ANALOG DEVICES INC 10-Q

ITEM 1. Financial Statements ANALOG DEVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in thousands, except per share amounts) Three Months Ended Six Months Ended May 3, 2025 May 4, 2024 May 3, 2025 May 4, 2024 Revenue $ 2,640,068 $ 2,159,039 $ 5,063,242 $ 4,671,743 Cost of sales 1,028,458 979,004 2,021,329 2,017,767 Gross margin 1,611,610 1,180,035 3,041,913 2,653,976 Operating expenses: Research and development 441,837 354,862 844,729 746,289 Selling, marketing, general and administrative 302,669 244,129 587,465 534,207 Amortization of intangibles 187,415 188,944 374,830 379,276 Special charges, net 1,745 5,977 65,632 22,117 Total operating expenses 933,666 793,912 1,872,656 1,681,889 Operating income: 677,944 386,123 1,169,257 972,087 Nonoperating expense (income): Interest expense 74,703 77,103 149,967 154,244 Interest income ( 21,725 ) ( 15,269 ) ( 45,212 ) ( 24,438 ) Other, net ( 962 ) ( 314 ) 2,998 4,260 Total nonoperating expense (income) 52,016 61,520 107,753 134,066 Income before income taxes 625,928 324,603 1,061,504 838,021 Provision for income taxes 56,158 22,361 100,418 73,052 Net income $ 569,770 $ 302,242 $ 961,086 $ 764,969 Shares used to compute earnings per common share – basic 496,173 496,130 496,145 495,947 Shares used to compute earnings per common share – diluted 498,201 498,533 498,434 498,637 Basic earnings per common share $ 1.15 $ 0.61 $ 1.94 $ 1.54 Diluted earnings per common share $ 1.14 $ 0.61 $ 1.93 $ 1.53 See accompanying notes. 1 ANALOG DEVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (in thousands) Three Months Ended Six Months Ended May 3, 2025 May 4, 2024 May 3, 2025 May 4, 2024 Net income $ 569,770 $ 302,242 $ 961,086 $ 764,969 Foreign currency translation adjustments ( 753 ) 264 ( 912 ) 649 Change in fair value of derivative instruments designated as cash flow hedges, net 17,573 1,306 17,496 9,326 Changes in pension plans, net 517 2,514 1,040 1,126 Other comprehensive income 17,337 4,084 17,624 11,101 Comprehensive income $ 587,107 $ 306,326 $ 978,710 $ 776,070 See accompanying notes. 2 ANALOG DEVICES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except share and per share amounts) May 3, 2025 November 2, 2024 ASSETS Current Assets Cash and cash equivalents $ 2,376,235 $ 1,991,342 Short-term investments — 371,822 Accounts receivable 1,382,365 1,336,331 Inventories 1,524,897 1,447,687 Prepaid expenses and other current assets 305,040 337,472 Total current assets 5,588,537 5,484,654 Non-current Assets Net property, plant and equipment 3,336,128 3,415,550 Goodwill 26,945,180 26,909,775 Intangible assets, net 8,787,380 9,585,464 Deferred tax assets 1,985,591 2,083,752 Other assets 701,671 749,082 Total non-current assets 41,755,950 42,743,623 TOTAL ASSETS $ 47,344,487 $ 48,228,277 LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities Accounts payable $ 429,405 $ 487,457 Income taxes payable 358,949 447,379 Debt, current — 399,636 Commercial paper notes 548,720 547,738 Accrued liabilities 1,353,568 1,106,070 Total current liabilities 2,690,642 2,988,280 Non-current Liabilities Long-term debt 6,648,417 6,634,313 Deferred income taxes 2,379,575 2,624,392 Income taxes payable 96,354 260,486 Other non-current liabilities 518,879 544,489 Total non-current liabilities 9,643,225 10,063,680 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, 496,248,196 shares outstanding ( 496,296,854 on November 2, 2024) 82,710 82,718 Capital in excess of par value 24,885,204 25,082,243 Retained earnings 10,210,338 10,196,612 Accumulated other comprehensive loss ( 167,632 ) ( 185,256 ) Total shareholders’ equity 35,010,620 35,176,317 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 47,344,487 $ 48,228,277 See accompanying notes. 