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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Analog Devices Inc | NASDAQ:ADI | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 237.72 | 235.40 | 241.65 | 190 | 13:31:52 |
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☑
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
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Massachusetts
|
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04-2348234
|
||
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
||
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|
|
|
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One Technology Way,
|
Norwood,
|
MA
|
|
02062-9106
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock $0.16 2/3 par value per share
|
ADI
|
Nasdaq Global Select Market
|
Large accelerated filer
|
|
☑
|
|
Accelerated filer
|
|
☐
|
|
|
|
|
|
|
|
Non-accelerated filer
|
|
☐
|
|
Smaller reporting company
|
|
☐
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|
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Emerging growth company
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|
☐
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|
ITEM 1.
|
Financial Statements
|
ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share amounts)
|
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
August 3, 2019
|
|
August 4, 2018 (2)
|
|
August 3, 2019
|
|
August 4, 2018 (2)
|
||||||||
Revenue
|
$
|
1,480,143
|
|
|
$
|
1,558,189
|
|
|
$
|
4,547,846
|
|
|
$
|
4,688,561
|
|
Cost of sales (1)
|
482,332
|
|
|
497,631
|
|
|
1,476,287
|
|
|
1,483,930
|
|
||||
Gross margin
|
997,811
|
|
|
1,060,558
|
|
|
3,071,559
|
|
|
3,204,631
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development (1)
|
280,102
|
|
|
291,642
|
|
|
853,330
|
|
|
869,711
|
|
||||
Selling, marketing, general and administrative (1)
|
162,825
|
|
|
171,487
|
|
|
493,295
|
|
|
520,541
|
|
||||
Amortization of intangibles
|
107,231
|
|
|
107,409
|
|
|
321,816
|
|
|
321,557
|
|
||||
Special charges
|
927
|
|
|
1,069
|
|
|
30,871
|
|
|
59,476
|
|
||||
|
551,085
|
|
|
571,607
|
|
|
1,699,312
|
|
|
1,771,285
|
|
||||
Operating income
|
446,726
|
|
|
488,951
|
|
|
1,372,247
|
|
|
1,433,346
|
|
||||
Nonoperating expense (income):
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
59,871
|
|
|
61,665
|
|
|
178,300
|
|
|
194,487
|
|
||||
Interest income
|
(2,625
|
)
|
|
(2,588
|
)
|
|
(8,241
|
)
|
|
(6,592
|
)
|
||||
Other, net
|
(78
|
)
|
|
(632
|
)
|
|
4,287
|
|
|
(527
|
)
|
||||
|
57,168
|
|
|
58,445
|
|
|
174,346
|
|
|
187,368
|
|
||||
Income before income taxes
|
389,558
|
|
|
430,506
|
|
|
1,197,901
|
|
|
1,245,978
|
|
||||
Provision for income taxes
|
27,184
|
|
|
21,949
|
|
|
112,584
|
|
|
143,853
|
|
||||
Net income
|
$
|
362,374
|
|
|
$
|
408,557
|
|
|
$
|
1,085,317
|
|
|
$
|
1,102,125
|
|
Shares used to compute earnings per common share – basic
|
369,533
|
|
|
371,315
|
|
|
369,160
|
|
|
370,211
|
|
||||
Shares used to compute earnings per common share – diluted
|
373,077
|
|
|
375,815
|
|
|
372,967
|
|
|
374,880
|
|
||||
Basic earnings per common share
|
$
|
0.98
|
|
|
$
|
1.10
|
|
|
$
|
2.93
|
|
|
$
|
2.97
|
|
Diluted earnings per common share
|
$
|
0.97
|
|
|
$
|
1.08
|
|
|
$
|
2.90
|
|
|
$
|
2.93
|
|
(1) Includes stock-based compensation expense as follows:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
$
|
5,247
|
|
|
$
|
5,734
|
|
|
$
|
15,720
|
|
|
$
|
13,775
|
|
Research and development
|
$
|
18,802
|
|
|
$
|
18,018
|
|
|
$
|
57,294
|
|
|
$
|
59,764
|
|
Selling, marketing, general and administrative
|
$
|
12,049
|
|
|
$
|
13,143
|
|
|
$
|
39,706
|
|
|
$
|
40,172
|
|
ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(in thousands)
|
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
August 3, 2019
|
|
August 4, 2018 (1)
|
|
August 3, 2019
|
|
August 4, 2018 (1)
|
||||||||
Net income
|
$
|
362,374
|
|
|
$
|
408,557
|
|
|
$
|
1,085,317
|
|
|
$
|
1,102,125
|
|
Foreign currency translation adjustments
|
(4,021
|
)
|
|
(9,345
|
)
|
|
(4,133
|
)
|
|
(2,593
|
)
|
||||
Change in fair value of available-for-sale securities
|
(5
|
)
|
|
2
|
|
|
10
|
|
|
5
|
|
||||
Change in fair value of derivative instruments designated as cash flow hedges (net of taxes of $14,574, $847, $24,757 and $476, respectively)
|
(54,811
|
)
|
|
(4,378
|
)
|
|
(92,661
|
)
|
|
(2,641
|
)
|
||||
Changes in pension plans including transition obligation, net actuarial loss and foreign currency translation adjustments (net of taxes of $60, $96, $186 and $298, respectively)
|
1,185
|
|
|
1,266
|
|
|
1,551
|
|
|
1,122
|
|
||||
Other comprehensive loss
|
(57,652
|
)
|
|
(12,455
|
)
|
|
(95,233
|
)
|
|
(4,107
|
)
|
||||
Comprehensive income
|
$
|
304,722
|
|
|
$
|
396,102
|
|
|
$
|
990,084
|
|
|
$
|
1,098,018
|
|
ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share amounts)
|
|||||||
|
August 3, 2019
|
|
November 3, 2018 (1)
|
||||
ASSETS
|
|
|
|
|
|
||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
612,164
|
|
|
$
|
816,591
|
|
Accounts receivable
|
689,976
|
|
|
639,717
|
|
||
Inventories (2)
|
638,305
|
|
|
586,760
|
|
||
Prepaid expenses and other current assets
|
66,613
|
|
|
69,058
|
|
||
Total current assets
|
2,007,058
|
|
|
2,112,126
|
|
||
Property, Plant and Equipment, at Cost
|
|
|
|
||||
Land and buildings
|
926,112
|
|
|
873,186
|
|
||
Machinery and equipment
|
2,594,832
|
|
|
2,478,032
|
|
||
Office equipment
|
84,487
|
|
|
76,233
|
|
||
Leasehold improvements
|
154,316
|
|
|
100,374
|
|
||
|
3,759,747
|
|
|
3,527,825
|
|
||
Less accumulated depreciation and amortization
|
2,538,555
|
|
|
2,373,497
|
|
||
Net property, plant and equipment
|
1,221,192
|
|
|
1,154,328
|
|
||
Other Assets
|
|
|
|
||||
Deferred compensation plan investments
|
45,778
|
|
|
39,853
|
|
||
Other investments
|
32,290
|
|
|
28,730
|
|
||
Goodwill
|
12,247,888
|
|
|
12,252,604
|
|
||
Intangible assets, net
|
4,346,377
|
|
|
4,778,192
|
|
||
Deferred tax assets
|
1,606,267
|
|
|
9,665
|
|
||
Other assets
|
59,800
|
|
|
62,868
|
|
||
Total other assets
|
18,338,400
|
|
|
17,171,912
|
|
||
|
$
|
21,566,650
|
|
|
$
|
20,438,366
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
220,230
|
|
|
$
|
260,919
|
|
Income taxes payable
|
173,917
|
|
|
93,722
|
|
||
Debt, current
|
411,434
|
|
|
67,000
|
|
||
Accrued liabilities
|
678,099
|
|
|
630,107
|
|
||
Total current liabilities
|
1,483,680
|
|
|
1,051,748
|
|
||
Non-current liabilities
|
|
|
|
||||
Long-term debt
|
5,278,643
|
|
|
6,265,674
|
|
||
Deferred income taxes
|
2,171,029
|
|
|
990,409
|
|
||
Deferred compensation plan liability
|
45,778
|
|
|
39,846
|
|
||
Income taxes payable
|
649,228
|
|
|
710,179
|
|
||
Other non-current liabilities
|
148,055
|
|
|
112,337
|
|
||
Total non-current liabilities
|
8,292,733
|
|
|
8,118,445
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Shareholders’ Equity
|
|
|
|
||||
Preferred stock, $1.00 par value, 471,934 shares authorized, none outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.16 2/3 par value, 1,200,000,000 shares authorized, 369,406,136 shares outstanding (370,159,553 on November 3, 2018)
|
61,569
|
|
|
61,694
|
|
||
Capital in excess of par value
|
5,060,586
|
|
|
5,282,222
|
|
||
Retained earnings
|
6,821,755
|
|
|
5,982,697
|
|
||
Accumulated other comprehensive loss
|
(153,673
|
)
|
|
(58,440
|
)
|
||
Total shareholders’ equity
|
11,790,237
|
|
|
11,268,173
|
|
||
|
$
|
21,566,650
|
|
|
$
|
20,438,366
|
|
(1)
|
Balances have been restated to reflect the full retrospective adoption of Accounting Standards Update (ASU) 2014-09,
Revenue from Contracts with Customers
(ASU 2014-09). See Note 1,
Basis of Presentation
, in the Notes to Condensed Consolidated Financial Statements.
