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
			July 30, 2022						July 31, 2021						July 30, 2022						July 31, 2021
Revenue			$	3,109,880					$	1,758,853					$	8,766,237					$	4,978,718
Cost of sales			1,066,738						537,669						3,376,578						1,575,526
Gross margin			2,043,142						1,221,184						5,389,659						3,403,192
Operating expenses:
Research and development			431,829						306,617						1,279,510						897,005
Selling, marketing, general and administrative			326,942						206,076						929,615						597,963
Amortization of intangibles			252,864						107,783						759,707						323,217
Special charges, net			138,201						(8,938)						244,603						(8,189)
Total operating expenses			1,149,836						611,538						3,213,435						1,809,996
Operating income:			893,306						609,646						2,176,224						1,593,196
Nonoperating expense (income):
Interest expense			51,189						44,659						152,701						130,204
Interest income			(1,797)						(300)						(2,578)						(799)
Other, net			(4,023)						(6,991)						(24,636)						(21,090)
Total nonoperating expense (income)			45,369						37,368						125,487						108,315
Income before income taxes			847,937						572,278						2,050,737						1,484,881
Provision for income taxes			98,952						68,967						238,402						170,146
Net income			$	748,985					$	503,311					$	1,812,335					$	1,314,735
Shares used to compute earnings per common share – basic			517,011						368,476						521,557						368,834
Shares used to compute earnings per common share – diluted			520,550						371,849						525,652						372,457
Basic earnings per common share			$	1.45					$	1.37					$	3.47					$	3.56
Diluted earnings per common share			$	1.44					$	1.35					$	3.45					$	3.53

See accompanying notes.

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(in thousands)

			Three Months Ended												Nine Months Ended
			July 30, 2022						July 31, 2021						July 30, 2022						July 31, 2021
Net income			$	748,985					$	503,311					$	1,812,335					$	1,314,735
Foreign currency translation adjustments			(9,028)						(2,952)						(31,500)						5,073
Change in fair value of derivative instruments designated as cash flow hedges (net of taxes of $854, $10,657, $1,103 and $6,452, respectively)			2,239						(40,040)						(471)						19,853
Changes in pension plans, net actuarial loss and foreign currency translation adjustments (net of taxes of $88, $85, $275 and $257, respectively)			1,770						964						5,902						(408)
Other comprehensive (loss) income			(5,019)						(42,028)						(26,069)						24,518
Comprehensive income			$	743,966					$	461,283					$	1,786,266					$	1,339,253

See accompanying notes.

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share and per share amounts)

			July 30, 2022						October 30, 2021
ASSETS
Current Assets
Cash and cash equivalents			$	1,524,960					$	1,977,964
Accounts receivable			1,742,646						1,459,056
Inventories			1,203,394						1,200,610
Prepaid expenses and other current assets			218,708						740,687
Total current assets			4,689,708						5,378,317
Non-current Assets
Net property, plant and equipment			2,180,048						1,979,051
Goodwill			26,920,335						26,918,470
Intangible assets, net			13,764,444						15,267,170
Deferred tax assets			2,297,122						2,267,269
Other assets			494,513						511,794
Total non-current assets			45,656,462						46,943,754
TOTAL ASSETS			$	50,346,170					$	52,322,071
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable			$	545,068					$	443,434
Income taxes payable			445,726						332,685
Debt, current			—						516,663
Accrued liabilities			1,450,407						1,477,530
Total current liabilities			2,441,201						2,770,312
Non-current Liabilities
Long-term debt			6,252,839						6,253,212
Deferred income taxes			3,764,370						3,938,830
Income taxes payable			712,982						811,337
Other non-current liabilities			536,187						555,838
Total non-current liabilities			11,266,378						11,559,217
Shareholders’ Equity
Preferred stock, $1.00 par value, 471,934 shares authorized, none outstanding			—						—
Common stock, $0.16 2/3 par value, 1,200,000,000 shares authorized, 514,341,531 shares outstanding (525,330,672 on October 30, 2021)			85,725						87,554
Capital in excess of par value			28,590,056						30,574,237
Retained earnings			8,175,444						7,517,316
Accumulated other comprehensive loss			(212,634)						(186,565)
Total shareholders’ equity			36,638,591						37,992,542
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			$	50,346,170					$	52,322,071

See accompanying notes.