3 ANALOG DEVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited) (in thousands) Three Months Ended May 3, 2025 Capital in Accumulated Other Common Stock Excess of Retained Comprehensive Shares Amount Par Value Earnings Loss BALANCE, FEBRUARY 1, 2025 495,976 $ 82,664 $ 25,041,250 $ 10,131,590 $ ( 184,969 ) Net income 569,770 Dividends declared and paid - $ 0.99 per share ( 491,022 ) Issuance of stock under stock plans and other 1,491 249 19,566 Stock-based compensation expense 72,831 Other comprehensive income 17,337 Common stock repurchased ( 1,219 ) ( 203 ) ( 248,443 ) BALANCE, MAY 3, 2025 496,248 $ 82,710 $ 24,885,204 $ 10,210,338 $ ( 167,632 ) Six Months Ended May 3, 2025 Capital in Accumulated Other Common Stock Excess of Retained Comprehensive Shares Amount Par Value Earnings Loss BALANCE, NOVEMBER 2, 2024 496,297 $ 82,718 $ 25,082,243 $ 10,196,612 $ ( 185,256 ) Net income 961,086 Dividends declared and paid - $ 1.91 per share ( 947,360 ) Issuance of stock under stock plans and other 1,902 317 61,245 Stock-based compensation expense 150,405 Other comprehensive income 17,624 Common stock repurchased ( 1,951 ) ( 325 ) ( 408,689 ) BALANCE, MAY 3, 2025 496,248 $ 82,710 $ 24,885,204 $ 10,210,338 $ ( 167,632 ) See accompanying notes. 4 Three Months Ended May 4, 2024 Capital in Accumulated Other Common Stock Excess of Retained Comprehensive Shares Amount Par Value Earnings Loss BALANCE, FEBRUARY 3, 2024 495,908 $ 82,653 $ 25,253,256 $ 10,393,449 $ ( 181,285 ) Net income 302,242 Dividends declared and paid - $ 0.92 per share ( 456,142 ) Issuance of stock under stock plans and other 1,487 247 14,270 Stock-based compensation expense 58,396 Other comprehensive income 4,084 Common stock repurchased ( 1,178 ) ( 196 ) ( 222,185 ) BALANCE, MAY 4, 2024 496,217 $ 82,704 $ 25,103,737 $ 10,239,549 $ ( 177,201 ) Six Months Ended May 4, 2024 Capital in Accumulated Other Common Stock Excess of Retained Comprehensive Shares Amount Par Value Earnings Loss BALANCE, OCTOBER 28, 2023 496,262 $ 82,712 $ 25,313,914 $ 10,356,798 $ ( 188,302 ) Net income 764,969 Dividends declared and paid - $ 1.78 per share ( 882,218 ) Issuance of stock under stock plans and other 2,163 360 63,976 Stock-based compensation expense 128,211 Other comprehensive income 11,101 Common stock repurchased ( 2,208 ) ( 368 ) ( 402,364 ) BALANCE, MAY 4, 2024 496,217 $ 82,704 $ 25,103,737 $ 10,239,549 $ ( 177,201 ) See accompanying notes. 5 ANALOG DEVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Six Months Ended May 3, 2025 May 4, 2024 Cash flows from operating activities: Net income $ 961,086 $ 764,969 Adjustments to reconcile net income to net cash provided by operations: Depreciation 198,781 173,172 Amortization of intangibles 817,429 880,376 Stock-based compensation expense 150,405 128,211 Deferred income taxes ( 149,370 ) ( 164,348 ) Other 4,203 13,370 Changes in operating assets and liabilities ( 36,247 ) 150,935 Total adjustments 985,201 1,181,716 Net cash provided by operating activities 1,946,287 1,946,685 Cash flows from investing activities: Purchases of short-term available-for-sale investments — ( 424,117 ) Maturities of short-term available-for-sale investments 372,778 — Additions to property, plant and equipment ( 239,246 ) ( 411,167 ) Proceeds from sale of property, plant and equipment, net 58,892 — Payments for acquisitions, net of cash acquired ( 45,652 ) — Other ( 12,880 ) 14,106 Net cash provided by (used for) investing activities 133,892 ( 821,178 ) Cash flows from financing activities: Proceeds from debt — 1,087,856 Debt repayments ( 399,998 ) — Proceeds from commercial paper notes 4,316,340 5,383,401 Payments of commercial paper notes ( 4,315,358 ) ( 5,382,390 ) Repurchase of common stock ( 409,014 ) ( 402,732 ) Dividend payments to shareholders ( 947,360 ) ( 882,218 ) Proceeds from employee stock plans 61,562 64,336 Other ( 1,458 ) ( 12,126 ) Net cash used for financing activities ( 1,695,286 ) ( 143,873 ) Net increase in cash and cash equivalents 384,893 981,634 Cash and cash equivalents at beginning of period 1,991,342 958,061 Cash and cash equivalents at end of period $ 2,376,235 $ 1,939,695 See accompanying notes. 