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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 29, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to             
Commission File No. 1-7819
Analog Devices, Inc.
(Exact name of registrant as specified in its charter) 
Massachusetts 04-2348234
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
One Analog Way,Wilmington,MA 01887
(Address of principal executive offices) (Zip Code)
(781) 935-5565
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock $0.16 2/3 par value per shareADINasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer   Accelerated filer 
Non-accelerated filer   Smaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes     No  
As of January 29, 2022 there were 523,315,130 shares of common stock of the registrant, $0.16 2/3 par value per share, outstanding.




PART I - FINANCIAL INFORMATION
 
ITEM 1.Financial Statements


ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share amounts)

 Three Months Ended
 January 29, 2022January 30, 2021
Revenue$2,684,293 $1,558,458 
Cost of sales1,282,296 513,087 
Gross margin1,401,997 1,045,371 
Operating expenses:
Research and development426,780 288,150 
Selling, marketing, general and administrative297,365 185,275 
Amortization of intangibles253,367 107,648 
Special charges, net59,728 438 
Total operating expenses1,037,240 581,511 
Operating income:364,757 463,860 
Nonoperating expense (income):
Interest expense51,964 42,479 
Interest income(218)(209)
Other, net(10,544)(15,028)
Total nonoperating expense (income)41,202 27,242 
Income before income taxes323,555 436,618 
Provision for income taxes43,478 48,099 
Net income$280,077 $388,519 
Shares used to compute earnings per common share – basic525,291 369,203 
Shares used to compute earnings per common share – diluted530,142 373,106 
Basic earnings per common share$0.53 $1.05 
Diluted earnings per common share$0.53 $1.04 

See accompanying notes.
1




ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(in thousands)
Three Months Ended
January 29, 2022January 30, 2021
Net income$280,077 $388,519 
Foreign currency translation adjustments(4,603)8,279 
Change in fair value of derivative instruments designated as cash flow hedges (net of taxes of $506 and $6,661, respectively)
1,046 24,465 
Changes in pension plans, net actuarial loss and foreign currency translation adjustments (net of taxes of $96 and $86, respectively)
1,504 (1,784)
Other comprehensive (loss) income(2,053)30,960 
Comprehensive income$278,024 $419,479 


See accompanying notes.


2


ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share amounts)
January 29, 2022October 30, 2021
ASSETS  
Current Assets
Cash and cash equivalents$1,790,399 $1,977,964 
Accounts receivable1,636,928 1,459,056 
Inventories972,571 1,200,610 
Prepaid expenses and other current assets236,797 740,687 
Total current assets4,636,695 5,378,317 
Non-current Assets
Net property, plant and equipment2,037,290 1,979,051 
Goodwill26,940,594 26,918,470 
Intangible assets, net14,762,722 15,267,170 
Deferred tax assets2,317,301 2,267,269 
Other assets521,012 511,794 
Total non-current assets46,578,919 46,943,754 
TOTAL ASSETS$51,215,614 $52,322,071 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable$436,227 $443,434 
Income taxes payable400,420 332,685 
Debt, current 516,663 
Accrued liabilities1,385,259 1,477,530 
Total current liabilities2,221,906 2,770,312 
Non-current Liabilities
Long-term debt6,253,575 6,253,212 
Deferred income taxes3,952,185 3,938,830 
Income taxes payable832,204 811,337 
Other non-current liabilities528,432 555,838 
Total non-current liabilities11,566,396 11,559,217 
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, 523,315,130 shares outstanding (525,330,672 on October 30, 2021)
87,221 87,554 
Capital in excess of par value30,093,961 30,574,237 
Retained earnings7,434,748 7,517,316 
Accumulated other comprehensive loss(188,618)(186,565)
Total shareholders’ equity37,427,312 37,992,542 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$51,215,614 $52,322,071 
See accompanying notes.
3


ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
(in thousands)
Three Months Ended January 29, 2022
Capital inAccumulated
Other
 Common StockExcess ofRetainedComprehensive
SharesAmountPar ValueEarningsLoss
BALANCE, OCTOBER 30, 2021
525,331 $87,554 $30,574,237 $7,517,316 $(186,565)
Net income280,077 
Dividends declared and paid - $0.69 per share
(362,645)
Issuance of stock under stock plans and other579 100 8,371 
Stock-based compensation expense86,939 
Other comprehensive loss(2,053)
Common stock repurchased(2,595)(433)(575,586)
BALANCE, JANUARY 29, 2022
523,315 $87,221 $30,093,961 $7,434,748 $(188,618)


Three Months Ended January 30, 2021
Capital inAccumulated
Other
Common StockExcess ofRetainedComprehensive
SharesAmountPar ValueEarningsLoss
BALANCE, OCTOBER 31, 2020369,485 $61,582 $4,949,586 $7,236,238 $(249,461)
Net income388,519 
Dividends declared and paid - $0.62 per share
(229,179)
Issuance of stock under stock plans and other488 82 19,838 
Stock-based compensation expense36,638 
Other comprehensive income30,960 
Common stock repurchased(1,079)(180)(156,877)
BALANCE, JANUARY 30, 2021
368,894 $61,484 $4,849,185 $7,395,578 $(218,501)