|
(2)
|
Includes
$7,091
and
$7,128
related to stock-based compensation at
August 3, 2019
and
November 3, 2018
, respectively.
|
|
Three Months Ended August 3, 2019
|
|||||||||||||||||
|
|
|
|
|
Capital in
|
|
|
|
Accumulated
Other
|
|||||||||
|
Common Stock
|
|
Excess of
|
|
Retained
|
|
Comprehensive
|
|||||||||||
|
Shares
|
|
Amount
|
|
Par Value
|
|
Earnings
|
|
(Loss) Income
|
|||||||||
BALANCE, MAY 4, 2019
|
369,761
|
|
|
$
|
61,628
|
|
|
$
|
5,117,202
|
|
|
$
|
6,659,449
|
|
|
$
|
(96,021
|
)
|
Net income
|
|
|
|
|
|
|
362,374
|
|
|
|
||||||||
Dividends declared and paid - $0.54 per share
|
|
|
|
|
|
|
(200,068
|
)
|
|
|
||||||||
Issuance of stock under stock plans and other
|
667
|
|
|
111
|
|
|
19,117
|
|
|
|
|
|
||||||
Stock-based compensation expense
|
|
|
|
|
36,098
|
|
|
|
|
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
(57,652
|
)
|
||||||||
Common stock repurchased
|
(1,022
|
)
|
|
(170
|
)
|
|
(111,831
|
)
|
|
|
|
|
||||||
BALANCE, AUGUST 3, 2019
|
369,406
|
|
|
$
|
61,569
|
|
|
$
|
5,060,586
|
|
|
$
|
6,821,755
|
|
|
$
|
(153,673
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Nine Months Ended August 3, 2019
|
|||||||||||||||||
|
|
|
|
|
Capital in
|
|
|
|
Accumulated
Other
|
|||||||||
|
Common Stock
|
|
Excess of
|
|
Retained
|
|
Comprehensive
|
|||||||||||
|
Shares
|
|
Amount
|
|
Par Value
|
|
Earnings
|
|
(Loss) Income
|
|||||||||
BALANCE, NOVEMBER 3, 2018 (1)
|
370,160
|
|
|
$
|
61,694
|
|
|
$
|
5,282,222
|
|
|
$
|
5,982,697
|
|
|
$
|
(58,440
|
)
|
Effect of Accounting Standards Update 2016-16 (see Note 1)
|
|
|
|
|
|
|
331,026
|
|
|
|
||||||||
Net income
|
|
|
|
|
|
|
1,085,317
|
|
|
|
||||||||
Dividends declared and paid - $1.56 per share
|
|
|
|
|
|
|
(577,285
|
)
|
|
|
||||||||
Issuance of stock under stock plans and other
|
3,807
|
|
|
635
|
|
|
105,500
|
|
|
|
|
|
||||||
Stock-based compensation expense
|
|
|
|
|
112,720
|
|
|
|
|
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
(95,233
|
)
|
||||||||
Common stock repurchased
|
(4,561
|
)
|
|
(760
|
)
|
|
(439,856
|
)
|
|
|
|
|
||||||
BALANCE, AUGUST 3, 2019
|
369,406
|
|
|
$
|
61,569
|
|
|
$
|
5,060,586
|
|
|
$
|
6,821,755
|
|
|
$
|
(153,673
|
)
|
(1)
|
Balances have been restated to reflect the full retrospective adoption of Accounting Standards Update (ASU) 2014-09,
Revenue from Contracts with Customers
(ASU 2014-09). See Note 1,
Basis of Presentation
, in the Notes to Condensed Consolidated Financial Statements.
|
|
Three Months Ended August 4, 2018
|
|||||||||||||||||
|
|
|
|
|
Capital in
|
|
|
|
Accumulated
Other
|
|||||||||
|
Common Stock
|
|
Excess of
|
|
Retained
|
|
Comprehensive
|
|||||||||||
|
Shares
|
|
Amount
|
|
Par Value
|
|
Earnings
|
|
(Loss) Income
|
|||||||||
BALANCE, MAY 5, 2018 (1)
|
370,897
|
|
|
$
|
61,817
|
|
|
$
|
5,362,608
|
|
|
$
|
5,527,591
|
|
|
$
|
(53,011
|
)
|
Net income
|
|
|
|
|
|
|
408,557
|
|
|
|
||||||||
Dividends declared and paid - $0.48 per share
|
|
|
|
|
|
|
(178,890
|
)
|
|
|
||||||||
Issuance of stock under stock plans and other
|
893
|
|
|
149
|
|
|
22,652
|
|
|
|
|
|
||||||
Stock-based compensation expense
|
|
|
|
|
36,895
|
|
|
|
|
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
(12,455
|
)
|
||||||||
Common stock repurchased
|
(120
|
)
|
|
(20
|
)
|
|
(11,933
|
)
|
|
|
|
|
||||||
BALANCE, AUGUST 4, 2018
|
371,670
|
|
|
$
|
61,946
|
|
|
$
|
5,410,222
|
|
|
$
|
5,757,258
|
|
|
$
|
(65,466
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Nine Months Ended August 4, 2018
|
|||||||||||||||||
|
|
|
|
|
Capital in
|
|
|
|
Accumulated
Other
|
|||||||||
|
Common Stock
|
|
Excess of
|
|
Retained
|
|
Comprehensive
|
|||||||||||
|
Shares
|
|
Amount
|
|
Par Value
|
|
Earnings
|
|
(Loss) Income
|
|||||||||
BALANCE, OCTOBER 28, 2017 (1)
|
368,636
|
|
|
$
|
61,441
|
|
|
$
|
5,250,519
|
|
|
$
|
5,179,024
|
|
|
$
|
(61,359
|
)
|
Net income
|
|
|
|
|
|
|
1,102,125
|
|
|
|
||||||||
Dividends declared and paid - $1.41 per share
|
|
|
|
|
|
|
(523,891
|
)
|
|
|
||||||||
Issuance of stock under stock plans and other
|
3,468
|
|
|
578
|
|
|
87,780
|
|
|
|
|
|
||||||
Stock-based compensation expense
|
|
|
|
|
113,711
|
|
|
|
|
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
(4,107
|
)
|
||||||||
Common stock repurchased
|
(434
|
)
|
|
(73
|
)
|
|
(41,788
|
)
|
|
|
|
|
||||||
BALANCE, AUGUST 4, 2018
|
371,670
|
|
|
$
|
61,946
|
|
|
$
|
5,410,222
|
|
|
$
|
5,757,258
|
|
|
$
|
(65,466
|
)
|
(1)
|
Balances have been restated to reflect the full retrospective adoption of Accounting Standards Update (ASU) 2014-09,
Revenue from Contracts with Customers
(ASU 2014-09). See Note 1,
Basis of Presentation
, in the Notes to Condensed Consolidated Financial Statements.
