available on the Company’s Intranet at https://thecircuit.web.analog.com/Pages/CircuitHome.aspx. (From The Circuit home page, click Knowledge Centers, HR, Employee Stock Programs. The related documents can be found in the right-hand column). If the Participant is unable to access this information via the Intranet, the Company’s Stock Plan Administrator can provide the Participant with copies (Stock_Plan_Admin@Analog.com). |
6. | Withholding Taxes. |
(a) | Regardless of any action the Company and/or the Employer, if different, takes with respect to any or all income tax (including U.S. federal, state and local taxes and/or non-U.S. taxes), social insurance, payroll tax, fringe benefits tax, payment on account or other |
(b) | Prior to any relevant taxable or tax withholding event, as applicable, the Participant will pay or make adequate arrangements satisfactory to the Company to satisfy all Tax-Related Items. In this regard, the Participant authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the methods set forth below: |
(i) | the Company may withhold a sufficient number of whole Shares otherwise issuable upon the vesting of the Performance RSUs that have an aggregate Fair Market Value (as defined under the Plan) sufficient to pay the minimum Tax-Related Items required to be withheld with respect to the Shares. The cash equivalent of the Shares withheld will be used to settle the obligation to withhold the Tax-Related Items (determined by reference to the closing price of the Common Stock on the Nasdaq Global Select Market on the applicable vesting date); or |
(ii) | the Company may, in its discretion, withhold any amount necessary to pay the Tax-Related Items from the Participant’s salary or other amounts payable to the Participant; or |
(iii) | the Company may withhold from proceeds of the sale of Shares either through a voluntary sale or through a mandatory sale arranged by the Company (on the Participant’s behalf pursuant to this authorization). |
7. | Option of Company to Deliver Cash. Notwithstanding any of the other provisions of this Agreement, and except as set forth in Appendix B, where share settlement is otherwise prohibited under local law or may present adverse tax consequences to the Participant, at the time the Performance RSUs vest, the Company may elect, in the sole discretion of the Compensation Committee of the Board, to deliver by wire transfer to the Participant in lieu of Shares an equivalent amount of cash (determined by reference to the closing price of the Common Stock on the Nasdaq Global Select Market on the applicable vesting date). If the Company elects to deliver cash to the Participant, the Company is authorized to retain such amount as is sufficient in the opinion of the Company to satisfy the Tax-Related Items withholding obligations of the Company pursuant to Section 6 herein. |
8. | Repatriation and Other Legal Requirements. The Participant agrees as a condition of the grant of the Performance RSUs, as applicable, to repatriate all payments attributable to the Shares and/or cash acquired under the Plan (including, but not limited to, dividends and any proceeds derived from the sale of the Shares acquired pursuant to the Performance RSUs) in accordance with all foreign exchange rules and regulations applicable to the Participant. In addition, the Participant also agrees to take any and all actions, and consent to any and |
9. | Miscellaneous. |
(a) | No Rights to Employment. The grant of the Performance RSUs shall not confer upon the Participant any right to continue in the employ of the Company or the Employer, nor limit in any way the right of the Company or the Employer to terminate the Participant’s employment at any time. Except in the event of disability or termination of employment due to death, the vesting of the Performance RSUs pursuant to Section 2 and Appendix A, is earned only by satisfaction of the performance-based vesting conditions and continuing service as an employee at the will of the Company or the Employer through the Vesting Date (not through the act of being hired or engaged or being granted the Performance RSUs hereunder). |
(b) | Discretionary Nature. The Participant acknowledges and agrees that the Plan is discretionary in nature and may be amended, cancelled, or terminated by the Company at any time, to the extent permitted under the Plan. The Participant’s participation in the Plan is voluntary. The grant of the Performance RSUs under the Plan is a one-time benefit and does not create any contractual or other right to receive a grant of Performance RSUs or any other award under the Plan or other benefits in lieu thereof in the future. Future grants, if any, will be at the sole discretion of the Company, including, but not limited to, the form and timing of any grant, the number of Shares subject to the grant, and the vesting provisions. Any amendment, modification or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Participant’s employment with the Company or the Employer. The Performance RSUs and income from such Performance RSUs shall not be included in any calculation of severance, resignation, redundancy, end of service payments, bonuses, long-service awards, holiday pay, pension, or retirement benefits or similar payments. The Performance RSUs should in no event be considered as compensation for, or relating in any way to, past services for the Company or the Employer. |
(c) | Exclusion from Termination Indemnities and Other Benefits. This Section 9(c) applies if the Participant resides outside the U.S.: The value of the Performance RSUs and any other awards granted under the Plan is an extraordinary item of compensation outside the scope of the Participant’s employment with the Company or the Employer (and the Participant’s employment contract, if any). Any grant under the Plan, including the grant of the Performance RSUs and the income and value of same, is not part of normal or expected compensation or salary. Further, the Performance RSUs and the Shares, and the income and value of same, are not intended to replace any pension rights or compensation. |
(d) | No Entitlement. This Section 9(d) applies if the Participant resides outside the U.S. and/or the Company is not the Participant's employer: In consideration of the grant of Performance RSUs, no claim or entitlement to compensation or damages shall arise from forfeiture of the Performance RSUs resulting from termination of the Participant’s employment with the Company or the Employer (regardless of the reason for such termination and whether or not later to be found invalid or in breach of employment laws in the jurisdiction where the Participant is employed or the terms of the Participant’s employment contract, if any) and the Participant irrevocably releases the Company from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, the Participant shall be deemed irrevocably to have waived the Participant’s entitlement to pursue such claim. |
(e) | Exchange Rates. This Section 9(e) applies if the Participant resides outside the U.S.: The Participant acknowledges and agrees that neither the Company nor the Employer shall be liable for any foreign exchange rate fluctuation between the Participant’s local currency and the United States Dollar that may affect the value of the Performance RSUs or of any amounts due to the Participant pursuant to the vesting and settlement of the Performance RSUs or the subsequent sale of any Shares. |
(f) | Future Value of Shares. The future value of the underlying Shares is unknown, indeterminable, and cannot be predicted with certainty. |
(g) | Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law. |
(h) | Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Company and the Participant and his or her respective heirs, executors, administrators, legal representatives, successors and assigns, subject to the restrictions on transfer set forth in Section 3 of this Agreement. |
(i) | Notice. Each notice relating to this Award shall be in writing (which shall include electronic form) and delivered in person, electronically or by first class mail, postage prepaid, to the address as hereinafter provided. Each notice shall be deemed to have been given on the date it is received. Each notice to the Company shall be addressed to it at its offices at Analog Devices, Inc., One |
(j) | Pronouns. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural, and vice versa. |
(k) | Entire Agreement. This Agreement and the Plan constitute the entire understanding between the parties, and supersede all prior agreements and understandings, relating to the subject matter of these documents. |
(l) | Governing Law. This Agreement shall be construed, interpreted and enforced in accordance with the internal laws of the Commonwealth of Massachusetts without regard to any applicable conflicts of laws. |
(m) | Compliance with Laws. Notwithstanding any other provision of the Plan or this Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the Shares, the Company shall not be required to deliver any Shares prior to the completion of any registration or qualification of the Shares under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and Exchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval the Company shall, in its absolute discretion, deem necessary or advisable. The Participant understands that the Company is under no obligation to register or qualify the Shares with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Shares. The Participant also understands and agrees that the Awards granted under the Plan, including the Performance RSUs and the underlying Shares, are subject to the listing standards of any national securities exchange or association on which the Company's securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, and any SEC regulations, as now or hereafter in effect. Further, the Participant agrees that the Company shall have unilateral authority to amend the Plan and the Agreement without the Participant’s consent to the extent necessary to comply with securities or other laws applicable to issuance of Shares. |
(n) | Interpretation. The interpretation and construction of any terms or conditions of this Agreement or the Plan, or other matters related to the Plan, by the Compensation Committee of the Board shall be final and conclusive. |
(o) | Participant’s Acceptance. The Participant is urged to read this Agreement carefully and to consult with his or her own legal counsel regarding the terms and consequences of this Agreement and the legal and binding effect of this Agreement. By virtue of his or her acceptance of this Award, the Participant is deemed to have accepted and agreed to all of the terms and conditions of this Agreement and the provisions of the Plan. |
(p) | Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to the Performance RSUs or other awards granted to the Participant under the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. |
(q) | English Language. The Participant acknowledges and agrees that it is the Participant’s express intent that this Agreement, the Plan and all other documents, notices and legal proceedings entered into, given or instituted pursuant to the Performance RSUs, be drawn up in English. If the Participant has received this Agreement, the Plan or any other documents related to the Performance RSUs translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version shall control. |
(r) | Appendix B. Notwithstanding any provisions herein to the contrary, if the Participant transfers the Participant’s residence and/or employment to a country other than the United States, the Performance RSUs shall be subject to any special terms and conditions for such country as may be set forth in Appendix B to this Agreement. Moreover, if the Participant relocates to one of the countries included in Appendix B, the special terms and conditions for such country will apply to the Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable in order to comply with local law or facilitate the administration of the Plan. Appendix B constitutes part of this Agreement. |
(s) | Additional Requirements. The Company reserves the right to impose other requirements on the Performance RSUs, any Shares acquired pursuant to the Performance RSUs, and the Participant’s participation in the Plan, to the extent the Company determines, in its sole discretion, that such other requirements are necessary or advisable for legal or administrative reasons. Such requirements may include (but are not limited to) requiring the Participant to sign any agreements or undertakings that may be necessary to accomplish the foregoing. |
(t) | Private Placement. The Company has submitted filings in the United States in connection with the stock incentive plan under which this Award was made. The Company has not submitted any registration statement, prospectus or other filings with other local securities authorities (unless otherwise required under such local law), and the grant of the Award is not intended to be a public offering of securities in any other jurisdiction or subject to the supervision of other local securities authorities. |
(u) | Changes in Capitalization. In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any non-cash distribution to holders of Common Stock, the number of Performance RSUs, and Shares issuable upon vesting and conversion thereof, shall be appropriately adjusted in such manner as shall be determined by the Compensation Committee. |
(v) | No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Participant’s participation in the Plan, or the Participant’s acquisition or sale of Shares. The Participant is encouraged to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan. |
(w) | Insider Trading Restrictions/Market Abuse Laws. The Participant acknowledges that, depending on the Participant’s or the Participant’s broker’s country of residence or where the Common Stock is listed, the Participant may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions which may affect the Participant’s ability to accept, acquire, sell, or otherwise dispose of Common Stock, rights to Common Stock (e.g., Performance RSUs), or rights linked to the value of Common Stock (e.g., phantom awards, futures) under the Plan during such times as the Participant is considered to have “inside information” regarding the Company (as defined by the laws or regulations in the Participant’s country). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders the Participant placed before possessing inside information. Furthermore, the Participant could be prohibited from (i) disclosing the inside information to any third party (other than on a “need to know” basis) and (ii) “tipping” third parties or causing them otherwise to buy or sell securities. Keep in mind third parties includes fellow employees. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. The Participant acknowledges that it is his or her responsibility to comply with any applicable restrictions, and the Participant should speak to his or her personal advisor on this matter. |
(x) | Foreign Asset/Account, Exchange Control, and Tax Reporting. Depending on the Participant’s country, the Participant may be subject to foreign asset/account, exchange control and/or tax reporting requirements as a result of the vesting of the Performance RSUs, the acquisition, holding, and/or transfer of Shares or cash resulting from participation in the Plan and/or the opening and maintenance of a brokerage or bank account in connection with the Plan. The Participant may be required to report such assets, accounts, account balances and values and/or related transactions to the applicable authorities in his or her country. The Participant also may be required to repatriate sale proceeds or other funds received as a result of participation in the Plan to the Participant’s country through a designated broker or bank and/or within a certain time after receipt. The Participant acknowledges that he or she is responsible for ensuring compliance with any applicable foreign asset/account, exchange control and tax reporting requirements. The Participant further understands that he or she should consult the Participant’s personal legal advisor on these matters. |
(y) | Waiver. The Participant acknowledges that a waiver by the Company or breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by the Participant or any other participant. |
/s/ Ray Stata | /s/ Vincent Roche | |||
Ray Stata | Vincent Roche | |||
Chairman of the Board | President & Chief Executive Officer |
1. | Performance Period. The three-year period beginning on the first day of the first quarter of the Company’s fiscal year 2019 and ending on the last day of the fourth quarter of the Company’s fiscal year 2021(the “Performance Period”). The Performance Period shall consist of the following three performance measurement periods: (i) the one-year period commencing on the first day of the first quarter and ending on the last day of the fourth quarter of the Company’s fiscal year 2019 (“FY 2019 Period”); (ii) the two-year period beginning on the first day of the first quarter of the Company’s fiscal year 2019 and ending on the last day of the fourth quarter of the Company’s fiscal year 2020 (“Cumulative FY19/20 Period”) and (iii) and the three-year period beginning on the first day of the first quarter of the Company’s fiscal year 2019 and ending on the last day of the fourth quarter of the Company’s fiscal year 2021 (“Cumulative FY19/21 Period,” and collectively, the “Performance Measurement Periods”); |