6 ANALOG DEVICES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED MAY 3, 2025 (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 November 2, 2024 (fiscal 2024) and related notes. The results of operations for the interim periods shown in this report are not necessarily indicative of the results that may be expected for the fiscal year ending November 1, 2025 (fiscal 2025) or any future period. The Company has a 52 - 53 week fiscal year that ends on the Saturday closest to the last day in October. Fiscal 2025 is a 52 -week fiscal year and fiscal 2024 was a 53 -week fiscal year. The additional week in fiscal 2024 was included in the first quarter ended February 3, 2024. Therefore, the first six months of fiscal 2025 included one less week of operations as compared to the first six months of fiscal 2024. Note 2 – Shareholders’ Equity As of May 3, 2025, the Company’s Board of Directors authorized the repurchase of $ 26.7 billion of its common stock under its common stock repurchase program and $ 11.4 billion remained available for repurchases under the program. 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 six months of fiscal 2025. Foreign currency translation adjustment Unrealized holding gains/losses on derivatives Pension plans Total November 2, 2024 $ ( 71,511 ) $ ( 85,202 ) $ ( 28,543 ) $ ( 185,256 ) Other comprehensive income before reclassifications ( 912 ) 16,942 — 16,030 Amounts reclassified out of other comprehensive income — 3,552 1,040 4,592 Tax effects — ( 2,998 ) — ( 2,998 ) Other comprehensive income ( 912 ) 17,496 1,040 17,624 May 3, 2025 $ ( 72,423 ) $ ( 67,706 ) $ ( 27,503 ) $ ( 167,632 ) 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: 7 Three Months Ended Six Months Ended Comprehensive (Loss) Income Component May 3, 2025 May 4, 2024 May 3, 2025 May 4, 2024 Location Unrealized holding gains/losses on derivatives: Currency forwards $ 446 $ ( 521 ) $ ( 1,133 ) $ ( 592 ) Cost of sales 118 ( 203 ) ( 729 ) ( 272 ) Research and development 36 ( 1,500 ) ( 2,048 ) ( 2,391 ) Selling, marketing, general and administrative Interest rate derivatives 3,731 3,732 7,462 7,462 Interest expense 4,331 1,508 3,552 4,207 Total before tax ( 850 ) ( 30 ) ( 1,008 ) ( 878 ) Tax $ 3,481 $ 1,478 $ 2,544 $ 3,329 Net of tax Amortization of pension components included in the computation of net periodic pension cost: Actuarial losses $ 517 $ 516 $ 1,040 $ 1,032 Net of tax Total amounts reclassified out of AOCI, net of tax $ 3,998 $ 1,994 $ 3,584 $ 4,361 Note 4 – Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended Six Months Ended May 3, 2025 May 4, 2024 May 3, 2025 May 4, 2024 Net income $ 569,770 $ 302,242 $ 961,086 $ 764,969 Basic shares: Weighted-average shares outstanding 496,173 496,130 496,145 495,947 Earnings per common share basic: $ 1.15 $ 0.61 $ 1.94 $ 1.54 Diluted shares: Weighted-average shares outstanding 496,173 496,130 496,145 495,947 Assumed exercise of common stock equivalents 2,028 2,403 2,289 2,690 Weighted-average common and common equivalent shares 498,201 498,533 498,434 498,637 Earnings per common share diluted: $ 1.14 $ 0.61 $ 1.93 $ 1.53 Anti-dilutive shares related to: Outstanding stock-based awards 52 66 121 140 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 Charges Global Repositioning Actions Balance at November 2, 2024 $ 13,855 Employee severance costs, net 56,334 Severance payments ( 2,887 ) Balance at February 1, 2025 $ 67,302 Employee severance costs, net 5,189 Severance payments ( 51,448 ) Balance at May 3, 2025 $ 21,043 8 The Company recorded net special charges of $ 65.6 million as part of its Global Repositioning Actions in the six months ended May 3, 2025. The Global Repositioning Actions were part of a transformation initiative aimed at aligning the Company’s enterprise strategy, organizational design and streamlining its operations to achieve its long-term strategic plan. The special charges include severance costs, in accordance with the Company’s ongoing benefit plan or statutory requirements at foreign locations, related to the termination of certain employees in manufacturing, engineering and selling, marketing, general and administrative roles. During the second quarter of fiscal 2025, the Company completed the sale of its facility in Milpitas, CA, that was previously classified as held for sale, for approximately $ 39.7 million, net of selling costs, which resulted in an immaterial loss recorded in Special charges, net. Note 6 – Revenue Revenue Trends by End Market The following tables summarize 