What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-05-19 compared with 2021-02-17 · 136 added, 107 removed, 453 unchanged (35% of the section changed)

3 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended

January 30, 2021 February 1, 2020

Three Months Ended Six Months Ended

May 1, 2021 May 2, 2020 May 1, 2021 May 2, 2020

Revenue $ 1,661,407 $ 1,317,060 $ 3,219,865 $ 2,620,625

25 unchanged sentences

(in thousands)

Three Months Ended

January 30, 2021 February 1, 2020

Three Months Ended Six Months Ended

May 1, 2021 May 2, 2020 May 1, 2021 May 2, 2020

Net income $ 422,905 $ 267,696 $ 811,424 $ 471,570

2 unchanged sentences

35,428 ( 69,386 ) 59,893 ( 81,411 )

Changes in pension plans including transition obligation, net actuarial loss and foreign currency translation adjustments (net of taxes of $ 86 and $ 160 , respectively)

Changes in pension plans, net actuarial loss and foreign currency translation adjustments (net of taxes of $ 86 , $ 157 , $ 172 and $ 317 , respectively)

412 1,393 ( 1,372 ) 1,647

5 unchanged sentences

(in thousands, except share and per share amounts)

January 30, 2021 October 31, 2020

May 1, 2021 October 31, 2020

Current Assets

46 unchanged sentences

(in thousands)

Three Months Ended January 30, 2021

Three Months Ended May 1, 2021

Capital in Accumulated

1 unchanged sentence

Shares Amount Par Value Earnings Loss

BALANCE, JANUARY 30, 2021

368,894 $ 61,484 $ 4,849,185 $ 7,395,578 $ ( 218,501 )

Net income 422,905

Dividends declared and paid - $ 0.69 per share

Issuance of stock under stock plans and other 1,155 192 23,560

Stock-based compensation expense 40,358

Other comprehensive income 35,586

Common stock repurchased ( 1,222 ) ( 204 ) ( 188,610 )

BALANCE, MAY 1, 2021

368,827 $ 61,472 $ 4,724,493 $ 7,564,054 $ ( 182,915 )

Six Months Ended May 1, 2021

Capital in Accumulated

Common Stock Excess of Retained Comprehensive

Shares Amount Par Value Earnings Loss

BALANCE, OCTOBER 31, 2020

6 unchanged sentences

Common stock repurchased ( 2,302 ) ( 384 ) ( 345,487 )

BALANCE, JANUARY 30, 2021

BALANCE, MAY 1, 2021

368,827 $ 61,472 $ 4,724,493 $ 7,564,054 $ ( 182,915 )

Three Months Ended February 1, 2020

See accompanying notes.

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(in thousands)

Three Months Ended May 2, 2020

Capital in Accumulated

1 unchanged sentence

Shares Amount Par Value Earnings Loss

BALANCE, FEBRUARY 1, 2020 368,220 $ 61,371 $ 4,923,947 $ 6,906,346 $ ( 202,147 )

Net income 267,696

Dividends declared and paid - $ 0.62 per share

Issuance of stock under stock plans and other 1,347 224 14,560

Stock-based compensation expense 35,900

Other comprehensive loss ( 74,855 )

Common stock repurchased ( 1,142 ) ( 190 ) ( 113,394 )

BALANCE, MAY 2, 2020

368,425 $ 61,405 $ 4,861,013 $ 6,945,442 $ ( 277,002 )

Six Months Ended May 2, 2020

Capital in Accumulated

Common Stock Excess of Retained Comprehensive

Shares Amount Par Value Earnings Loss

BALANCE, NOVEMBER 2, 2019 368,302 $ 61,385 $ 4,936,349 $ 6,899,253 $ ( 187,799 )

7 unchanged sentences

Common stock repurchased ( 2,051 ) ( 342 ) ( 219,272 )

BALANCE, FEBRUARY 1, 2020

BALANCE, MAY 2, 2020

368,425 $ 61,405 $ 4,861,013 $ 6,945,442 $ ( 277,002 )