See accompanying notes.
4



ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
  
Three Months Ended
 January 29, 2022January 30, 2021
Cash flows from operating activities:
Net income$280,077 $388,519 
Adjustments to reconcile net income to net cash provided by operations:
Depreciation65,165 56,309 
Amortization of intangibles504,645 145,044 
Stock-based compensation expense86,939 36,638 
Cost of goods sold for inventory acquired271,396  
Deferred income taxes(34,651)(27,275)
Other(1,748)(14,553)
Changes in operating assets and liabilities(315,410)(156,741)
Total adjustments576,336 39,422 
Net cash provided by operating activities856,413 427,941 
Cash flows from investing activities:
Additions to property, plant and equipment(111,133)(67,388)
Other7,824 (7,683)
Net cash used for investing activities(103,309)(75,071)
Cash flows from financing activities:
Early termination of debt(519,116) 
Dividend payments to shareholders(362,645)(229,179)
Repurchase of common stock(76,019)(157,057)
Proceeds from employee stock plans8,471 19,920 
Other12,041 2,493 
Net cash used for financing activities(937,268)(363,823)
Effect of exchange rate changes on cash(3,401)3,156 
Net decrease in cash and cash equivalents(187,565)(7,797)
Cash and cash equivalents at beginning of period1,977,964 1,055,860 
Cash and cash equivalents at end of period$1,790,399 $1,048,063 

See accompanying notes.
5


ANALOG DEVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED JANUARY 29, 2022 (UNAUDITED)
(all tabular amounts in thousands except per share amounts and percentages)

Note 1 – 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 October 30, 2021 (fiscal 2021) 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 October 29, 2022 (fiscal 2022) 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. Certain amounts reported in previous periods have been reclassified to conform to the fiscal 2022 presentation.
On August 26, 2021 (Acquisition Date), the Company completed the acquisition of Maxim Integrated Products, Inc. (Maxim), an independent manufacturer of innovative analog and mixed-signal products and technologies. The acquisition of Maxim is referred to as the Acquisition. The consolidated financial statements included in this Quarterly Report on Form 10-Q include the financial results of Maxim prospectively from the Acquisition Date. See Note 14, Acquisitions, in these Notes to Condensed Consolidated Financial Statements for additional information.
Note 2 – Shareholders' Equity
In fiscal 2021, the Company entered into accelerated share repurchase agreements (ASR) with third party financial institutions, paid $2.5 billion and received an initial delivery of 12.3 million shares of common stock, which represented approximately 80% of the notional amount of the ASR. As of October 30, 2021, the Company recorded the remaining 20%, or $500.0 million, within Prepaid expenses and other current assets on the Consolidated Balance Sheet, which was utilized during the first quarter of fiscal 2022. During the first quarter of fiscal 2022, the ASR was completed and an additional 2.1 million shares of common stock were received as final settlement of the ASR. In total, the Company repurchased 14.4 million shares under the ASR at an average price per share of $173.77.
As of January 29, 2022, the Company had repurchased a total of approximately 174.0 million shares of its common stock for approximately $9.3 billion under the Company's share repurchase program. As of January 29, 2022, an additional $7.3 billion remains available for repurchase of shares under the current authorized program. The Company also repurchases shares in settlement of employee tax withholding obligations due upon the vesting of restricted stock units/awards or the exercise of stock options. Future repurchases of common stock will be dependent upon the Company's financial position, results of operations, outlook, liquidity, and other factors deemed relevant by the Company.
Note 3 – Accumulated Other Comprehensive (Loss) Income
The following table provides the changes in accumulated other comprehensive (loss) income (AOCI) by component and the related tax effects during the first three months of fiscal 2022.
Foreign currency translation adjustmentUnrealized holding gains (losses) on derivativesPension plansTotal
October 30, 2021$(25,795)$(123,754)$(37,016)$(186,565)
Other comprehensive (loss) income before reclassifications(4,603)(7,013)1,015 (10,601)
Amounts reclassified out of other comprehensive income 8,565 585 9,150 
Tax effects (506)(96)(602)
Other comprehensive (loss) income(4,603)1,046 1,504 (2,053)
January 29, 2022$(30,398)$(122,708)$(35,512)$(188,618)
The amounts reclassified out of AOCI into the Condensed Consolidated Statements of Income and the Condensed Consolidated Statements of Shareholders' Equity with presentation location during each period were as follows:
6


Three Months Ended
Comprehensive Income ComponentJanuary 29, 2022January 30, 2021Location
Unrealized holding (gains) losses on derivatives
Currency forwards $1,751 $(1,986)Cost of sales
1,210 (1,064)Research and development
1,873 (1,218)Selling, marketing, general and administrative
Interest rate derivatives3,731 464 Interest expense
8,565 (3,804)Total before tax
(1,301)204 Tax
$7,264 $(3,600)Net of tax
Amortization of pension components included in the computation of net periodic pension cost
     Actuarial losses585 748 
(96)(86)Tax
$489 $662 Net of tax
Total amounts reclassified out of AOCI, net of tax$7,753 $(2,938)
Note 4 – Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share:
 Three Months Ended
 January 29, 2022January 30, 2021
Net Income$280,077 $388,519 
Basic shares:
Weighted-average shares outstanding525,291 369,203 
Earnings per common share basic:$0.53 $1.05 
Diluted shares:
Weighted-average shares outstanding525,291 369,203 
Assumed exercise of common stock equivalents4,851 3,903 
Weighted-average common and common equivalent shares530,142 373,106 
Earnings per common share diluted:$0.53 $1.04 
Anti-dilutive shares related to:
Outstanding stock-based awards185 239 

