What changed in this filing

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Item 1. Financial Statements

2023-05-24 compared with 2023-02-15 · 115 added, 43 removed, 327 unchanged (33% of the section changed)

3 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended

January 28, 2023 January 29, 2022

Three Months Ended Six Months Ended

April 29, 2023 April 30, 2022 April 29, 2023 April 30, 2022

Revenue $ 3,262,930 $ 2,972,064 $ 6,512,560 $ 5,656,357

25 unchanged sentences

(in thousands)

Three Months Ended

January 28, 2023 January 29, 2022

Three Months Ended Six Months Ended

April 29, 2023 April 30, 2022 April 29, 2023 April 30, 2022

Net income $ 977,656 $ 783,273 $ 1,939,130 $ 1,063,350

2 unchanged sentences

Changes in pension plans, net actuarial gain/loss and foreign currency translation adjustments, net 344 2,628 796 4,132

Other comprehensive income (loss) 28,418 ( 2,053 )

Other comprehensive (loss) income ( 2,629 ) ( 18,997 ) 25,789 ( 21,050 )

Comprehensive income $ 975,027 $ 764,276 $ 1,964,919 $ 1,042,300

1 unchanged sentence

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

January 28, 2023 October 29, 2022

April 29, 2023 October 29, 2022

Current Assets

16 unchanged sentences

Income taxes payable 308,968 265,845

Commercial paper notes 253,635 —

Accrued liabilities 1,514,805 1,594,650

19 unchanged sentences

(in thousands)

Three Months Ended January 28, 2023

Three Months Ended April 29, 2023

Capital in Accumulated

1 unchanged sentence

Shares Amount Par Value Earnings Loss

BALANCE, JANUARY 28, 2023

505,852 $ 84,306 $ 27,319,566 $ 9,297,347 $ ( 169,734 )

Net income 977,656

Dividends declared and paid - $ 0.86 per share

Issuance of stock under stock plans and other 1,764 294 25,480

Stock-based compensation expense 69,102

Other comprehensive loss ( 2,629 )

Common stock repurchased ( 6,198 ) ( 1,029 ) ( 1,151,922 )

BALANCE, APRIL 29, 2023

501,418 $ 83,571 $ 26,262,226 $ 9,839,790 $ ( 172,363 )

Six Months Ended April 29, 2023

Capital in Accumulated

Common Stock Excess of Retained Comprehensive

Shares Amount Par Value Earnings Loss

BALANCE, OCTOBER 29, 2022

6 unchanged sentences

Common stock repurchased ( 10,259 ) ( 1,706 ) ( 1,805,802 )

BALANCE, APRIL 29, 2023

501,418 $ 83,571 $ 26,262,226 $ 9,839,790 $ ( 172,363 )

See accompanying notes.

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(in thousands)

Three Months Ended April 30, 2022

Capital in Accumulated

Common Stock Excess of Retained Comprehensive

Shares Amount Par Value Earnings Loss

BALANCE, JANUARY 29, 2022 523,315 $ 87,221 $ 30,093,961 $ 7,434,748 $ ( 188,618 )

Net income 783,273

Dividends declared and paid - $ 0.76 per share

Issuance of stock under stock plans and other 1,404 234 11,348

Stock-based compensation expense 70,996

Other comprehensive loss ( 18,997 )

Common stock repurchased ( 4,913 ) ( 819 ) ( 776,021 )

BALANCE, APRIL 30, 2022

519,806 $ 86,636 $ 29,400,284 $ 7,820,477 $ ( 207,615 )

Three Months Ended January 29, 2022

Six Months Ended April 30, 2022

Capital in Accumulated

8 unchanged sentences

Common stock repurchased ( 7,508 ) ( 1,250 ) ( 1,351,610 )

BALANCE, JANUARY 29, 2022

BALANCE, APRIL 30, 2022

519,806 $ 86,636 $ 29,400,284 $ 7,820,477 $ ( 207,615 )