3 unchanged sentences

(in thousands)

Three Months Ended

January 30, 2021 February 1, 2020

Six Months Ended

May 1, 2021 May 2, 2020

Cash flows from operating activities:

18 unchanged sentences

Cash flows from financing activities:

Proceeds from debt — 395,646

Proceeds from revolver — 350,000

Payments on revolver — ( 350,000 )

Debt repayments — ( 300,000 )

Dividend payments to shareholders ( 483,608 ) ( 427,760 )

4 unchanged sentences

Effect of exchange rate changes on cash 4,229 ( 508 )

Net (decrease) increase in cash and cash equivalents ( 7,797 ) 6,086

Net increase in cash and cash equivalents 249,356 136,615

Cash and cash equivalents at beginning of period 1,055,860 648,322

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JANUARY 30, 2021 (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED MAY 1, 2021 (UNAUDITED)

(all tabular amounts in thousands except per share amounts and percentages)

9 unchanged sentences

Note 2 – Stock-Based Compensation and Shareholders' Equity

A summary of the Company’s stock option activity as of January 30, 2021 and changes during the three-month period then ended is presented below:

A summary of the Company’s stock option activity as of May 1, 2021 and changes during the six-month period then ended is presented below:

(in thousands)

7 unchanged sentences

Options expired ( 6 ) $ 40.70

Options outstanding at January 30, 2021 4,277 $ 79.71 5.9 $ 289,219

Options exercisable at January 30, 2021 2,332 $ 61.96 4.4 $ 199,072

Options vested or expected to vest at January 30, 2021 (1) 4,158 $ 78.63 5.9 $ 285,622

Options outstanding at May 1, 2021 4,105 $ 83.66 5.9 $ 285,319

Options exercisable at May 1, 2021 2,673 $ 65.99 4.6 $ 233,013

Options vested or expected to vest at May 1, 2021 (1) 3,985 $ 82.43 5.8 $ 281,816

(1) In addition to the vested options, the Company expects a portion of the unvested options to vest at some point in the future.

5 unchanged sentences

The Monte Carlo simulation model also uses stock price volatility and other variables to estimate the probability of satisfying the performance conditions, including the possibility that the market condition may not be satisfied, and the resulting fair value of the award.

During the three-month periods ended January 30, 2021 and February 1, 2020, 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 $ 30.4 million and $ 20.3 million, respectively.

A summary of the Company’s restricted stock unit/award activity as of January 30, 2021 and changes during the three-month period then ended is presented below:

During the six-month periods ended May 1, 2021 and May 2, 2020, 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 $ 61.0 million and $ 35.3 million, respectively.

A summary of the Company’s restricted stock unit/award activity as of May 1, 2021 and changes during the six-month period then ended is presented below:

Stock Units/Awards

6 unchanged sentences

Forfeited ( 100 ) $ 99.51

Restricted stock units/awards outstanding at January 30, 2021 3,639 $ 92.02

In the first quarter of fiscal 2021, the Company issued approximately 110,000 performance-based restricted stock units (Maxim Integration PRSUs) related to the Company's planned acquisition of Maxim to a select group of employees.

Restricted stock units/awards outstanding at May 1, 2021 3,603 $ 104.18

In the first half of fiscal 2021, the Company issued approximately 121,000 performance-based restricted stock units (Maxim Integration PRSUs) related to the Company's planned acquisition of Maxim to a select group of employees.

The number of Maxim Integration PRSUs that may be earned will range from 0 % to a maximum of 200 % of the issued amount of Maxim Integration PRSUs and will be determined according to the achievement of certain performance metrics.

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The grant-date fair value of these awards is also impacted by the number of units that are expected to vest during the performance period and is adjusted through the related stock-based compensation expense at each reporting period based on the probability of achievement of that performance condition.

As of January 30, 2021, there was $ 267.1 million of total unrecognized compensation cost related to unvested stock-based awards comprised of stock options and restricted stock units/awards.