2. | Vesting Date. Cliff Vesting Date. |
3. | Determination Date: The date the Compensation Committee of the Board determines the level of attainment of the Operating Profit Goals for each of the three corresponding Performance Measurement Periods, which date shall be as soon as practicable following the last day of the applicable Performance Measurement Period. |
4. | Performance Parameters. The Performance Parameters are based on the attainment of Company’s Operating Profit Goals established for each of the Performance Measurement Periods. The attainment level, ranging from 0% to 200%, of the Operating Profit Goal applicable to each Performance Measurement Period shall be measured separately on each corresponding Determination Date and weighted equally. The number of Performance RSUs that shall vest shall be equal to a number of Performance RSUs that is between 0% and 200% of the Initial Grant Number. Attainment among the Operation Profit Goal attainment levels is subject to interpolation on a linear basis. |
(a) | “Operating Profit Goal” shall mean the goal related to Non-GAAP Operating Profit Before Taxes for each of the Performance Measurement Periods approved by the Compensation Committee of the Board in connection with the granting of the Award. |
(b) | “Non-GAAP Operating Profit Before Taxes” means Non-GAAP Operating Profit Before Taxes, as reported by the Company in its earnings press release furnished to the U.S. Securities and Exchange Commission, which shall be determined in accordance with GAAP and disclosed non-GAAP adjustments and further adjusted for the results of any acquisitions or divestitures of significant materiality to be reported in the Company’s 10-Q/10-K filings. |
(c) | The definition of or method of determining Non-GAAP Operating Profit Before Taxes for purposes of ascertaining the attainment level of the Operating Profit Goal may, in the discretion of the Compensation Committee of the Board, be adjusted to eliminate the impact of any one or more of the following unanticipated events: |
(i) | items related to a change in Generally Accepted Accounting Principles in the United States, International Financial Reporting Standards or such other accounting principles or standards as may apply to the Company’s financial statements under United States federal securities laws from time to time; |
(ii) | items relating to unusual or extraordinary corporate transactions, events or developments, or |
(iii) | items relating to gains or losses for material litigation, arbitration and contractual settlements. |
Payout Percent | Number of Potential Shares Attained | Performance Parameters |
0% | 0 | Company Operating Profit Goal does not meet minimum threshold approved by the Compensation Committee of the Board |
100% | Number of Awards Granted | Company Operating Profit Goal meets target approved by Compensation Committee of the Board |
200% | Grant Custom 2 | Company Operating Profit Goal meets or exceeds the maximum target approved by the Compensation Committee of the Board |
(a) | Data Collection and Usage. The Company collects, processes and uses personal data of Participants, including, name, home address and telephone number, date of birth, social insurance number or other identification number, salary, citizenship, job title, any shares of stock or directorships held in the Company, and details of all Performance RSUs, canceled, vested, or outstanding in the Participant’s favor, which the Company receives from the Participant or the Employer. If the Company offers the Participant a grant of Performance RSUs under the Plan, then the Company will collect the Participant’s personal data for purposes of allocating stock and implementing, administering and managing the Plan. The Company’s legal basis for the processing of the Participant’s personal data would be his or her consent. |
(b) | Stock Plan Administration Service Providers. The Company transfers participant data to Fidelity Stock Plan Services LLC, an independent service provider based in the United States, which assists the Company with the implementation, administration and management of the Plan. In the future, the Company may select a different service provider and share the Participant’s data with another company that serves in a similar manner. The Company’s service provider will open an account for the Participant to receive and trade shares of Common Stock. The Participant will be asked to agree on separate terms and data processing practices with the service provider, which is a condition to the Participant’s ability to participate in the Plan. |
(c) | International Data Transfers. The Company and its service providers are based in the United States. If the Participant is outside the United States, the Participant should note that his or her country has enacted data privacy laws that are different from the United States. For example, the European Commission has issued a limited adequacy finding with respect to the United States that applies only to the extent companies register for the EU-U.S. Privacy Shield program. The Company’s legal basis for the transfer of the Employee’s personal data is his or her consent. |
(d) | Data Retention. The Company will use the Participant’s personal data only as long as is necessary to implement, administer and manage the Participant’s participation in the Plan or as required to comply with legal or regulatory obligations, including under tax and security laws. If the Company keeps data longer, it would be to satisfy legal or regulatory obligations and the Company’s legal basis would be relevant laws or regulations. |
(e) | Voluntariness and Consequences of Consent Denial or Withdrawal. The Participant’s participation in the Plan and the Participant’s grant of consent is purely voluntary. The Participant may deny or withdraw his or her consent at any time. If the Participant does not consent, or if the Participant withdraws his or her consent, the Participant cannot participate in the Plan. This would not affect the Participant’s salary from or employment with the Employer; the Participant would merely forfeit the opportunities associated with the Plan. |
(f) | Data Subject Rights. The Participant has a number of rights under data privacy laws in his or her country. Depending on where the Participant is based, the Participant’s rights may include the right to (a) request access or copies of personal data the Company processes, (b) rectification of incorrect data, (c) deletion of data, (d) restrictions on processing, (e) portability of data, (f) lodge complaints with competent authorities in the Participant’s country, and/or (g) a list with the names and addresses of any potential recipients of the Participant’s personal data. To receive clarification regarding the Participant’s rights or to exercise the Participant’s rights please contact the Company at Analog Devices, Inc., One Technology Way, Norwood, Massachusetts, 02062 U.S.A., Attention: Stock Plan Administrator. |
The Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of his or her personal data as described in this document by and among, as applicable, the Employer, and the Company and its subsidiaries for the exclusive purpose of implementing, administering and managing the Participant’s participation in the Plan. The Participant understands that the Company and the Employer may hold certain personal information about the Participant, including, but not limited to, his or her name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all Performance RSUs or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in the Participant’s favor, for the purpose of implementing, administering and managing the Plan (“Data”). The source of the Data is the Employer as well as information the Participant is providing to the Company and the Employer in connection with the Performance RSUs. The Participant understands that Data may be transferred to Fidelity or any other third parties as may be selected by the Company in the future, which are assisting in the implementation, administration and management of the Plan, that these recipients may be located in the Participant’s country or elsewhere and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than the Participant’s country. The Participant understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. The Participant authorizes the Company, Fidelity and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing his or her participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Participant may elect to deposit any Shares acquired upon settlement of the Award. The Participant understands that Data will be held only as long as is necessary to implement, administer and manage the Participant’s participation in the Plan. The Participant understands that he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. The Participant understands, however, that refusing or withdrawing his or her consent may affect the Participant’s ability to participate in the Plan. For more information on the consequences of a refusal to consent or withdrawal of consent, the Participant understands that he or she may contact his or her regional stock plan administrator at Stock_Plan_Admin@Analog.com. | Peserta dengan ini secara eksplicit, secara sukarela dan tanpa sebarang keraguan mengizinkan pengumpulan, penggunaan dan pemindahan, dalam bentuk elektronik atau lain-lain, data peribadinya seperti yang dinyatakan dalam dokumen ini, oleh dan di antara, sebagaimana yang berkenaan, Majikan, Syarikat, dan mana-mana anak Syarikatnya bagi tujuan ekslusif untuk membantu dalam pelaksanaan, pentadbiran dan pengurusan penyertaan Peserta dalam Pelan. Peserta memahami bahawa Syarikat dan Majikan mungkin memegang maklumat peribadi tertentu tentang Peserta, termasuk, tetapi tidak terhad kepada, namanya, alamat rumah dan nombor telefon, tarikh lahir, nombor insurans sosial atau nombor pengenalan lain, gaji, kewarganegaraan, jawatan, apa-apa syer dalam saham atau jawatan pengarah yang dipegang dalam Syarikat, butir-butir semua Performance RSUs atau apa-apa hak lain untuk syer dalam saham yang dianugerahkan, dibatalkan, dilaksanakan, terletak hak, tidak diletak hak ataupun yang belum dijelaskan bagi faedah Peserta, untuk tujuan eksklusif bagi melaksanakan, mentadbir dan menguruskan Pelan (“Data”). Sumber Data adalah daripada Majikan dan juga daripada maklumat yang dibekalkan oleh Peserta kepada Syarikat dan Majikan berkenaan dengan Performance RSUs. Penerima Anugerah juga memahami bahawa Data mungkin dipindahkan kepada Fidelity atau mana-mana pihak ketiga yang mungkin dipilih oleh Syarikat pada masa depan, yang membantu dalam pelaksanaan, pentadbiran dan pengurusan Pelan, bahawa penerima-penerima ini mungkin berada di negara Peserta atau di tempat lain, dan bahawa negara penerima (contohnya, Amerika Syarikat) mungkin mempunyai undang-undang privasi data dan perlindungan yang berbeza daripada negara Peserta. Peserta memahami bahawa dia boleh meminta senarai nama dan alamat mana-mana penerima Data dengan menghubungi wakil sumber manusia tempatannya. Peserta memberi kuasa kepada Syarikat, Fidelity, dan mana-mana penerima lain yang mungkin membantu Syarikat (masa sekarang atau pada masa depan) untuk melaksanakan, mentadbir dan menguruskan penyertaan Peserta dalam Pelan untuk menerima, memiliki, menggunakan, mengekalkan dan memindahkan Data, dalam bentuk elektronik atau lain-lain, semata-mata dengan tujuan untuk melaksanakan, mentadbir dan menguruskan penyertaan Peserta dalam Pelan, termasuk apa-apa pemindahan Data yang diperlukan kepada broker atau pihak ketiga dengan siapa Peserta mungkin pilih untuk mendepositkan apa-apa Saham yang diperolehi di atas penyelesaian Anugerah. Peserta memahami bahawa Data akan dipegang hanya untuk tempoh yang diperlukan untuk melaksanakan, mentadbir dan menguruskan penyertaannya dalam Pelan tersebut. Peserta memahami bahawa dia boleh, pada bila-bila masa, melihat data, meminta maklumat tambahan mengenai penyimpanan dan pemprosesan Data, meminta bahawa pindaan-pindaan dilaksanakan ke atas Data atau menolak atau menarik balik persetujuan dalam ini, dalam mana-mana kes, tanpa kos, dengan menghubungi secara bertulis wakil sumber manusia tempatannya. Peserta memahami bahawa keengganan atau penarikan balik persetujuannya boleh menjejaskan keupayaannya untuk mengambil bahagian dalam Pelan. Untuk maklumat lanjut mengenai akibat keengganannya untuk memberikan keizinan atau penarikan balik keizinan, Peserta fahami bahawa dia boleh menghubungi pentadbir pelan saham serantau di Stock_Plan_Admin@Analog.com. |
1. | OFFER |
2. | TERMS OF GRANT |
3. | ADDITIONAL DOCUMENTS |
(a) | the Plan; |
(b) | the Plan Prospectus; and |
(c) | the Agreement. |
4. | RELIANCE ON STATEMENTS |
5. | WHO IS ELIGIBLE TO PARTICIPATE? |
6. | ACCEPTING AN AWARD |
7. | WHAT ARE THE MATERIAL TERMS OF THE RESTRICTED STOCK UNITS? |
(a) | What are Restricted Stock Units? |
(b) | Do I have to pay any money to receive the Restricted Stock Units? |
(c) | How many Shares will I receive upon vesting of my Restricted Stock Units? |
(f) | What happens if my employment with the Company or Australian Subsidiary terminates? |
8. | WHAT IS A SHARE IN THE COMPANY |
9. | HOW CAN I OBTAIN UPDATED INDICATIVE EXAMPLES OF THE CURRENT MARKET PRICE IN AUSTRALIAN DOLLARS? |
10. | WHAT ADDITIONAL RISK FACTORS APPLY TO AUSTRALIAN RESIDENTS’ PARTICIPATION IN THE PLAN? |
11. | PLAN MODIFICATION, TERMINATION ETC. |
12. | WHAT ARE THE AUSTRALIAN TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN? |
(a) | What is the effect of the grant of the Restricted Stock Units? |
(b) | When will you be taxed if your Restricted Stock Units are subject to a real risk of forfeiture? |
(c) | What is the amount to be included in your assessable income if an ESS deferred taxing point occurs? |
(d) | What is the market value of the Underlying Shares? |
(e) | What happens if I cease employment before my Restricted Stock Units vest? |
(f) | What tax consequences will arise when I sell my Shares? |
(g) | What are the taxation consequences if a dividend is paid on the Shares? |
(h) | What are the tax withholding and reporting obligations associated with the Restricted Stock Units? |
13. | WHAT ARE THE U.S. TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN? |
• | you agree that any employer’s NICs liability that may arise in connection with your Awards will be transferred to you; |
• | you authorise your employer to recover an amount sufficient to cover this liability by such methods including, but not limited to, deductions from your salary or other payments due or the sale of sufficient shares acquired pursuant to your Awards; and |
• | you acknowledge that even if you have clicked on the “ACCEPT” box where indicated, the Company or your employer may still require you to sign a paper copy of this Election (or a substantially similar form) if the Company determines such is necessary to give effect to the Election. |
A. | The individual who has obtained authorised access to this Election (the “Employee”), who is employed by one of the employing companies listed in the attached schedule (the “Employer”) and who is eligible to receive restricted stock units (“Awards”) pursuant to the Analog Devices, Inc. Amended and Restated 2006 Stock Incentive Plan (the “Plan”), and |
B. | Analog Devices, Inc. of One Technology Way, Norwood, Massachusetts 02062, U.S.A. (the “Company”), which may grant Awards under the Plans and is entering into this Election on behalf of the Employer. |
1. | Introduction |
1.1 | This Election relates to all Awards granted to the Employee or assumed and converted under the Plan up to the termination dates of the Plans. |
1.2 | In this Election the following words and phrases have the following meanings: |
(a) | “Chargeable Event” means, in relation to the Awards: |
(i) | the acquisition of securities pursuant to restricted stock units and/or stock purchase rights (within section 477(3)(a) of ITEPA); |
(ii) | the assignment (if applicable) or release of the restricted stock units in return for consideration (within section 477(3)(b) of ITEPA); |
(iii) | the receipt of a benefit in connection with the restricted stock units, other than a benefit within (i) or (ii) above (within section 477(3)(c) of ITEPA); |
(iv) | post-acquisition charges relating to the shares acquired pursuant to the restricted stock units (within section 427 of ITEPA); and/or |
(v) | post-acquisition charges relating to the shares acquired pursuant to the restricted stock units (within section 439 of ITEPA). |
(b) | “ITEPA” means the Income Tax (Earnings and Pensions) Act 2003. |
(c) | “SSCBA” means the Social Security Contributions and Benefits Act 1992. |
1.3 | This Election relates to the employer’s secondary Class 1 National Insurance Contributions (the “Employer’s Liability”) which may arise on the occurrence of a Chargeable Event in respect of the Awards pursuant to section 4(4)(a) and/or paragraph 3B(1A) of Schedule 1 of the SSCBA. |
1.4 | This Election does not apply in relation to any liability, or any part of any liability, arising as a result of regulations being given retrospective effect by virtue of section 4B(2) of either the SSCBA, or the Social Security Contributions and Benefits (Northern Ireland) Act 1992. |