3 unchanged sentences

(in thousands)

Three Months Ended

January 28, 2023 January 29, 2022

Six Months Ended

April 29, 2023 April 30, 2022

Cash flows from operating activities:

20 unchanged sentences

Proceeds from employee stock plans 67,012 20,054

Proceeds from commercial paper notes 253,635 —

Other 52,942 26,657

1 unchanged sentence

Effect of exchange rate changes on cash — ( 16,095 )

Net increase (decrease) in cash and cash equivalents 199,890 ( 187,565 )

Net decrease in cash and cash equivalents ( 292,963 ) ( 240,231 )

Cash and cash equivalents at beginning of period 1,470,572 1,977,964

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JANUARY 28, 2023 (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED APRIL 29, 2023 (UNAUDITED)

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

5 unchanged sentences

Note 2 – Shareholders' Equity

As of January 28, 2023, the Company had repurchased a total of approximately 193.6 million shares of its common stock for approximately $ 12.4 billion under the Company's share repurchase program.

As of January 28, 2023, an additional $ 4.3 billion remains available for repurchase of shares under the current authorized program.

As of April 29, 2023, the Company had repurchased a total of approximately 199.3 million shares of its common stock for approximately $ 13.4 billion under the Company's share repurchase program.

As of April 29, 2023, an additional $ 3.2 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 as well as for the Company's employee stock purchase plan.

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 2023.

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 2023.

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

4 unchanged sentences

Other comprehensive income 1,635 23,358 796 25,789

January 28, 2023 $ ( 69,637 ) $ ( 94,146 ) $ ( 5,951 ) $ ( 169,734 )

April 29, 2023 $ ( 70,501 ) $ ( 96,255 ) $ ( 5,607 ) $ ( 172,363 )

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 (Loss) Income Component January 28, 2023 January 29, 2022 Location

Three Months Ended Six Months Ended

Comprehensive (Loss) Income Component April 29, 2023 April 30, 2022 April 29, 2023 April 30, 2022 Location

Unrealized holding (gains) losses on derivatives:

11 unchanged sentences

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

Three Months Ended

January 28, 2023 January 29, 2022

Three Months Ended Six Months Ended

April 29, 2023 April 30, 2022 April 29, 2023 April 30, 2022

Net Income $ 977,656 $ 783,273 $ 1,939,130 $ 1,063,350

12 unchanged sentences

Note 5 – Special Charges, Net

Liabilities related to special charges, net are included in Accrued liabilities in the Condensed Consolidated Balance Sheets.

Liabilities related to special charges, net are included in Accrued liabilities and Other non-current liabilities in the Condensed Consolidated Balance Sheets.

The activity is detailed below:

3 unchanged sentences

Balance at January 28, 2023 $ 35,772

Severance and benefit payments ( 22,820 )

Employee severance and benefit costs 23,136

Balance at April 29, 2023 $ 36,088

Accrued liabilities $ 12,952

Other non-current liabilities $ 23,136

Note 6 – Commitments and Contingencies

6 unchanged sentences

The plaintiffs seek damages in an amount to be determined at trial, plaintiffs’ costs and disbursements, including reasonable attorneys’ and experts’ fees, costs and other expenses.

The Company believes that it and the other defendants have meritorious defenses to these allegations;

On May 2, 2023, the Court of Chancery entered an order dismissing the action in its entirety and with prejudice.

On May 9, 2023, plaintiffs filed a Motion for Reargument.

The Company believes that it and the other defendants have meritorious arguments in response to the motion and defenses to the underlying allegations;

however, the Company is currently unable to determine the ultimate outcome of this matter or determine an estimate, or a range of estimates, of potential losses, if any.