As of May 1, 2021, there was $ 382.2 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 1.5 years.

The total grant-date fair values of awards that vested during the three-month periods ended January 30, 2021 and February 1, 2020 were approximately $ 15.6 million and $ 14.8 million, respectively.

The total grant-date fair values of awards that vested during the six-month periods ended May 1, 2021 and May 2, 2020 were approximately $ 94.2 million and $ 113.4 million, respectively.

Total stock-based compensation expense recognized was as follows:

Three Months Ended

January 30, 2021 February 1, 2020

Three Months Ended Six Months Ended

May 1, 2021 May 2, 2020 May 1, 2021 May 2, 2020

Cost of sales $ 4,653 $ 4,356 $ 9,007 $ 8,920

2 unchanged sentences

Total stock-based compensation expense $ 40,358 $ 35,900 $ 76,996 $ 73,401

As of January 30, 2021 and October 31, 2020, the Company capitalized $ 5.7 million and $ 5.8 million, respectively, of stock-based compensation in Inventories on the Condensed Consolidated Balance Sheets.

As of May 1, 2021 and October 31, 2020, the Company capitalized $ 6.0 million and $ 5.8 million, respectively, of stock-based compensation in Inventories on the Condensed Consolidated Balance Sheets.

Common Stock Repurchases

As of January 30, 2021, the Company had repurchased a total of approximately 157.1 million shares of its common stock for approximately $ 6.4 billion under the Company's share repurchase program.

As of January 30, 2021, an additional $ 1.7 billion remains available for repurchase of shares under the current authorized program.

As of May 1, 2021, the Company had repurchased a total of approximately 158.0 million shares of its common stock for approximately $ 6.6 billion under the Company's share repurchase program.

As of May 1, 2021, an additional $ 1.6 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.

1 unchanged sentence

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 2021.

The following table provides the changes in accumulated other comprehensive (loss) income (AOCI) by component and the related tax effects during the first six months of fiscal 2021.

Foreign currency translation adjustment Unrealized holding gains (losses) on derivatives Pension plans Total

4 unchanged sentences

Other comprehensive income (loss) 8,025 59,893 ( 1,372 ) 66,546

January 30, 2021 $ ( 18,573 ) $ ( 148,205 ) $ ( 51,723 ) $ ( 218,501 )

May 1, 2021 $ ( 18,827 ) $ ( 112,777 ) $ ( 51,311 ) $ ( 182,915 )

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:

Three Months Ended

Comprehensive Income Component January 30, 2021 February 1, 2020 Location

Three Months Ended Six Months Ended

Comprehensive Income Component May 1, 2021 May 2, 2020 May 1, 2021 May 2, 2020 Location

Unrealized holding losses (gains) on derivatives

17 unchanged sentences

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

Three Months Ended

January 30, 2021 February 1, 2020

Three Months Ended Six Months Ended

May 1, 2021 May 2, 2020 May 1, 2021 May 2, 2020

Net Income $ 422,905 $ 267,696 $ 811,424 $ 471,570

12 unchanged sentences

Note 5 – Special Charges

The following table is a quarterly roll-forward from October 31, 2020 to January 30, 2021 of the employee separation and exit cost accruals established related to existing restructuring actions:

The following table is a quarterly roll-forward from October 31, 2020 to May 1, 2021 of the employee separation and exit cost accruals established related to existing restructuring actions:

Accrued Restructuring Closure of Manufacturing Facilities Repositioning Action Other Actions

4 unchanged sentences

Balance at January 30, 2021 $ 43,664 $ 12,894 $ 3,156

Second quarter fiscal 2021 special charges 311 — —

Severance and other payments ( 5,769 ) ( 2,767 ) ( 270 )

Effect of foreign currency on accrual — ( 44 ) —

Balance at May 1, 2021 $ 38,206 $ 10,083 $ 2,886

Current - accrued liabilities $ 36,440 $ 10,083 $ 2,886

1 unchanged sentence

Repositioning Action

The Company recorded special charges of $ 137.5 million on a cumulative basis through January 30, 2021, as a result of organizational initiatives to better align the global workforce with the Company's long-term strategic plan.