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)

(in thousands)

			Three Months Ended July 30, 2022
															Capital in												Accumulated Other
			Common Stock												Excess of						Retained						Comprehensive
			Shares						Amount						Par Value						Earnings						Loss
BALANCE, APRIL 30, 2022			519,806						$	86,636					$	29,400,284					$	7,820,477					$	(207,615)
Net income																					748,985
Dividends declared and paid - $0.76 per share																					(394,018)
Issuance of stock under stock plans and other			413						69						9,891
Stock-based compensation expense															84,874
Other comprehensive loss																											(5,019)
Common stock repurchased			(5,878)						(980)						(904,993)
BALANCE, JULY 30, 2022			514,341						$	85,725					$	28,590,056					$	8,175,444					$	(212,634)
			Nine Months Ended July 30, 2022
															Capital in												Accumulated Other
			Common Stock												Excess of						Retained						Comprehensive
			Shares						Amount						Par Value						Earnings						Loss
BALANCE, OCTOBER 30, 2021			525,331						$	87,554					$	30,574,237					$	7,517,316					$	(186,565)
Net income																					1,812,335
Dividends declared and paid - $2.21 per share																					(1,154,207)
Issuance of stock under stock plans and other			2,396						400						29,613
Stock-based compensation expense															242,809
Other comprehensive loss																											(26,069)
Common stock repurchased			(13,386)						(2,229)						(2,256,603)
BALANCE, JULY 30, 2022			514,341						$	85,725					$	28,590,056					$	8,175,444					$	(212,634)

See accompanying notes.

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)

(in thousands)

			Three Months Ended July 31, 2021
															Capital in												Accumulated Other
			Common Stock												Excess of						Retained						Comprehensive
			Shares						Amount						Par Value						Earnings						Loss
BALANCE, MAY 1, 2021			368,827						$	61,472					$	4,724,493					$	7,564,054					$	(182,915)
Net income																					503,311
Dividends declared and paid - $0.69 per share																					(254,506)
Issuance of stock under stock plans and other			396						66						11,610
Stock-based compensation expense															41,687
Other comprehensive loss																											(42,028)
Common stock repurchased			(1,009)						(168)						(163,113)
BALANCE, JULY 31, 2021			368,214						$	61,370					$	4,614,677					$	7,812,859					$	(224,943)
			Nine Months Ended July 31, 2021
															Capital in												Accumulated Other
			Common Stock												Excess of						Retained						Comprehensive
			Shares						Amount						Par Value						Earnings						Loss
BALANCE, OCTOBER 31, 2020			369,485						$	61,582					$	4,949,586					$	7,236,238					$	(249,461)
Net income																					1,314,735
Dividends declared and paid - $2.00 per share																					(738,114)
Issuance of stock under stock plans and other			2,040						340						55,008
Stock-based compensation expense															118,683
Other comprehensive income																											24,518
Common stock repurchased			(3,311)						(552)						(508,600)
BALANCE, JULY 31, 2021			368,214						$	61,370					$	4,614,677					$	7,812,859					$	(224,943)

See accompanying notes.

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

			Nine Months Ended
			July 30, 2022						July 31, 2021
Cash flows from operating activities:
Net income			$	1,812,335					$	1,314,735
Adjustments to reconcile net income to net cash provided by operations:
Depreciation			212,635						158,937
Amortization of intangibles			1,512,250						436,734
Stock-based compensation expense			242,809						118,683
Non-cash impairment charge			91,953						—
Gain on sale of property, plant, and equipment			(4,352)						(13,557)
Cost of goods sold for inventory acquired			271,396						—
Deferred income taxes			(205,128)						(72,578)
Non-cash operating lease costs			(17,958)						16,855
Other			(7,061)						(14,965)
Changes in operating assets and liabilities			(582,813)						(150,499)
Total adjustments			1,513,731						479,610
Net cash provided by operating activities			3,326,066						1,794,345
Cash flows from investing activities:
Additions to property, plant and equipment			(394,796)						(212,899)
Other			43,761						29,619
Net cash used for investing activities			(351,035)						(183,280)
Cash flows from financing activities:
Proceeds from revolver			400,000						—
Payments on revolver			(400,000)						—
Early termination of debt			(519,116)						—
Dividend payments to shareholders			(1,154,207)						(738,114)
Repurchase of common stock			(1,758,832)						(509,152)
Proceeds from employee stock plans			30,013						55,348
Other			(1,718)						1,952
Net cash used for financing activities			(3,403,860)						(1,189,966)
Effect of exchange rate changes on cash			(24,175)						3,742
Net (decrease) increase in cash and cash equivalents			(453,004)						424,841
Cash and cash equivalents at beginning of period			1,977,964						1,055,860
Cash and cash equivalents at end of period			$	1,524,960					$	1,480,701

See accompanying notes.