1.5 | This Election does not apply to the extent that it relates to relevant employment income which is employment income of the earner by virtue of Chapter 3A of Part VII of ITEPA (employment income: securities with artificially depressed market value). |
2. | The Election |
3. | Payment of the Employer’s Liability |
3.1 | The Employee hereby authorises the Company and/or the Employer to collect the Employer’s Liability from the Employee at any time after the Chargeable Event: |
(i) | by deduction from salary or any other payment payable to the Employee at any time on or after the date of the Chargeable Event; and/or |
(ii) | directly from the Employee by payment in cash or cleared funds; and/or |
(iii) | by arranging, on behalf of the Employee, for the sale of some of the securities which the Employee is entitled to receive in respect of the Awards; and/or |
(iv) | by any other means specified in the applicable award agreement. |
3.2 | The Company hereby reserves for itself and the Company the right to withhold the transfer of any securities related to the Awards to the Employee until full payment of the Employer’s Liability is received. |
3.3 | The Company agrees to remit the Employer’s Liability to HM Revenue & Customs on behalf of the Employee within 14 days after the end of the UK tax month during which the Chargeable Event occurs (or within 17 days after the end of the UK tax month during which the Chargeable Event occurs if payments are made electronically). |
4. | Duration of Election |
4.1 | The Employee and the Company agree to be bound by the terms of this Election regardless of whether the Employee is transferred abroad or is not employed by the Employer on the date on which the Employer’s Liability becomes due. |
4.2 | This Election will continue in effect until the earliest of the following: |
(i) | the Employee and the Company agree in writing that it should cease to have effect; |
(ii) | on the date the Company serves written notice on the Employee terminating its effect; |
(iii) | on the date HM Revenue & Customs withdraws approval of this Election; or |
(iv) | after due payment of the Employer’s Liability in respect of the entirety of the Awards to which this Election relates or could relate, such that the Election ceases to have effect in accordance with its terms. |
4.3 | This Election will continue in force regardless of whether the Employee ceases to be an employee of the Employer. |
/s/ Kevin P. Lanouette | |||
Kevin P. Lanouette | |||
Assistant General Counsel |
Registered Office: | Unit 3 Horizon Business Village, 1 Brooklands Road, Weybridge, Surrey, KT13 OTJ |
Company Registration Number: | 895439 |
Corporation Tax Reference: | 6873689030216A |
PAYE Reference: | 120/A4055 |
Registered Office: | 3 The Listons, Liston Road, Marlow, Buckinghamshire, SL7 1FD |
Company Registration Number: | 2149602 |
Corporation Tax Reference: | 120PA00148447 |
PAYE Reference: | 120/L30589 |
1. | I have reviewed this quarterly report on Form 10-Q of Analog Devices, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 22, 2019 | /s/ VINCENT ROCHE | |
Vincent Roche | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Analog Devices, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 22, 2019 | /s/ Prashanth Mahendra-Rajah | |
Prashanth Mahendra-Rajah | ||
Senior Vice President, Finance | ||
and Chief Financial Officer | ||
(Principal Financial Officer) |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 22, 2019 | /s/ VINCENT ROCHE | |
Vincent Roche | ||
Chief Executive Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 22, 2019 | /s/ Prashanth Mahendra-Rajah | |
Prashanth Mahendra-Rajah | ||
Chief Financial Officer |
Document and Entity Information |
6 Months Ended |
---|---|
May 04, 2019
shares
| |
Document and Entity Information [Abstract] | |
Entity Registrant Name | ANALOG DEVICES INC |
Entity Trading Symbol | ADI |
Entity Central Index Key | 0000006281 |
Current Fiscal Year End Date | --11-02 |
Entity Filer Category | Large Accelerated Filer |
Document Type | 10-Q |
Document Period End Date | May 04, 2019 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q2 |
Entity Emerging Growth Company | false |
Entity Small Business | false |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | 369,761,227 |
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
May 04, 2019 |
May 05, 2018 |
[1] | May 04, 2019 |
May 05, 2018 |
[1] | |||
Income Statement [Abstract] | ||||||||
Revenue | $ 1,526,602 | $ 1,563,502 | $ 3,067,703 | $ 3,130,372 | ||||
Cost of sales | 492,510 | 491,112 | 993,955 | 986,299 | ||||
Gross margin | 1,034,092 | 1,072,390 | 2,073,748 | 2,144,073 | ||||
Operating expenses: | ||||||||
Research and development | 285,846 | 289,472 | 573,228 | 578,069 | ||||
Selling, marketing, general and administrative | 163,128 | 172,146 | 330,470 | 349,054 | ||||
Amortization of intangibles | 107,261 | 107,129 | 214,585 | 214,148 | ||||
Special charges | 8,162 | 1,089 | 29,944 | 58,407 | ||||
Total operating expenses | 564,397 | 569,836 | 1,148,227 | 1,199,678 | ||||
Operating income | 469,695 | 502,554 | 925,521 | 944,395 | ||||
Nonoperating expense (income): | ||||||||
Interest expense | 59,701 | 64,792 | 118,429 | 132,822 | ||||
Interest income | (2,928) | (1,912) | (5,616) | (4,004) | ||||
Other, net | 4,525 | (451) | 4,365 | 105 | ||||
Nonoperating expense (income) | 61,298 | 62,429 | 117,178 | 128,923 | ||||
Income before income taxes | 408,397 | 440,125 | 808,343 | 815,472 | ||||
Provision for income taxes | 40,460 | 39,797 | 85,400 | 121,904 | ||||
Net income | $ 367,937 | $ 400,328 | $ 722,943 | $ 693,568 | ||||
Shares used to compute earnings per common share – basic (in shares) | 369,246 | 370,384 | 368,974 | 369,685 | ||||
Shares used to compute earnings per common share – diluted (in shares) | 373,342 | 374,778 | 372,912 | 374,430 | ||||
Basic earnings per common share (in dollars per share) | $ 0.99 | $ 1.08 | $ 1.95 | $ 1.87 | ||||
Diluted earnings per common share (in dollars per share) | $ 0.98 | $ 1.06 | $ 1.93 | $ 1.84 | ||||
Cost of sales | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||
Stock-based compensation expense | $ 5,389 | $ 3,820 | $ 10,473 | $ 8,041 | ||||
Research and development | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||
Stock-based compensation expense | 19,567 | 22,018 | 38,492 | 41,746 | ||||
Selling, marketing, general and administrative | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||
Stock-based compensation expense | $ 15,273 | $ 13,076 | $ 27,657 | $ 27,029 | ||||
|
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
May 04, 2019 |
May 05, 2018 |
[1] | May 04, 2019 |
May 05, 2018 |
[1] | |||
Statement of Comprehensive Income [Abstract] | ||||||||
Net income | $ 367,937 | $ 400,328 | $ 722,943 | $ 693,568 | ||||
Foreign currency translation adjustments | (3,428) | (3,419) | (112) | 6,752 | ||||
Change in fair value of available-for-sale securities | 5 | 5 | 15 | 3 | ||||
Change in fair value of derivative instruments designated as cash flow hedges (net of taxes of $3,802, $771, $10,183 and $1,323, respectively) | (14,912) | (6,613) | (37,850) | 1,737 | ||||
Changes in pension plans including transition obligation, net actuarial loss and foreign currency translation adjustments (net of taxes of $63, $99, $126 and $202, respectively) | 335 | 1,373 | 366 | (144) | ||||
Other comprehensive (loss) income | (18,000) | (8,654) | (37,581) | 8,348 | ||||
Comprehensive income | $ 349,937 | $ 391,674 | $ 685,362 | $ 701,916 | ||||
|
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
May 04, 2019 |
May 05, 2018 |
May 04, 2019 |
May 05, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||||
Tax effect of change in fair value of derivative instruments designated as cash flow hedges | $ 3,802 | $ 771 | $ 10,183 | $ 1,323 |
Tax effect of changes in pension plans including prior service cost, transition obligation, net actuarial loss and foreign currency translation adjustments | $ 63 | $ 99 | $ 126 | $ 202 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
May 04, 2019 |
Nov. 03, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 471,934 | 471,934 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.1667 | $ 0.1667 |
Common stock, shares authorized (in shares) | 1,200,000,000 | 1,200,000,000 |
Common stock, shares outstanding (in shares) | 369,761,227 | 370,159,553 |
Stock-based compensation | $ 6,982 | $ 7,128 |
Condensed Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands |
Total |
Common Stock |
Capital in Excess of Par Value |
Retained Earnings |
Accumulated Other Comprehensive (Loss) Income |
|||
---|---|---|---|---|---|---|---|---|
Beginning balance (in shares) at Oct. 28, 2017 | [1] | 368,636 | ||||||
Beginning balance at Oct. 28, 2017 | [1] | $ 61,441 | $ 5,250,519 | $ 5,179,024 | $ (61,359) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | [1] | $ 693,568 | 693,568 | |||||
Dividends declared and paid | (345,001) | |||||||
Issuance of stock under stock plans and other (in shares) | 2,575 | |||||||
Issuance of stock under stock plans and other | $ 429 | 65,128 | ||||||
Stock-based compensation expense | 76,816 | |||||||
Other comprehensive (loss) income | [1] | 8,348 | ||||||
Common stock repurchased (in shares) | (314) | |||||||
Common stock repurchased | $ (53) | (29,855) | ||||||
Ending balance (in shares) at May. 05, 2018 | 370,897 | |||||||
Ending balance at May. 05, 2018 | $ 61,817 | 5,362,608 | 5,527,591 | (53,011) | ||||
Beginning balance (in shares) at Feb. 03, 2018 | [1] | 369,804 | ||||||
Beginning balance at Feb. 03, 2018 | [1] | $ 61,635 | 5,318,109 | 5,305,545 | (44,357) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | [1] | 400,328 | 400,328 | |||||
Dividends declared and paid | (178,282) | |||||||
Issuance of stock under stock plans and other (in shares) | 1,324 | |||||||
Issuance of stock under stock plans and other | $ 221 | 27,524 | ||||||
Stock-based compensation expense | 38,914 | |||||||
Other comprehensive (loss) income | [1] | (8,654) | ||||||
Common stock repurchased (in shares) | (231) | |||||||
Common stock repurchased | $ (39) | (21,939) | ||||||
Ending balance (in shares) at May. 05, 2018 | 370,897 | |||||||
Ending balance at May. 05, 2018 | $ 61,817 | 5,362,608 | 5,527,591 | (53,011) | ||||
Beginning balance (in shares) at Nov. 03, 2018 | [1] | 370,160 | ||||||
Beginning balance at Nov. 03, 2018 | [1] | 11,268,173 | $ 61,694 | 5,282,222 | 5,982,697 | (58,440) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 722,943 | 722,943 | ||||||
Dividends declared and paid | (377,217) | |||||||
Issuance of stock under stock plans and other (in shares) | 3,140 | |||||||
Issuance of stock under stock plans and other | $ 524 | 86,383 | ||||||
Stock-based compensation expense | 76,622 | |||||||
Other comprehensive (loss) income | (37,581) | (37,581) | ||||||
Common stock repurchased (in shares) | (3,539) | |||||||
Common stock repurchased | $ (590) | (328,025) | ||||||
Ending balance (in shares) at May. 04, 2019 | 369,761 | |||||||
Ending balance at May. 04, 2019 | 11,742,258 | $ 61,628 | 5,117,202 | 6,659,449 | (96,021) | |||
Beginning balance (in shares) at Feb. 02, 2019 | 368,314 | |||||||
Beginning balance at Feb. 02, 2019 | $ 61,387 | 5,111,058 | 6,491,013 | (78,021) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 367,937 | 367,937 | ||||||
Dividends declared and paid | (199,501) | |||||||
Issuance of stock under stock plans and other (in shares) | 2,369 | |||||||
Issuance of stock under stock plans and other | $ 395 | 67,283 | ||||||
Stock-based compensation expense | 40,229 | |||||||
Other comprehensive (loss) income | (18,000) | (18,000) | ||||||
Common stock repurchased (in shares) | (922) | |||||||
Common stock repurchased | $ (154) | (101,368) | ||||||
Ending balance (in shares) at May. 04, 2019 | 369,761 | |||||||
Ending balance at May. 04, 2019 | $ 11,742,258 | $ 61,628 | $ 5,117,202 | $ 6,659,449 | $ (96,021) | |||
|
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
May 04, 2019 |
May 05, 2018 |
May 04, 2019 |
May 05, 2018 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Dividends (in dollars per share) | $ 0.54 | $ 0.48 | $ 1.02 | $ 0.93 |
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands |
6 Months Ended | ||||
---|---|---|---|---|---|
May 04, 2019 |
May 05, 2018 |
||||
Cash flows from operating activities: | |||||
Net income | $ 722,943 | $ 693,568 | [1] | ||
Adjustments to reconcile net income to net cash provided by operations: | |||||
Depreciation | 117,435 | 113,004 | [1] | ||
Amortization of intangibles | 284,525 | 285,004 | [1] | ||
Stock-based compensation expense | 76,622 | 76,816 | [1] | ||
Non-cash portion of special charge | 4,367 | 0 | [1] | ||
Deferred income taxes | (21,843) | (705,640) | [1] | ||
Other non-cash activity | 18,429 | 10,104 | [1] | ||
Changes in operating assets and liabilities | (159,829) | 634,326 | [1] | ||
Total adjustments | 319,706 | 413,614 | [1] | ||
Net cash provided by operating activities | 1,042,649 | 1,107,182 | [1] | ||
Cash flows from investing activities: | |||||
Additions to property, plant and equipment | (166,202) | (117,122) | [1] | ||
Payments for acquisitions, net of cash acquired | 0 | (52,339) | [1] | ||
Changes in other assets | (4,585) | (1,029) | [1] | ||
Net cash used for investing activities | (170,787) | (170,490) | [1] | ||
Cash flows from financing activities: | |||||
Proceeds from debt | 0 | 743,778 | [1] | ||
Proceeds from revolver | 75,000 | 0 | |||
Payments on revolver | (75,000) | 0 | |||
Debt repayments | (350,000) | (1,620,000) | [1] | ||
Dividend payments to shareholders | (377,217) | (345,001) | [1] | ||
Repurchase of common stock | (328,615) | (29,908) | [1] | ||
Proceeds from employee stock plans | 86,907 | 65,557 | [1] | ||
Contingent consideration payment | (4,000) | (542) | [1] | ||
Changes in other financing activities | (2,144) | 7,945 | [1] | ||
Net cash used for financing activities | (975,069) | (1,178,171) | [1] | ||
Effect of exchange rate changes on cash | 217 | 158 | [1] | ||
Net decrease in cash and cash equivalents | (102,990) | (241,321) | [1] | ||
Cash and cash equivalents at beginning of period | 816,591 | 1,047,838 | [1] | ||
Cash and cash equivalents at end of period | $ 713,601 | $ 806,517 | [1] | ||
|
Basis of Presentation |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation In the opinion of management, the information furnished in the accompanying condensed consolidated financial statements reflects all normal recurring adjustments that are necessary to fairly state the results for these interim periods and should be read in conjunction with Analog Devices, Inc.’s (the Company) Annual Report on Form 10-K for the fiscal year ended November 3, 2018 (fiscal 2018) and related notes. The results of operations for the interim periods shown in this report are not necessarily indicative of the results that may be expected for the fiscal year ending November 2, 2019 (fiscal 2019) or any future period. The Company has a 52-53 week fiscal year that ends on the Saturday closest to the last day in October. Fiscal 2019 is a 52-week fiscal year and fiscal 2018 was a 53-week fiscal year. The additional week in fiscal 2018 was included in the first quarter ended February 3, 2018. Therefore, the first six months of fiscal 2019 included one less week of operations as compared to the first six months of fiscal 2018. Certain amounts reported in previous periods have been reclassified to conform to the fiscal 2019 presentation. As further discussed in Note 2, Revenue Recognition and Note 13, New Accounting Pronouncements, the Company adopted the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (ASU 2014-09), in the first quarter of fiscal 2019. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period showing, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized as of the date of initial application. The Company adopted ASU 2014-09 using the full retrospective method and applied the practical expedient, in which the Company is not required to disclose the amount of consideration allocated to any remaining performance obligations or an explanation of when the Company expects to recognize that amount as revenue for all reporting periods presented before the date of the initial application. As a result of the adoption of ASU 2014-09, the Company changed its accounting policy for revenue recognition and recognizes revenue from product sales to its customers and distributors when title passes, which is generally upon shipment. Prior to the adoption of ASU 2014-09, revenue and the related cost of sales on shipments to certain distributors were deferred until the distributor resold the products to their end customers. See Note 2, Revenue Recognition, in these Notes to Condensed Consolidated Financial Statements for the details of the Company’s revenue recognition policies. The adoption of ASU 2014-09 impacted the Company’s condensed consolidated statements of income and balance sheets but did not impact its condensed consolidated statements of cash flows, with the exceptions of net income and reclassifications within adjustments to reconcile net income to cash provided by operations, and did not impact the condensed consolidated statement of shareholders' equity, with the exceptions of retained earnings and net income. As shown in the tables below, pursuant to the guidance in ASU 2014-09, the Company restated its historical financial results to be consistent with the standard. Accordingly, the amounts for all periods presented in this Form 10-Q reflect the impact of ASU 2014-09.