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 May 3, 2025 May 4, 2024 Revenue % of Revenue* Y/Y% Revenue % of Revenue* Industrial $ 1,157,747 44 % 17 % $ 991,446 46 % Automotive 849,505 32 % 24 % 684,102 32 % Consumer 317,756 12 % 30 % 244,947 11 % Communications 315,060 12 % 32 % 238,544 11 % Total revenue $ 2,640,068 100 % 22 % $ 2,159,039 100 % Six Months Ended May 3, 2025 May 4, 2024 Revenue % of Revenue* Y/Y% Revenue % of Revenue* Industrial $ 2,229,837 44 % 2 % $ 2,181,828 47 % Automotive 1,584,534 31 % 11 % 1,433,586 31 % Consumer 634,667 13 % 23 % 514,063 11 % Communications 614,204 12 % 13 % 542,266 12 % Total revenue $ 5,063,242 100 % 8 % $ 4,671,743 100 % * The sum of the individual percentages may not equal the total due to rounding. 9 Revenue by Sales Channel The following tables summarize 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. Other customers include the U.S. government, government prime contractors and certain commercial customers for which revenue is recorded over time. Three Months Ended May 3, 2025 May 4, 2024 Channel Revenue % of Revenue* Revenue % of Revenue* Distributors $ 1,480,088 56 % $ 1,248,382 58 % Direct customers 1,125,775 43 % 873,593 40 % Other 34,205 1 % 37,064 2 % Total revenue $ 2,640,068 100 % $ 2,159,039 100 % Six Months Ended May 3, 2025 May 4, 2024 Channel Revenue % of Revenue* Revenue % of Revenue* Distributors $ 2,855,552 56 % $ 2,783,592 60 % Direct customers 2,145,647 42 % 1,813,568 39 % Other 62,043 1 % 74,583 2 % Total revenue $ 5,063,242 100 % $ 4,671,743 100 % * The sum of the individual percentages may not equal the total due to rounding. Note 7 – Fair Value Assets and Liabilities Recorded at Fair Value on a Recurring Basis The tables below, set forth by level, present the Company’s financial assets and liabilities, excluding accrued interest components that were accounted for at fair value on a recurring basis as of May 3, 2025 and November 2, 2024. The tables exclude cash on hand and assets and liabilities that are measured at historical cost or any basis other than fair value. As of May 3, 2025 and November 2, 2024, the Company held $ 1.8 billion and $ 1.4 billion, respectively, of cash that is excluded from the tables below. May 3, 2025 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 $ 564,760 $ — $ 564,760 Other assets: Forward foreign currency exchange contracts (1) — 20,704 20,704 Deferred compensation plan investments 88,173 — 88,173 Total assets measured at fair value $ 652,933 $ 20,704 $ 673,637 Liabilities Forward foreign currency exchange contracts (1) $ — $ 5,320 $ 5,320 Interest rate derivatives (2) — 21,881 21,881 Total liabilities measured at fair value $ — $ 27,201 $ 27,201 10 (1) The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 8, Derivatives, in these Notes to Condensed Consolidated Financial Statements for more information related to the Company’s master netting arrangements. (2) The carrying value of the related debt was adjusted by an equal and offsetting amount. The fair value of interest rate derivatives is estimated using a discounted cash flow analysis based on the contractual terms of the derivatives. See Note 8, Derivatives, in these Notes to Condensed Consolidated Financial Statements. November 2, 2024 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 $ 592,560 $ — $ 592,560 Short-term investments: Available-for-sale: Securities with one year or less to maturity: Corporate obligations (1) — 71,246 71,246 Bank obligations (1) — 300,576 300,576 Other assets: Forward foreign currency exchange contracts (2) — 7,318 7,318 Deferred compensation plan investments 92,698 — 92,698 Total assets measured at fair value $ 685,258 $ 379,140 $ 1,064,398 Liabilities Forward foreign currency exchange contracts (2) $ — $ 16,279 $ 16,279 Interest rate derivatives (3) — 36,855 36,855 Total liabilities measured at fair value $ — $ 53,134 $ 53,134 (1) The amortized cost of the Company’s investments classified as available-for-sale as of November 2, 2024 was $ 382.9 million. (2) The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 8, Derivatives, in these Notes to Condensed Consolidated Financial Statements for