7 unchanged sentences

Three Months Ended

January 28, 2023 January 29, 2022

April 29, 2023 April 30, 2022

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

4 unchanged sentences

Total revenue $ 3,262,930 100 % 10 % $ 2,972,064 100 %

Six Months Ended

April 29, 2023 April 30, 2022

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

Industrial $ 3,438,006 53 % 21 % $ 2,849,577 50 %

Automotive 1,498,178 23 % 27 % 1,183,985 21 %

Communications 941,735 14 % 6 % 887,663 16 %

Consumer 634,641 10 % ( 14 ) % 735,132 13 %

Total revenue $ 6,512,560 100 % 15 % $ 5,656,357 100 %

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

7 unchanged sentences

Three Months Ended

January 28, 2023 January 29, 2022

April 29, 2023 April 30, 2022

Channel Revenue % of Revenue* Revenue % of Revenue*

3 unchanged sentences

Total revenue $ 3,262,930 100 % $ 2,972,064 100 %

Six Months Ended

April 29, 2023 April 30, 2022

Channel Revenue % of Revenue* Revenue % of Revenue*

Distributors $ 4,007,733 62 % $ 3,503,042 62 %

Direct customers 2,420,320 37 % 2,094,891 37 %

Other 84,507 1 % 58,424 1 %

Total revenue $ 6,512,560 100 % $ 5,656,357 100 %

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

Note 8 – Fair Value

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 28, 2023 and October 29, 2022.

The tables exclude cash on hand and assets and liabilities that are measured at historical cost or any basis other than fair value.

January 28, 2023 and October 29, 2022, the Company held $ 702.6 million and $ 1,016.0 million, respectively, of cash that was excluded from the tables below.

January 28, 2023

As of April 29, 2023 and October 29, 2022, the Company held $ 661.3 million and $ 1,016.0 million, respectively, of cash that was

excluded from the tables below.

April 29, 2023

Fair Value measurement at

27 unchanged sentences

Total liabilities measured at fair value $ — $ 16,984 $ 16,984

In addition to the methods and assumptions used by the Company in estimating its fair value disclosure for financial instruments disclosed in Note 2j, Summary of Significant Accounting Policies, in the Company's Annual Report on Form 10-K for fiscal 2022, which was filed with the Securities and Exchange Commission on November 22, 2022, the following methods and assumptions were used by the Company in estimating its fair value disclosure for financial instruments:

Interest rate derivative — The fair value of interest rate derivatives is estimated using a discounted cash flow analysis based on the contractual terms of the derivatives.

Assets and Liabilities Not Recorded at Fair Value on a Recurring Basis

Debt — The table below presents the estimated fair value of certain financial instruments not recorded at fair value on a recurring basis.

Commercial paper — The fair value of commercial paper is obtained from indicative market prices and are classified as Level 2 measurements according to the fair value hierarchy.

As of April 29, 2023, the fair value of the commercial paper notes was $ 254.2 million.

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 28, 2023 October 29, 2022

April 29, 2023 October 29, 2022

Principal Amount Outstanding Fair Value Principal Amount Outstanding Fair Value

13 unchanged sentences

Note 9 – Derivatives

Foreign Exchange Exposure Management — 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 28, 2023 and October 29, 2022 were $ 310.3 million and $ 307.1 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 28, 2023 and October 29, 2022 were as follows:

Foreign Exchange Exposure Management — 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 April 29, 2023 and October 29, 2022 were $ 307.0 million and $ 307.1 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 April 29, 2023 and October 29, 2022 were as follows:

Fair Value At

Balance Sheet Location January 28, 2023 October 29, 2022

Balance Sheet Location April 29, 2023 October 29, 2022

Forward foreign currency exchange contracts Prepaid expenses and other current assets $ 6,022 $ —

Forward foreign currency exchange contracts Accrued liabilities $ — $ 18,050

As of January 28, 2023 and October 29, 2022, the total notional amounts of undesignated hedges related to forward foreign currency exchange contracts were $ 334.9 million and $ 246.4 million, respectively.

As of April 29, 2023 and October 29, 2022, the total notional amounts of undesignated hedges related to forward foreign currency exchange contracts were $ 413.6 million and $ 246.4 million, respectively.