The impact on the Company's previously reported condensed consolidated balance sheet line items is as follows:
In addition, in the first quarter of fiscal 2019, the Company adopted ASU 2016-16, Income Taxes (Topic 740) (ASU 2016-16) using the modified retrospective method with a cumulative-effect adjustment directly to retained earnings. ASU 2016-16 requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. The adoption of ASU 2016-16 resulted in the following cumulative-effect increase in the Company's deferred tax assets, deferred tax liabilities and retained earnings as follows:
See Note 13, New Accounting Pronouncements, and Note 12, Income Taxes, in these Notes to Condensed Consolidated Financial Statements for more information on the adoption of ASU 2016-16.
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Revenue Recognition |
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Revenue Recognition [Abstract] | |
Revenue Recognition | Revenue Recognition Revenue Recognition Policy: In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, to achieve a consistent application of revenue recognition, resulting in a single revenue model to be applied by reporting companies under U.S. generally accepted accounting principles. Under the new model, 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. As a result of the adoption of ASU 2014-09, at the beginning of the first quarter of fiscal 2019, the Company revised its revenue recognition policy. The Company now 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. Under ASU 2014-09, the Company recognizes revenue 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 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 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 cost of sales as incurred. Sales taxes are excluded from revenue. 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 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 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 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 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 obligation, the 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 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 dates and with an original expected duration of one year or less. As allowed under ASU 2014-09, the Company has opted to not disclose the amount of unsatisfied performance obligations as these contracts have original expected durations of less than one year. 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 recorded for known product warranty issues. 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 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 receive is unknown as of the end of a reporting period. Such consideration primarily includes sales made to distributors under agreements that allow certain rights of return, referred to as stock rotation, and credits issued to the distributor due to price protection. Stock rotation allows distributors limited levels of returns in order to reduce the amounts of slow-moving, discontinued or obsolete product from their inventory. 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 shipped and billed to the distributor. A refund liability for distributor credits covering variable consideration are 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 consistent with the provisions the Company has made based on its historical estimates. 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. To date, there have been no material impairment losses on accounts receivable. There were no material contract assets or contract liabilities recorded on the condensed consolidated balance sheet in any of the periods presented.
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Stock-Based Compensation and Shareholders' Equity |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation and Shareholders' Equity | Stock-Based Compensation and Shareholders' Equity A summary of the Company’s stock option activity as of May 4, 2019 and changes during the three- and six-month periods then ended is presented below:
During the three- and six-month periods ended May 4, 2019, 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) was $72.6 million and $99.7 million, respectively, and the total amount of proceeds received by the Company from the exercise of these options was $67.7 million and $86.9 million, respectively. During the three- and six-month periods ended May 5, 2018, 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) was $28.7 million and $82.5 million, respectively, and the total amount of proceeds received by the Company from the exercise of these options was $27.7 million and $65.6 million, respectively. A summary of the Company’s restricted stock unit/award activity as of May 4, 2019 and changes during the three- and six-month periods then ended is presented below:
As of May 4, 2019, there was $395.6 million of total unrecognized compensation cost related to unvested stock-based awards comprised of stock options and restricted stock units/awards. That cost is expected to be recognized over a weighted-average period of 1.6 years. The total grant-date fair value of shares that vested during the three- and six-month periods ended May 4, 2019 was approximately $87.1 million and $106.4 million, respectively. The total grant-date fair value of shares that vested during the three- and six-month periods ended May 5, 2018 was approximately $64.1 million and $84.5 million, respectively. Common Stock Repurchases As of May 4, 2019, the Company had repurchased a total of approximately 152.0 million shares of its common stock for approximately $5.8 billion under the Company's share repurchase program. As of May 4, 2019, an additional $2.3 billion remains available for repurchase of shares under the current authorized program.
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Accumulated Other Comprehensive Income (Loss) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following table provides the changes in accumulated other comprehensive income (loss) (OCI) by component and the related tax effects during the first six months of fiscal 2019.
The amounts reclassified out of accumulated OCI into the Condensed Consolidated Statement of Income with presentation location during each period were as follows:
______________ (a) The amortization of pension components is included in the computation of net periodic pension cost. For further information see Note 11, Retirement Plans, in the Notes to Consolidated Financial Statements in Item 8 of the Annual Report on Form 10-K for the fiscal year ended November 3, 2018. The Company estimates $2.3 million, net of tax, of losses of forward foreign currency derivative instruments included in OCI will be reclassified into earnings within the next 12 months. There was no material ineffectiveness recorded within OCI related to designated forward foreign currency derivative instruments in the three- and six-month periods ended May 4, 2019 and May 5, 2018. As of May 4, 2019, the Company held 10 investment securities, 1 of which was in an unrealized loss position with immaterial gross unrealized losses and an aggregate fair value of $25.0 million. As of November 3, 2018, the Company held 15 investment securities, 15 of which were in an unrealized loss position with immaterial gross unrealized losses and an aggregate fair value of $205.0 million. These unrealized losses were primarily related to corporate obligations that earn lower interest rates than current market rates. None of these investments have been in a loss position for more than twelve months. As the Company does not intend to sell these investments and it is unlikely that the Company will be required to sell the investments before recovery of their amortized basis, which will be at maturity, the Company does not consider those investments to be other-than-temporarily impaired at May 4, 2019 and November 3, 2018. Realized gains or losses on investments are determined based on the specific identification basis and are recognized in nonoperating expense (income). There were no material net realized gains or losses from the sales of available-for-sale investments during any of the fiscal periods presented.
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share Unvested restricted stock awards that entitle recipients to voting and nonforfeitable dividend rights from the date of grant are 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 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. The following table sets forth the computation of basic and diluted earnings per share:
(1) Balances have been restated to reflect the full retrospective adoption of ASU 2014-09. See Note 1, Basis of Presentation, in these Notes to Condensed Consolidated Financial Statements.
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Special Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special Charges | Special Charges 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 assessments, the Company has undertaken various restructuring actions over the past several years. These actions are described below. The following table is a roll-forward from November 3, 2018 to May 4, 2019 of the employee separation and exit cost accruals established related to these actions:
Repositioning Action During the first and second quarters of fiscal 2019, the Company recorded special charges of $20.7 million and $3.6 million, respectively, as a result of organizational initiatives to reposition the Company's global workforce skill set to align with the Company's long-term strategic plan. Approximately $19.8 million of the total charges for the first and second quarters of fiscal 2019 were for severance and fringe benefit costs in accordance with either the Company's ongoing benefit plan or statutory requirements for 140 engineering and selling, marketing, general and administrative (SMG&A) employees. As of May 4, 2019, the Company still employed 68 of the 140 employees included in this action. These employees must continue to be employed by the Company until their employment is involuntarily terminated in order to receive the severance benefits. The remaining $4.4 million of the charges related to the write off of acquired intellectual property during the first quarter of fiscal 2019 due to the Company's decision to discontinue certain product development strategies. Closure of Manufacturing Facilities The Company recorded special charges of $48.7 million on a cumulative basis through May 4, 2019 as a result of its decision to consolidate certain wafer and test facility operations acquired as part of the acquisition of Linear Technology Corporation (Linear). Over the next two to four years, the Company plans to close its Hillview wafer fabrication facility located in Milpitas, California and its Singapore test facility. The Company intends to transfer Hillview wafer fabrication production to its other internal facilities and to external foundries. In addition, the Company is planning to transition testing operations currently handled in its Singapore facility to its facilities in Penang, Malaysia and the Philippines, in addition to its outsourced assembly and test partners. 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 one-time termination benefits for 1,249 manufacturing, engineering and SMG&A employees. Employees included in this action must continue to be employed by the Company until their employment is terminated in order to receive the severance benefits.
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company designs, develops, manufactures and markets a broad range of integrated circuits (ICs). The Company operates and tracks its results in one reportable segment based on the aggregation of eight operating segments. The Chief Executive Officer has been identified as the Company's Chief Operating Decision Maker. Revenue Trends by End Market The following table summarizes revenue by end market for the three- and six-month periods ended May 4, 2019 and May 5, 2018. 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” 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 evolve and improve, the categorization of 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 end market.
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 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 some commercial customers. The following tables summarize revenue by channel for the three- and six-month periods ended May 4, 2019 and May 5, 2018:
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Fair Value |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | 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 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 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 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 reporting entity has the ability to access at the measurement date. 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 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 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 components that were accounted for at fair value on a recurring basis as of May 4, 2019 and November 3, 2018. 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 May 4, 2019 and November 3, 2018, the Company held $233.6 million and $217.6 million, respectively, of cash and held-to-maturity investments that were excluded from the tables below.
The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments: 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. Deferred compensation plan investments — The fair value of these mutual fund, money market fund and equity investments are based on quoted market prices. Interest rate derivatives — The fair value of the interest rate derivatives is estimated using a discounted cash flow analysis based on the contractual terms of the derivative. 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 hedges, is based on the estimated amount the Company would receive if it sold these agreements at the reporting date taking into consideration current interest 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 information such as strike price, spot rate, maturity date and volatility. Financial Instruments Not Recorded at Fair Value on a Recurring Basis 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 are obtained from broker prices and are classified as Level 1 measurements according to the fair value hierarchy. See Note 10, Debt, in these Notes to Condensed Consolidated Financial Statements for further discussion related to outstanding debt.
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Derivatives |
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May 04, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives | Derivatives 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 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 Philippine Peso, the Japanese Yen and the British Pound. 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 for periods consistent with the terms of the underlying transactions, generally one year or less. Hedges related to anticipated transactions are designated and documented at the inception of the respective hedges as cash flow hedges and are qualitatively evaluated for effectiveness quarterly. Derivative instruments are employed to eliminate or minimize certain foreign currency exposures that can be confidently identified and quantified. As the terms of the contract and the underlying transaction are matched at inception, forward contract effectiveness is calculated by comparing the change in fair value of the contract to the change in the forward value of the anticipated transaction, with the gain or loss on the derivative reported as a component of accumulated OCI in shareholders’ equity and reclassified into earnings 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 flow hedges denominated in Euros, British Pounds, Philippine Pesos and Japanese Yen as of May 4, 2019 and November 3, 2018 was $197.4 million and $194.4 million, respectively. The fair values of forward foreign currency derivative instruments designated as hedging instruments in the Company’s condensed consolidated balance sheets as of May 4, 2019 and November 3, 2018 was as follows:
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 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 May 4, 2019 and November 3, 2018, the total notional amount of these undesignated hedges was $80.6 million and $40.6 million, respectively. The fair value of these hedging instruments in the Company’s condensed consolidated balance sheets was immaterial as of May 4, 2019 and November 3, 2018. All 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 arrangements have been presented in the Company's condensed consolidated balance sheet on a net basis. As of May 4, 2019 and November 3, 2018, none of the netting arrangements involved collateral. The following table presents the gross amounts of the Company's derivative assets and liabilities and the net amounts recorded in the Company's condensed consolidated balance sheet:
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 these changes. In the first quarter of fiscal 2019, the Company entered into an interest rate swap agreement which locked in the interest rate for up to $1.0 billion in future debt issuances. The interest rate swap agreement was designated and qualified as a cash flow hedge. The fair value of this hedge was $51.6 million as of May 4, 2019 and is included within accrued liabilities in the Company's condensed consolidated balance sheets. 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 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 May 4, 2019 and November 3, 2018, 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 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 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 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. The Company records the fair value of its derivative financial instruments in its condensed consolidated financial statements in 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 either recognized periodically in earnings or in shareholders’ equity as a component of OCI. Changes in the fair value of cash flow hedges are recorded in OCI and reclassified into earnings in the same line item on the condensed consolidated statement of income as the impact of the hedged transaction when the underlying contract matures and, for interest rate exposure derivatives, over the term of the corresponding debt instrument. Changes in the fair values of derivatives 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 accumulated other comprehensive income into the condensed consolidated statement of income related to forward foreign currency exchange contracts, see Note 4, Accumulated Other Comprehensive Income (Loss), in these Notes to Condensed Consolidated Financial Statements for further information.
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Debt |
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May 04, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company has a senior unsecured revolving credit facility with certain institutional lenders that expires on July 10, 2020. The agreement for such revolving credit facility (the Credit Agreement) provides that the Company may borrow up to $1.0 billion. In December 2018, the Company borrowed $75.0 million under this revolving credit facility and utilized the proceeds for the repayment of existing indebtedness and working capital requirements. The Company repaid the $75 million plus interest of $0.2 million in January 2019. The Company 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. During the six-month period ended May 4, 2019, the Company made additional principal payments of $350.0 million on its 3-year unsecured term loan. These amounts were not contractually due under the terms of the loan.