Note 5 – Special Charges, net
Liabilities related to special charges, net are included in Accrued liabilities in the Condensed Consolidated Balance Sheets. The activity is detailed below:
Accrued Special ChargesClosure of Manufacturing Facilities Global Repositioning Actions
Balance at October 30, 2021$25,774 $21,065 
Employee severance and benefit costs75 44,411 
Facility closure costs6,513  
Severance and benefit payments(4,016)(25,776)
Facility closure cost payments (6,513) 
Effect of foreign currency on accrual (54)
Balance at January 29, 2022$21,833 $39,646 
Closure of Manufacturing Facilities
The Company recorded net special charges of $62.6 million on a cumulative basis through January 29, 2022 as a result of its decision to consolidate certain wafer and test facility operations acquired as part of the acquisition of Linear Technology Corporation.
The special charges include severance and fringe benefit costs, in accordance with the Company's ongoing benefit plan or statutory requirements at foreign locations, one-time termination benefits for the impacted manufacturing, engineering and SMG&A employees and other exit costs. These one-time termination benefits are being recognized over the future service period required for employees to earn these benefits.
During fiscal 2021, the Company ceased production at its Hillview wafer fabrication facility located in Milpitas, California and determined that this facility met the held for sale criteria specified in Accounting Standards Codification (ASC) 360. See Note 6, Property, Plant and Equipment in these Notes to Condensed Consolidated Financial Statements for amounts reclassified.
During fiscal 2021, the Company completed the sale of its facility and certain equipment in Singapore, which were previously classified as held for sale, for approximately $35.7 million, which resulted in a gain of $13.6 million. Concurrent with the sale, the Company entered into a short-term lease agreement to leaseback a portion of the facility while it completes its transition of related operations to its facilities in Penang, Malaysia and the Philippines, as well as to its outsourced assembly and test partners.
Global Repositioning Actions
The Company recorded net special charges of $274.1 million on a cumulative basis through January 29, 2022, as a result of organizational initiatives to better align its global workforce with the Company's long-term strategic plan. Special charges of $53.1 million recognized in the first quarter of fiscal 2022 primarily consisted of $61.4 million of severance and benefit costs as well as charges recorded from the acceleration of equity awards in connection with the termination of a limited number of employees as part of the integration of the Acquisition. These charges were partially offset by a gain of $8.3 million recognized upon the sale of a business.
Note 6 – Property, Plant and Equipment
During fiscal 2021, the Company ceased production at its Hillview wafer fabrication facility located in Milpitas, California and determined that this facility met the held for sale criteria specified in ASC 360. As of January 29, 2022, Prepaid expenses and other current assets includes the following assets held for sale recorded at the fair value of the asset group, less costs to sell:
Land and buildings$40,070 
Less accumulated depreciation and amortization(13,634)
Net property, plant and equipment reclassified to Prepaid expenses and other current assets$26,436 
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Note 7 – Revenue
Revenue Trends by End Market
The following table summarizes revenue by end market. The categorization of revenue by end market is determined using a variety of data points including the technical characteristics of the product, the “sold to” customer information, the “ship to” customer information and the end customer product or application into which the Company’s product will be incorporated. As data systems for capturing and tracking this data and the Company's methodology evolves and improves, the categorization of 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.
Three Months Ended
 January 29, 2022January 30, 2021
 Revenue% of Revenue*Y/Y%Revenue% of Revenue*
Industrial$1,341,113 50 %57 %$856,186 55 %
Automotive552,671 21 %124 %246,504 16 %
Communications412,397 15 %46 %281,726 18 %
Consumer378,112 14 %117 %174,042 11 %
Total revenue$2,684,293 100 %72 %$1,558,458 100 %
* The sum of the individual percentages may not equal the total due to rounding.
Revenue by Sales Channel
The following table summarizes revenue by 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 certain commercial customers for which revenue is recorded over time.
Three Months Ended
January 29, 2022January 30, 2021
ChannelRevenue% of Revenue*Revenue% of Revenue*
   Distributors$1,653,054 62 %$946,386 61 %
   Direct customers1,003,181 37 %589,456 38 %
   Other28,058 1 %22,616 1 %
Total revenue$2,684,293 100 %$1,558,458 100 %
* The sum of the individual percentages may not equal the total due to rounding.
Note 8 – 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.
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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 January 29, 2022 and October 30, 2021. The tables exclude cash on hand and assets and liabilities that are measured at historical cost or any basis other than fair value. As of January 29, 2022 and October 30, 2021, the Company held $1,053.5 million and $1,315.0 million, respectively, of cash that was excluded from the tables below.
 January 29, 2022
 
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$606,876 $ $606,876 
Corporate obligations (1) 129,993 129,993 
Other assets:
Deferred compensation plan investments70,258  70,258 
Total assets measured at fair value$677,134 $129,993 $807,127 
Liabilities
Forward foreign currency exchange contracts (2)$ $11,004 $11,004 
Total liabilities measured at fair value$ $11,004 $11,004 
(1)The amortized cost of the Company’s investments classified as available-for-sale as of January 29, 2022 was $130.0 million. 
(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.
 October 30, 2021
 
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$662,997 $ $662,997 
Other assets:
Deferred compensation plan investments71,301  71,301 
Total assets measured at fair value$734,298 $ $734,298 
Liabilities
Forward foreign currency exchange contracts (1)$ $8,085 $8,085 
Total liabilities measured at fair value$ $8,085 $8,085 
(1)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.