The Company recorded special charges of $ 137.5 million on a cumulative basis through May 1, 2021, as a result of organizational initiatives to better align the global workforce with the Company's long-term strategic plan.

Approximately $ 123.3 million of the total charges was for severance and fringe benefit costs in accordance with either the Company's ongoing benefit plan or statutory requirements for the impacted manufacturing, engineering and selling, marketing, general and administrative (SMG&A) employees.

The remaining $ 14.2 million of the charges were recorded in fiscal 2019 and related to the write-off of acquired intellectual property due to the Company's decision to discontinue certain product development strategies.

The remaining $ 14.2 million of the charges were recorded in the fiscal year ended November 2, 2019 (fiscal 2019) and related to the write-off of acquired intellectual property due to the Company's decision to discontinue certain product development strategies.

Closure of Manufacturing Facilities

The Company recorded special charges of $ 55.4 million on a cumulative basis through January 30, 2021 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).

The Company plans to close its Hillview wafer fabrication facility located in Milpitas, California in fiscal 2021 and its Singapore test facility in the fiscal year ending October 29, 2022.

The Company recorded special charges of $ 55.7 million on a cumulative basis through May 1, 2021 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).

The Company plans to close its Hillview wafer fabrication facility located in Milpitas, California in fiscal 2021 and complete the transition from its Singapore test facility in the fiscal year ending October 29, 2022.

The Company intends to transfer Hillview wafer fabrication production to its other internal facilities and to external foundries.

4 unchanged sentences

As discussed in Note 5, Special Charges , 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.

Accordingly, management has entered into an agreement to sell the facility in Singapore in May 2021 and has determined that this facility and certain equipment therein have met the held for sale criteria as specified in ASC 360.

Accordingly, management has entered into an agreement to sell the facility in Singapore at the end of May 2021 and has determined that this facility and certain equipment therein have met the held for sale criteria as specified in ASC 360.

No write-down to fair value was required upon this designation during fiscal 2020, as the fair value of the asset group, less costs to sell, was greater than its carrying value.

As shown below, this carrying value was reclassified from various line items within Property, plant and equipment to Prepaid expenses and other current assets upon designation and remains in Prepaid expenses and other current assets as of January 30, 2021.

Land and buildings $ 36,451

14 unchanged sentences

Three Months Ended

January 30, 2021 February 1, 2020

May 1, 2021 May 2, 2020

Revenue % of Revenue* Y/Y% Revenue % of Revenue*

4 unchanged sentences

Total revenue $ 1,661,407 100 % 26 % $ 1,317,060 100 %

Six Months Ended

May 1, 2021 May 2, 2020

Revenue % of Revenue* Y/Y% Revenue % of Revenue*

Industrial $ 1,828,140 57 % 30 % $ 1,405,224 54 %

Communications 557,786 17 % 8 % 517,872 20 %

Automotive 503,501 16 % 30 % 386,618 15 %

Consumer 330,438 10 % 6 % 310,911 12 %

Total revenue $ 3,219,865 100 % 23 % $ 2,620,625 100 %

* The sum of the individual percentages may not equal the total due to rounding.

7 unchanged sentences

Three Months Ended

January 30, 2021 February 1, 2020

May 1, 2021 May 2, 2020

Channel Revenue % of Revenue* Revenue % of Revenue*

3 unchanged sentences

Total revenue $ 1,661,407 100 % $ 1,317,060 100 %

Six Months Ended

May 1, 2021 May 2, 2020

Channel Revenue % of Revenue* Revenue % of Revenue*

Distributors $ 2,039,314 63 % $ 1,497,949 57 %

Direct customers 1,136,011 35 % 1,077,382 41 %

Other 44,540 1 % 45,294 2 %

Total revenue $ 3,219,865 100 % $ 2,620,625 100 %

* The sum of the individual percentages may not equal the total due to rounding.