ANALOG DEVICES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED JULY 30, 2022 (UNAUDITED)

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

Note 1 – Basis of Presentation

In the opinion of management, the information furnished in the accompanying condensed consolidated financial statements reflects all normal recurring adjustments that are necessary to fairly state the results for these interim periods and should be read in conjunction with Analog Devices, Inc.’s (the Company) Annual Report on Form 10-K for the fiscal year ended October 30, 2021 (fiscal 2021) and related notes. The results of operations for the interim periods shown in this report are not necessarily indicative of the results that may be expected for the fiscal year ending October 29, 2022 (fiscal 2022) or any future period.

The Company has a 52-53 week fiscal year that ends on the Saturday closest to the last day in October. Certain amounts reported in previous periods have been reclassified to conform to the fiscal 2022 presentation.

On August 26, 2021 (Acquisition Date), the Company completed the acquisition of Maxim Integrated Products, Inc. (Maxim), an independent manufacturer of innovative analog and mixed-signal products and technologies. The acquisition of Maxim is referred to as the Acquisition. The consolidated financial statements included in this Quarterly Report on Form 10-Q include the financial results of Maxim prospectively from the Acquisition Date. See Note 14, Acquisitions, in these Notes to Condensed Consolidated Financial Statements for additional information.

Note 2 – Shareholders' Equity

In fiscal 2021, the Company entered into accelerated share repurchase agreements (ASR) with third party financial institutions, paid $2.5 billion and received an initial delivery of 12.3 million shares of common stock, which represented approximately 80% of the notional amount of the ASR. As of October 30, 2021, the Company recorded the remaining 20%, or $500.0 million, within Prepaid expenses and other current assets on the Consolidated Balance Sheet, which was utilized during the first quarter of fiscal 2022. During the first quarter of fiscal 2022, the ASR was completed and an additional 2.1 million shares of common stock were received as final settlement of the ASR. In total, the Company repurchased 14.4 million shares under the ASR at an average price per share of $173.77.

As of July 30, 2022, the Company had repurchased a total of approximately 184.3 million shares of its common stock for approximately $10.9 billion under the Company's share repurchase program. As of July 30, 2022, an additional $5.7 billion remains available for repurchase of shares under the current authorized program. The Company also repurchases shares in settlement of employee tax withholding obligations due upon the vesting of restricted stock units/awards or the exercise of stock options. Future repurchases of common stock will be dependent upon the Company's financial position, results of operations, outlook, liquidity and other factors deemed relevant by the Company.

Note 3 – Accumulated Other Comprehensive (Loss) Income

The following table provides the changes in accumulated other comprehensive (loss) income (AOCI) by component and the related tax effects during the first nine months of fiscal 2022.

			Foreign currency translation adjustment																		Unrealized holding gains (losses) on derivatives						Pension plans						Total
October 30, 2021			$	(25,795)																	$	(123,754)					$	(37,016)					$	(186,565)
Other comprehensive (loss) income before reclassifications			(31,500)																		(27,471)						4,513						(54,458)
Amounts reclassified out of other comprehensive income			—																		28,103						1,664						29,767
Tax effects			—																		(1,103)						(275)						(1,378)
Other comprehensive (loss) income			(31,500)																		(471)						5,902						(26,069)
July 30, 2022			$	(57,295)																	$	(124,225)					$	(31,114)					$	(212,634)

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												Nine Months Ended
Comprehensive (Loss) Income Component						July 30, 2022						July 31, 2021						July 30, 2022						July 31, 2021						Location
Unrealized holding (gains) losses on derivatives
Currency forwards						$	2,520					$	(351)					$	6,384					$	(3,700)					Cost of sales
						1,320						(283)						3,903						(2,138)						Research and development
						2,265						28						6,623						(1,796)						Selling, marketing, general and administrative
Interest rate derivatives						3,731						464						11,193						1,391						Interest expense
						9,836						(142)						28,103						(6,243)						Total before tax
						(423)						(28)						(3,209)						505						Tax
						$	9,413					$	(170)					$	24,894					$	(5,738)					Net of tax
Amortization of pension components included in the computation of net periodic pension cost
Actuarial losses						529						747						1,664						2,245
						(88)						(85)						(275)						(257)						Tax
						$	441					$	662					$	1,389					$	1,988					Net of tax
Total amounts reclassified out of AOCI, net of tax						$	9,854					$	492					$	26,283					$	(3,750)