|
|
Nine Months Ended
|
||||||
|
August 3, 2019
|
|
August 4, 2018 (1)
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
1,085,317
|
|
|
$
|
1,102,125
|
|
Adjustments to reconcile net income to net cash provided by operations:
|
|
|
|
||||
Depreciation
|
179,041
|
|
|
169,651
|
|
||
Amortization of intangibles
|
427,046
|
|
|
428,222
|
|
||
Stock-based compensation expense
|
112,720
|
|
|
113,711
|
|
||
Non-cash portion of special charge
|
4,367
|
|
|
—
|
|
||
Deferred income taxes
|
(55,444
|
)
|
|
(711,484
|
)
|
||
Other non-cash activity
|
26,701
|
|
|
22,019
|
|
||
Changes in operating assets and liabilities
|
(184,552
|
)
|
|
603,676
|
|
||
Total adjustments
|
509,879
|
|
|
625,795
|
|
||
Net cash provided by operating activities
|
1,595,196
|
|
|
1,727,920
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Additions to property, plant and equipment
|
(224,297
|
)
|
|
(168,872
|
)
|
||
Payments for acquisitions, net of cash acquired
|
—
|
|
|
(52,839
|
)
|
||
Changes in other assets
|
(5,132
|
)
|
|
(3,268
|
)
|
||
Net cash used for investing activities
|
(229,429
|
)
|
|
(224,979
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from debt
|
1,250,000
|
|
|
743,778
|
|
||
Early termination of debt
|
(1,250,000
|
)
|
|
—
|
|
||
Proceeds from revolver
|
75,000
|
|
|
—
|
|
||
Payments on revolver
|
(75,000
|
)
|
|
—
|
|
||
Debt repayments
|
(650,000
|
)
|
|
(2,050,000
|
)
|
||
Dividend payments to shareholders
|
(577,285
|
)
|
|
(523,891
|
)
|
||
Repurchase of common stock
|
(440,616
|
)
|
|
(41,861
|
)
|
||
Proceeds from employee stock plans
|
106,135
|
|
|
88,358
|
|
||
Changes in other financing activities
|
(7,918
|
)
|
|
6,320
|
|
||
Net cash used for financing activities
|
(1,569,684
|
)
|
|
(1,777,296
|
)
|
||
Effect of exchange rate changes on cash
|
(510
|
)
|
|
(908
|
)
|
||
Net decrease in cash and cash equivalents
|
(204,427
|
)
|
|
(275,263
|
)
|
||
Cash and cash equivalents at beginning of period
|
816,591
|
|
|
1,047,838
|
|
||
Cash and cash equivalents at end of period
|
$
|
612,164
|
|
|
$
|
772,575
|
|
Condensed Consolidated Statement of Income
|
Nine Months Ended August 4, 2018
|
||||||||||
|
As Reported
|
|
Impact of Adoption
|
|
As Adjusted
|
||||||
Revenue
|
$
|
4,604,356
|
|
|
$
|
84,205
|
|
|
$
|
4,688,561
|
|
Cost of sales
|
1,464,708
|
|
|
19,222
|
|
|
1,483,930
|
|
|||
Gross margin
|
3,139,648
|
|
|
64,983
|
|
|
3,204,631
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
869,711
|
|
|
—
|
|
|
869,711
|
|
|||
Selling, marketing, general and administrative
|
520,541
|
|
|
—
|
|
|
520,541
|
|
|||
Amortization of intangibles
|
321,557
|
|
|
—
|
|
|
321,557
|
|
|||
Special charges
|
59,476
|
|
|
—
|
|
|
59,476
|
|
|||
|
1,771,285
|
|
|
—
|
|
|
1,771,285
|
|
|||
Operating income
|
1,368,363
|
|
|
64,983
|
|
|
1,433,346
|
|
|||
Nonoperating expense (income):
|
|
|
|
|
|
||||||
Interest expense
|
194,487
|
|
|
—
|
|
|
194,487
|
|
|||
Interest income
|
(6,592
|
)
|
|
—
|
|
|
(6,592
|
)
|
|||
Other, net
|
(527
|
)
|
|
—
|
|
|
(527
|
)
|
|||
|
187,368
|
|
|
—
|
|
|
187,368
|
|
|||
Income before income taxes
|
1,180,995
|
|
|
64,983
|
|
|
1,245,978
|
|
|||
Provision for income taxes
|
118,528
|
|
|
25,325
|
|
|
143,853
|
|
|||
Net income
|
$
|
1,062,467
|
|
|
$
|
39,658
|
|
|
$
|
1,102,125
|
|
Shares used to compute earnings per common share – basic
|
370,211
|
|
|
—
|
|
|
370,211
|
|
|||
Shares used to compute earnings per common share – diluted
|
374,880
|
|
|
—
|
|
|
374,880
|
|
|||
Basic earnings per common share
|
$
|
2.86
|
|
|
$
|
0.11
|
|
|
$
|
2.97
|
|
Diluted earnings per common share
|
$
|
2.82
|
|
|
$
|
0.11
|
|
|
$
|
2.93
|
|
|
November 3, 2018
|
||||||||||
|
As Reported
|
|
Impact of Adoption
|
|
As Adjusted
|
||||||
Deferred tax assets
|
$
|
21,078
|
|
|
$
|
(11,413
|
)
|
|
$
|
9,665
|
|
Deferred income on shipments to distributors, net
|
$
|
487,417
|
|
|
$
|
(487,417
|
)
|
|
$
|
—
|
|
Accrued liabilities
|
$
|
497,080
|
|
|
$
|
133,027
|
|
|
$
|
630,107
|
|
Deferred income taxes
|
$
|
927,065
|
|
|
$
|
63,344
|
|
|
$
|
990,409
|
|
Retained earnings
|
$
|
5,703,064
|
|
|
$
|
279,633
|
|
|
$
|
5,982,697
|
|
|
November 4, 2018
|
||||||||||
|
Beginning Balance November 3, 2018 as Adjusted
|
|
Impact of Adoption of ASU 2016-16
|
|
Balance November 4, 2018
|
||||||
Deferred tax assets
|
$
|
9,665
|
|
|
$
|
1,655,129
|
|
|
$
|
1,664,794
|
|
Deferred income taxes
|
$
|
990,409
|
|
|
$
|
1,324,103
|
|
|
$
|
2,314,512
|
|
Retained earnings
|
$
|
5,982,697
|
|
|
$
|
331,026
|
|
|
$
|
6,313,723
|
|
Activity During The Three Months Ended August 3, 2019
|
Options
Outstanding
(in thousands)
|
|
Weighted-
Average Exercise
Price Per Share
|
|
Weighted-
Average
Remaining
Contractual
Term in Years
|
|
Aggregate
Intrinsic Value |
|||||
Options outstanding at May 4, 2019
|
5,822
|
|
|
|
$64.99
|
|
|
|
|
|
||
Options granted
|
14
|
|
|
|
$108.06
|
|
|
|
|
|
||
Options exercised
|
(360
|
)
|
|
|
$54.07
|
|
|
|
|
|
||
Options forfeited
|
(85
|
)
|
|
|
$85.29
|
|
|
|
|
|
||
Options outstanding at August 3, 2019
|
5,391
|
|
|
|
$65.51
|
|
|
6.1
|
|
|
$254,294
|
|
Options exercisable at August 3, 2019
|
3,117
|
|
|
|
$55.04
|
|
|
5.0
|
|
|
$179,685
|
|
Options vested or expected to vest at August 3, 2019 (1)
|
5,227
|
|
|
|
$64.90
|
|
|
6.1
|
|
|
$249,744
|
|
(1)
|
In addition to the vested options, the Company expects a portion of the unvested options to vest at some point in the future. The number of options expected to vest is calculated by applying an estimated forfeiture rate to the unvested options.