9


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.
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
Held for sale assets —The Company has classified the assets held for sale at fair value, which is determined based on the use of appraisals and input from market participants, and as such is considered a Level 3 fair value measurement. See Note 6, Property, Plant and Equipment, in these Notes to Condensed Consolidated Financial Statements for more information related to held for sale assets.
Debt — The table below presents the estimated fair value of certain financial instruments not recorded at fair value on a recurring basis. The fair values of the senior unsecured notes are obtained from broker prices and are classified as Level 1 measurements according to the fair value hierarchy.
January 29, 2022October 30, 2021
Principal Amount OutstandingFair Value Principal Amount Outstanding Fair Value
Maxim 2023 Notes, due March 2023$ $ $500,000 $520,236 
2024 Notes, due October 2024500,000 500,233 500,000 500,482 
2025 Notes, due April 2025400,000 413,314 400,000 423,265 
2026 Notes, due December 2026900,000 960,798 900,000 986,243 
Maxim 2027 Notes, due June 2027500,000 528,442 500,000 542,942 
2028 Notes, due October 2028750,000 722,982 750,000 743,109 
2031 Notes, due October 20311,000,000 964,300 1,000,000 996,702 
2036 Notes, due December 2036144,278 165,586 144,278 176,960 
2041 Notes, due October 2041750,000 712,026 750,000 758,246 
2045 Notes, due December 2045332,587 444,072 332,587 469,592 
2051 Notes, due October 20511,000,000 952,121 1,000,000 1,029,830 
Total debt$6,276,865 $6,363,874 $6,776,865 $7,147,607 
Note 9 – 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 British Pound, Philippine Peso, Thai Baht, South Korean Won and the Japanese Yen. Derivative instruments are employed to eliminate or minimize certain foreign currency exposures that can be confidently identified and quantified. These foreign currency exchange contracts are entered into 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 matched with the underlying exposures at inception and designated and documented as cash flow hedges. They are qualitatively evaluated for effectiveness on a quarterly basis. The gain or loss on the derivative is recorded as a component of AOCI in shareholders’ equity and is reclassified into earnings in the same line item on the Consolidated Statements of Income as the impact of the hedged transaction in the same period during which the hedged transaction affects earnings.
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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, Thai Baht, South Korean Won and Japanese Yen as of January 29, 2022 and October 30, 2021 were $304.9 million and $343.6 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 January 29, 2022 and October 30, 2021 were as follows:
Fair Value At
Balance Sheet LocationJanuary 29, 2022October 30, 2021
Forward foreign currency exchange contractsAccrued liabilities$9,464 $7,113 
As of January 29, 2022 and October 30, 2021, the total notional amounts of undesignated hedges related to forward foreign currency exchange contracts were $206.2 million and $120.0 million, respectively. The fair values of these hedging instruments in the Company’s Condensed Consolidated Balance Sheets were immaterial as of January 29, 2022 and October 30, 2021.
The Company estimates $7.3 million, net of tax, of settlements on forward foreign currency derivative instruments included in AOCI will be reclassified into earnings within the next twelve months.
All of the Company’s derivative financial instruments are eligible for netting arrangements that allow the Company and its counterparties to net settle amounts owed to each other. Derivative assets and liabilities that can be net settled under these arrangements have been presented in the Company's Condensed Consolidated Balance Sheets on a net basis. As of January 29, 2022 and October 30, 2021, none of the netting arrangements involved collateral.
The following table presents the gross amounts of the Company's forward foreign currency exchange contract derivative assets and liabilities and the net amounts recorded in the Company's Condensed Consolidated Balance Sheets:
 January 29, 2022October 30, 2021
Gross amount of recognized assets$544 $319 
Gross amounts of recognized liabilities(11,548)(8,404)
Net liabilities offset and presented in the Condensed Consolidated Balance Sheets$(11,004)$(8,085)
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 January 29, 2022 and October 30, 2021, nonperformance is not perceived to be a material risk. Furthermore, none of the Company’s derivatives are subject to collateral or other security arrangements and none contain provisions that are dependent on the 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.
For information on the unrealized holding gains (losses) on derivatives included in and reclassified out of AOCI into the Condensed Consolidated Statements of Income related to forward foreign currency exchange contracts, see Note 3, Accumulated Other Comprehensive (Loss) Income, in these Notes to Condensed Consolidated Financial Statements for further information.
Note 10 – Inventories
Inventories at January 29, 2022 and October 30, 2021 were as follows:
January 29, 2022October 30, 2021
Raw materials$80,456 $71,639 
Work in process679,644 858,627 
Finished goods212,471 270,344 
Total inventories$972,571 $1,200,610 