Note 4 – Earnings Per Share

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

			Three Months Ended												Nine Months Ended
			July 30, 2022						July 31, 2021						July 30, 2022						July 31, 2021
Net Income			$	748,985					$	503,311					$	1,812,335					$	1,314,735
Basic shares:
Weighted-average shares outstanding			517,011						368,476						521,557						368,834
Earnings per common share basic:			$	1.45					$	1.37					$	3.47					$	3.56
Diluted shares:
Weighted-average shares outstanding			517,011						368,476						521,557						368,834
Assumed exercise of common stock equivalents			3,539						3,373						4,095						3,623
Weighted-average common and common equivalent shares			520,550						371,849						525,652						372,457
Earnings per common share diluted:			$	1.44					$	1.35					$	3.45					$	3.53
Anti-dilutive shares related to:
Outstanding stock-based awards			755						645						559						502

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			Closure of Manufacturing Facilities																		Global Repositioning Actions
Balance at October 30, 2021			$	25,774																	$	21,065
Employee severance and benefit costs			75																		44,411
Facility closure costs			6,513																		—
Severance and benefit payments			(4,016)																		(25,776)
Facility closure cost payments			(6,513)																		—
Effect of foreign currency on accrual			—																		(54)
Balance at January 29, 2022			$	21,833																	$	39,646
Employee severance and benefit costs			—																		39,610
Facility closure costs			4,287																		—
Severance and benefit payments			(14,026)																		(25,608)
Facility closure cost payments			(4,287)																		—
Effect of foreign currency on accrual			—																		(156)
Balance at April 30, 2022			$	7,807																	$	53,492
Employee severance and benefit costs			—																		49,712
Facility closure costs			888																		—
Severance and benefit payments			(4,663)																		(44,638)
Facility closure cost payments			(1,303)																		—
Effect of foreign currency on accrual			—																		(35)
Balance at July 30, 2022			$	2,729																	$	58,531

Closure of Manufacturing Facilities

The Company recorded net special charges of $63.4 million on a cumulative basis through July 30, 2022 as a result of its decision to consolidate certain wafer and test facility operations acquired as part of the acquisition of Linear Technology Corporation.

During the third quarter of fiscal 2022, the Company completed the sale of its Hillview wafer fabrication facility and certain equipment located in Milpitas, California, which were previously classified as held for sale, for approximately $31.8 million, which resulted in a gain of $4.4 million. During fiscal 2021, the Company completed the sale of its facility and certain equipment in Singapore, which were previously classified as held for sale, for approximately $35.7 million, which resulted in a gain of $13.6 million.

Global Repositioning Actions

The Company recorded net special charges of $458.1 million on a cumulative basis through July 30, 2022, as part of the integration of the Acquisition and continued organizational initiatives to consolidate its footprint related to certain manufacturing, engineering, sales, marketing and administrative offices and to better align its global workforce with the Company's long-term strategic plan.

In connection with the Company’s decision during the third quarter of fiscal 2022 to transition its engineering, sales, marketing and administrative activities from its leased property in Santa Clara, California to its owned property in San Jose, California, the Company entered into a sublease agreement for a portion of the leased property and intends to sublease the remainder of this property. As a result of the sublease transaction, the Company recorded an impairment charge of $91.9 million in net special charges which represented the excess carrying value of the associated asset group over its estimated fair value. The Company estimated fair value using cash flows from the estimated net sublease rental income discounted at a market rate. The Company allocated $60.6 million, $28.1 million and $3.2 million of the impairment charge to right of use assets, leasehold improvements and office equipment, respectively.

Special charges also included $145.2 million in the first nine months of fiscal 2022 primarily consisting of $153.5 million of severance and benefit costs as well as charges recorded from the acceleration of equity awards in connection with the termination of certain employees in manufacturing, engineering and selling, marketing, general and administrative roles at sites assumed related to the Acquisition and various locations throughout the world. These charges were partially offset by a gain of $8.3 million recognized upon the sale of a business.

Note 6 - Commitments and Contingencies

On March 17, 2022, Walter E. Ryan and Ryan Asset Management, LLC, purported stockholders of Maxim, filed a putative class action in the Court of Chancery of the State of Delaware (C.A. No. 2022—0255) against the Company and the former directors of Maxim. The complaint alleges breach of fiduciary duties by the individual defendants in connection with Maxim’s agreement, as part of the merger negotiations with the Company, to suspend Maxim dividends for up to four quarters prior to the closing of the Acquisition. The complaint further alleges that the Company aided and abetted that alleged breach of fiduciary duties. 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; 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.