|
Activity During The Nine Months Ended August 3, 2019
|
Options
Outstanding
(in thousands)
|
|
Weighted-
Average Exercise
Price Per Share
|
|||
Options outstanding at November 3, 2018
|
7,297
|
|
|
|
$58.42
|
|
Options granted
|
454
|
|
|
|
$107.11
|
|
Options exercised
|
(2,168
|
)
|
|
|
$49.38
|
|
Options forfeited
|
(187
|
)
|
|
|
$78.03
|
|
Options expired
|
(5
|
)
|
|
|
$21.97
|
|
Options outstanding at August 3, 2019
|
5,391
|
|
|
|
$65.51
|
|
Activity During The Three Months Ended August 3, 2019
|
Restricted
Stock Units/Awards
Outstanding
(in thousands)
|
|
Weighted-
Average Grant-
Date Fair Value
Per Share
|
|||
Restricted stock units/awards outstanding at May 4, 2019
|
4,978
|
|
|
|
$85.49
|
|
Units/Awards granted
|
96
|
|
|
|
$95.68
|
|
Restrictions lapsed
|
(304
|
)
|
|
|
$79.38
|
|
Forfeited
|
(90
|
)
|
|
|
$81.62
|
|
Restricted stock units/awards outstanding at August 3, 2019
|
4,680
|
|
|
|
$86.17
|
|
|
|
|
|
|||
Activity During The Nine Months Ended August 3, 2019
|
Restricted
Stock Units/Awards
Outstanding
(in thousands)
|
|
Weighted-
Average Grant-
Date Fair Value
Per Share
|
|||
Restricted stock units/awards outstanding at November 3, 2018
|
5,289
|
|
|
|
$77.54
|
|
Units/Awards granted
|
1,296
|
|
|
|
$97.88
|
|
Restrictions lapsed
|
(1,635
|
)
|
|
|
$68.49
|
|
Forfeited
|
(270
|
)
|
|
|
$79.55
|
|
Restricted stock units/awards outstanding at August 3, 2019
|
4,680
|
|
|
|
$86.17
|
|
|
Foreign currency translation adjustment
|
|
Unrealized holding gains (losses) on available for sale securities
|
|
Unrealized holding gains (losses) on derivatives
|
|
Pension plans
|
|
Total
|
||||||||||
November 3, 2018
|
$
|
(28,711
|
)
|
|
$
|
(10
|
)
|
|
$
|
(14,355
|
)
|
|
$
|
(15,364
|
)
|
|
$
|
(58,440
|
)
|
Other comprehensive income (loss) before reclassifications
|
(4,133
|
)
|
|
10
|
|
|
(124,532
|
)
|
|
983
|
|
|
(127,672
|
)
|
|||||
Amounts reclassified out of other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
7,114
|
|
|
754
|
|
|
7,868
|
|
|||||
Tax effects
|
—
|
|
|
—
|
|
|
24,757
|
|
|
(186
|
)
|
|
24,571
|
|
|||||
Other comprehensive income (loss)
|
(4,133
|
)
|
|
10
|
|
|
(92,661
|
)
|
|
1,551
|
|
|
(95,233
|
)
|
|||||
August 3, 2019
|
$
|
(32,844
|
)
|
|
$
|
—
|
|
|
$
|
(107,016
|
)
|
|
$
|
(13,813
|
)
|
|
$
|
(153,673
|
)
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
August 3, 2019
|
|
August 4, 2018 (1)
|
|
August 3, 2019
|
|
August 4, 2018 (1)
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net Income
|
$
|
362,374
|
|
|
$
|
408,557
|
|
|
$
|
1,085,317
|
|
|
$
|
1,102,125
|
|
Less: income allocated to participating securities
|
812
|
|
|
1,526
|
|
|
2,750
|
|
|
4,439
|
|
||||
Net income allocated to common stockholders
|
$
|
361,562
|
|
|
$
|
407,031
|
|
|
$
|
1,082,567
|
|
|
$
|
1,097,686
|
|
|
|
|
|
|
|
|
|
||||||||
Basic shares:
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding
|
369,533
|
|
|
371,315
|
|
|
369,160
|
|
|
370,211
|
|
||||
Earnings per common share basic:
|
$
|
0.98
|
|
|
$
|
1.10
|
|
|
$
|
2.93
|
|
|
$
|
2.97
|
|
Diluted shares:
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding
|
369,533
|
|
|
371,315
|
|
|
369,160
|
|
|
370,211
|
|
||||
Assumed exercise of common stock equivalents
|
3,544
|
|
|
4,500
|
|
|
3,807
|
|
|
4,669
|
|
||||
Weighted-average common and common equivalent shares
|
373,077
|
|
|
375,815
|
|
|
372,967
|
|
|
374,880
|
|
||||
Earnings per common share diluted:
|
$
|
0.97
|
|
|
$
|
1.08
|
|
|
$
|
2.90
|
|
|
$
|
2.93
|
|
Anti-dilutive shares related to:
|
|
|
|
|
|
|
|
||||||||
Outstanding share-based awards
|
446
|
|
|
810
|
|
|
963
|
|
|
1,424
|
|
Accrued Restructuring
|
Closure of Manufacturing Facilities
|
|
Reduction of Operating Costs Action
|
|
Early Retirement Action
|
|
Repositioning Action
|
||||||||
Balance at November 3, 2018
|
$
|
42,974
|
|
|
$
|
5,255
|
|
|
$
|
9,897
|
|
|
$
|
—
|
|
First quarter fiscal 2019 special charges
|
1,127
|
|
|
—
|
|
|
—
|
|
|
20,655
|
|
||||
Severance and other payments
|
—
|
|
|
(2,489
|
)
|
|
(2,766
|
)
|
|
(1,051
|
)
|
||||
Non-cash impairment charge
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,367
|
)
|
||||
Effect of foreign currency on accrual
|
(14
|
)
|
|
4
|
|
|
—
|
|
|
(2
|
)
|
||||
Balance at February 2, 2019
|
$
|
44,087
|
|
|
$
|
2,770
|
|
|
$
|
7,131
|
|
|
$
|
15,235
|
|
Second quarter fiscal 2019 special charges
|
4,593
|
|
|
—
|
|
|
—
|
|
|
3,569
|
|
||||
Severance and other payments
|
—
|
|
|
(909
|
)
|
|
(1,641
|
)
|
|
(3,782
|
)
|
||||
Effect of foreign currency on accrual
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
||||
Balance at May 4, 2019
|
$
|
48,662
|
|
|
$
|
1,861
|
|
|
$
|
5,490
|
|
|
$
|
15,013
|
|
Third quarter fiscal 2019 special charges
|
927
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Severance and other payments
|
—
|
|
|
(596
|
)
|
|
(583
|
)
|
|
(4,321
|
)
|
||||