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Note 11 – Debt
In conjunction with the Acquisition, the Company acquired $500.0 million aggregate principal amount of Maxim’s 3.375% senior unsecured and unsubordinated notes due March 15, 2023 (the Maxim March 2023 Notes). On November 4, 2021, the Maxim March 2023 Notes were redeemed for cash at a redemption price equal to $1,038.23 for each $1,000 principal amount.
Note 12 – Income Taxes
The Company’s effective tax rates for the three-month periods ended January 29, 2022 and January 30, 2021 were below the U.S. statutory tax rate of 21.0%, due to lower statutory tax rates applicable to the Company's operations in the foreign jurisdictions in which it earns income.
In the first quarter of fiscal 2022, the Company increased acquisition related tax reserves by $25.3 million consisting of $21.8 million in tax and $3.5 million in accrued interest primarily relating to tax audits. The Company engages in continuous discussions and negotiations with tax authorities regarding tax matters in various jurisdictions. It is reasonably possible that the balance of gross unrecognized tax benefits, including accrued interest and penalties, could decrease by as much as $146.0 million within the next twelve months due to the completion of tax audits, including any administrative appeals.
The Company has numerous audits ongoing throughout the world including: an IRS income tax audit for the fiscal years ended November 3, 2018 and November 2, 2019; a pre-acquisition IRS income tax audit for Maxim's fiscal years ended June 27, 2015 through June 24, 2017; various U.S. state and local audits and various international audits. The Company's U.S. federal tax returns prior to the fiscal year ended November 3, 2018 are no longer subject to examination, except for the Maxim pre-Acquisition fiscal years 2015 to 2017 noted above.
Note 13 – New Accounting Pronouncements
Standards Implemented
Reference Rate Reform
In March 2020, the Financial Accounting Standards Board (FASB) issued ASU No. 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for accounting for contracts, hedging relationships, and other transactions affected by reference rate reform, if certain criteria are met. The provisions of this standard are available for election through December 31, 2022. The Company adopted this standard in the first quarter of fiscal 2022 with no material impact on the Company's financial position and results of operations.
Standards to Be Implemented
Acquired Contract Assets and Contract Liabilities
In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Acquired Contract Assets and Contract Liabilities. Under the new guidance (ASC 805-20-30-28), the acquirer should determine what contract assets and/or contract liabilities it would have recorded under ASC 606 (the revenue guidance) as of the acquisition date, as if the acquirer had entered into the original contract at the same date and on the same terms as the acquiree. The recognition and measurement of those contract assets and contract liabilities will likely be comparable to what the acquiree has recorded on its books under ASC 606 as of the acquisition date. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. ASU 2021-08 is effective for the Company in the first quarter of the fiscal year ended November 1, 2024. Early adoption is permitted, including in an interim period, for any period for which financial statements have not yet been issued. However, adoption in an interim period other than the first fiscal quarter requires an entity to apply the new guidance to all prior business combinations that have occurred since the beginning of the annual period in which the new guidance is adopted. The Company is currently evaluating the adoption date of ASU 2021-08 and the impact, if any, adoption will have on its financial position and results of operations.
Note 14 – Acquisitions
Maxim Integrated Products, Inc.
On the Acquisition Date, the Company completed its acquisition of all of the voting interests of Maxim, an independent manufacturer of innovative analog and mixed-signal products and technologies. The total consideration paid to acquire Maxim, which consisted of cash, common stock of the Company and share-based compensation awards, was approximately $28.0 billion. The Company believes the combination creates an expanded suite of top-performing mixed-signal and power management technology offerings and complements the Company's legacy offerings. The results of operations of Maxim from the Acquisition Date are included in the Company’s Condensed Consolidated Statement of Income, Condensed Consolidated
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Balance Sheet, Condensed Consolidated Statement of Cash Flows and Condensed Consolidated Statement of Shareholders’ Equity for the three-month period ended January 29, 2022.
During the first quarter of 2022, the Company recorded acquisition accounting adjustments of $24.9 million to goodwill comprised of $19.0 million to income tax payable, $7.8 million to other non-current liabilities and $1.6 million to accrued liabilities offset by $3.5 million to deferred income taxes. The Acquisition accounting is not complete and additional information relating to conditions that existed at the Acquisition Date may become known to the Company during the remainder of the measurement period. As of the filing date of this Quarterly Report on Form 10-Q, the Company is still in the process of valuing Maxim's assets, including fixed assets, intangible assets, and liabilities, including related income tax accounting.
The following unaudited pro forma consolidated financial information for the three-month period ended January 30, 2021 combines the results of the Company for the three-month period ended January 30, 2021 and the unaudited results of Maxim for the corresponding period. The unaudited pro forma consolidated financial information assumes that the Acquisition, which closed on August 26, 2021, was completed on November 3, 2019 (the first day of fiscal 2020). The pro forma consolidated financial information has been calculated after applying the Company’s accounting policies and includes adjustments for amortization expense of acquired intangible assets, fair value adjustments for acquired inventory, property, plant and equipment and long-term debt and compensation expense for ongoing share-based compensation arrangements that were replaced in conjunction with the Acquisition, together with the consequential tax effects. These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the operating results of the Company that would have been achieved had the Acquisition actually taken place on November 3, 2019. In addition, these results are not intended to be a projection of future results and do not reflect events that may occur after the Acquisition, including but not limited to revenue enhancements, cost savings or operating synergies that the combined Company may achieve as a result of the Acquisition.