Note 7 – Revenue

Revenue Trends by End Market

The following table summarizes revenue by end market. The categorization of revenue by end market is determined using a variety of data points including the technical characteristics of the product, the “sold to” customer information, the “ship to” customer information and the end customer product or application into which the Company’s product will be incorporated. As data systems for capturing and tracking this data and the Company's methodology evolves and improves, the categorization of products by end market can vary over time. When this occurs, the Company reclassifies revenue by end market for prior periods. Such reclassifications typically do not materially change the sizing of, or the underlying trends of revenue within, each end market.

			Three Months Ended
			July 30, 2022																		July 31, 2021
			Revenue						% of Revenue*						Y/Y%						Revenue						% of Revenue*
Industrial			$	1,555,070					50		%				55		%				$	1,006,383					57		%
Automotive			659,090						21		%				127		%				290,182						16		%
Communications			490,732						16		%				69		%				290,391						17		%
Consumer			404,988						13		%				136		%				171,897						10		%
Total revenue			$	3,109,880					100		%				77		%				$	1,758,853					100		%
			Nine Months Ended
			July 30, 2022																		July 31, 2021
			Revenue						% of Revenue*						Y/Y%						Revenue						% of Revenue*
Industrial			$	4,402,912					50		%				55		%				$	2,841,665					57		%
Automotive			1,844,017						21		%				132		%				794,739						16		%
Communications			1,376,182						16		%				62		%				850,153						17		%
Consumer			1,143,126						13		%				132		%				492,161						10		%
Total revenue			$	8,766,237					100		%				76		%				$	4,978,718					100		%
* The sum of the individual percentages may not equal the total due to rounding.

Revenue by Sales Channel

The following table summarizes revenue by channel. The Company sells its products globally through a direct sales force, third party distributors, independent sales representatives and via its website. Distributors are customers that buy products with the intention of reselling them. Direct customers are non-distributor customers and consist primarily of original equipment manufacturers (OEMs). Other customers include the U.S. government, government prime contractors and certain commercial customers for which revenue is recorded over time.

			Three Months Ended
			July 30, 2022												July 31, 2021
Channel			Revenue						% of Revenue*						Revenue						% of Revenue*
Distributors			$	1,922,982					62		%				$	1,123,301					64		%
Direct customers			1,146,538						37		%				588,001						33		%
Other			40,360						1		%				47,551						3		%
Total revenue			$	3,109,880					100		%				$	1,758,853					100		%
			Nine Months Ended
			July 30, 2022												July 31, 2021
Channel			Revenue						% of Revenue*						Revenue						% of Revenue*
Distributors			$	5,426,024					62		%				$	3,162,615					64		%
Direct customers			3,241,429						37		%				1,724,012						35		%
Other			98,784						1		%				92,091						2		%
Total revenue			$	8,766,237					100		%				$	4,978,718					100		%
* The sum of the individual percentages may not equal the total due to rounding.

Note 8 – Fair Value

The Company defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Level 1 — Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 — Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability.

Level 3 — Level 3 inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date.

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 July 30, 2022 and October 30, 2021. The tables exclude cash on hand and assets and liabilities that are measured at historical cost or any basis other than fair value. As of July 30, 2022 and October 30, 2021, the Company held $951.9 million and $1,315.0 million, respectively, of cash that was excluded from the tables below.

			July 30, 2022
			Fair Value measurement at Reporting Date using:
			Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)												Total
Assets
Cash equivalents:
Available-for-sale:
Government and institutional money market funds			$	573,019					$	—											$	573,019
Other assets:
Deferred compensation plan investments			68,128						—												68,128
Total assets measured at fair value			$	641,147					$	—											$	641,147
Liabilities
Forward foreign currency exchange contracts (1)			$	—					$	23,677											$	23,677
Total liabilities measured at fair value			$	—					$	23,677											$	23,677

(1)The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 9, Derivatives, in these Notes to Condensed Consolidated Financial Statements for more information related to the Company's master netting arrangements.

			October 30, 2021
			Fair Value measurement at Reporting Date using:
			Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)												Total
Assets
Cash equivalents:
Available-for-sale:
Government and institutional money market funds			$	662,997					$	—											$	662,997
Other assets:
Deferred compensation plan investments			71,301						—												71,301
Total assets measured at fair value			$	734,298					$	—											$	734,298
Liabilities
Forward foreign currency exchange contracts (1)			$	—					$	8,085											$	8,085
Total liabilities measured at fair value			$	—					$	8,085											$	8,085

(1)The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 9, Derivatives, in these Notes to Condensed Consolidated Financial Statements for more information related to the Company's master netting arrangements.