Effect of foreign currency on accrual
|
(84
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||
Balance at August 3, 2019
|
$
|
49,505
|
|
|
$
|
1,265
|
|
|
$
|
4,907
|
|
|
$
|
10,687
|
|
Current - accrued liabilities
|
$
|
—
|
|
|
$
|
1,265
|
|
|
$
|
4,907
|
|
|
$
|
10,687
|
|
Other non-current liabilities
|
$
|
49,505
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
August 3, 2019
|
||||||||||
|
Fair Value measurement at
Reporting Date using:
|
|
|||||||||
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Total
|
||||||
Assets
|
|
|
|
|
|
||||||
Cash equivalents:
|
|
|
|
|
|
||||||
Available-for-sale:
|
|
|
|
|
|
||||||
Government and institutional money market funds
|
$
|
321,499
|
|
|
$
|
—
|
|
|
$
|
321,499
|
|
Corporate obligations (1)
|
—
|
|
|
39,968
|
|
|
39,968
|
|
|||
Other assets:
|
|
|
|
|
|
||||||
Deferred compensation investments
|
46,888
|
|
|
—
|
|
|
46,888
|
|
|||
Total assets measured at fair value
|
$
|
368,387
|
|
|
$
|
39,968
|
|
|
$
|
408,355
|
|
Liabilities
|
|
|
|
|
|
||||||
Forward foreign currency exchange contracts (2)
|
—
|
|
|
3,746
|
|
|
3,746
|
|
|||
Interest rate derivatives
|
—
|
|
|
121,754
|
|
|
121,754
|
|
|||
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
125,500
|
|
|
$
|
125,500
|
|
(1)
|
The amortized cost of the Company’s investments classified as available-for-sale as of
August 3, 2019
was
$40.0 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.
|
|
November 3, 2018
|
||||||||||
|
Fair Value measurement at
Reporting Date using:
|
|
|
||||||||
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Total
|
||||||
Assets
|
|
|
|
|
|
||||||
Cash equivalents:
|
|
|
|
|
|
||||||
Available-for-sale:
|
|
|
|
|
|
||||||
Government and institutional money market funds
|
$
|
394,076
|
|
|
$
|
—
|
|
|
$
|
394,076
|
|
Corporate obligations (1)
|
—
|
|
|
204,886
|
|
|
204,886
|
|
|||
Other assets:
|
|
|
|
|
|
||||||
Deferred compensation investments
|
41,001
|
|
|
—
|
|
|
41,001
|
|
|||
Interest rate derivatives
|
—
|
|
|
1,436
|
|
|
1,436
|
|
|||
Total assets measured at fair value
|
$
|
435,077
|
|
|
$
|
206,322
|
|
|
$
|
641,399
|
|
Liabilities
|
|
|
|
|
|
||||||
Forward foreign currency exchange contracts (2)
|
—
|
|
|
7,150
|
|
|
7,150
|
|
|||
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
7,150
|
|
|
$
|
7,150
|
|
(1)
|
The amortized cost of the Company’s investments classified as available-for-sale as of
November 3, 2018
was
$205.0 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.
|
|
August 3, 2019
|
|
November 3, 2018
|
||||||||||||
|
Principal Amount Outstanding
|
|
Fair Value
|
|
Principal Amount Outstanding
|
|
Fair Value
|
||||||||
3-Year term loan, due March 2022
|
$
|
1,125,000
|
|
|
$
|
1,125,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
3-Year term loan, due March 2020
|
—
|
|
|
—
|
|
|
425,000
|
|
|
425,000
|
|
||||
5-Year term loan, due March 2022
|
—
|
|
|
—
|
|
|
1,350,000
|
|
|
1,350,000
|
|
||||
2.85% Senior unsecured notes, due March 2020
|
300,000
|
|
|
301,375
|
|
|
300,000
|
|
|
298,147
|
|
||||
2.95% Senior unsecured notes, due January 2021
|
450,000
|
|
|
455,147
|
|
|
450,000
|
|
|
444,568
|
|
||||
2.50% Senior unsecured notes, due December 2021
|
400,000
|
|
|
403,714
|
|
|
400,000
|
|
|
386,375
|
|
||||
2.875% Senior unsecured notes, due June 2023
|
500,000
|
|
|
512,529
|
|
|
500,000
|
|
|
479,189
|
|
||||
3.125% Senior unsecured notes, due December 2023
|
550,000
|
|
|
568,844
|
|
|
550,000
|
|
|
529,120
|
|
||||
3.90% Senior unsecured notes, due December 2025
|
850,000
|
|
|
921,161
|
|
|
850,000
|
|
|
829,611
|
|
||||
3.50% Senior unsecured notes, due December 2026
|
900,000
|
|
|
944,452
|
|
|
900,000
|
|
|
848,027
|
|
||||
4.50% Senior unsecured notes, due December 2036
|
250,000
|
|
|
273,838
|
|
|
250,000
|
|
|
232,627
|
|
||||
5.30% Senior unsecured notes, due December 2045
|
400,000
|
|
|
494,982
|
|
|
400,000
|
|
|
407,984
|
|
||||
Total debt
|
$
|
5,725,000
|
|
|
$
|
6,001,042
|
|
|
$
|
6,375,000
|
|
|
$
|
6,230,648
|
|
|
|
|
Fair Value At
|
||||||
|
Balance Sheet Location
|
|
August 3, 2019
|
|
November 3, 2018
|
||||
Forward foreign currency exchange contracts
|
Accrued liabilities
|
|
$
|
2,812
|
|
|
$
|
6,934
|
|
|
August 3, 2019
|
|
November 3, 2018
|
||||
Gross amount of recognized liabilities
|
$
|
(5,866
|
)
|
|
$
|
(8,054
|
)
|
Gross amounts of recognized assets offset in the condensed consolidated balance sheet
|
2,120
|
|
|
904
|
|
||
Net liabilities presented in the condensed consolidated balance sheet
|
$
|
(3,746
|
)
|
|
$
|
(7,150
|
)
|
|
August 3, 2019
|
|
November 3, 2018
|
||||
Raw materials
|
$
|
36,966
|
|
|
$
|
30,511
|
|
Work in process
|
416,327
|
|
|
375,908
|
|
||
Finished goods
|
185,012
|
|
|
180,341
|
|
||
Total inventories
|
$
|
638,305
|
|
|
$
|
586,760
|
|
•
|
ASU 2017-01,
Business Combinations (Topic 805) Clarifying the Definition of a Business
.