more information related to the Company’s master netting arrangements. (3) The carrying value of the related debt was adjusted by an equal and offsetting amount. The fair value of interest rate derivatives is estimated using a discounted cash flow analysis based on the contractual terms of the derivatives. See Note 8, Derivatives, in these Notes to Condensed Consolidated Financial Statements. Assets and Liabilities Not Recorded at Fair Value on a Recurring Basis The table below presents the estimated fair values of certain financial instruments not recorded at fair value on a recurring basis. Given the short tenure of the Company’s commercial paper notes, the carrying value of the outstanding commercial paper notes approximates the fair values, and therefore, are excluded from the table below ($ 548.7 million and $ 547.7 million as of May 3, 2025 and November 2, 2024, respectively). 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. 11 May 3, 2025 November 2, 2024 Principal Amount Outstanding Fair Value Principal Amount Outstanding Fair Value 2025 Notes, due April 2025 $ — $ — 400,000 397,027 2026 Notes, due December 2026 900,000 888,786 900,000 882,795 2027 Notes, due June 2027 440,212 433,822 440,212 421,077 2028 Notes, due October 2028 750,000 687,186 750,000 673,316 2031 Notes, due October 2031 1,000,000 855,938 1,000,000 843,766 2032 Notes, due October 2032 300,000 290,073 300,000 287,172 2034 Notes, due April 2034 550,000 550,679 550,000 553,375 2036 Notes, due December 2036 144,278 135,324 144,278 136,718 2041 Notes, due October 2041 750,000 531,630 750,000 534,435 2045 Notes, due December 2045 332,587 312,258 332,587 322,942 2051 Notes, due October 2051 1,000,000 627,351 1,000,000 655,668 2054 Notes, due April 2054 550,000 510,692 550,000 541,912 Total senior unsecured notes $ 6,717,077 $ 5,823,739 $ 7,117,077 $ 6,250,203 Note 8 – Derivatives Foreign Exchange Exposure Management — The total notional amounts of forward foreign currency derivative instruments designated as hedging instruments of cash flow hedges as of May 3, 2025 and November 2, 2024 were $ 276.0 million and $ 257.0 million, respectively, and the fair values of these instruments in the Company’s Condensed Consolidated Balance Sheets were as follows: Fair Value At Balance Sheet Location May 3, 2025 November 2, 2024 Forward foreign currency exchange contracts Prepaid expenses and other current assets $ 12,297 $ 780 Forward foreign currency exchange contracts Accrued liabilities $ 136 $ 4,235 As of May 3, 2025 and November 2, 2024, the total notional amounts of undesignated hedges related to forward foreign currency exchange contracts were $ 191.8 million and $ 176.8 million, respectively, and the fair values of undesignated hedges in the Company’s Condensed Consolidated Balance Sheets were as follows: Fair Value At Balance Sheet Location May 3, 2025 November 2, 2024 Undesignated hedges related to forward foreign currency exchange contracts Prepaid expenses and other current assets $ 8,407 $ 6,538 Undesignated hedges related to forward foreign currency exchange contracts Accrued liabilities $ 5,184 $ 12,044 Interest Rate Exposure Management — The Company does not consider the risk of counterparty default to be significant. The gain or loss on the Company’s interest rate swap transactions attributable to the hedged benchmark interest rate risk and the offsetting gain or loss on the related interest rate swaps were recorded as follows: May 3, 2025 Balance Sheet Location Loss on Swaps Gain on Note Accrued liabilities $ 21,881 $ — Long-term debt $ — $ 21,881 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. 