Pro Forma Three Months Ended
(unaudited)
January 30, 2021
Revenue
$2,059,679 
Net income
$298,895 
Basic net income per common share
$0.56 
Diluted net income per common share
$0.55 
Note 15 – Subsequent Events
On February 15, 2022, the Board of Directors of the Company declared a cash dividend of $0.76 per outstanding share of common stock. The dividend will be paid on March 8, 2022 to all shareholders of record at the close of business on February 25, 2022 and is expected to total approximately $397.7 million.
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ITEM 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
This information should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended October 30, 2021 (fiscal 2021).
This Quarterly Report on Form 10-Q, including the following discussion, contains forward-looking statements regarding future events and our future results that are subject to the safe harbor created under the Private Securities Litigation Reform Act of 1995 and other safe harbors under the Securities Act of 1933 and the Securities Exchange Act of 1934. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” “could” and “will,” and variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections regarding our future financial performance; our anticipated growth and trends in our businesses; our future liquidity, capital needs and capital expenditures; our development of technologies and research and development investments; the impact of the COVID-19 pandemic on our business, financial condition and results of operations; our future market position and expected competitive changes in the marketplace for our products; our plans and ability to pay dividends or repurchase stock; our ability to service our outstanding debt; our expected tax rate; the effect of changes in or the application of new or revised tax laws; expected cost savings; the effect of new accounting pronouncements; our ability to successfully integrate or realize the benefits or synergies expected of acquired businesses and technologies, including the acquired business, operations and employees of Maxim Integrated Products, Inc.; and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those identified in Part II, Item 1A. “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update any forward-looking statements, including to reflect events or circumstances occurring after the date of the filing of this report, except to the extent required by law.
Impact of COVID-19 on our Business
The pandemic caused by the novel strain of the coronavirus (COVID-19) and the numerous measures implemented by government authorities in response, have impacted and likely will continue to impact our workforce and operations, the operations of our customers and those of our respective vendors and suppliers. We have significant operations worldwide, including in the United States, the Philippines, Ireland, Malaysia, Thailand, China and India. Each of these countries has been affected by the pandemic and taken measures to try to contain it, resulting in disruptions at some of our manufacturing operations and facilities.
The spread of COVID-19 has caused us to modify our business practices (including restricting employee travel, modifying employee work locations and cancelling physical participation in meetings, events and conferences) and we may take further actions as may be required by government authorities or that we determine are in the best interests of our employees, customers, partners, suppliers and shareholders.
While we are confident that our strategy and long-term contingency planning have positioned us well to weather the current uncertainty, we cannot at this time fully quantify or forecast the impact of COVID-19 on our business. The full extent of the impact of the COVID-19 pandemic on our business, financial condition and results of operations will depend on future developments, which are highly uncertain such as the continued duration and severity of the pandemic, the spread of more contagious variants of the virus, the adoption rate of vaccines, the actions to contain the virus or treat its impact, or how quickly and to what extent normal economic and operating conditions can resume.
Acquisition of Maxim Integrated Products, Inc.
On August 26, 2021 (Acquisition Date), we completed the acquisition of Maxim Integrated Products, Inc. (Maxim), an independent manufacturer of innovative analog and mixed-signal products and technologies. The acquisition of Maxim is referred to as the Acquisition. The consolidated financial statements included in this Quarterly Report on Form 10-Q include the financial results of Maxim prospectively from the Acquisition Date. See Note 14, Acquisitions, in the Notes to the Condensed Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.
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Results of Operations
Overview
(all tabular amounts in thousands except per share amounts and percentages)
 Three Months Ended
 January 29, 2022January 30, 2021$ Change% Change
Revenue$2,684,293 $1,558,458 $1,125,835 72 %
Gross margin %52.2 %67.1 %
Net income$280,077 $388,519 $(108,442)(28)%
Net income as a % of revenue10.4 %24.9 %
Diluted EPS$0.53 $1.04 $(0.51)(49)%
Revenue Trends by End Market
The following table summarizes revenue by end market. The categorization of revenue by end market is determined using a variety of data points including the technical characteristics of the product, the “sold to” customer information, the “ship to” customer information and the end customer product or application into which our product will be incorporated. As data systems for capturing and tracking this data and our methodology evolves and improves, the categorization of products by end market can vary over time. When this occurs, we reclassify revenue by end market for prior periods. Such reclassifications typically do not materially change the sizing of, or the underlying trends of results within, each end market.
Three Months Ended
 January 29, 2022January 30, 2021