7 unchanged sentences

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 January 30, 2021 and October 31, 2020.

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 30, 2021 and October 31, 2020, the Company held $ 205.7 million and $ 239.6 million, respectively, of cash and held-to-maturity investments that were excluded from the tables below.

January 30, 2021

As of May 1, 2021 and October 31, 2020, the Company held $ 272.1 million and $ 239.6 million, respectively, of cash and held-to-maturity investments that were excluded from the tables below.

Fair Value measurement at

7 unchanged sentences

Other assets:

Deferred compensation investments 59,490 — 59,490

Deferred compensation plan investments 61,371 — 61,371

Forward foreign currency exchange contracts (2) — 3,389 3,389

2 unchanged sentences

Total liabilities measured at fair value $ — $ 135,242 $ 135,242

(1) The amortized cost of the Company’s investments classified as available-for-sale as of January 30, 2021 was $ 20.0 million.

(1) The amortized cost of the Company’s investments classified as available-for-sale as of May 1, 2021 was $ 230.0 million.

(2) The Company has master netting arrangements by counterparty with respect to derivative contracts.

10 unchanged sentences

Forward foreign currency exchange contracts (1) — 5,427 5,427

Deferred compensation investments 52,956 — 52,956

Deferred compensation plan investments 52,956 — 52,956

Total assets measured at fair value $ 869,209 $ 5,427 $ 874,636

16 unchanged sentences

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 30, 2021 October 31, 2020

May 1, 2021 October 31, 2020

Principal Amount Outstanding Fair Value Principal Amount Outstanding Fair Value

18 unchanged sentences

Total debt $ 5,175,000 $ 5,643,939 $ 5,175,000 $ 5,708,995

As of January 30, 2021, the Company believed that none of its unrealized losses on its available-for-sale investments were attributable to credit losses and therefore were not impaired.

As of May 1, 2021, the Company believed that none of its unrealized losses on its available-for-sale investments were attributable to credit losses and therefore were not impaired.

The investments with unrealized losses consisted primarily of corporate debt securities.

4 unchanged sentences

Unrealized gains and losses, net of taxes, are reported as a component of AOCI in the Company’s Condensed Consolidated Statements of Stockholders’ Equity.

No material amounts were reclassified out of AOCI during the three months ended January 30, 2021 and February 1, 2020 for realized gains or losses on available-for-sale investments.

No material amounts were reclassified out of AOCI during the three- and six-month periods ended May 1, 2021 and May 2, 2020 for realized gains or losses on available-for-sale investments.

Note 9 – Derivatives

9 unchanged sentences

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.

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 January 30, 2021 and October 31, 2020 were $ 217.0 million and $ 202.7 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 30, 2021 and October 31, 2020 were as follows:

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 1, 2021 and October 31, 2020 were $ 227.3 million and $ 202.7 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 1, 2021 and October 31, 2020 were as follows:

Fair Value At

Balance Sheet Location January 30, 2021 October 31, 2020

Balance Sheet Location May 1, 2021 October 31, 2020

Forward foreign currency exchange contracts Prepaid expenses and other current assets $ 2,228 $ 5,550

As of January 30, 2021 and October 31, 2020, the total notional amounts of undesignated hedges related to forward foreign currency exchange contracts were $ 87.5 million and $ 62.7 million, respectively.

The fair values of these hedging instruments in the Company’s Condensed Consolidated Balance Sheets were immaterial as of January 30, 2021 and October 31, 2020.

The Company estimates that $ 5.1 million, net of tax, of settlements of forward foreign currency derivative instruments included in AOCI will be reclassified into earnings within the next 12 months.

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.

As of May 1, 2021 and October 31, 2020, the total notional amounts of undesignated hedges related to forward foreign currency exchange contracts were $ 130.3 million and $ 62.7 million, respectively.