The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:

Cash equivalents — These investments are adjusted to fair value based on quoted market prices or are determined using a yield curve model based on current market rates.

Deferred compensation plan investments — The fair value of these mutual fund, money market fund and equity investments are based on quoted market prices.

Forward foreign currency exchange contracts — The estimated fair value of forward foreign currency exchange contracts, which includes derivatives that are accounted for as cash flow hedges and those that are not designated as cash flow hedges, is based on the estimated amount the Company would receive if it sold these agreements at the reporting date taking into consideration current interest rates as well as the creditworthiness of the counterparty for assets and the Company’s creditworthiness for liabilities. The fair value of these instruments is based upon valuation models using current market information such as strike price, spot rate, maturity date and volatility.

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

Santa Clara, California leased property asset group — As a result of a sublease transaction involving a leased property in Santa Clara, California during the third quarter of 2022, the Company estimated the fair value of the sublease assets using discounted cash flows from the estimated net sublease rental income discounted at a market rate and recorded an impairment charge which represented the excess carrying value of the asset group associated with the Santa Clara, California leased property over its estimated fair value. These assets are considered a Level 2 fair value measurement. See Note 5, Special Charges, Net, in these Notes to Condensed Consolidated Financial Statements for additional information.

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.

			July 30, 2022												October 30, 2021
			Principal Amount Outstanding						Fair Value						Principal Amount Outstanding						Fair Value
Maxim 2023 Notes, due March 2023			$	—					$	—					$	500,000					$	520,236
2024 Notes, due October 2024			500,000						489,243						500,000						500,482
2025 Notes, due April 2025			400,000						395,881						400,000						423,265
2026 Notes, due December 2026			900,000						907,976						900,000						986,243
Maxim 2027 Notes, due June 2027			500,000						488,514						500,000						542,942
2028 Notes, due October 2028			750,000						678,323						750,000						743,109
2031 Notes, due October 2031			1,000,000						891,385						1,000,000						996,702
2036 Notes, due December 2036			144,278						150,517						144,278						176,960
2041 Notes, due October 2041			750,000						631,709						750,000						758,246
2045 Notes, due December 2045			332,587						376,689						332,587						469,592
2051 Notes, due October 2051			1,000,000						816,848						1,000,000						1,029,830
Total debt			$	6,276,865					$	5,827,085					$	6,776,865					$	7,147,607

Note 9 – Derivatives

Foreign Exchange Exposure Management — The Company enters into forward foreign currency exchange contracts to offset certain operational and balance sheet exposures from the impact of changes in foreign currency exchange rates. Such exposures result from the portion of the Company’s operations, assets and liabilities that are denominated in currencies other than the U.S. dollar, primarily the Euro; other significant exposures include the British Pound, Philippine Peso, Thai Baht, South Korean Won and the Japanese Yen. Derivative instruments are employed to eliminate or minimize certain foreign currency exposures that can be confidently identified and quantified. These foreign currency exchange contracts are entered into to support transactions made in the normal course of business, and accordingly, are not speculative in nature. The contracts are for periods consistent with the terms of the underlying transactions, generally one year or less. Hedges related to anticipated transactions are matched with the underlying exposures at inception and designated and documented as cash flow hedges. They are qualitatively evaluated for effectiveness on a quarterly basis. The gain or loss on the derivative is recorded as a component of AOCI in shareholders’ equity and is reclassified into earnings in the same line item on the Consolidated Statements of Income as the impact of the hedged transaction in the same period during which the hedged transaction affects earnings.

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 July 30, 2022 and October 30, 2021 were $296.6 million and $343.6 million, respectively. The fair values of forward foreign currency derivative instruments designated as hedging instruments in the Company’s Condensed Consolidated Balance Sheets as of July 30, 2022 and October 30, 2021 were as follows:

									Fair Value At
			Balance Sheet Location						July 30, 2022						October 30, 2021
Forward foreign currency exchange contracts			Accrued liabilities						$	19,915					$	7,113

As of July 30, 2022 and October 30, 2021, the total notional amounts of undesignated hedges related to forward foreign currency exchange contracts were $222.6 million and $120.0 million, respectively. The fair values of these hedging instruments in the Company’s Condensed Consolidated Balance Sheets were immaterial as of July 30, 2022 and October 30, 2021.

The Company estimates $14.8 million, net of tax, of losses on forward foreign currency derivative instruments included in AOCI will be reclassified into earnings within the next twelve months.