|
•
|
ASU 2016-15,
Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments
.
|
•
|
ASU 2016-01,
Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities
.
|
•
|
ASU 2017-09,
Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting.
|
•
|
ASU 2017-07,
Improving the Presentation of Net Period Pension Cost and Net Period Postretirement Benefit Cost.
|
ITEM 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Three Months Ended
|
|||||||||||||
|
August 3, 2019
|
|
August 4, 2018 (1)
|
|
$ Change
|
|
% Change
|
|||||||
Revenue
|
$
|
1,480,143
|
|
|
$
|
1,558,189
|
|
|
$
|
(78,046
|
)
|
|
(5
|
)%
|
Gross margin %
|
67.4
|
%
|
|
68.1
|
%
|
|
|
|
|
|||||
Net income
|
$
|
362,374
|
|
|
$
|
408,557
|
|
|
$
|
(46,183
|
)
|
|
(11
|
)%
|
Net income as a % of revenue
|
24.5
|
%
|
|
26.2
|
%
|
|
|
|
|
|||||
Diluted EPS
|
$
|
0.97
|
|
|
$
|
1.08
|
|
|
$
|
(0.11
|
)
|
|
(10
|
)%
|
|
|
|
|
|
|
|
|
|||||||
|
Nine Months Ended
|
|||||||||||||
|
August 3, 2019
|
|
August 4, 2018 (1)
|
|
$ Change
|
|
% Change
|
|||||||
Revenue
|
$
|
4,547,846
|
|
|
$
|
4,688,561
|
|
|
$
|
(140,715
|
)
|
|
(3
|
)%
|
Gross margin %
|
67.5
|
%
|
|
68.3
|
%
|
|
|
|
|
|||||
Net income
|
$
|
1,085,317
|
|
|
$
|
1,102,125
|
|
|
$
|
(16,808
|
)
|
|
(2
|
)%
|
Net income as a % of revenue
|
23.9
|
%
|
|
23.5
|
%
|
|
|
|
|
|||||
Diluted EPS
|
$
|
2.90
|
|
|
$
|
2.93
|
|
|
$
|
(0.03
|
)
|
|
(1
|
)%
|
|
Three Months Ended
|
||||||||||
|
August 3, 2019
|
|
August 4, 2018
|
||||||||
|
Revenue
|
|
% of Revenue*
|
|
Revenue (1)
|
|
% of Revenue*
|
||||
Channel
|
|
|
|
|
|
|
|
||||
Distributors
|
863,055
|
|
|
58
|
%
|
|
856,504
|
|
|
55
|
%
|
Direct customers
|
600,609
|
|
|
41
|
%
|
|
687,151
|
|
|
44
|
%
|
Other
|
16,479
|
|
|
1
|
%
|
|
14,534
|
|
|
1
|
%
|
Total revenue
|
1,480,143
|
|
|
100
|
%
|
|
1,558,189
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
||||
|
Nine Months Ended
|
||||||||||
|
August 3, 2019
|
|
August 4, 2018
|
||||||||
|
Revenue
|
|
% of Revenue*
|
|
Revenue (1)
|
|
% of Revenue*
|
||||
Channel
|
|
|
|
|
|
|
|
||||
Distributors
|
2,563,807
|
|
|
56
|
%
|
|
2,590,792
|
|
|
55
|
%
|
Direct customers
|
1,934,376
|
|
|
43
|
%
|
|
2,035,743
|
|
|
43
|
%
|
Other
|
49,663
|
|
|
1
|
%
|
|
62,026
|
|
|
1
|
%
|
Total revenue
|
4,547,846
|
|
|
100
|
%
|
|
4,688,561
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
||||
* The sum of the individual percentages may not equal the total due to rounding.
|
|||||||||||
(1) Balances have been restated to reflect the full retrospective adoption of ASU 2014-09. See Note 1,
Basis of Presentation
, in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||||
|
August 3, 2019
|
|
August 4, 2018 (1)
|
|
$ Change
|
|
% Change
|
|
August 3, 2019
|
|
August 4, 2018 (1)
|
|
$ Change
|
|
% Change
|
||||||||||||||
Gross margin
|
$
|
997,811
|
|
|
$
|
1,060,558
|
|
|
$
|
(62,747
|
)
|
|
(6
|
)%
|
|
$
|
3,071,559
|
|
|
$
|
3,204,631
|
|
|
$
|
(133,072
|
)
|
|
(4
|
)%
|
Gross margin %
|
67.4
|
%
|
|
68.1
|
%
|
|
|
|
|
|
67.5
|
%
|
|
68.3
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||||
|
August 3, 2019
|
|
August 4, 2018
|
|
$ Change
|
|
% Change
|
|
August 3, 2019
|
|
August 4, 2018
|
|
$ Change
|
|
% Change
|
||||||||||||||
R&D expenses
|
$
|
280,102
|
|
|
$
|
291,642
|
|
|
$
|
(11,540
|
)
|
|
(4
|
)%
|
|
$
|
853,330
|
|
|
$
|
869,711
|
|
|
$
|
(16,381
|
)
|
|
(2
|
)%
|
R&D expenses as a % of revenue
|
18.9
|
%
|
|
18.7
|
%
|
|
|
|
|
|
18.8
|
%
|
|
18.5
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||||
|
August 3, 2019
|
|
August 4, 2018
|
|
$ Change
|
|
% Change
|
|
August 3, 2019
|
|
August 4, 2018
|
|
$ Change
|
|
% Change
|
||||||||||||||
SMG&A expenses
|
$
|
162,825
|
|
|
$
|
171,487
|
|
|
$
|
(8,662
|
)
|
|
(5
|
)%
|
|
$
|
493,295
|
|
|
$
|
520,541
|
|
|
$
|
(27,246
|
)
|
|
(5
|
)%
|
SMG&A expenses as a % of revenue
|
11.0
|
%
|
|
11.0
|
%
|
|
|
|
|
|
10.8
|
%
|
|
11.1
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||||
|
August 3, 2019
|
|
August 4, 2018
|
|
$ Change
|
|
% Change
|
|
August 3, 2019
|
|
August 4, 2018
|
|
$ Change
|
|
% Change
|
||||||||||||||
Operating income
|
$
|
446,726
|
|
|
$
|
488,951
|
|
|
$
|
(42,225
|
)
|
|
(9
|
)%
|
|
$
|
1,372,247
|
|
|
$
|
1,433,346
|
|
|
$
|
(61,099
|
)
|
|
(4
|
)%
|
Operating income as a % of revenue
|
30.2
|
%
|
|
31.4
|
%
|
|
|
|
|
|
30.2
|
%
|
|
30.6
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||
|
August 3, 2019
|
|
August 4, 2018
|
|
$ Change
|
|
August 3, 2019
|
|
August 4, 2018
|
|
$ Change
|
||||||||||||
Interest expense
|
$
|
59,871
|
|
|
$
|
61,665
|
|
|
$
|
(1,794
|
)
|
|
$
|
178,300
|
|
|
$
|
194,487
|
|
|
$
|
(16,187
|
)
|
Interest income
|
(2,625
|
)
|
|
(2,588
|
)
|
|
(37
|
)
|
|
(8,241
|
)
|
|
(6,592
|
)
|
|
(1,649
|
)
|
||||||
Other, net
|
(78
|
)
|
|
(632
|
)
|
|
554
|
|
|
4,287
|
|
|
(527
|
)
|
|
4,814
|
|
||||||
Total nonoperating expense (income)
|
$
|
57,168
|
|
|
$
|
58,445
|
|
|
$
|
(1,277
|
)
|
|
$
|
174,346
|
|
|
$
|
187,368
|
|
|
$
|
(13,022
|
)
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||
|
August 3, 2019
|
|
August 4, 2018 (1)
|
|
$ Change
|
|
August 3, 2019
|
|
August 4, 2018 (1)
|
|
$ Change
|
||||||||||||
Provision for income taxes
|
$
|
27,184
|
|
|
$
|
21,949
|
|
|
$
|
5,235
|
|
|
$
|
112,584
|
|
|
$
|
143,853
|
|
|
$
|
(31,269
|
)
|
Effective income tax rate
|
7.0
|
%
|
|
5.1
|
%
|
|
|
|
9.4
|
%
|
|
11.5
|
%
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||||
|
August 3, 2019
|
|
August 4, 2018 (1)
|
|
$ Change
|
|
% Change
|
|
August 3, 2019
|
|
August 4, 2018 (1)
|
|
$ Change
|
|
% Change
|
||||||||||||||
Net Income
|
$
|
362,374
|
|
|
$
|
408,557
|
|
|
$
|
(46,183
|
)
|
|
(11
|
)%
|
|
$
|
1,085,317
|
|
|
$
|
1,102,125
|
|
|
$
|
(16,808
|
)
|
|
(2
|
%)
|
Net Income as a % of revenue
|
24.5
|
%
|
|
26.2
|
%
|
|
|
|
|
|
23.9
|
%
|
|
23.5
|
%
|
|
|
|
|
||||||||||
Diluted EPS
|
$
|
0.97
|
|
|
$
|
1.08
|
|
|
|
|
|
|
|
$2.90
|
|
|
|
$2.93
|
|
|
|
|
|
|
Nine Months Ended
|
||||||
|
August 3, 2019
|
|
August 4, 2018 (1)
|
||||
Net cash provided by operating activities
|
$
|
1,595,196
|
|
|
$
|
1,727,920
|
|
Net cash provided by operations as a % of revenue
|
35.1
|
%
|
|
36.9
|
%
|
||
Net cash used for investing activities
|
$
|
(229,429
|
)
|
|
$
|
(224,979
|
)
|
Net cash used for financing activities
|
$
|
(1,569,684
|
)
|
|
$
|
(1,777,296
|
)
|
|
August 3, 2019
|
|
November 3, 2018