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 28, 2023 October 29, 2022

April 29, 2023 October 29, 2022

Gross amounts of recognized liabilities $ ( 3,802 ) $ ( 19,846 )

9 unchanged sentences

The gain or loss on the hedged item attributable to the hedged benchmark interest rate risk and the offsetting gain or loss on the related interest rate swaps were recorded as follows:

January 28, 2023

April 29, 2023

Balance Sheet location Loss on Swaps Gain on Note

3 unchanged sentences

Note 10 – Inventories

Inventories at January 28, 2023 and October 29, 2022 were as follows:

January 28, 2023 October 29, 2022

Inventories at April 29, 2023 and October 29, 2022 were as follows:

April 29, 2023 October 29, 2022

Raw materials $ 122,518 $ 110,908

3 unchanged sentences

Note 11 – Debt

Revolving Credit Facility.

On June 23, 2021, the Company entered into a Third Amended and Restated Credit Agreement (Revolving Credit Agreement) with Bank of America, N.A.

4 unchanged sentences

Each Term SOFR Loan will bear interest at a rate per annum equal to the applicable adjusted term SOFR plus a margin based on the Company's Debt Ratings (as defined in the Revolving Credit Agreement, as amended) from time to time of between 0.690 % and 1.175 %.

As of January 28, 2023, the Company had no outstanding borrowings under this revolving credit facility but may borrow in the future and use the proceeds for repayment of existing indebtedness, stock repurchases, acquisitions, capital expenditures, working capital and other lawful corporate purposes.

As of April 29, 2023, the Company had no outstanding borrowings under this revolving credit facility but may borrow in the future and use the proceeds for repayment of existing indebtedness, stock repurchases, acquisitions, capital expenditures, working capital and other lawful corporate purposes.

Outstanding Debt.

On April 26, 2023 (Redemption Date), the Company redeemed for cash $ 59.8 million representing all of the outstanding 3.450 % senior notes due June 15, 2027 issued by Maxim (Maxim Notes) in accordance with the terms of the indenture governing the Maxim Notes.

The Maxim Notes were redeemed for cash at a redemption price equal to $1,012.55 for each $1,000 principal of the Maxim Notes and included accrued interest.

Commercial Paper Program.

On April 14, 2023, the Company established a commercial paper program under which the Company may issue short-term, unsecured commercial paper notes (CP Notes) in an amount up to a maximum aggregate face amount of $ 2.5 billion outstanding at any time, with maturities up to 397 days from the date of issuance.

The CP Notes will be sold under customary market terms in the U.S.

commercial paper market at a discount from par or at par and bear interest at rates determined at the time of issuance.

The Company intends to use the net proceeds of the CP Notes for general corporate purposes, including without limitation, repayment of indebtedness, stock repurchases, acquisitions, capital expenditures and working capital.

As of April 29, 2023, the Company had $ 253.6 million of outstanding borrowings under the commercial paper program recorded in the Condensed Consolidated Balance Sheet.

The carrying value of the outstanding CP Notes approximated fair value at April 29, 2023.

Note 12 – Income Taxes

The Company’s effective tax rates for the three-month periods ended January 28, 2023 and January 29, 2022 were below the U.S.

The Company’s effective tax rates for the three- and six-month periods ended April 29, 2023 and April 30, 2022 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.

22 unchanged sentences

Note 14 – Subsequent Events

On February 14, 2023, the Board of Directors of the Company declared a cash dividend of $ 0.86 per outstanding share of common stock.

The dividend will be paid on March 8, 2023 to all shareholders of record at the close of business on February 27, 2023 and is expected to total approximately $ 435.0 million.

On May 23, 2023, the Board of Directors of the Company declared a cash dividend of $ 0.86 per outstanding share of common stock.

The dividend will be paid on June 14, 2023 to all shareholders of record at the close of business on June 5, 2023 and is expected to total approximately $ 431.2 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