 Revenue% of
Revenue*
Y/Y%Revenue% of
Revenue*
Industrial$1,341,113 50 %57 %$856,186 55 %
Automotive552,671 21 %124 %246,504 16 %
Communications412,397 15 %46 %281,726 18 %
Consumer378,112 14 %117 %174,042 11 %
Total revenue$2,684,293 100 %72 %$1,558,458 100 %
* The sum of the individual percentages may not equal the total due to rounding.
Revenue increased 72% in the three-month period ended January 29, 2022, as compared to the same period of the prior fiscal year, with the Acquisition contributing approximately 70% of that increase. From an end market perspective, revenue increased in the three-month period ended January 29, 2022, as compared to the same period of the prior fiscal year, primarily as a result of the Acquisition and higher demand for our products across all end markets.
Revenue by Sales Channel
The following table summarizes revenue by sales channel. We sell our products globally through a direct sales force, third party distributors, independent sales representatives and via our website. Distributors are customers that buy products with the intention of reselling them. Direct customers are non-distributor customers and consist primarily of original equipment manufacturers (OEMs). Other customers include the U.S. government, government prime contractors and certain commercial customers for which revenue is recorded over time.
Three Months Ended
January 29, 2022January 30, 2021
Revenue% of Revenue*Revenue% of Revenue*
Channel
   Distributors$1,653,054 62 %$946,386 61 %
   Direct customers1,003,181 37 %589,456 38 %
   Other28,058 %22,616 %
Total revenue$2,684,293 100 %$1,558,458 100 %
* The sum of the individual percentages may not equal the total due to rounding.
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As indicated in the table above, the percentage of total revenue sold via each channel has remained relatively consistent in the periods presented, but can fluctuate from time to time based on end customer demand.
Gross Margin
 Three Months Ended
 January 29, 2022January 30, 2021$ Change% Change
Gross margin$1,401,997 $1,045,371 $356,626 34 %
Gross margin %52.2 %67.1 %
Gross margin percentage decreased by 1,490 basis points in the three-month period ended January 29, 2022, as compared to the same period of the prior fiscal year, primarily as a result of additional cost of goods sold related to the Acquisition, including $271.4 million related to the nonrecurring fair value adjustment recorded to inventory and $214.2 million related to amortization expense of intangible assets. These increases in cost of sales as a result of the Acquisition were partially offset by favorable product mix, synergies related to the Acquisition and higher utilization of our factories due to increased customer demand.
Research and Development (R&D)
 Three Months Ended
 January 29, 2022January 30, 2021$ Change% Change
R&D expenses$426,780 $288,150 $138,630 48 %
R&D expenses as a % of revenue16 %18 %
R&D expenses increased in the three-month period ended January 29, 2022, as compared to the same period of the prior fiscal year, primarily as a result of the Acquisition and to a lesser extent higher salary and benefit expenses and variable compensation expenses.
R&D expenses as a percentage of revenue will fluctuate from year-to-year depending on the amount of revenue and the success of new product development efforts, which we view as critical to our future growth. We expect to continue the development of innovative technologies and processes for new products. We believe that a continued commitment to R&D is essential to maintain product leadership with our existing products as well as to provide innovative new product offerings.
Selling, Marketing, General and Administrative (SMG&A)
 Three Months Ended
 January 29, 2022January 30, 2021$ Change% Change
SMG&A expenses$297,365 $185,275 $112,090 60 %
SMG&A expenses as a % of revenue11 %12 %
SMG&A expenses increased in the three-month period ended January 29, 2022, as compared to the same period of the prior fiscal year, primarily as a result of the Acquisition as well as higher salary and benefit expenses and variable compensation expenses.
Amortization of Intangibles
 Three Months Ended
 January 29, 2022January 30, 2021$ Change% Change
Amortization expenses$253,367 $107,648 $145,719 135 %
Amortization expenses as a % of revenue%%
Amortization expenses increased in the three-month period ended January 29, 2022, as compared to the same period of the prior fiscal year, primarily as a result of amortization expense of intangible assets recorded as a result of the Acquisition.
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Special Charges, Net
 Three Months Ended
 January 29, 2022January 30, 2021$ Change% Change
Special charges, net$59,728 $438 $59,290 13,537 %
Special charges, net as a % of revenue%— %
Special charges, net increased in the three-month period ended January 29, 2022, as compared to the same period of the prior fiscal year, primarily as a result of severance and benefit costs as well as charges recorded from the acceleration of equity awards in connection with the termination of a limited number of employees as part of the integration of the Acquisition.
Operating Income
 Three Months Ended
 January 29, 2022January 30, 2021$ Change% Change
Operating income$364,757 $463,860 $(99,103)(21)%
Operating income as a % of revenue13.6 %29.8 %
The year-over-year decrease in operating income in the three-month period ended January 29, 2022 was primarily the result of an increase in revenue of $1,125.8 million, which contributed to an increase in gross margin of $356.6 million, offset by increases of $145.7 million in amortization expenses, $138.6 million in R&D expenses, $112.1 million in SMG&A expenses and $59.3 million in special charges, net, as described above under the headings Revenue Trends by End Market, Gross Margin, Research and Development (R&D), Amortization of Intangibles, Selling, Marketing, General and Administrative (SMG&A) and Special Charges, Net.
Nonoperating Expense (Income)
 Three Months Ended
 January 29, 2022January 30, 2021$ Change
Total nonoperating expense (income)$41,202 $27,242 $13,960 
The year-over-year increase in nonoperating expense (income) in the three-month period ended January 29, 2022 was the result of higher interest expense related to our debt obligations and lower gains from other investments.
Provision for Income Taxes
 Three Months Ended
 January 29, 2022January 30, 2021$ Change
Provision for income taxes$43,478 $48,099 $(4,621)