All of the Company’s derivative financial instruments are eligible for netting arrangements that allow the Company and its counterparties to net settle amounts owed to each other. Derivative assets and liabilities that can be net settled under these arrangements have been presented in the Company's Condensed Consolidated Balance Sheets on a net basis. As of July 30, 2022 and October 30, 2021, none of the netting arrangements involved collateral.

The following table presents the gross amounts of the Company's forward foreign currency exchange contract derivative assets and liabilities and the net amounts recorded in the Company's Condensed Consolidated Balance Sheets:

			July 30, 2022						October 30, 2021
Gross amounts of recognized liabilities			$	(24,197)					$	(8,404)
Gross amount of recognized assets			520						319
Net liabilities offset and presented in the Condensed Consolidated Balance Sheets			$	(23,677)					$	(8,085)

The market risk associated with the Company’s derivative instruments results from currency exchange rate or interest rate movements that are expected to offset the market risk of the underlying transactions, assets and liabilities being hedged. The counterparties to the agreements relating to the Company’s derivative instruments consist of a number of major international financial institutions with high credit ratings. Based on the credit ratings of the Company’s counterparties as of July 30, 2022 and October 30, 2021, nonperformance is not perceived to be a material risk. Furthermore, none of the Company’s derivatives are subject to collateral or other security arrangements and none contain provisions that are dependent on the Company’s credit ratings from any credit rating agency. While the contract or notional amounts of derivative financial instruments provide one measure of the volume of these transactions, they do not represent the amount of the Company’s exposure to credit risk. The amounts potentially subject to credit risk (arising from the possible inability of counterparties to meet the terms of their contracts) are generally limited to the amounts, if any, by which the counterparties’ obligations under the contracts exceed the obligations of the Company to the counterparties. As a result of the above considerations, the Company does not consider the risk of counterparty default to be significant.

For information on the unrealized holding gains (losses) on derivatives included in and reclassified out of AOCI into the Condensed Consolidated Statements of Income related to forward foreign currency exchange contracts, see Note 3,

Accumulated Other Comprehensive (Loss) Income, in these Notes to Condensed Consolidated Financial Statements for further information.

Note 10 – Inventories

Inventories at July 30, 2022 and October 30, 2021 were as follows:

			July 30, 2022						October 30, 2021
Raw materials			$	107,395					$	71,639
Work in process			818,531						858,627
Finished goods			277,468						270,344
Total inventories			$	1,203,394					$	1,200,610

Note 11 – Debt

In conjunction with the Acquisition, the Company acquired $500.0 million aggregate principal amount of Maxim’s 3.375% senior unsecured and unsubordinated notes due March 15, 2023 (the Maxim March 2023 Notes). On November 4, 2021, the Maxim March 2023 Notes were redeemed for cash at a redemption price equal to $1,038.23 for each $1,000 principal amount.

On June 23, 2021, the Company entered into a Third Amended and Restated Credit Agreement (Revolving Credit Agreement) with Bank of America, N.A. as administrative agent and the other banks identified therein as lenders. The Revolving Credit Agreement provides for a five year unsecured revolving credit facility in an aggregate principal amount not to exceed $2.5 billion (subject to certain terms and conditions). In June 2022, the Company borrowed $400.0 million under this revolving credit facility and utilized the proceeds for working capital requirements. The Company repaid the $400.0 million plus interest in July 2022. As of July 30, 2022, 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.

Note 12 – Income Taxes

The Company’s effective tax rates for the three- and nine-month periods ended July 30, 2022 and July 31, 2021 were below the U.S. statutory tax rate of 21.0%, due to lower statutory tax rates applicable to the Company's operations in the foreign jurisdictions in which it earns income.

During the first nine months of fiscal 2022, the Company increased acquisition related tax reserves by $15.6 million consisting of $12.3 million in tax and $3.3 million in accrued interest primarily relating to tax audits. It is reasonably possible that the balance of gross unrecognized tax benefits, including accrued interest and penalties, could decrease by as much as $148.0 million within the next twelve months due to the completion of tax audits, including any administrative appeals.

The Company has numerous audits ongoing throughout the world including: an IRS income tax audit for the fiscal years ended November 3, 2018 and November 2, 2019; a pre-acquisition IRS income tax audit for Maxim's fiscal years ended June 27, 2015 through June 26, 2021; various U.S. state and local audits and various international audits. The Company's U.S. federal tax returns prior to the fiscal year ended November 3, 2018 are no longer subject to examination, except for the applicable Maxim pre-Acquisition fiscal years noted above.