12 Note 9 – Inventories Inventories at May 3, 2025 and November 2, 2024 were as follows: May 3, 2025 November 2, 2024 Raw materials $ 74,105 $ 93,608 Work in process 1,172,112 1,047,022 Finished goods 278,680 307,057 Total inventories $ 1,524,897 $ 1,447,687 Note 10 – Debt Revolving Credit Agreement On April 11, 2025, the Company entered into its Fourth Amended and Restated Revolving Credit Agreement (Revolving Credit Agreement) with the Company and Bank of America, N.A. as administrative agent and the other banks identified therein as lenders, which further amended and restated its revolving credit agreement dated as of June 23, 2021. The Revolving Credit Agreement provides for a five-year unsecured revolving credit facility in an aggregate principal amount of up to $ 3.0 billion, expiring on April 11, 2030. The Revolving Credit Agreement contains customary representations and warranties, and affirmative and negative covenants and events of default applicable to the Company and its subsidiaries. As of May 3, 2025, the Company was in compliance with these covenants. Senior Notes During the second quarter of fiscal 2025, the Company repaid the $ 400.0 million principal amount on its 2025 Notes, due April 2025. Note 11 – Income Taxes The Company’s effective tax rates for the three- and six-month periods ended May 3, 2025 and May 4, 2024 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 October 30, 2021 (fiscal 2021), November 2, 2019 (fiscal 2019) and November 3, 2018 (fiscal 2018); a pre-acquisition IRS income tax audit for Maxim Integrated Products, Inc.’s (Maxim) fiscal years ended June 27, 2015 through August 26, 2021; and various U.S. state and local audits and international audits, including Irish corporate tax audits for fiscal 2021. The Company’s U.S. federal income tax returns prior to fiscal 2018 are no longer subject to examination, except for the applicable Maxim pre-acquisition fiscal years noted above. During the second quarter of fiscal 2025, the Company received an assessment from the U.S. Internal Revenue Service (IRS) for fiscal 2018 and fiscal 2019, totaling approximately $ 267.0 million. The assessment excludes any penalties and interest. The assessment pertains to transfer pricing arrangements between the Company and one of its wholly-owned foreign subsidiaries. The Company firmly disagrees with this assessment and maintains that its transfer pricing is appropriate. Consequently, the Company has not recorded any additional tax liability related to fiscal 2018 and fiscal 2019 in relation to this issue, nor to any other periods. The Company intends to vigorously defend its original tax return position and is currently in the process of preparing a formal protest and appeal with the IRS. Should the IRS ultimately prevail regarding its assessments for fiscal 2018 and fiscal 2019, such a resolution, along with any potential impact on subsequent fiscal years, could have a material adverse effect on the Company’s income tax expense and net earnings in future periods. Note 12 – New Accounting Pronouncements Standards to Be Implemented Segment Reporting In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which enhances the disclosure requirements for reportable segments. ASU 2023-07 requires segment disclosure to include significant segment expense categories and amounts, and qualitative detail of other segment items. Disclosure of multiple measures of segment profit and loss may also be reported. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact, if any, adoption will have on its financial statement 13 disclosures. Income Taxes In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . ASU 2023-09 requires the disaggregation of information in existing income tax disclosures related to the effective tax rate reconciliation and income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact, if any, adoption will have on its financial statement disclosures. Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , requiring public companies to disaggregate key expense categories such as inventory purchases, employee compensation and depreciation in their financial statements. This aims to improve investor insights into company performance. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact, if any, adoption will have on its financial statement disclosures. Note 13 – Subsequent Events On May 21, 2025, the Board of Directors of the Company declared a cash dividend of $ 0.99 per outstanding share of common stock. The dividend will be paid on June 18, 2025 to all shareholders of record at the close of business on June 4, 2025 and is expected to total approximately $ 491.3 million. 14