Effective income tax rate13.4 %11.0 %
The effective tax rates for the three-month periods ended January 29, 2022 and January 30, 2021 were below the U.S. statutory tax rate of 21% due to lower statutory tax rates applicable to our operations in the foreign jurisdictions in which we earn income. Our pretax income for the three-month periods ended January 29, 2022 and January 30, 2021 was primarily generated in Ireland at a tax rate of 12.5%.
See Note 12, Income Taxes, in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion.
Net Income
 Three Months Ended
 January 29, 2022January 30, 2021$ Change% Change
Net Income$280,077 $388,519 $(108,442)(28)%
Net Income as a % of revenue10.4 %24.9 %
Diluted EPS$0.53 $1.04 
Net income decreased in the three-month period ended January 29, 2022, as compared to the same period of the prior fiscal year, as a result of a $99.1 million decrease in operating income and a $14.0 million increase in nonoperating expense (income), partially offset by a $4.6 million decrease in provision for income taxes.
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Liquidity and Capital Resources
At January 29, 2022, our principal source of liquidity was $1,790.4 million of cash and cash equivalents, of which approximately $681.7 million was held in the United States and the balance of our cash and cash equivalents was held outside the United States in various foreign subsidiaries. We manage our worldwide cash requirements by, among other things, reviewing available funds held by our foreign subsidiaries and the cost effectiveness by which those funds can be accessed in the United States. We do not expect current regulatory restrictions or taxes on repatriation to have a material adverse effect on our overall liquidity, financial condition or the results of operations. Our cash and cash equivalents consist of highly liquid investments with maturities of three months or less, including money market funds. We maintain these balances with high credit quality counterparties, continually monitor the amount of credit exposure to any one issuer and diversify our investments in order to minimize our credit risk.
We believe that our existing sources of liquidity and cash expected to be generated from future operations, together with existing and anticipated available short- and long-term financing, will be sufficient to fund operations, capital expenditures, research and development efforts and dividend payments (if any) in the immediate future and for at least the next twelve months.
 Three Months Ended
 January 29, 2022January 30, 2021
Net cash provided by operating activities$856,413 $427,941 
Net cash provided by operations as a % of revenue32 %27 %
Net cash used for investing activities$(103,309)$(75,071)
Net cash used for financing activities$(937,268)$(363,823)
The following changes contributed to the net change in cash and cash equivalents in the three-month period ended January 29, 2022 as compared to the same period in fiscal 2021.
Operating Activities
Cash provided by operating activities is net income adjusted for certain non-cash items and changes in operating assets and liabilities. The increase in cash provided by operating activities during the three-month period ended January 29, 2022, as compared to the same period of the prior fiscal year, was primarily the result of an increase in net income adjusted for noncash amortization of intangibles and cost of goods sold for inventory acquired, offset by changes in working capital.
Investing Activities
Investing cash flows generally consist of capital expenditures and cash used for acquisitions. The increase in cash used for investing activities during the three-month period ended January 29, 2022, as compared to the same period of the prior fiscal year, was primarily the result of an increase in cash used for capital expenditures.
Financing Activities
Financing cash flows generally consist of payments of dividends to stockholders, repurchases of common stock, issuance and repayment of debt and proceeds from the sale of shares of common stock pursuant to employee equity incentive plans. The increase in cash used for financing activities during the three-month period ended January 29, 2022, as compared to the same period of the prior fiscal year, was primarily the result of early termination of debt in the first quarter of fiscal 2022 and higher dividend payments to shareholders, partially offset by less cash used for common stock repurchases.
Working Capital
January 29, 2022October 30, 2021$ Change% Change
Accounts receivable$1,636,928 $1,459,056 $177,872 12 %
Days sales outstanding*52 55 
Inventory$972,571 $1,200,610 $(228,039)(19)%
Days cost of sales in inventory*77 118 
_______________________________________
*We use the average of the current quarter and prior quarter ending net accounts receivable and ending inventory balance in our calculation of days sales outstanding and days cost of sales in inventory, respectively. Cost of sales amounts used in the calculation of days cost of sales in inventory include Acquisition accounting adjustments related to the sale of acquired inventory written up to fair value, amortization of developed technology intangible assets acquired and depreciation related to the write-up of fixed assets to fair value.
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The increase in accounts receivable in dollars was primarily the result of variations in the timing of collections and billings and increased revenue levels.
Inventory decreased primarily as a result of our October 30, 2021 balance including additional costs related to the Acquisition as a result of accounting for acquired inventory at fair-value. Inventory levels also fluctuate due to our efforts to balance manufacturing production, demand and inventory levels. Our inventory levels are impacted by our need to support forecasted sales demand and variations between those forecasts and actual demand.
Current liabilities decreased to approximately $2,221.9 million at January 29, 2022 from approximately $2,770.3 million at the end of fiscal 2021 primarily due to early termination of debt.
Debt
As of January 29, 2022, our debt obligations consisted of the following:
Principal Amount Outstanding
2024 Notes, due October 2024$500,000 
2025 Notes, due April 2025400,000 
2026 Notes, due December 2026900,000 
Maxim 2027 Notes, due June 2027500,000 
2028 Notes, due October 2028750,000 
2031 Notes, due October 20311,000,000 
2036 Notes, due December 2036144,278 
2041 Notes, due October 2041