|
|
$ Change
|
|
% Change
|
|||||||
Accounts receivable, net
|
$
|
689,976
|
|
|
$
|
639,717
|
|
|
$
|
50,259
|
|
|
8
|
%
|
Days sales outstanding*
|
42
|
|
|
40
|
|
|
|
|
|
|||||
Inventory
|
$
|
638,305
|
|
|
$
|
586,760
|
|
|
$
|
51,545
|
|
|
9
|
%
|
Days cost of sales in inventory*
|
118
|
|
|
107
|
|
|
|
|
|
|
Principal Amount Outstanding
|
|
|
3-Year term loan, due March 2022
|
$
|
1,125,000
|
|
2.85% Senior unsecured notes, due March 2020
|
300,000
|
|
|
2.95% Senior unsecured notes, due January 2021
|
450,000
|
|
|
2.50% Senior unsecured notes, due December 2021
|
400,000
|
|
|
2.875% Senior unsecured notes, due June 2023
|
500,000
|
|
|
3.125% Senior unsecured notes, due December 2023
|
550,000
|
|
|
3.90% Senior unsecured notes, due December 2025
|
850,000
|
|
|
3.50% Senior unsecured notes, due December 2026
|
900,000
|
|
|
4.50% Senior unsecured notes, due December 2036
|
250,000
|
|
|
5.30% Senior unsecured notes, due December 2045
|
400,000
|
|
|
Total debt
|
$
|
5,725,000
|
|
ITEM 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
ITEM 4.
|
Controls and Procedures
|
ITEM 1A.
|
Risk Factors
|
•
|
the effects of adverse economic conditions in the markets in which we sell our products;
|
•
|
changes in customer demand for our products and/or for end products that incorporate our products;
|
•
|
the timing, delay, reduction or cancellation of significant customer orders and our ability to manage inventory;
|
•
|
fluctuations in customer order patterns and seasonality;
|
•
|
our ability to accurately forecast distributor demand for our products;
|
•
|
our ability to accurately estimate future distributor pricing credits and/or stock rotation rights;
|
•
|
our ability to effectively manage our cost structure in both the short term and over a longer duration;
|
•
|
changes in geographic, product or customer mix;
|
•
|
changes in our effective tax rates or new or revised tax legislation in the United States, Ireland or worldwide;
|
•
|
the effects of issued, threatened or retaliatory government sanctions, trade barriers or economic restrictions, changes in law, regulations or other restrictions, including executive orders, changes in import and export regulations, export classifications or changes in duties and tariffs, particularly with respect to China;
|
•
|
the timing of new product announcements or introductions by us, our customers or our competitors and the market acceptance of such products;
|
•
|
pricing decisions and competitive pricing pressures;
|
•
|
fluctuations in manufacturing yields, adequate availability of wafers and other raw materials, and manufacturing, assembly and test capacity;
|
•
|
the ability of our third-party suppliers, subcontractors and manufacturers to supply us with sufficient quantities of raw materials, products and/or components;
|
•
|
a decline in infrastructure spending by foreign governments, including China;
|
•
|
a decline in the U.S. government defense budget, changes in spending or budgetary priorities, a prolonged U.S. government shutdown or delays in contract awards;
|
•
|
any significant decline in our backlog;
|
•
|
our ability to recruit, hire, retain and motivate adequate numbers of engineers and other qualified employees to meet the demands of our customers;
|
•
|
our ability to generate new design opportunities and win competitive bid selection processes;
|
•
|
the increasing costs of providing employee benefits worldwide, including health insurance, retirement plan and pension plan contributions and retirement benefits;
|
•
|
our ability to utilize our manufacturing facilities at efficient levels;
|
•
|
potential significant litigation-related costs or product warranty and/or indemnity claims, including those not covered by our suppliers or insurers;
|
•
|
the difficulties inherent in forecasting future operating expense levels, including with respect to costs associated with labor, utilities, transportation and raw materials;
|
•
|
the costs related to compliance with increasing worldwide government, environmental and social responsibility regulations;
|
•
|
new accounting pronouncements or changes in existing accounting standards and practices; and
|
•
|
the effects of public health emergencies, natural disasters, widespread travel disruptions, security risks, terrorist activities, international conflicts and other events beyond our control.
|
•
|
political, legal and economic changes, crises or instability and civil unrest in foreign markets, including potential macroeconomic weakness related to escalating trade disputes between the United States and China and the United Kingdom's pending withdrawal from the European Union;
|
•
|
currency conversion risks and exchange rate and interest rate fluctuations, including the potential impact of the transition from LIBOR;
|
•
|
trade policy, trade, travel, export or taxation disputes or restrictions, government sanctions, import or export tariffs, changes to export classifications or other restrictions imposed by the U.S. government or by the governments of the countries in which we do business, particularly in China;
|
•
|
complex, varying and changing government regulations and legal standards and requirements, particularly with respect to price protection, competition practices, export control regulations and restrictions, customs and tax requirements, immigration, anti-boycott regulations, data privacy, intellectual property, anti-corruption and environmental
|
•
|
economic disruption from terrorism and threats of terrorism and the response to them by the U.S. and its allies;
|
•
|
increased managerial complexities, including different employment practices and labor issues;
|
•
|
changes in immigration laws, regulations and procedures and enforcement practices of various government agencies;
|
•
|
greater difficulty enforcing intellectual property rights and weaker laws protecting such rights;
|
•
|
natural disasters or pandemics;
|
•
|
transportation disruptions and delays and increases in labor and transportation costs;
|
•
|
changes to foreign taxes, tariffs and freight rates;
|
•
|
fluctuations in raw material costs and energy costs;
|
•
|
greater difficulty in accounts receivable collections and longer collection periods; and
|
•
|
costs associated with our foreign defined benefit pension plans.