The fair values of these hedging instruments in the Company’s Condensed Consolidated Balance Sheets were immaterial as of May 1, 2021 and October 31, 2020.

The Company estimates that settlements of forward foreign currency derivative instruments included in AOCI that will be reclassified into earnings within the next 12 months will be immaterial.

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 30, 2021 and October 31, 2020, none of the netting arrangements involved collateral.

As of May 1, 2021 and October 31, 2020, 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 30, 2021 October 31, 2020

May 1, 2021 October 31, 2020

Gross amount of recognized assets $ 5,057 $ 6,114

1 unchanged sentence

Net assets presented in the Condensed Consolidated Balance Sheets $ 3,389 $ 5,427

As of January 30, 2021 and October 31, 2020, the fair value of the interest rate swap agreement designated as a cash flow hedge was $ 185.3 million and $ 214.6 million, respectively, and is included within Accrued liabilities in the Company's Condensed Consolidated Balance Sheets.

As of May 1, 2021 and October 31, 2020, the fair value of the interest rate swap agreement designated as a cash flow hedge was $ 135.2 million and $ 214.6 million, respectively, 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 January 30, 2021 and October 31, 2020, nonperformance is not perceived to be a material risk.

Based on the credit ratings of the Company’s counterparties as of May 1, 2021 and October 31, 2020, 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.

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.

1 unchanged sentence

Note 10 – Inventories

Inventories at January 30, 2021 and October 31, 2020 were as follows:

January 30, 2021 October 31, 2020

Inventories at May 1, 2021 and October 31, 2020 were as follows:

May 1, 2021 October 31, 2020

Raw materials $ 39,165 $ 33,806

3 unchanged sentences

Note 11 – Income Taxes

The Company’s effective tax rates for the three-month periods ended January 30, 2021 and February 1, 2020 were below the U.S.

The Company’s effective tax rates for the three- and six-month periods ended May 1, 2021 and May 2, 2020 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.

The Company has numerous audits ongoing throughout the world including:

an IRS income tax audit for the fiscal years ended November 3, 2018 (fiscal 2018) and November 2, 2019 (fiscal 2019);

an IRS income tax audit for the fiscal year ended November 3, 2018 (fiscal 2018) and fiscal 2019;

state and local tax audits;

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The Company’s Ireland tax returns prior to the fiscal year ended November 2, 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 the fiscal year ended November 2, 2013 (fiscal 2013) of approximately € 43.0 million, or $ 52.0 million (as of January 30, 2021), from the Irish Revenue Commissioners (Irish Revenue).

During the fourth quarter of fiscal 2018, the Company’s Irish tax resident subsidiary received an assessment for the fiscal year ended November 2, 2013 (fiscal 2013) of approximately € 43.0 million, or approximately $ 52.0 million (as of May 1, 2021), 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.

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 other open years subsequent to fiscal 2013 could have a material unfavorable impact on the Company's income tax expense and net earnings in future periods.

During fiscal 2019, Irish Revenue commenced transfer pricing audits of the fiscal years ended November 1, 2014 (fiscal 2014);

October 31, 2015 (fiscal 2015);

October 29, 2016 (fiscal 2016);

and fiscal 2017.

However, the Company received confirmation from Irish Revenue that the audit relating to fiscal 2014 was complete and that no further tax assessment arose in respect of that period.

During fiscal 2020, the Company settled the audit relating to fiscal 2015 for an additional tax payment that was not material.

The audits related to fiscal 2016 and fiscal 2017 are on-going.

As of May 1, 2021, the Company has recorded a liability in the Condensed Consolidated Balance Sheet related to this assessment for an amount that is not material.

In the event a settlement is not reached beforehand, the matter will proceed to 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 would have a material unfavorable impact on the Company's income tax expense and net earnings in future periods.

During fiscal 2019, Irish Revenue commenced transfer pricing audits of the fiscal years ended November 1, 2014 (fiscal 2014) through fiscal 2017.

The Company settled the audits relating to fiscal 2014 through fiscal 2017 with either no assessment or for additional tax payments that were not material.