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Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories at May 4, 2019 and November 3, 2018 were as follows:
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Income Taxes |
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May 04, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Tax Cuts and Jobs Act of 2017 (Tax Legislation), enacted in December 2017, contains significant changes to U.S. tax law, including lowering the U.S. corporate income tax rate to 21.0%, implementing a territorial tax system, and imposing a one-time tax on deemed repatriated earnings of foreign subsidiaries. The Tax Legislation reduced the U.S. statutory tax rate from 35.0% to 21.0%, effective January 1, 2018, which resulted in a blended statutory income tax rate for the Company of 23.4% for fiscal 2018. For fiscal 2019, the Company’s U.S. statutory income tax rate was reduced to the statutory income tax rate of 21.0%. In fiscal 2018, the Company recorded a provisional tax benefit of $637.0 million for the re-measurement of deferred tax assets and liabilities based on the rates to which they are expected to reverse in the future, which is generally 21.0%. The Tax Legislation also implemented a territorial tax system. As part of transitioning to the territorial tax system, the Tax Legislation included a one-time transition tax based on the Company's total post-1986 undistributed foreign earnings and profits that were previously deferred from U.S. income tax. In fiscal 2018, the Company recorded a provisional tax expense amount for the one-time transition tax of $691.0 million, which is comprised of the $755.0 million transition tax liability less a deferred tax liability of $64.0 million that was recorded in prior years. In the first quarter of fiscal 2019, the Company adjusted its provisional net charge by recording an additional tax benefit of $7.5 million for a change to its estimate for the transition tax due to the finalization of the aggregate foreign cash positions. The Tax Legislation subjects U.S. corporations to tax on its 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 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 balance sheet. The Company completed its accounting for the income tax effects of the Tax Legislation during the first quarter of 2019, in accordance with the U.S. Securities and Exchange Commission Staff Accounting Bulletin No. 118. As of May 4, 2019, the U.S. Treasury Department and the Internal Revenue Service (IRS) are still in the process of issuing various regulations relating to the Tax Legislation. Furthermore, there is a possibility that Congress could enact technical corrections to the Tax Legislation in the future. Accordingly, future adjustments to the financial statements may be necessary as the regulations are issued and when the Company files its fiscal 2018 tax returns with the IRS and foreign tax authorities. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) (ASU 2016-16). ASU 2016-16 requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted ASU 2016-16 in the first quarter of fiscal 2019 using the modified retrospective method with a cumulative-effect adjustment directly to retained earnings. The Company adopted the guidance effective as of November 4, 2018. The adoption of ASU 2016-16 resulted in a net cumulative-effect adjustment that resulted in an increase in retained earnings of $331.0 million, by recording new deferred tax assets from intra-entity transfers involving assets other than inventory, partially offset by a U.S. deferred tax liability related to GILTI. Adoption of the standard resulted in an increase in long-term deferred tax assets of $1.7 billion and an increase in long-term deferred tax liabilities of $1.3 billion. The Company has numerous income tax audits ongoing at any time throughout the world, including an Internal Revenue Service audit for Linear’s pre-acquisition fiscal years 2015, 2016 and 2017, various U.S. state and local tax audits, and international audits including the transfer pricing audit in Ireland discussed below. Except for the Linear pre-acquisition audit, the Company’s U.S. federal tax returns prior to fiscal year 2015 are no longer subject to examination. The Company’s Ireland tax returns prior to fiscal 2013 are no longer subject to examination. During the fourth quarter of fiscal 2018, the Company’s Irish tax resident subsidiary received an assessment for fiscal 2013 of approximately €43.0 million, or $48.2 million (as of May 4, 2019), from the Irish Revenue Commissioners (Irish Revenue). This assessment excludes any penalties and interest. The assessment claims that the Company’s Irish entity failed to conform to 2010 OECD Transfer Pricing Guidelines. The Company strongly disagrees with the assessment and maintains that its transfer pricing is appropriate. Therefore, the Company has not recorded any additional tax liability related to fiscal 2013 or any other periods. The Company intends to vigorously defend its originally filed tax return position and is currently preparing for an appeal with the Irish Tax Appeals Commission, which is the normal process for the resolution of differences between Irish Revenue and taxpayers. If Irish Revenue were ultimately to prevail with respect to its assessment for fiscal 2013, such assessment and any potential impact related to years subsequent to 2013 could have a material unfavorable impact on the Company's income tax expense and net earnings in future periods. Irish Revenue has also commenced a transfer pricing audit of fiscal 2014 through 2017. Although the Company believes that its estimates of income taxes payable are reasonable, no assurance can be given that the Company will prevail in the matters raised or that the outcome of one or all of these matters will not be different than that which is reflected in the historical income tax provisions and accruals. The Company believes such differences would not have a material impact on the Company’s financial condition.
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New Accounting Pronouncements |
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New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |||||||||||||||||||||
New Accounting Pronouncements | New Accounting Pronouncements Standards Implemented Revenue Recognition In May 2014, the FASB issued ASU 2014-09, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB issued several amendments and updates to the new revenue standard, including guidance related to when an entity should recognize revenue gross as a principal or net as an agent and how an entity should identify performance obligations. The Company adopted ASU 2014-09 in the first quarter of fiscal 2019 using the full retrospective method and restated prior periods. As a result of the adoption of ASU 2014-09 the Company changed its accounting policy for revenue recognition. See Note 1, Basis of Presentation, and Note 2, Revenue Recognition, in these Notes to Condensed Consolidated Financial Statements for details of the impact of ASU 2014-09 on the Company's financial statements. Income Taxes In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) (ASU 2016-16). ASU 2016-16 requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted ASU 2016-16 in the first quarter of fiscal 2019 using the modified retrospective method with a cumulative-effect adjustment directly to retained earnings. The adoption of ASU 2016-16 resulted in a net cumulative-effect adjustment that resulted in an increase in retained earnings of $331.0 million, by recording new deferred tax assets from intra-entity transfers involving assets other than inventory, partially offset by a U.S. deferred tax liability related to GILTI. Adoption of the standard resulted in an increase in long-term deferred tax assets of $1.7 billion and an increase in long-term deferred tax liabilities of $1.3 billion. Other The following standards were adopted during the first quarter of fiscal 2019 and did not have a material impact on the Company's financial position and results of operations:
Standards to Be Implemented Comprehensive Income In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02). ASU 2018-02 allows for reclassification of stranded tax effects resulting from the Tax Legislation from accumulated other comprehensive income to retained earnings. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. ASU 2018-02 is effective for the Company in the first quarter of the fiscal year ending October 31, 2020 (fiscal 2020). The Company is currently evaluating the adoption date and the impact, if any, adoption will have on its financial position and results of operations. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (ASU 2016-02). ASU 2016-02 requires a lessee to recognize most leases on the balance sheet but recognize expenses on the income statement in a manner similar to current practice. The update states that a lessee will recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying assets for the lease term. Leases will continue to be classified as either financing or operating, with classification affecting the recognition, measurement and presentation of expenses and cash flows arising from a lease. In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842 (ASU 2018-01). ASU 2018-01 permits an entity to elect an optional transition practical expedient to not evaluate land easements that exist or expired before the entity’s adoption of Topic 842 and that were not previously accounted for as leases under Topic 840. In July 2018, the FASB issued ASU 2018-11, Leases – Targeted Improvements (Topic 842) (ASU 2018-11), which provides for an additional transition method that allows companies to apply the new lease standard at the adoption date, eliminating the requirement to apply the standard to the earliest period presented in the financial statements. ASU 2016-02, ASU 2018-01 and ASU 2018-11 are effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. ASU 2016-02 and ASU 2018-01 are effective for the Company in the first quarter of fiscal 2020. The Company is currently evaluating the impact adoption will have on its financial position and results of operations and expects that there will be an increase in assets and liabilities on the Consolidated Balance Sheets at adoption due to the recognition of right-of-use assets and related lease liabilities. The Company does not expect the adoption of ASU 2016-02, ASU 2018-01 and ASU 2018-11 to have a material impact on its results of operations. Retirement Benefits In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Topic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans (ASU 2018-14), which modifies the disclosure requirements for defined benefit pension plans and other post-retirement plans. ASU 2018-14 is effective for fiscal years ending after December 15, 2020, with early adoption permitted. ASU 2018-14 is effective for the Company in the first quarter of the fiscal year ending October 30, 2021 (fiscal 2021). The Company is currently evaluating the adoption date. The adoption of ASU 2018-14 will modify the Company's disclosures for defined benefit plans and other post-retirement plans but is not expected to impact its financial position or results of operations. Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (ASU 2016-13). ASU 2016-13 requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years. ASU 2016-13 is effective for the Company in the first quarter of fiscal 2021. The Company is currently evaluating the adoption date and the impact, if any, adoption will have on its financial position and results of operations.
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Subsequent Events |
6 Months Ended |
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May 04, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn May 21, 2019, the Board of Directors of the Company declared a cash dividend of $0.54 per outstanding share of common stock. The dividend will be paid on June 11, 2019 to all shareholders of record at the close of business on May 31, 2019 and is expected to total approximately $199.7 million. |
Basis of Presentation (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fiscal Period | The Company has a 52-53 week fiscal year that ends on the Saturday closest to the last day in October. Fiscal 2019 is a 52-week fiscal year and fiscal 2018 was a 53-week fiscal year. The additional week in fiscal 2018 was included in the first quarter ended February 3, 2018. Therefore, the first six months of fiscal 2019 included one less week of operations as compared to the first six months of fiscal 2018. Certain amounts reported in previous periods have been reclassified to conform to the fiscal 2019 presentation.
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New Accounting Pronouncements | As further discussed in Note 2, Revenue Recognition and Note 13, New Accounting Pronouncements, the Company adopted the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (ASU 2014-09), in the first quarter of fiscal 2019. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period showing, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized as of the date of initial application. The Company adopted ASU 2014-09 using the full retrospective method and applied the practical expedient, in which the Company is not required to disclose the amount of consideration allocated to any remaining performance obligations or an explanation of when the Company expects to recognize that amount as revenue for all reporting periods presented before the date of the initial application. As a result of the adoption of ASU 2014-09, the Company changed its accounting policy for revenue recognition and recognizes revenue from product sales to its customers and distributors when title passes, which is generally upon shipment. Prior to the adoption of ASU 2014-09, revenue and the related cost of sales on shipments to certain distributors were deferred until the distributor resold the products to their end customers. See Note 2, Revenue Recognition, in these Notes to Condensed Consolidated Financial Statements for the details of the Company’s revenue recognition policies. The adoption of ASU 2014-09 impacted the Company’s condensed consolidated statements of income and balance sheets but did not impact its condensed consolidated statements of cash flows, with the exceptions of net income and reclassifications within adjustments to reconcile net income to cash provided by operations, and did not impact the condensed consolidated statement of shareholders' equity, with the exceptions of retained earnings and net income. As shown in the tables below, pursuant to the guidance in ASU 2014-09, the Company restated its historical financial results to be consistent with the standard. Accordingly, the amounts for all periods presented in this Form 10-Q reflect the impact of ASU 2014-09.
Standards Implemented Revenue Recognition In May 2014, the FASB issued ASU 2014-09, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB issued several amendments and updates to the new revenue standard, including guidance related to when an entity should recognize revenue gross as a principal or net as an agent and how an entity should identify performance obligations. The Company adopted ASU 2014-09 in the first quarter of fiscal 2019 using the full retrospective method and restated prior periods. As a result of the adoption of ASU 2014-09 the Company changed its accounting policy for revenue recognition. See Note 1, Basis of Presentation, and Note 2, Revenue Recognition, in these Notes to Condensed Consolidated Financial Statements for details of the impact of ASU 2014-09 on the Company's financial statements. Income Taxes In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) (ASU 2016-16). ASU 2016-16 requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted ASU 2016-16 in the first quarter of fiscal 2019 using the modified retrospective method with a cumulative-effect adjustment directly to retained earnings. The adoption of ASU 2016-16 resulted in a net cumulative-effect adjustment that resulted in an increase in retained earnings of $331.0 million, by recording new deferred tax assets from intra-entity transfers involving assets other than inventory, partially offset by a U.S. deferred tax liability related to GILTI. Adoption of the standard resulted in an increase in long-term deferred tax assets of $1.7 billion and an increase in long-term deferred tax liabilities of $1.3 billion. Other The following standards were adopted during the first quarter of fiscal 2019 and did not have a material impact on the Company's financial position and results of operations:
Standards to Be Implemented Comprehensive Income In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02). ASU 2018-02 allows for reclassification of stranded tax effects resulting from the Tax Legislation from accumulated other comprehensive income to retained earnings. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. ASU 2018-02 is effective for the Company in the first quarter of the fiscal year ending October 31, 2020 (fiscal 2020). The Company is currently evaluating the adoption date and the impact, if any, adoption will have on its financial position and results of operations. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (ASU 2016-02). ASU 2016-02 requires a lessee to recognize most leases on the balance sheet but recognize expenses on the income statement in a manner similar to current practice. The update states that a lessee will recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying assets for the lease term. Leases will continue to be classified as either financing or operating, with classification affecting the recognition, measurement and presentation of expenses and cash flows arising from a lease. In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842 (ASU 2018-01). ASU 2018-01 permits an entity to elect an optional transition practical expedient to not evaluate land easements that exist or expired before the entity’s adoption of Topic 842 and that were not previously accounted for as leases under Topic 840. In July 2018, the FASB issued ASU 2018-11, Leases – Targeted Improvements (Topic 842) (ASU 2018-11), which provides for an additional transition method that allows companies to apply the new lease standard at the adoption date, eliminating the requirement to apply the standard to the earliest period presented in the financial statements. ASU 2016-02, ASU 2018-01 and ASU 2018-11 are effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. ASU 2016-02 and ASU 2018-01 are effective for the Company in the first quarter of fiscal 2020. The Company is currently evaluating the impact adoption will have on its financial position and results of operations and expects that there will be an increase in assets and liabilities on the Consolidated Balance Sheets at adoption due to the recognition of right-of-use assets and related lease liabilities. The Company does not expect the adoption of ASU 2016-02, ASU 2018-01 and ASU 2018-11 to have a material impact on its results of operations. Retirement Benefits In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Topic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans (ASU 2018-14), which modifies the disclosure requirements for defined benefit pension plans and other post-retirement plans. ASU 2018-14 is effective for fiscal years ending after December 15, 2020, with early adoption permitted. ASU 2018-14 is effective for the Company in the first quarter of the fiscal year ending October 30, 2021 (fiscal 2021). The Company is currently evaluating the adoption date. The adoption of ASU 2018-14 will modify the Company's disclosures for defined benefit plans and other post-retirement plans but is not expected to impact its financial position or results of operations. Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (ASU 2016-13). ASU 2016-13 requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years. ASU 2016-13 is effective for the Company in the first quarter of fiscal 2021. The Company is currently evaluating the adoption date and the impact, if any, adoption will have on its financial position and results of operations.
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Revenue Recognition | Revenue Recognition Policy: In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, to achieve a consistent application of revenue recognition, resulting in a single revenue model to be applied by reporting companies under U.S. generally accepted accounting principles. Under the new model, 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. As a result of the adoption of ASU 2014-09, at the beginning of the first quarter of fiscal 2019, the Company revised its revenue recognition policy. The Company now 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. Under ASU 2014-09, the Company recognizes revenue 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 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 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 cost of sales as incurred. Sales taxes are excluded from revenue. 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 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 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 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 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 obligation, the 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 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 dates and with an original expected duration of one year or less. As allowed under ASU 2014-09, the Company has opted to not disclose the amount of unsatisfied performance obligations as these contracts have original expected durations of less than one year. 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 recorded for known product warranty issues. 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 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 receive is unknown as of the end of a reporting period. Such consideration primarily includes sales made to distributors under agreements that allow certain rights of return, referred to as stock rotation, and credits issued to the distributor due to price protection. Stock rotation allows distributors limited levels of returns in order to reduce the amounts of slow-moving, discontinued or obsolete product from their inventory. 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 shipped and billed to the distributor. A refund liability for distributor credits covering variable consideration are 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 consistent with the provisions the Company has made based on its historical estimates. 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. To date, there have been no material impairment losses on accounts receivable. There were no material contract assets or contract liabilities recorded on the condensed consolidated balance sheet in any of the periods presented.
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Fair Value | The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments: 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. Deferred compensation plan investments — The fair value of these mutual fund, money market fund and equity investments are based on quoted market prices. Interest rate derivatives — The fair value of the interest rate derivatives is estimated using a discounted cash flow analysis based on the contractual terms of the derivative. 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 hedges, is based on the estimated amount the Company would receive if it sold these agreements at the reporting date taking into consideration current interest 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 information such as strike price, spot rate, maturity date and volatility.