|
•
|
the inability to successfully integrate Linear's business into our own in a manner that permits the combined company to achieve the cost savings and operating synergies anticipated to result from the Acquisition, which could result in the anticipated benefits of the Acquisition not being realized partly or wholly in the time frame currently anticipated or at all;
|
•
|
integrating personnel, IT systems and corporate, finance and administrative infrastructures of the two companies while maintaining focus on providing consistent, high quality products and services;
|
•
|
coordinating and integrating our internal operations, compensation and benefits programs, policies and procedures, and corporate structures; and
|
•
|
servicing the substantial debt that we have incurred in connection with the Acquisition.
|
•
|
seek additional financing in the debt or equity markets;
|
•
|
refinance or restructure all or a portion of our indebtedness;
|
•
|
borrow under our revolving credit facility;
|
•
|
divert funds that would otherwise be invested in our operations;
|
•
|
repatriate earnings as dividends from foreign locations, attracting foreign withholding and state and local income taxes;
|
•
|
sell selected assets; or
|
•
|
reduce or delay planned capital expenditures or operating expenditures.
|
•
|
difficulty or delay integrating acquired technologies, operations and personnel with our existing businesses;
|
•
|
diversion of management's attention in connection with both negotiating the transaction and integrating the assets;
|
•
|
strain on managerial and operational resources as management tries to oversee larger or more complex operations;
|
•
|
the future funding requirements for acquired companies, which may be significant;
|
•
|
potential loss of key employees;
|
•
|
exposure to unforeseen liabilities or regulatory compliance issues of acquired companies;
|
•
|
higher than expected or unexpected costs relating to or associated with an acquisition and integration of assets;
|
•
|
difficulty realizing synergies and growth prospects of an acquisition in a timely manner or at all; and
|
•
|
increased risk of costly and time-consuming legal proceedings.
|
•
|
liability for damages and remediation;
|
•
|
the imposition of regulatory penalties and civil and criminal fines;
|
•
|
the suspension or termination of the development, manufacture, sale or use of certain of our products;
|
•
|
changes to our manufacturing processes or a need to substitute materials that may cost more or be less available;
|
•
|
damage to our reputation; and/or
|
•
|
increased expenses associated with compliance.
|
•
|
global economic conditions generally;
|
•
|
crises in global credit, debt and financial markets;
|
•
|
actual or anticipated fluctuations in our revenue and operating results;
|
•
|
changes in financial estimates or other statements made by securities analysts or others in analyst reports or other publications or our failure to perform in line with those estimates or statements or our published guidance;
|
•
|
financial results and prospects of our customers;
|
•
|
U.S. and foreign government actions, including with respect to trade, travel, export and taxation;
|
•
|
changes in market valuations of other semiconductor companies;
|
•
|
rumors and speculation in the press, investment community or on social media about us, our customers or other companies in our industry;
|
•
|
announcements by us, our customers or our competitors of significant new products, technical innovations, material transactions, acquisitions or dispositions, litigation, capital commitments or revised earnings estimates;
|
•
|
departures of key personnel;
|
•
|
alleged noncompliance with laws, regulations or ethics standards by us or any of our employees, officers or directors; and
|
•
|
negative media publicity targeting us or our suppliers, customers or competitors.
|
ITEM 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
Total Number of
Shares Purchased
(a)
|
|
Average Price
Paid Per Share (b)
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs (c)
|
|
Approximate Dollar
Value of Shares that
May Yet Be
Purchased Under
the Plans or
Programs
|
||||||
May 5, 2019 through June 1, 2019
|
285,310
|
|
|
$
|
101.83
|
|
|
280,297
|
|
|
$
|
2,306,481,570
|
|
June 2, 2019 through June 29, 2019
|
291,771
|
|
|
$
|
106.59
|
|
|
283,550
|
|
|
$
|
2,276,244,379
|
|
June 30, 2019 through August 3, 2019
|
444,943
|
|
|
$
|
116.53
|
|
|
360,464
|
|
|
$
|
2,234,257,708
|
|
Total
|
1,022,024
|
|
|
$
|
109.59
|
|
|
924,311
|
|
|
$
|
2,234,257,708
|
|
(a)
|
Includes 97,713 shares withheld by us from employees to satisfy minimum employee tax obligations upon vesting of restricted stock units/awards granted to our employees under our equity compensation plans.
|
(b)
|
The average price paid for shares in connection with vesting of restricted stock units/awards are averages of the closing stock price at the vesting date which is used to calculate the number of shares to be withheld.
|
(c)
|
Shares repurchased pursuant to the stock repurchase program publicly announced on August 12, 2004. Under the repurchase program, we may repurchase outstanding shares of our common stock from time to time in the open market and through privately negotiated transactions in an aggregate amount of up to $8.2 billion. Unless terminated earlier by resolution of our Board of Directors, the repurchase program will expire when we have repurchased all shares authorized for repurchase under the repurchase program.
|
ITEM 6.
|
Exhibits
|
|
||
Exhibit No.
|
|
Description
|
10.1
|
|
Credit Agreement, dated as of June 28, 2019, among Analog Devices, Inc., as Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, and each lender from time to time party thereto
, filed as exhibit 10.1 to the Company's Current Report on Form 8-K as filed with the Commission on July 1, 2019 (File No. 1-7819) and incorporated herein by reference.
|
10.2
|
|
Second Amended and Restated Credit Agreement, dated as of June 28, 2019, among Analog Devices, Inc., as Borrower, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and each lender from time to time party thereto
, filed as exhibit 10.2 to the Company's Current Report on Form 8-K as filed with the Commission on July 1, 2019 (File No. 1-7819) and incorporated herein by reference.
|
31.1†
|
|
|
31.2†
|
|
|
32.1†
|
|
|
32.2†
|
|
|
101.INS
|
|
The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document.**
|
101.SCH
|
|
Inline XBRL Schema Document.**
|
101.CAL
|
|
Inline XBRL Calculation Linkbase Document.**
|
101.LAB
|
|
Inline XBRL Labels Linkbase Document.**
|
101.PRE
|
|
Inline XBRL Presentation Linkbase Document.**
|
101.DEF
|
|
Inline XBRL Definition Linkbase Document.**
|
104
|
|
Cover page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101).
|
†
|
|
Filed or furnished herewith.
|
**
|
|
Submitted electronically herewith.
|
|
ANALOG DEVICES, INC.
|
||
|
|
|
|
Date: August 21, 2019
|
By:
|
|
/s/ Vincent Roche
|
|
|
|
Vincent Roche
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
Date: August 21, 2019
|
By:
|
|
/s/ Prashanth Mahendra-Rajah
|
|
|
|
Prashanth Mahendra-Rajah
|
|
|
|
Senior Vice President, Finance and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
1 Year Analog Devices Chart |
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