Note 13 – New Accounting Pronouncements

Standards Implemented

Reference Rate Reform

In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for accounting for contracts, hedging relationships, and other transactions affected by reference rate reform, if certain criteria are met. The provisions of this standard are available for election through December 31, 2022. The Company adopted this standard in the first quarter of fiscal 2022 with no material impact on the Company's financial position and results of operations.

Standards to Be Implemented

Acquired Contract Assets and Contract Liabilities

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Acquired Contract Assets and Contract Liabilities. Under the new guidance (ASC 805-20-30-28), the acquirer should determine what

contract assets and/or contract liabilities it would have recorded under ASC 606 (the revenue guidance) as of the acquisition date, as if the acquirer had entered into the original contract at the same date and on the same terms as the acquiree. The recognition and measurement of those contract assets and contract liabilities will likely be comparable to what the acquiree has recorded on its books under ASC 606 as of the acquisition date. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. ASU 2021-08 is effective for the Company in the first quarter of the fiscal year ended November 1, 2024. Early adoption is permitted, including in an interim period, for any period for which financial statements have not yet been issued. However, adoption in an interim period other than the first fiscal quarter requires an entity to apply the new guidance to all prior business combinations that have occurred since the beginning of the annual period in which the new guidance is adopted. The Company is currently evaluating the adoption date of ASU 2021-08 and the impact, if any, adoption will have on its financial position and results of operations.

Note 14 – Acquisitions

Maxim Integrated Products, Inc.

On the Acquisition Date, the Company completed its acquisition of all of the voting interests of Maxim, an independent manufacturer of innovative analog and mixed-signal products and technologies. The total consideration paid to acquire Maxim, which consisted of cash, common stock of the Company and share-based compensation awards, was approximately $28.0 billion. The Company believes the combination creates an expanded suite of top-performing mixed-signal and power management technology offerings and complements the Company's legacy offerings. The results of operations of Maxim from the Acquisition Date are included in the Company’s Condensed Consolidated Statements of Income, Condensed Consolidated Statements of Comprehensive Income, Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Cash Flows and Condensed Consolidated Statement of Shareholders’ Equity for the three- and nine-month periods ended July 30, 2022.

In the nine-month period ended July 30, 2022, the Company recorded acquisition accounting adjustments of $15.3 million to goodwill comprised of $19.0 million to income tax payable and $1.6 million to accrued liabilities offset by decreases of $3.5 million to deferred income taxes and $1.8 million to other non-current liabilities. The Acquisition accounting is not complete and additional information relating to conditions that existed at the Acquisition Date may become known to the Company during the remainder of the measurement period. As of the filing date of this Quarterly Report on Form 10-Q, the Company is still in the process of valuing Maxim's assets, including fixed assets, intangible assets, and liabilities, including related income tax accounting.

The following unaudited pro forma consolidated financial information for the three- and nine-month periods ended July 31, 2021 combines the results of the Company for the three- and nine-month periods ended July 31, 2021 and the unaudited results of Maxim for the corresponding period. The unaudited pro forma consolidated financial information assumes that the Acquisition, which closed on August 26, 2021, was completed on November 3, 2019 (the first day of fiscal 2020). The pro forma consolidated financial information has been calculated after applying the Company’s accounting policies and includes adjustments for amortization expense of acquired intangible assets, fair value adjustments for acquired inventory, property, plant and equipment and long-term debt and compensation expense for ongoing share-based compensation arrangements that were replaced in conjunction with the Acquisition, together with the consequential tax effects. These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the operating results of the Company that would have been achieved had the Acquisition actually taken place on November 3, 2019. In addition, these results are not intended to be a projection of future results and do not reflect events that may occur after the Acquisition, including but not limited to revenue enhancements, cost savings or operating synergies that the combined Company may achieve as a result of the Acquisition.

						Pro Forma Three Months Ended (unaudited)						Pro Forma Nine Months Ended (unaudited)
						July 31, 2021						July 31, 2021
Revenue						$	2,506,950					$	7,005,648
Net income						$	485,904					$	1,111,411
Basic net income per common share						$	0.90					$	2.07
Diluted net income per common share						$	0.89					$	2.04

Note 15 – Subsequent Events

On August 16, 2022, the Board of Directors of the Company declared a cash dividend of $0.76 per outstanding share of common stock. The dividend will be paid on September 8, 2022 to all shareholders of record at the close of business on August 30, 2022 and is expected to total approximately $390.9 million.