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Derivatives | 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 these changes. In the first quarter of fiscal 2019, the Company entered into an interest rate swap agreement which locked in the interest rate for up to $1.0 billion in future debt issuances. The interest rate swap agreement was designated and qualified as a cash flow hedge. The fair value of this hedge was $51.6 million as of May 4, 2019 and is included within accrued liabilities in the Company's condensed consolidated balance sheets. 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 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 May 4, 2019 and November 3, 2018, 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 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 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 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. The Company records the fair value of its derivative financial instruments in its condensed consolidated financial statements in 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 either recognized periodically in earnings or in shareholders’ equity as a component of OCI. Changes in the fair value of cash flow hedges are recorded in OCI and reclassified into earnings in the same line item on the condensed consolidated statement of income as the impact of the hedged transaction when the underlying contract matures and, for interest rate exposure derivatives, over the term of the corresponding debt instrument. Changes in the fair values of derivatives not qualifying for hedge accounting are reported in earnings as they occur. 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 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 Philippine Peso, the Japanese Yen and the British Pound. 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 for periods consistent with the terms of the underlying transactions, generally one year or less. Hedges related to anticipated transactions are designated and documented at the inception of the respective hedges as cash flow hedges and are qualitatively evaluated for effectiveness quarterly. Derivative instruments are employed to eliminate or minimize certain foreign currency exposures that can be confidently identified and quantified. As the terms of the contract and the underlying transaction are matched at inception, forward contract effectiveness is calculated by comparing the change in fair value of the contract to the change in the forward value of the anticipated transaction, with the gain or loss on the derivative reported as a component of accumulated OCI in shareholders’ equity and reclassified into earnings in the same period during which the hedged transaction affects earnings.
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Basis of Presentation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 04, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The adoption of ASU 2016-16 resulted in the following cumulative-effect increase in the Company's deferred tax assets, deferred tax liabilities and retained earnings as follows:
See Note 13, New Accounting Pronouncements, and Note 12, Income Taxes, in these Notes to Condensed Consolidated Financial Statements for more information on the adoption of ASU 2016-16. Accordingly, the amounts for all periods presented in this Form 10-Q reflect the impact of ASU 2014-09.
The impact on the Company's previously reported condensed consolidated balance sheet line items is as follows:
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Stock-Based Compensation and Shareholders' Equity (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 04, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the activity under the company's stock option plans | A summary of the Company’s stock option activity as of May 4, 2019 and changes during the three- and six-month periods then ended is presented below:
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Schedule of share-based compensation, restricted stock units award activity | A summary of the Company’s restricted stock unit/award activity as of May 4, 2019 and changes during the three- and six-month periods then ended is presented below:
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Accumulated Other Comprehensive Income (Loss) (Tables) |
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May 04, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of accumulated other comprehensive loss, net of tax | The following table provides the changes in accumulated other comprehensive income (loss) (OCI) by component and the related tax effects during the first six months of fiscal 2019.
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Reclassification out of Accumulated Other Comprehensive Income | The amounts reclassified out of accumulated OCI into the Condensed Consolidated Statement of Income with presentation location during each period were as follows:
______________ (a) The amortization of pension components is included in the computation of net periodic pension cost. For further information see Note 11, Retirement Plans, in the Notes to Consolidated Financial Statements in Item 8 of the Annual Report on Form 10-K for the fiscal year ended November 3, 2018.
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share:
(1) Balances have been restated to reflect the full retrospective adoption of ASU 2014-09. See Note 1, Basis of Presentation, in these Notes to Condensed Consolidated Financial Statements.
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Special Charges (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Restructuring | The following table is a roll-forward from November 3, 2018 to May 4, 2019 of the employee separation and exit cost accruals established related to these actions:
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Segment Information (Tables) |
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May 04, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following tables summarize revenue by channel for the three- and six-month periods ended May 4, 2019 and May 5, 2018:
The following table summarizes revenue by end market for the three- and six-month periods ended May 4, 2019 and May 5, 2018. 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” 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 evolve and improve, the categorization of 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 end market.
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Fair Value (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 04, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 May 4, 2019 and November 3, 2018. 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 May 4, 2019 and November 3, 2018, the Company held $233.6 million and $217.6 million, respectively, of cash and held-to-maturity investments that were excluded from the tables below.
(2) The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 9, Derivatives, in these Notes to Condensed Consolidated Financial Statements for more information related to the Company's master netting arrangements.
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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 are obtained from broker prices and are classified as Level 1 measurements according to the fair value hierarchy. See Note 10, Debt, in these Notes to Condensed Consolidated Financial Statements for further discussion related to outstanding debt.
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Derivatives (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 04, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Hedging Instruments | The fair values of forward foreign currency derivative instruments designated as hedging instruments in the Company’s condensed consolidated balance sheets as of May 4, 2019 and November 3, 2018 was as follows:
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Net Amount of Derivative Assets and 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 condensed consolidated balance sheet:
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Inventories (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 04, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories | Inventories at May 4, 2019 and November 3, 2018 were as follows:
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Basis of Presentation Revenue Income Statement Adoption (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
May 04, 2019 |
May 05, 2018 |
May 04, 2019 |
May 05, 2018 |
|||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Revenue | $ 1,526,602 | $ 1,563,502 | [1] | $ 3,067,703 | $ 3,130,372 | [1] | ||
Cost of sales | 492,510 | 491,112 | [1] | 993,955 | 986,299 | [1] | ||
Gross margin | 1,034,092 | 1,072,390 | [1] | 2,073,748 | 2,144,073 | [1] | ||
Operating expenses: | ||||||||
Research and development | 285,846 | 289,472 | [1] | 573,228 | 578,069 | [1] | ||
Selling, marketing, general and administrative | 163,128 | 172,146 | [1] | 330,470 | 349,054 | [1] | ||
Amortization of intangibles | 107,261 | 107,129 | [1] | 214,585 | 214,148 | [1] | ||
Special charges | 8,162 | 1,089 | [1] | 29,944 | 58,407 | [1] | ||
Total operating expenses | 564,397 | 569,836 | [1] | 1,148,227 | 1,199,678 | [1] | ||
Operating income | 469,695 | 502,554 | [1] | 925,521 | 944,395 | [1] | ||
Nonoperating expense (income): | ||||||||
Interest expense | 59,701 | 64,792 | [1] | 118,429 | 132,822 | [1] | ||
Interest income | (2,928) | (1,912) | [1] | (5,616) | (4,004) | [1] | ||
Other, net | 4,525 | (451) | [1] | 4,365 | 105 | [1] | ||
Nonoperating expense (income) | 61,298 | 62,429 | [1] | 117,178 | 128,923 | [1] | ||
Income before income taxes | 408,397 | 440,125 | [1] | 808,343 | 815,472 | [1] | ||
Provision for income taxes | 40,460 | 39,797 | [1] | 85,400 | 121,904 | [1] | ||
Net income | $ 367,937 | $ 400,328 | [1] | $ 722,943 | $ 693,568 | [1] | ||
Shares used to compute earnings per common share – basic (in shares) | 369,246 | 370,384 | [1] | 368,974 | 369,685 | [1] | ||
Shares used to compute earnings per common share – diluted (in shares) | 373,342 | 374,778 | [1] | 372,912 | 374,430 | [1] | ||
Basic earnings per common share (in dollars per share) | $ 0.99 | $ 1.08 | [1] | $ 1.95 | $ 1.87 | [1] | ||
Diluted earnings per common share (in dollars per share) | $ 0.98 | $ 1.06 | [1] | $ 1.93 | $ 1.84 | [1] | ||
As Reported | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Revenue | $ 1,513,053 | $ 3,031,677 | ||||||
Cost of sales | 479,241 | 962,675 | ||||||
Gross margin | 1,033,812 | 2,069,002 | ||||||
Operating expenses: | ||||||||
Research and development | 289,472 | 578,069 | ||||||
Selling, marketing, general and administrative | 172,146 | 349,054 | ||||||
Amortization of intangibles | 107,129 | 214,148 | ||||||
Special charges | 1,089 | 58,407 | ||||||
Total operating expenses | 569,836 | 1,199,678 | ||||||
Operating income | 463,976 | 869,324 | ||||||
Nonoperating expense (income): | ||||||||
Interest expense | 64,792 | 132,822 | ||||||
Interest income | (1,912) | (4,004) | ||||||
Other, net | (451) | 105 | ||||||
Nonoperating expense (income) | 62,429 | 128,923 | ||||||
Income before income taxes | 401,547 | 740,401 | ||||||
Provision for income taxes | 21,716 | 92,398 | ||||||
Net income | $ 379,831 | $ 648,003 | ||||||
Shares used to compute earnings per common share – basic (in shares) | 370,384 | 369,685 | ||||||
Shares used to compute earnings per common share – diluted (in shares) | 374,778 | 374,430 | ||||||
Basic earnings per common share (in dollars per share) | $ 1.02 | $ 1.75 | ||||||
Diluted earnings per common share (in dollars per share) | $ 1.01 | $ 1.72 | ||||||
Accounting Standards Update 2014-09 | Impact of Adoption | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Revenue | $ 50,449 | $ 98,695 | ||||||
Cost of sales | 11,871 | 23,624 | ||||||
Gross margin | 38,578 | 75,071 | ||||||
Operating expenses: | ||||||||
Research and development | 0 | 0 | ||||||
Selling, marketing, general and administrative | 0 | 0 | ||||||
Amortization of intangibles | 0 | 0 | ||||||
Special charges | 0 | 0 | ||||||
Total operating expenses | 0 | 0 | ||||||
Operating income | 38,578 | 75,071 | ||||||
Nonoperating expense (income): | ||||||||
Interest expense | 0 | 0 | ||||||
Interest income | 0 | 0 | ||||||
Other, net | 0 | 0 | ||||||
Nonoperating expense (income) | 0 | 0 | ||||||
Income before income taxes | 38,578 | 75,071 | ||||||
Provision for income taxes | 18,081 | 29,506 | ||||||
Net income | $ 20,497 | $ 45,565 | ||||||
Shares used to compute earnings per common share – basic (in shares) | 0 | 0 | ||||||
Shares used to compute earnings per common share – diluted (in shares) | 0 | 0 | ||||||
Basic earnings per common share (in dollars per share) | $ 0.06 | $ 0.12 | ||||||
Diluted earnings per common share (in dollars per share) | $ 0.05 | $ 0.12 | ||||||
|
Basis of Presentation Revenue Balance Sheet Adoption (Details) - USD ($) $ in Thousands |
May 04, 2019 |
Nov. 04, 2018 |
Nov. 03, 2018 |
|||
---|---|---|---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Deferred tax assets | $ 1,610,109 | $ 1,664,794 | $ 9,665 | [1] | ||
Deferred income on shipments to distributors, net | 0 | |||||
Accrued liabilities | 658,271 | 630,107 | [1] | |||
Deferred income taxes | 2,228,822 | 2,314,512 | 990,409 | [1] | ||
Retained earnings | $ 6,659,449 | $ 6,313,723 | 5,982,697 | [1] | ||
As Reported | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Deferred tax assets | 21,078 | |||||
Deferred income on shipments to distributors, net | 487,417 | |||||
Accrued liabilities | 497,080 | |||||
Deferred income taxes | 927,065 | |||||
Retained earnings | 5,703,064 | |||||
Accounting Standards Update 2014-09 | Impact of Adoption | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Deferred tax assets | (11,413) | |||||
Deferred income on shipments to distributors, net | (487,417) | |||||
Accrued liabilities | 133,027 | |||||
Deferred income taxes | 63,344 | |||||
Retained earnings | $ 279,633 | |||||
|
Basis of Presentation Income Taxes Adoption (Details) - USD ($) $ in Thousands |
May 04, 2019 |
Nov. 04, 2018 |
Nov. 03, 2018 |
|||
---|---|---|---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Roll Forward] | ||||||
Deferred tax assets | $ 1,610,109 | $ 1,664,794 | $ 9,665 | [1] | ||
Deferred income taxes | 2,228,822 | 2,314,512 | 990,409 | [1] | ||
Retained earnings | $ 6,659,449 | 6,313,723 | 5,982,697 | [1] | ||
Accounting Standards Update 2016-16 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Roll Forward] | ||||||
Deferred tax assets | 1,655,129 | 1,700,000 | ||||
Deferred income taxes | 1,324,103 | $ 1,300,000 | ||||
Retained earnings | $ 331,026 | |||||
|
Revenue Recognition (Details) |
6 Months Ended |
---|---|
May 04, 2019 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Standard product warranty term | 12 months |
Minimum | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Accounts receivable, payment terms | 30 days |
Maximum | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Accounts receivable, payment terms | 45 days |
Stock-Based Compensation and Shareholders' Equity - Outstanding Compensation (Details) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
May 04, 2019
USD ($)
$ / shares
shares
|
May 04, 2019
USD ($)
$ / shares
shares
|
|
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Options outstanding, weighted-average remaining contractual term in years | 6 years 3 months 18 days | |
Options exercisable, weighted-average remaining contractual term in years | 5 years 2 months 12 days | |
Options vested or expected to vest, weighted-average remaining contractual term in years | 6 years 2 months 12 days | |
Options outstanding, aggregate intrinsic value | $ | $ 302,503 | $ 302,503 |
Options exercisable, aggregate intrinsic value | $ | 214,319 | 214,319 |
Options vested or expected to vest, aggregate intrinsic value | $ | $ 296,225 | $ 296,225 |
Employee Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Options outstanding, at beginning of period (in shares) | shares | 6,741 | 7,297 |
Options granted (in shares) | shares | 413 | 439 |
Options exercised (in shares) | shares | (1,294) | (1,806) |
Options forfeited (in shares) | shares | (38) | (103) |
Options expired (in shares) | shares | (5) | |
Options outstanding, at end of period (in shares) | shares | 5,822 | 5,822 |
Options exercisable (in shares) | shares | 3,443 | 3,443 |
Options vested or expected to vest (in shares) | shares | 5,626 | 5,626 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Options outstanding, weighted-average exercise price per share, at beginning of period (in dollars per share) | $ / shares | $ 60.03 | $ 58.42 |
Options granted, weighted-average exercise price per share (in dollars per share) | $ / shares | 108.08 | 107.08 |
Options exercised, weighted-average exercise price per share (in dollars per share) | $ / shares | 52.60 | 48.44 |
Options forfeited, weighted-average exercise price per share (in dollars per share) | $ / shares | 75.43 | 72.06 |
Options expired, weighted-average exercise price per share (in dollars per share) | $ / shares | 21.97 | |
Options outstanding, weighted-average exercise price per share, at end of period (in dollars per share) | $ / shares | 64.99 | 64.99 |
Options exercisable, weighted-average exercise price per share (in dollars per share) | $ / shares | 54.70 | 54.70 |
Options vested or expected to vest, weighted-average exercise price per share (in dollars per share) | $ / shares | $ 64.30 | $ 64.30 |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||
Restricted stock units/awards outstanding, at beginning of period (in shares) | shares | 4,985 | 5,289 |
Units/Awards granted (in shares) | shares | 1,144 | 1,200 |
Restrictions lapsed (in shares) | shares | (1,074) | (1,331) |
Forfeited (in shares) | shares | (77) | (180) |
Restricted stock units/awards outstanding, at end of period (in shares) | shares | 4,978 | 4,978 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Restricted stock units/awards outstanding, at beginning of period (in dollar per shares) | $ / shares | $ 77.76 | $ 77.54 |
Units/Awards granted (in dollar per shares) | $ / shares | 98.90 | 98.06 |
Restrictions lapsed (in dollar per shares) | $ / shares | 64.18 | 66.00 |
Forfeited (in dollar per shares) | $ / shares | 78.81 | 78.58 |
Restricted stock units/awards outstanding, at end of period (in dollar per shares) | $ / shares | $ 85.49 | $ 85.49 |
Stock-Based Compensation and Shareholders' Equity (Textual) (Details) - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
May 04, 2019 |
May 05, 2018 |
May 04, 2019 |
May 05, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total intrinsic value of options exercised | $ 72.6 | $ 28.7 | $ 99.7 | $ 82.5 |
Proceeds received from exercise of options | 67.7 | 27.7 | 86.9 | 65.6 |
Total unrecognized compensation cost related to unvested share-based awards, before tax consideration | 395.6 | $ 395.6 | ||
Weighted-average period to recognize compensation cost | 1 year 7 months 6 days | |||
Total grant-date fair value of vested stock options | $ 87.1 | $ 64.1 | $ 106.4 | $ 84.5 |
Number of shares authorized to be repurchased (shares) | 152.0 | 152.0 | ||
Stock repurchase program, authorized amount | $ 2,300.0 | $ 2,300.0 | ||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock repurchase program, authorized amount | $ 5,800.0 | $ 5,800.0 |
Accumulated Other Comprehensive Income (Loss) (Table) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
May 04, 2019 |
May 05, 2018 |
May 04, 2019 |
May 05, 2018 |
||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||
Beginning balance | [1] | $ 11,268,173 | |||||||
Other comprehensive income (loss) before reclassifications | (53,345) | ||||||||
Amounts reclassified out of other comprehensive income (loss) | 5,707 | ||||||||
Tax effects | 10,057 | ||||||||
Other comprehensive (loss) income | $ (18,000) | $ (8,654) | [1] | (37,581) | $ 8,348 | [1] | |||
Ending balance | 11,742,258 | 11,742,258 | |||||||
AOCI [Member] | |||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||
Beginning balance | (78,021) | (44,357) | [1] | (58,440) | [1] | (61,359) | [1] | ||
Other comprehensive (loss) income | (18,000) | (37,581) | |||||||
Ending balance | (96,021) | $ (53,011) | (96,021) | $ (53,011) | |||||
Foreign currency translation adjustment | |||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||
Beginning balance | (28,711) | ||||||||
Other comprehensive income (loss) before reclassifications | (112) | ||||||||
Amounts reclassified out of other comprehensive income (loss) | 0 | ||||||||
Tax effects | 0 | ||||||||
Other comprehensive (loss) income | (112) | ||||||||
Ending balance | (28,823) | (28,823) | |||||||
Unrealized holding gains (losses) on available for sale securities | |||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||
Beginning balance | (10) | ||||||||
Other comprehensive income (loss) before reclassifications | 15 | ||||||||
Amounts reclassified out of other comprehensive income (loss) | 0 | ||||||||
Tax effects | 0 | ||||||||
Other comprehensive (loss) income | 15 | ||||||||
Ending balance | 5 | 5 | |||||||
Unrealized holding gains (losses) on derivatives | |||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||
Beginning balance | (14,355) | ||||||||
Other comprehensive income (loss) before reclassifications | (53,229) | ||||||||
Amounts reclassified out of other comprehensive income (loss) | 5,196 | ||||||||
Tax effects | 10,183 | ||||||||
Other comprehensive (loss) income | (37,850) | ||||||||
Ending balance | (52,205) | (52,205) | |||||||
Pension plans | |||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||
Beginning balance | (15,364) | ||||||||
Other comprehensive income (loss) before reclassifications | (19) | ||||||||
Amounts reclassified out of other comprehensive income (loss) | 511 | ||||||||
Tax effects | (126) | ||||||||
Other comprehensive (loss) income | 366 | ||||||||
Ending balance | $ (14,998) | $ (14,998) | |||||||
|
Accumulated Other Comprehensive Income (Loss) - Amounts Reclassified Out of Accumulated Other Comprehensive Income (Loss) (Table) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
May 04, 2019 |
May 05, 2018 |
May 04, 2019 |
May 05, 2018 |
|||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Cost of sales | $ 492,510 | $ 491,112 | [1] | $ 993,955 | $ 986,299 | [1] | ||
Research and development | 285,846 | 289,472 | [1] | 573,228 | 578,069 | [1] | ||
Selling, marketing, general and administrative | 163,128 | 172,146 | [1] | 330,470 | 349,054 | [1] | ||
Interest expense | 59,701 | 64,792 | [1] | 118,429 | 132,822 | [1] | ||
Total before tax | 408,397 | 440,125 | [1] | 808,343 | 815,472 | [1] | ||
Tax | (40,460) | (39,797) | [1] | (85,400) | (121,904) | [1] | ||
Net income | 367,937 | 400,328 | [1] | 722,943 | 693,568 | [1] | ||
Total amounts reclassified out of accumulated other comprehensive income (loss), net of tax | 2,466 | (2,122) | 4,778 | (4,137) | ||||
Unrealized holding gains (losses) on derivatives | Reclassification out of Accumulated Other Comprehensive Income | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Net income | 2,275 | (2,433) | 4,393 | (4,772) | ||||
Pension plans | Reclassification out of Accumulated Other Comprehensive Income | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Total before tax | 254 | 410 | 511 | 837 | ||||
Tax | (63) | (99) | (126) | (202) | ||||
Net income | 191 | 311 | 385 | 635 | ||||
Transition obligation | Reclassification out of Accumulated Other Comprehensive Income | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Amortization of pension components | 0 | 2 | 0 | 4 | ||||
Prior service credit | Reclassification out of Accumulated Other Comprehensive Income | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Amortization of pension components | 0 | 1 | 0 | 1 | ||||
Actuarial losses | Reclassification out of Accumulated Other Comprehensive Income | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Amortization of pension components | 254 | 407 | 511 | 832 | ||||
Currency forwards | Unrealized holding gains (losses) on derivatives | Reclassification out of Accumulated Other Comprehensive Income | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Cost of sales | 478 | (590) | 1,197 | (1,865) | ||||
Research and development | 770 | (714) | 1,618 | (1,783) | ||||
Selling, marketing, general and administrative | 956 | (787) | 1,871 | (1,756) | ||||
Interest rate derivatives | Unrealized holding gains (losses) on derivatives | Reclassification out of Accumulated Other Comprehensive Income | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Interest expense | 464 | (473) | 510 | 157 | ||||
Total before tax | 2,668 | (2,564) | 5,196 | (5,247) | ||||
Tax | $ (393) | $ 131 | $ (803) | $ 475 | ||||
|
Accumulated Other Comprehensive Income (Loss) (Textual) (Details) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
May 04, 2019
USD ($)
position
|
May 05, 2018 |
May 04, 2019
USD ($)
position
|
May 05, 2018 |
Nov. 03, 2018
USD ($)
position
|
|
Equity [Abstract] | |||||
Cash flow hedge gain (loss) to be reclassified within twelve months | $ | $ 2.3 | ||||
Cash flow hedge ineffectiveness | no material ineffectiveness | no material ineffectiveness | no material ineffectiveness | no material ineffectiveness | |
Number of investment positions | position | 10 | 10 | 15 | ||
Number of securities in unrealized loss position | position | 1 | 1 | 15 | ||
Fair value of securities in continuous unrealized loss position | $ | $ 25.0 | $ 25.0 | $ 205.0 |
Earnings Per Share (Tables) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
May 04, 2019 |
May 05, 2018 |
May 04, 2019 |
May 05, 2018 |
|||||
Earnings per share | ||||||||
Net income | $ 367,937 | $ 400,328 | [1] | $ 722,943 | $ 693,568 | [1] | ||
Less: income allocated to participating securities | 908 | 1,532 | 1,932 | 2,827 | ||||
Net income allocated to common stockholders | $ 367,029 | $ 398,796 | $ 721,011 | $ 690,741 | ||||
Basic shares: | ||||||||
Weighted-average shares outstanding (in shares) | 369,246 | 370,384 | [1] | 368,974 | 369,685 | [1] | ||
Earnings per common share basic: | ||||||||
Earnings per common share, basic (in dollars per share) | $ 0.99 | $ 1.08 | [1] | $ 1.95 | $ 1.87 | [1] | ||
Diluted shares: | ||||||||
Weighted-average shares outstanding (in shares) | 369,246 | 370,384 | [1] | 368,974 | 369,685 | [1] | ||
Assumed exercise of common stock equivalents (in shares) | 4,096 | 4,394 | 3,938 | 4,745 | ||||
Weighted-average common and common equivalent shares (in shares) | 373,342 | 374,778 | [1] | 372,912 | 374,430 | [1] | ||
Earnings per common share diluted: | ||||||||
Earnings per common share, diluted (in dollars per share) | $ 0.98 | $ 1.06 | [1] | $ 1.93 | $ 1.84 | [1] | ||
Anti-dilutive shares related to: | ||||||||
Outstanding share-based awards (in shares) | 432 | 1,990 | 1,222 | 1,731 | ||||
|
Special Charges - Restructuring (Table) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
May 04, 2019 |
Feb. 02, 2019 |
May 05, 2018 |
[1] | May 04, 2019 |
May 05, 2018 |
[1] | |||
Summary of the Company's special charges and accruals related to ongoing actions, Balance Sheet | |||||||||
Special charges | $ 8,162 | $ 1,089 | $ 29,944 | $ 58,407 | |||||
Non-cash impairment charge | (4,367) | $ 0 | |||||||
Closure of Manufacturing Facilities | |||||||||
Summary of the Company's special charges and accruals related to ongoing actions, Balance Sheet | |||||||||
Accrued restructuring, beginning balance | 44,087 | $ 42,974 | 42,974 | ||||||
Special charges | 1,127 | 4,593 | |||||||
Severance and other payments | 0 | 0 | |||||||
Non-cash impairment charge | 0 | ||||||||
Effect of foreign currency on accrual | (14) | (18) | |||||||
Accrued restructuring, ending balance | 48,662 | 44,087 | 48,662 | ||||||
Reduction of Operating Costs Action | |||||||||
Summary of the Company's special charges and accruals related to ongoing actions, Balance Sheet | |||||||||
Accrued restructuring, beginning balance | 2,770 | 5,255 | 5,255 | ||||||
Special charges | 0 | 0 | |||||||
Severance and other payments | (2,489) | (909) | |||||||
Non-cash impairment charge | 0 | ||||||||
Effect of foreign currency on accrual | 4 | 0 | |||||||
Accrued restructuring, ending balance | 1,861 | 2,770 | 1,861 | ||||||
Early Retirement Action | |||||||||
Summary of the Company's special charges and accruals related to ongoing actions, Balance Sheet | |||||||||
Accrued restructuring, beginning balance | 7,131 | 9,897 | 9,897 | ||||||
Special charges | 0 | 0 | |||||||
Severance and other payments | (2,766) | (1,641) | |||||||
Non-cash impairment charge | 0 | ||||||||
Effect of foreign currency on accrual | 0 | 0 | |||||||
Accrued restructuring, ending balance | 5,490 | 7,131 | 5,490 | ||||||
Repositioning Action | |||||||||
Summary of the Company's special charges and accruals related to ongoing actions, Balance Sheet | |||||||||
Accrued restructuring, beginning balance | 15,235 | 0 | 0 | ||||||
Special charges | 3,600 | 20,655 | 3,569 | ||||||
Severance and other payments | (1,051) | (3,782) | |||||||
Non-cash impairment charge | (4,367) | ||||||||
Effect of foreign currency on accrual | (2) | (9) | |||||||
Accrued restructuring, ending balance | 15,013 | $ 15,235 | 15,013 | ||||||
Current - accrued liabilities | Closure of Manufacturing Facilities | |||||||||
Summary of the Company's special charges and accruals related to ongoing actions, Balance Sheet | |||||||||
Accrued restructuring, ending balance | 0 | 0 | |||||||
Current - accrued liabilities | Reduction of Operating Costs Action | |||||||||
Summary of the Company's special charges and accruals related to ongoing actions, Balance Sheet | |||||||||
Accrued restructuring, ending balance | 1,861 | 1,861 | |||||||
Current - accrued liabilities | Early Retirement Action | |||||||||
Summary of the Company's special charges and accruals related to ongoing actions, Balance Sheet | |||||||||
Accrued restructuring, ending balance | 5,490 | 5,490 | |||||||
Current - accrued liabilities | Repositioning Action | |||||||||
Summary of the Company's special charges and accruals related to ongoing actions, Balance Sheet | |||||||||
Accrued restructuring, ending balance | 15,013 | 15,013 | |||||||
Other non-current liabilities | Closure of Manufacturing Facilities | |||||||||
Summary of the Company's special charges and accruals related to ongoing actions, Balance Sheet | |||||||||
Accrued restructuring, ending balance | 48,662 | 48,662 | |||||||
Other non-current liabilities | Reduction of Operating Costs Action | |||||||||
Summary of the Company's special charges and accruals related to ongoing actions, Balance Sheet | |||||||||
Accrued restructuring, ending balance | 0 | 0 | |||||||
Other non-current liabilities | Early Retirement Action | |||||||||
Summary of the Company's special charges and accruals related to ongoing actions, Balance Sheet | |||||||||
Accrued restructuring, ending balance | 0 | 0 | |||||||
Other non-current liabilities | Repositioning Action | |||||||||
Summary of the Company's special charges and accruals related to ongoing actions, Balance Sheet | |||||||||
Accrued restructuring, ending balance | $ 0 | $ 0 | |||||||
|
Special Charges (Textual) (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
May 04, 2019
USD ($)
|
Feb. 02, 2019
USD ($)
|
May 05, 2018
USD ($)
|
[1] |
May 04, 2019
USD ($)
employee
|
May 05, 2018
USD ($)
|
[1] | |||
Restructuring Cost and Reserve [Line Items] | |||||||||
Special charges | $ 8,162 | $ 1,089 | $ 29,944 | $ 58,407 | |||||
Repositioning Action | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Special charges | 3,600 | $ 20,655 | $ 3,569 | ||||||
Expected number of positions eliminated | employee | 140 | ||||||||
Number of employees still employed who are planned to be separated | employee | 68 | ||||||||
Repositioning Action | Intellectual Property | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Impairment of intangible assets, finite-lived | $ 4,400 | ||||||||
Severance and Fringe Benefits | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Special charges | $ 19,800 | 19,800 | |||||||
Closure of Manufacturing Facilities | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Special charges | $ 1,127 | 4,593 | |||||||
Workforce Reductions Plan 2018 | Closure of Manufacturing Facilities | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Special charges | $ 48,700 | ||||||||
Number of manufacturing, engineering and selling, marketing, general and administrative employees related to operating costs action | employee | 1,249 | ||||||||
Minimum | Workforce Reductions Plan 2018 | Closure of Manufacturing Facilities | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring, Closure of Facility, Period | 2 years | ||||||||
Maximum | Workforce Reductions Plan 2018 | Closure of Manufacturing Facilities | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring, Closure of Facility, Period | 4 years | ||||||||
|
Segment Information (Textual) (Details) |
6 Months Ended |
---|---|
May 04, 2019
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Number of operating segments | 8 |
Segment Information - Revenue Trends by Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
May 04, 2019 |
May 05, 2018 |
May 04, 2019 |
May 05, 2018 |
|||||
Revenue Trends | ||||||||
Revenue | $ 1,526,602 | $ 1,563,502 | [1] | $ 3,067,703 | $ 3,130,372 | [1] | ||
Percent of Revenue (as percent) | 100.00% | 100.00% | 100.00% | 100.00% | ||||
Year over Year Change (as percent) | (2.00%) | (2.00%) | ||||||
Operating Segments | Industrial | ||||||||
Revenue Trends | ||||||||
Revenue | $ 763,455 | $ 810,732 | $ 1,488,077 | $ 1,590,445 | ||||
Percent of Revenue (as percent) | 50.00% | 52.00% | 49.00% | 51.00% | ||||
Year over Year Change (as percent) | (6.00%) | (6.00%) | ||||||
Operating Segments | Automotive | ||||||||
Revenue Trends | ||||||||
Revenue | $ 249,765 | $ 250,919 | $ 511,319 | $ 515,791 | ||||
Percent of Revenue (as percent) | 16.00% | 16.00% | 17.00% | 16.00% | ||||
Year over Year Change (as percent) | 0.00% | (1.00%) | ||||||
Operating Segments | Consumer | ||||||||
Revenue Trends | ||||||||
Revenue | $ 153,745 | $ 227,077 | $ 362,966 | $ 491,711 | ||||
Percent of Revenue (as percent) | 10.00% | 15.00% | 12.00% | 16.00% | ||||
Year over Year Change (as percent) | (32.00%) | (26.00%) | ||||||
Operating Segments | Communications | ||||||||
Revenue Trends | ||||||||
Revenue | $ 359,637 | $ 274,774 | $ 705,341 | $ 532,425 | ||||
Percent of Revenue (as percent) | 24.00% | 18.00% | 23.00% | 17.00% | ||||
Year over Year Change (as percent) | 31.00% | 32.00% | ||||||
|
Segment Information - Revenue by Sales Channel (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
May 04, 2019 |
May 05, 2018 |
May 04, 2019 |
May 05, 2018 |
|||||
Segment Reporting Information [Line Items] | ||||||||
Revenue | $ 1,526,602 | $ 1,563,502 | [1] | $ 3,067,703 | $ 3,130,372 | [1] | ||
Percent of Revenue (as percent) | 100.00% | 100.00% | 100.00% | 100.00% | ||||
Distributors | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue | $ 871,510 | $ 869,277 | $ 1,700,753 | $ 1,734,289 | ||||
Percent of Revenue (as percent) | 57.00% | 56.00% | 55.00% | 55.00% | ||||
Direct customers | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue | $ 638,277 | $ 675,188 | $ 1,333,766 | $ 1,348,591 | ||||
Percent of Revenue (as percent) | 42.00% | 43.00% | 43.00% | 43.00% | ||||
Other | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue | $ 16,815 | $ 19,037 | $ 33,184 | $ 47,492 | ||||
Percent of Revenue (as percent) | 1.00% | 1.00% | 1.00% | 2.00% | ||||
|
Fair Value - Textual (Details) - USD ($) $ in Millions |
May 04, 2019 |
Nov. 03, 2018 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Cash and held to maturity investments | $ 233.6 | $ 217.6 |
Fair Value - Assets and Liabilities (Details) - USD ($) $ in Thousands |
May 04, 2019 |
Nov. 03, 2018 |
---|---|---|
Other assets: | ||
Interest rate derivatives | $ 0 | |
Recurring | ||
Other assets: | ||
Deferred compensation investments | $ 43,720 | 41,001 |
Interest rate derivatives | 1,436 | |
Total assets measured at fair value | 523,759 | 641,399 |
Liabilities | ||
Forward foreign currency exchange contracts | 3,542 | 7,150 |
Interest rate derivatives | 51,644 | |
Total liabilities measured at fair value | 55,186 | 7,150 |
Amortized cost | 109,800 | 205,000 |
Recurring | Government and institutional money market funds | ||
Available-for-sale: | ||
Cash equivalents: | 370,220 | 394,076 |
Recurring | Corporate obligations | ||
Available-for-sale: | ||
Cash equivalents: | 109,819 | 204,886 |
Recurring | Level 1 | ||
Other assets: | ||
Deferred compensation investments | 43,720 | 41,001 |
Total assets measured at fair value | 413,940 | 435,077 |
Liabilities | ||
Forward foreign currency exchange contracts | 0 | 0 |
Interest rate derivatives | 0 | |
Total liabilities measured at fair value | 0 | 0 |
Recurring | Level 1 | Government and institutional money market funds | ||
Available-for-sale: | ||
Cash equivalents: | 370,220 | 394,076 |
Recurring | Level 1 | Corporate obligations | ||
Available-for-sale: | ||
Cash equivalents: | 0 | 0 |
Recurring | Level 2 | ||
Other assets: | ||
Deferred compensation investments | 0 | 0 |
Interest rate derivatives | 1,436 | |
Total assets measured at fair value | 109,819 | 206,322 |
Liabilities | ||
Forward foreign currency exchange contracts | 3,542 | 7,150 |
Interest rate derivatives | 51,644 | |
Total liabilities measured at fair value | 55,186 | 7,150 |
Recurring | Level 2 | Government and institutional money market funds | ||
Available-for-sale: | ||
Cash equivalents: | 0 | 0 |
Recurring | Level 2 | Corporate obligations | ||
Available-for-sale: | ||
Cash equivalents: | $ 109,819 | $ 204,886 |
Fair Value Fair Value - Debt (Details) - USD ($) |
6 Months Ended | |
---|---|---|
May 04, 2019 |
Nov. 03, 2018 |
|
3-Year term loan, due March 2020 | Unsecured debt term | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt term | 3 years | |
Long-term Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Principal | $ 6,025,000,000 | $ 6,375,000,000 |
Fair Value | $ 6,104,878,000 | 6,230,648,000 |
Long-term Debt | 3-Year term loan, due March 2020 | Unsecured debt term | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt term | 3 years | |
Principal | $ 75,000,000 | 425,000,000 |
Fair Value | $ 75,000,000 | 425,000,000 |
Long-term Debt | 5-Year term loan, due March 2022 | Unsecured debt term | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt term | 5 years | |
Principal | $ 1,350,000,000 | 1,350,000,000 |
Fair Value | 1,350,000,000 | 1,350,000,000 |
Long-term Debt | 2.85% Senior unsecured notes, due March 2020 | Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Principal | 300,000,000 | 300,000,000 |
Fair Value | $ 300,113,000 | 298,147,000 |
Debt Instrument, Interest Rate, Stated Percentage | 2.85% | |
Long-term Debt | 2.90% Senior unsecured notes, due January 2021 | Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Principal | $ 450,000,000 | 450,000,000 |
Fair Value | $ 450,564,000 | 444,568,000 |
Debt Instrument, Interest Rate, Stated Percentage | 2.90% | |
Long-term Debt | 2.50% Senior unsecured notes, due December 2021 | Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Principal | $ 400,000,000 | 400,000,000 |
Fair Value | $ 396,406,000 | 386,375,000 |
Debt Instrument, Interest Rate, Stated Percentage | 2.50% | |
Long-term Debt | 2.875% Senior unsecured notes, due June 2023 | Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Principal | $ 500,000,000 | 500,000,000 |
Fair Value | $ 495,695,000 | 479,189,000 |
Debt Instrument, Interest Rate, Stated Percentage | 2.875% | |
Long-term Debt | 3.125% Senior unsecured notes, due December 2023 | Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Principal | $ 550,000,000 | 550,000,000 |
Fair Value | $ 554,447,000 | 529,120,000 |
Debt Instrument, Interest Rate, Stated Percentage | 3.125% | |
Long-term Debt | 3.90% Senior unsecured notes, due December 2025 | Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Principal | $ 850,000,000 | 850,000,000 |
Fair Value | $ 874,714,000 | 829,611,000 |
Debt Instrument, Interest Rate, Stated Percentage | 3.90% | |
Long-term Debt | 3.50% Senior unsecured notes, due December 2026 | Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Principal | $ 900,000,000 | 900,000,000 |
Fair Value | $ 903,740,000 | 848,027,000 |
Debt Instrument, Interest Rate, Stated Percentage | 3.50% | |
Long-term Debt | 4.50% Senior unsecured notes, due December 2036 | Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Principal | $ 250,000,000 | 250,000,000 |
Fair Value | $ 251,900,000 | 232,627,000 |
Debt Instrument, Interest Rate, Stated Percentage | 4.50% | |
Long-term Debt | 5.30% Senior unsecured notes, due December 2045 | Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Principal | $ 400,000,000 | 400,000,000 |
Fair Value | $ 452,299,000 | $ 407,984,000 |
Debt Instrument, Interest Rate, Stated Percentage | 5.30% |
Derivatives (Textual) (Details) - USD ($) $ in Millions |
6 Months Ended | ||
---|---|---|---|
May 04, 2019 |
Feb. 02, 2019 |
Nov. 03, 2018 |
|
Derivative [Line Items] | |||
Contracts period | one year or less | ||
Forward Contracts | |||
Derivative [Line Items] | |||
Notional amount of cash flow hedges | $ 197.4 | $ 194.4 | |
Notional amount of derivative | 80.6 | $ 40.6 | |
Interest Rate Swap Agreements | |||
Derivative [Line Items] | |||
Notional amount of derivative | $ 1,000.0 | ||
Accrued liabilities | Designated as Hedging Instrument | Interest Rate Swap Agreements | |||
Derivative [Line Items] | |||
Derivative assets, fair value | $ 51.6 |
Derivatives - Forward Foreign Currency (Table) (Details) - USD ($) $ in Thousands |
May 04, 2019 |
Nov. 03, 2018 |
---|---|---|
Forward foreign currency exchange contracts | Accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency contracts, liability | $ 3,297 | $ 6,934 |
Derivative - Net Amounts (Table) (Details) - USD ($) $ in Thousands |
May 04, 2019 |
Nov. 03, 2018 |
---|---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross amount of recognized liabilities | $ (5,109) | $ (8,054) |
Gross amounts of recognized assets offset in the condensed consolidated balance sheet | 1,567 | 904 |
Net liabilities presented in the condensed consolidated balance sheet | $ (3,542) | $ (7,150) |
Debt (Textual) (Details) - USD ($) |
1 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jan. 31, 2019 |
Dec. 31, 2018 |
May 04, 2019 |
May 05, 2018 |
||||
Debt Instrument [Line Items] | |||||||
Short-term debt borrowed | $ 75,000,000 | $ 0 | |||||
Repayments of debt | 75,000,000 | 0 | |||||
Repayments of debt | 350,000,000 | $ 1,620,000,000 | [1] | ||||
Unsecured debt term | 3-Year term loan, due March 2020 | |||||||
Debt Instrument [Line Items] | |||||||
Repayments of debt | $ 350,000,000.0 | ||||||
Debt term | 3 years | ||||||
Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Amount available under credit facility | $ 1,000,000,000.0 | ||||||
Short-term debt borrowed | $ 75,000,000.0 | ||||||
Repayments of debt | $ 75,000,000 | ||||||
Interest expense, borrowings | $ 200,000 | ||||||
|
Inventories (Table) (Details) - USD ($) $ in Thousands |
May 04, 2019 |
Nov. 03, 2018 |
|||||
---|---|---|---|---|---|---|---|
Inventory Disclosure [Abstract] | |||||||
Raw materials | $ 35,853 | $ 30,511 | |||||
Work in process | 400,724 | 375,908 | |||||
Finished goods | 171,508 | 180,341 | |||||
Total inventories | [1] | $ 608,085 | $ 586,760 | [2] | |||
|
Income Taxes (Textual) (Details) $ in Thousands, € in Millions |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Feb. 02, 2019
USD ($)
|
Nov. 03, 2018
EUR (€)
|
May 04, 2019
USD ($)
|
Nov. 03, 2018
USD ($)
|
Nov. 04, 2018
USD ($)
|
||||
Income Tax Contingency [Line Items] | ||||||||
Federal statutory rate (as percent) | 21.00% | 35.00% | ||||||
Blended federal statutory income tax rate (as percent) | 23.40% | |||||||
Income tax expense (benefit) | $ (7,500) | $ (637,000) | ||||||
Provisional income tax expense | 691,000 | |||||||
Transition tax | 755,000 | |||||||
Tax benefit related to deferred tax liabilities in prior years | 64,000 | |||||||
Deferred tax assets | $ 1,610,109 | 9,665 | [1] | $ 1,664,794 | ||||
Deferred income taxes | 2,228,822 | 990,409 | [1] | 2,314,512 | ||||
Accounting Standards Update 2016-16 | ||||||||
Income Tax Contingency [Line Items] | ||||||||
Deferred tax assets | 1,700,000 | 1,655,129 | ||||||
Deferred income taxes | $ 1,300,000 | 1,324,103 | ||||||
Retained Earnings | Accounting Standards Update 2016-16 | ||||||||
Income Tax Contingency [Line Items] | ||||||||
Effect of accounting standards | $ 331,026 | |||||||
Revenue Commissioners, Ireland | ||||||||
Income Tax Contingency [Line Items] | ||||||||
Tax settlement | € 43.0 | $ 48,200 | ||||||
|
New Accounting Pronouncements (Details) - USD ($) $ in Thousands |
May 04, 2019 |
Nov. 04, 2018 |
Nov. 03, 2018 |
|||
---|---|---|---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Deferred tax assets | $ 1,610,109 | $ 1,664,794 | $ 9,665 | [1] | ||
Deferred income taxes | $ 2,228,822 | 2,314,512 | 990,409 | [1] | ||
Accounting Standards Update 2016-16 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Deferred tax assets | 1,655,129 | 1,700,000 | ||||
Deferred income taxes | 1,324,103 | $ 1,300,000 | ||||
Retained Earnings | Accounting Standards Update 2016-16 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Effect of accounting standards | $ 331,026 | |||||
|
Subsequent Events (Textual) (Details) - Common Stock - Subsequent event - USD ($) $ / shares in Units, $ in Millions |
May 31, 2019 |
May 21, 2019 |
---|---|---|
Subsequent Event [Line Items] | ||
Common stock cash dividends per share, declared (in dollars per share) | $ 0.54 | |
Dividends | $ 199.7 |
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