Note 12 – New Accounting Pronouncements

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See Note 8, Fair Value, in these Notes to Condensed Consolidated Financial Statements for more information related to how the Company assesses credit losses on its available-for-sale debt securities.

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes .

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (ASU-2019-12).

ASU 2019-12 eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

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Under the terms of the Merger Agreement, Maxim stockholders will receive, for each outstanding share of Maxim common stock, 0.630 of a share of the Company’s common stock at the closing.

The estimated merger consideration is approximately $ 27.0 billion based on the closing price of the Company's common stock on February 12, 2021.

The estimated merger consideration is approximately $ 25.0 billion based on the closing price of the Company's common stock on May 14, 2021.

The value of the merger consideration will fluctuate based upon changes in the price of the Company's common stock and the number of shares of Maxim common stock, restricted stock awards and restricted stock unit awards outstanding on the closing date.

The transaction is subject to customary closing conditions, including receipt of certain non-U.S.

The transaction is subject to customary closing conditions, including receipt of certain remaining non-U.S.

regulatory approvals.

The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, has expired.

To date, required regulatory approvals have been obtained in all jurisdictions with the exception of China.

The Merger Agreement includes termination rights for both the Company and Maxim.

1 unchanged sentence

On October 8, 2020, the required shareholder approvals relating to the Merger Agreement were obtained from both the Company's shareholders and Maxim's shareholders.

In the first three months of fiscal 2021, the Company incurred $ 15.2 million of transaction-related costs recorded within Selling, marketing, general and administrative expenses in the Company's Condensed Consolidated Statement of Income.

Maxim Merger Litigation

As previously disclosed, in August and September 2020, three lawsuits were filed against the Company and/or its board of directors in connection with the Company’s proposed acquisition of Maxim:

(1) Joseph Post v.

Maxim Integrated Products, Inc., et al., Case No.

1:99-mc-09999 (D.

Del., filed August 24, 2020) (the Post Action);

(2) Coe Living Trust v.

Analog Devices, Inc., et al., Case No.

1:20-cv-11682 (D.

Mass., filed September 11, 2020) (the Coe Action);

and (3) Delman, et al.

Stata, et al., Case No.

2082CV00864 (Mass.

Ct., Norfolk Cnty., filed September 11, 2020) (the Delman Action).

The Post Action was brought by a purported shareholder of Maxim against Maxim, the members of Maxim’s board of directors, the Company and a subsidiary of the Company.

The Coe Action was brought by a purported shareholder of the Company against the Company and the members of the Company’s board of directors.

The Delman Action was brought by two purported shareholders of the Company against the members of the Company’s board of directors.

In exchange for certain disclosures that the Company and Maxim voluntarily made in Form 8-Ks filed on September 30, 2020, the plaintiff in the Post Action filed a notice of voluntary dismissal on October 8, 2020, the plaintiff in the Coe Action filed a notice of voluntary dismissal on October 22, 2020, and the plaintiffs in the Delman Action filed a notice of dismissal subject to court approval on October 1, 2020.

In each case, the notices of dismissal did not affect the rights of any other shareholders.

In the three- and six-month periods ended May 1, 2021, the Company incurred $ 23.0 million and $ 38.2 million of transaction-related costs, respectively, recorded within Selling, marketing, general and administrative expenses in the Company's Condensed Consolidated Statements of Income.

Note 14 – Subsequent Events

On February 16, 2021, the Board of Directors of the Company declared a cash dividend of $ 0.69 per outstanding share of common stock.

The dividend will be paid on March 9, 2021 to all shareholders of record at the close of business on February 26, 2021 and is expected to total approximately $ 254.5 million.

On May 18, 2021, the Board of Directors of the Company declared a cash dividend of $ 0.69 per outstanding share of common stock.

The dividend will be paid on June 8, 2021 to all shareholders of record at the close of business on May 28, 2021 and is expected to total approximately $ 254.5 million.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements