þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Massachusetts | 04-2348234 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) |
One Technology Way, Norwood, MA | 02062-9106 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Three Months Ended | ||||||||
July 30, 2011 | July 31, 2010 | |||||||
Revenue
|
$ | 757,902 | $ | 720,290 | ||||
Cost of sales (1)
|
248,262 | 240,088 | ||||||
|
||||||||
Gross margin
|
509,640 | 480,202 | ||||||
|
||||||||
Operating expenses:
|
||||||||
Research and development (1)
|
128,476 | 126,987 | ||||||
Selling, marketing, general and administrative (1)
|
102,323 | 102,070 | ||||||
|
||||||||
|
230,799 | 229,057 | ||||||
|
||||||||
Operating income
|
278,841 | 251,145 | ||||||
Nonoperating (income) expense:
|
||||||||
Interest expense
|
6,159 | 2,614 | ||||||
Interest income
|
(2,395 | ) | (3,206 | ) | ||||
Other, net
|
206 | 416 | ||||||
|
||||||||
|
3,970 | (176 | ) | |||||
|
||||||||
|
||||||||
Income before income taxes
|
274,871 | 251,321 | ||||||
|
||||||||
Provision for income taxes
|
54,936 | 51,830 | ||||||
|
||||||||
|
||||||||
Net income
|
$ | 219,935 | $ | 199,491 | ||||
|
||||||||
|
||||||||
Shares used to compute earnings per share basic
|
299,616 | 298,027 | ||||||
|
||||||||
Shares used to compute earnings per share diluted
|
308,744 | 306,168 | ||||||
|
||||||||
|
||||||||
Basic earnings per share
|
$ | 0.73 | $ | 0.67 | ||||
|
||||||||
|
||||||||
Diluted earnings per share
|
$ | 0.71 | $ | 0.65 | ||||
|
||||||||
|
||||||||
Dividends declared and paid per share
|
$ | 0.25 | $ | 0.22 | ||||
|
||||||||
|
||||||||
(1) Includes stock-based compensation expense as follows:
|
||||||||
Cost of sales
|
$ | 1,811 | $ | 1,878 | ||||
Research and development
|
$ | 5,877 | $ | 5,996 | ||||
Selling, marketing, general and administrative
|
$ | 5,622 | $ | 5,302 |
1
Nine Months Ended | ||||||||
July 30, 2011 | July 31, 2010 | |||||||
Revenue
|
$ | 2,277,186 | $ | 1,991,513 | ||||
Cost of sales (1)
|
751,159 | 708,320 | ||||||
|
||||||||
Gross margin
|
1,526,027 | 1,283,193 | ||||||
|
||||||||
Operating expenses:
|
||||||||
Research and development (1)
|
381,681 | 364,165 | ||||||
Selling, marketing, general and administrative (1)
|
307,613 | 288,211 | ||||||
Special charge
|
| 16,483 | ||||||
|
||||||||
|
689,294 | 668,859 | ||||||
|
||||||||
Operating income from continuing operations
|
836,733 | 614,334 | ||||||
Nonoperating (income) expense:
|
||||||||
Interest expense
|
13,067 | 7,720 | ||||||
Interest income
|
(6,877 | ) | (7,411 | ) | ||||
Other, net
|
96 | 417 | ||||||
|
||||||||
|
6,286 | 726 | ||||||
|
||||||||
|
||||||||
Income from continuing operations before income taxes
|
830,447 | 613,608 | ||||||
|
||||||||
Provision for income taxes
|
153,080 | 127,377 | ||||||
|
||||||||
|
||||||||
Income from continuing operations, net of tax
|
677,367 | 486,231 | ||||||
|
||||||||
|
||||||||
Gain on sale of discontinued operations, net of tax
|
6,500 | 859 | ||||||
|
||||||||
|
||||||||
Net income
|
$ | 683,867 | $ | 487,090 | ||||
|
||||||||
|
||||||||
Shares used to compute earnings per share basic
|
299,586 | 297,107 | ||||||
|
||||||||
Shares used to compute earnings per share diluted
|
309,070 | 305,578 | ||||||
|
||||||||
|
||||||||
Basic earnings per share from continuing operations
|
$ | 2.26 | $ | 1.64 | ||||
|
||||||||
Basic earnings per share
|
$ | 2.28 | $ | 1.64 | ||||
|
||||||||
|
||||||||
Diluted earnings per share from continuing operations
|
$ | 2.19 | $ | 1.59 | ||||
|
||||||||
Diluted earnings per share
|
$ | 2.21 | $ | 1.59 | ||||
|
||||||||
|
||||||||
Dividends declared and paid per share
|
$ | 0.69 | $ | 0.62 | ||||
|
||||||||
|
||||||||
(1) Includes stock-based compensation expense as follows:
|
||||||||
Cost of sales
|
$ | 5,459 | $ | 5,409 | ||||
Research and development
|
$ | 17,256 | $ | 17,323 | ||||
Selling, marketing, general and administrative
|
$ | 16,091 | $ | 15,534 |
2
July 30, 2011 | October 30, 2010 | |||||||
Assets
|
||||||||
|
||||||||
Cash and cash equivalents
|
$ | 1,357,821 | $ | 1,070,000 | ||||
Short-term investments
|
2,156,717 | 1,617,768 | ||||||
Accounts receivable, net
|
375,011 | 387,169 | ||||||
Inventory (1):
|
||||||||
Raw materials
|
29,641 | 22,008 | ||||||
Work in process
|
173,665 | 171,390 | ||||||
Finished goods
|
96,026 | 84,080 | ||||||
|
||||||||
|
299,332 | 277,478 | ||||||
Deferred tax assets
|
83,670 | 74,710 | ||||||
Prepaid income tax
|
24,979 | | ||||||
Prepaid expenses and other current assets
|
41,601 | 51,874 | ||||||
|
||||||||
Total current assets
|
4,339,131 | 3,478,999 | ||||||
|
||||||||
|
||||||||
Property, plant and equipment, at cost:
|
||||||||
Land and buildings
|
418,819 | 401,277 | ||||||
Machinery and equipment
|
1,605,154 | 1,578,493 | ||||||
Office equipment
|
52,974 | 56,449 | ||||||
Leasehold improvements
|
48,855 | 65,326 | ||||||
|
||||||||
|
2,125,802 | 2,101,545 | ||||||
Less accumulated depreciation and amortization
|
1,644,206 | 1,628,880 | ||||||
|
||||||||
Net property, plant and equipment
|
481,596 | 472,665 | ||||||
|
||||||||
|
||||||||
Deferred compensation plan investments
|
26,930 | 8,690 | ||||||
Other investments
|
3,319 | 1,317 | ||||||
Goodwill
|
280,868 | 255,580 | ||||||
Intangible assets, net
|
12,475 | 1,343 | ||||||
Deferred tax assets
|
46,942 | 52,765 | ||||||
Other assets
|
60,120 | 57,472 | ||||||
|
||||||||
Total other assets
|
430,654 | 377,167 | ||||||
|
||||||||
|
$ | 5,251,381 | $ | 4,328,831 | ||||
|
(1) | Includes $2,474 and $2,534 related to stock-based compensation at July 30, 2011 and October 30, 2010, respectively. |
3
July 30, 2011 | October 30, 2010 | |||||||
Liabilities and Shareholders Equity
|
||||||||
|
||||||||
Accounts payable
|
$ | 106,009 | $ | 133,111 | ||||
Deferred income on shipments to distributors, net
|
277,528 | 242,848 | ||||||
Income taxes payable
|
17,236 | 60,421 | ||||||
Current portion of long-term debt
|
14,500 | | ||||||
Accrued liabilities
|
141,014 | 207,087 | ||||||
|
||||||||
Total current liabilities
|
556,287 | 643,467 | ||||||
|
||||||||
|
||||||||
Long-term debt
|
875,766 | 400,635 | ||||||
Deferred income taxes
|
1,223 | 1,800 | ||||||
Deferred compensation plan liability
|
26,948 | 8,690 | ||||||
Other non-current liabilities
|
75,440 | 74,522 | ||||||
|
||||||||
Total non-current liabilities
|
979,377 | 485,647 | ||||||
|
||||||||
|
||||||||
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, 299,437,920 shares issued
and outstanding
(298,652,994 on October 30, 2010)
|
49,907 | 49,777 | ||||||
Capital in excess of par value
|
321,839 | 286,969 | ||||||
Retained earnings
|
3,373,631 | 2,896,566 | ||||||
Accumulated other comprehensive loss
|
(29,660 | ) | (33,595 | ) | ||||
|
||||||||
Total shareholders equity
|
3,715,717 | 3,199,717 | ||||||
|
||||||||
|
$ | 5,251,381 | $ | 4,328,831 | ||||
|
4
Nine Months Ended | ||||||||
July 30, 2011 | July 31, 2010 | |||||||
Cash flows from operating activities:
|
||||||||
|
||||||||
Net income
|
$ | 683,867 | $ | 487,090 | ||||
Adjustments to reconcile net income
to net cash provided by operations:
|
||||||||
Depreciation
|
88,092 | 86,776 | ||||||
Amortization of intangibles
|
1,079 | 4,189 | ||||||
Stock-based compensation expense
|
38,806 | 38,266 | ||||||
Gain on sale of business
|
(6,500 | ) | (859 | ) | ||||
Excess tax benefit-stock options
|
(37,296 | ) | (153 | ) | ||||
Deferred income taxes
|
(6,989 | ) | (16,233 | ) | ||||
Non-cash portion of special charge
|
| 487 | ||||||
Other non-cash activity
|
1,185 | 1,420 | ||||||
Changes in operating assets and liabilities
|
(91,875 | ) | 115,916 | |||||
|
||||||||
Total adjustments
|
(13,498 | ) | 229,809 | |||||
|
||||||||
Net cash provided by operating activities
|
670,369 | 716,899 | ||||||
|
||||||||
|
||||||||
Cash flows from investing activities:
|
||||||||
Purchases of short-term available-for-sale investments
|
(3,132,633 | ) | (2,439,506 | ) | ||||
Maturities of short-term available-for-sale investments
|
2,334,311 | 2,015,706 | ||||||
Sales of short-term available-for-sale investments
|
259,385 | 84,941 | ||||||
Proceeds related to sale of businesses
|
10,000 | 63,036 | ||||||
Payments for acquisitions, net of cash acquired
|
(13,988 | ) | | |||||
Additions to property, plant and equipment
|
(96,665 | ) | (73,794 | ) | ||||
(Increase) decrease in other assets
|
(6,683 | ) | 3,668 | |||||
|
||||||||
Net cash used for investing activities
|
(646,273 | ) | (345,949 | ) | ||||
|
||||||||
|
||||||||
Cash flows from financing activities:
|
||||||||
Proceeds from long-term debt
|
515,507 | | ||||||
Term loan repayments
|
(24,767 | ) | | |||||
Dividend payments to shareholders
|
(206,802 | ) | (184,375 | ) | ||||
Repurchase of common stock
|
(247,440 | ) | (4,047 | ) | ||||
Net proceeds from employee stock plans
|
189,239 | 174,002 | ||||||
Increase in other financing activities
|
365 | 502 | ||||||
Excess tax benefit-stock options
|
37,296 | 153 | ||||||
|
||||||||
Net cash provided by (used for) financing activities
|
263,398 | (13,765 | ) | |||||
|
||||||||
Effect of exchange rate changes on cash
|
327 | (3,485 | ) | |||||
|
||||||||
|
||||||||
Net increase in cash and cash equivalents
|
287,821 | 353,700 | ||||||
Cash and cash equivalents at beginning of period
|
1,070,000 | 639,729 | ||||||
|
||||||||
Cash and cash equivalents at end of period
|
$ | 1,357,821 | $ | 993,429 | ||||
|
5
6
Three Months Ended | Nine Months Ended | |||||||||||||||
Stock Options | July 30, 2011 | July 31, 2010 | July 30, 2011 | July 31, 2010 | ||||||||||||
Options granted (in thousands)
|
20 | 12 | 1,980 | 1,850 | ||||||||||||
Weighted-average exercise price per share
|
$ | 38.50 | $ | 29.19 | $ | 37.61 | $ | 31.51 | ||||||||
Weighted-average grant-date fair value per share
|
$ | 7.91 | $ | 7.00 | $ | 8.62 | $ | 7.78 | ||||||||
Assumptions:
|
||||||||||||||||
Weighted-average expected volatility
|
28.2 | % | 33.3 | % | 29.2 | % | 31.4 | % | ||||||||
Weighted-average expected term (in years)
|
5.3 | 5.3 | 5.3 | 5.3 | ||||||||||||
Weighted-average risk-free interest rate
|
1.7 | % | 2.1 | % | 2.1 | % | 2.6 | % | ||||||||
Weighted-average expected dividend yield
|
2.6 | % | 3.0 | % | 2.3 | % | 2.5 | % |
7
Weighted- | ||||||||||||||||
Average | ||||||||||||||||
Options | Weighted- | Remaining | Aggregate | |||||||||||||
Outstanding | Average Exercise | Contractual | Intrinsic | |||||||||||||
Activity during the Three Months Ended July 30, 2011 | (in thousands) | Price Per Share | Term in Years | Value | ||||||||||||
Options outstanding at April 30, 2011
|
37,023 | $ | 30.13 | |||||||||||||
Options granted
|
20 | $ | 38.50 | |||||||||||||
Options exercised
|
(1,467 | ) | $ | 28.06 | ||||||||||||
Options forfeited
|
(114 | ) | $ | 28.05 | ||||||||||||
Options expired
|
(179 | ) | $ | 41.98 | ||||||||||||
|
||||||||||||||||
Options outstanding at July 30, 2011
|
35,283 | $ | 30.17 | 4.7 | $ | 199,989 | ||||||||||
|
||||||||||||||||
Options exercisable at July 30, 2011
|
18,837 | $ | 31.88 | 3.6 | $ | 92,054 | ||||||||||
|
||||||||||||||||
Options vested or expected to vest at July 30, 2011 (1)
|
34,532 | $ | 30.20 | 4.6 | $ | 195,298 | ||||||||||
|
(1) | In addition to the vested options, the Company expects a portion of the unvested options to vest at some point in the future. Options expected to vest is calculated by applying an estimated forfeiture rate to the unvested options. |
Options | Weighted- | |||||||
Outstanding | Average Exercise | |||||||
Activity during the Nine Months Ended July 30, 2011 | (in thousands) | Price Per Share | ||||||
Options outstanding at October 30, 2010
|
43,079 | $ | 29.87 | |||||
Options granted
|
1,980 | $ | 37.61 | |||||
Options exercised
|
(7,210 | ) | $ | 26.27 | ||||
Options forfeited
|
(376 | ) | $ | 27.72 | ||||
Options expired
|
(2,190 | ) | $ | 44.23 | ||||
|
||||||||
Options outstanding at July 30, 2011
|
35,283 | $ | 30.17 | |||||
|
8
Restricted | Weighted- | |||||||
Stock Units | Average Grant | |||||||
Outstanding | Date Fair Value | |||||||
Activity during the Three Months Ended July 30, 2011 | (in thousands) | Per Share | ||||||
Restricted stock units outstanding at April 30, 2011
|
2,091 | $ | 31.03 | |||||
Units granted
|
20 | $ | 33.96 | |||||
Restrictions lapsed
|
(6 | ) | $ | 18.51 | ||||
Forfeited
|
(10 | ) | $ | 31.39 | ||||
|
||||||||
Restricted stock units outstanding at July 30, 2011
|
2,095 | $ | 31.09 | |||||
|
Restricted | Weighted- | |||||||
Stock Units | Average Grant | |||||||
Outstanding | Date Fair Value | |||||||
Activity during the Nine Months Ended July 30, 2011 | (in thousands) | Per Share | ||||||
Restricted stock units outstanding at October 30, 2010
|
1,265 | $ | 28.21 | |||||
Units granted
|
890 | $ | 34.97 | |||||
Restrictions lapsed
|
(29 | ) | $ | 24.17 | ||||
Forfeited
|
(31 | ) | $ | 31.47 | ||||
|
||||||||
Restricted stock units outstanding at July 30, 2011
|
2,095 | $ | 31.09 | |||||
|
9
Three Months Ended | ||||||||
July 30, 2011 | July 31, 2010 | |||||||
Net income
|
$ | 219,935 | $ | 199,491 | ||||
Foreign currency translation adjustments
|
1,455 | (4,772 | ) | |||||
Change in unrealized holding losses (net of taxes of $17 and
$10, respectively) on securities classified as short-term investments
|
(113 | ) | (69 | ) | ||||
Change in unrealized holding (losses) gains (net of taxes of $62
and $53, respectively) on securities classified as other investments
|
(116 | ) | 98 | |||||
Change in unrealized (losses) gains (net of taxes of $783 and $312,
respectively) on derivative instruments designated as cash flow hedges
|
(5,155 | ) | 1,588 | |||||
Pension plans
|
||||||||
Transition (obligation) asset
|
(2 | ) | 4 | |||||
Net actuarial gain (loss)
|
980 | (60 | ) | |||||
|
||||||||
Other comprehensive loss
|
(2,951 | ) | (3,211 | ) | ||||
|
||||||||
Comprehensive income
|
$ | 216,984 | $ | 196,280 | ||||
|
Nine Months Ended | ||||||||
July 30, 2011 | July 31, 2010 | |||||||
Income from continuing operations, net of tax
|
$ | 677,367 | $ | 486,231 | ||||
Foreign currency translation adjustments
|
7,614 | (1,091 | ) | |||||
Change in unrealized holding gains (losses) (net of taxes of $1 and
$26, respectively) on securities classified as short-term investments
|
11 | (191 | ) | |||||
Change in unrealized holding gains (net of taxes of $1
and $107, respectively) on securities classified as other investments
|
1 | 198 | ||||||
Change in unrealized losses (net of taxes of $334 and $1,053,
respectively) on derivative instruments designated as cash flow hedges
|
(2,512 | ) | (7,178 | ) | ||||
Pension plans
|
||||||||
Prior service cost
|
| (1 | ) | |||||
Transition (obligation) asset
|
(4 | ) | 5 | |||||
Net actuarial (loss) gain
|
(1,175 | ) | 579 | |||||
|
||||||||
Other comprehensive gain (loss)
|
3,935 | (7,679 | ) | |||||
|
||||||||
Comprehensive income from continuing operations
|
681,302 | 478,552 | ||||||
|
||||||||
Gain on sale of discontinued operations, net of tax
|
6,500 | 859 | ||||||
|
||||||||
Comprehensive income
|
$ | 687,802 | $ | 479,411 | ||||
|
10
July 30, 2011 | October 30, 2010 | |||||||
Foreign currency translation adjustment
|
$ | 6,223 | $ | (1,391 | ) | |||
Unrealized gains on available-for-sale securities
|
829 | 822 | ||||||
Unrealized losses on available-for-sale securities
|
(186 | ) | (191 | ) | ||||
Unrealized gains on derivative instruments
|
3,621 | 6,133 | ||||||
Pension plans
|
||||||||
Transition obligation
|
(133 | ) | (129 | ) | ||||
Net actuarial loss
|
(40,014 | ) | (38,839 | ) | ||||
|
||||||||
Total accumulated other comprehensive loss
|
$ | (29,660 | ) | $ | (33,595 | ) | ||
|
July 30, 2011 | October 30, 2010 | |||||||
Unrealized gains on available-for-sale securities classified as short-term investments
|
$ | 174 | $ | 165 | ||||
Unrealized losses on available-for-sale securities classified as short-term investments
|
(214 | ) | (217 | ) | ||||
|
||||||||
Net unrealized losses on securities classified as short-term investments
|
$ | (40 | ) | $ | (52 | ) | ||
|
Three Months Ended | ||||||||
July 30, 2011 | July 31, 2010 | |||||||
Basic:
|
||||||||
Net income
|
$ | 219,935 | $ | 199,491 | ||||
|
||||||||
Weighted-average shares outstanding
|
299,616 | 298,027 | ||||||
|
||||||||
Earnings per share:
|
$ | 0.73 | $ | 0.67 | ||||
|
||||||||
Diluted:
|
||||||||
Net income
|
$ | 219,935 | $ | 199,491 | ||||
|
||||||||
Weighted-average shares outstanding
|
299,616 | 298,027 | ||||||
Assumed exercise of common stock equivalents
|
9,128 | 8,141 | ||||||
|
||||||||
Weighted-average common and common equivalent shares
|
308,744 | 306,168 | ||||||
|
||||||||
Earnings per share:
|
$ | 0.71 | $ | 0.65 | ||||
|
||||||||
Anti-dilutive common stock equivalents related to outstanding stock options
|
4,820 | 19,464 |
11
Nine Months Ended | ||||||||
July 30, 2011 | July 31, 2010 | |||||||
Income from continuing operations, net of tax
|
$ | 677,367 | $ | 486,231 | ||||
Gain on sale of discontinued operations, net of tax
|
6,500 | 859 | ||||||
|
||||||||
Net income
|
$ | 683,867 | $ | 487,090 | ||||
|
||||||||
Basic shares:
|
||||||||
Weighted-average shares outstanding
|
299,586 | 297,107 | ||||||
|
||||||||
Earnings per share-basic:
|
||||||||
Income from continuing operations, net of tax
|
$ | 2.26 | $ | 1.64 | ||||
Gain on sale of discontinued operations, net of tax
|
0.02 | 0.00 | ||||||
|
||||||||
Net income
|
$ | 2.28 | $ | 1.64 | ||||
|
||||||||
Diluted shares:
|
||||||||
Weighted-average shares outstanding
|
299,586 | 297,107 | ||||||
Assumed exercise of common stock equivalents
|
9,484 | 8,471 | ||||||
|
||||||||
Weighted-average common and common equivalent shares
|
309,070 | 305,578 | ||||||
|
||||||||
Earnings per share-diluted:
|
||||||||
Income from continuing operations, net of tax
|
$ | 2.19 | $ | 1.59 | ||||
Gain on sale of discontinued operations, net of tax
|
0.02 | 0.00 | ||||||
|
||||||||
Net income
|
$ | 2.21 | $ | 1.59 | ||||
|
||||||||
Anti-dilutive common stock equivalents related to outstanding stock options
|
5,942 | 19,449 |
Closure of | ||||||||||||||||
Closure of Wafer | Wafer | |||||||||||||||
Fabrication | Reduction of | Fabrication | ||||||||||||||
Facility | Operating | Facility | Total Special | |||||||||||||
Income Statement | in Sunnyvale | Costs | in Cambridge | Charges | ||||||||||||
Fiscal 2008 Charges:
|
||||||||||||||||
Workforce reductions
|
$ | | $ | 1,627 | $ | | $ | 1,627 | ||||||||
|
||||||||||||||||
Total Fiscal 2008 Charges
|
$ | | $ | 1,627 | $ | | $ | 1,627 | ||||||||
|
||||||||||||||||
Fiscal 2009 Charges:
|
||||||||||||||||
Workforce reductions
|
| 26,583 | 7,446 | 34,029 | ||||||||||||
Facility closure costs
|
| 2,411 | 57 | 2,468 | ||||||||||||
Non-cash impairment charge
|
| 839 | 14,629 | 15,468 | ||||||||||||
Other items
|
| 500 | | 500 | ||||||||||||
|
||||||||||||||||
Total Fiscal 2009 Charges
|
$ | | $ | 30,333 | $ | 22,132 | $ | 52,465 | ||||||||
|
||||||||||||||||
Fiscal 2010 Charges:
|
||||||||||||||||
Workforce reductions
|
| 10,908 | | 10,908 | ||||||||||||
Facility closure costs
|
375 | | 4,689 | 5,064 | ||||||||||||
Non-cash impairment charge
|
| 487 | | 487 | ||||||||||||
Other items
|
| 24 | | 24 | ||||||||||||
|
||||||||||||||||
Total Fiscal 2010 Charges
|
$ | 375 | $ | 11,419 | $ | 4,689 | $ | 16,483 | ||||||||
|
12
Closure of Wafer | ||||||||||||
Reduction of | Fabrication Facility | Total Special | ||||||||||
Balance Sheet | Operating Costs | in Cambridge | Charges | |||||||||
Balance at October 30, 2010
|
$ | 5,546 | $ | 1,963 | $ | 7,509 | ||||||
|
||||||||||||
Severance payments
|
(1,300 | ) | (457 | ) | (1,757 | ) | ||||||
Facility closure costs
|
| (560 | ) | (560 | ) | |||||||
Effect of foreign currency on accrual
|
(10 | ) | | (10 | ) | |||||||
|
||||||||||||
Balance at January 29, 2011
|
$ | 4,236 | $ | 946 | $ | 5,182 | ||||||
|
||||||||||||
Severance payments
|
(1,288 | ) | (520 | ) | (1,808 | ) | ||||||
Facility closure costs
|
| (50 | ) | (50 | ) | |||||||
Effect of foreign currency on accrual
|
21 | | 21 | |||||||||
|
||||||||||||
Balance at April 30, 2011
|
$ | 2,969 | $ | 376 | $ | 3,345 | ||||||
|
||||||||||||
Severance payments
|
(468 | ) | (376 | ) | (844 | ) | ||||||
Effect of foreign currency on accrual
|
(4 | ) | | (4 | ) | |||||||
|
||||||||||||
Balance at July 30, 2011
|
$ | 2,497 | $ | | $ | 2,497 | ||||||
|
13
Three Months Ended | Three Months Ended | |||||||||||||||||||
July 30, 2011 | July 31, 2010 | |||||||||||||||||||
Revenue | % of Revenue* | Y/Y% | Revenue | % of Revenue* | ||||||||||||||||
Industrial
|
$ | 365,158 | 48 | % | 8 | % | $ | 339,629 | 47 | % | ||||||||||
Automotive
|
101,190 | 13 | % | 21 | % | 83,462 | 12 | % | ||||||||||||
Consumer
|
115,983 | 15 | % | (14 | %) | 134,379 | 19 | % | ||||||||||||
Communications
|
164,560 | 22 | % | 10 | % | 149,690 | 21 | % | ||||||||||||
Computer
|
11,011 | 1 | % | (16 | %) | 13,130 | 2 | % | ||||||||||||
|
||||||||||||||||||||
Total revenue
|
$ | 757,902 | 100 | % | 5 | % | $ | 720,290 | 100 | % | ||||||||||
|
* | The sum of the individual percentages does not equal the total due to rounding. |
Nine Months Ended | Nine Months Ended | |||||||||||||||||||
July 30, 2011 | July 31, 2010 | |||||||||||||||||||
Revenue | % of Revenue | Y/Y% | Revenue | % of Revenue | ||||||||||||||||
Industrial
|
$ | 1,085,078 | 48 | % | 18 | % | $ | 917,941 | 46 | % | ||||||||||
Automotive
|
302,056 | 13 | % | 26 | % | 239,206 | 12 | % | ||||||||||||
Consumer
|
346,314 | 15 | % | (8 | %) | 378,048 | 19 | % | ||||||||||||
Communications
|
507,655 | 22 | % | 22 | % | 415,371 | 21 | % | ||||||||||||
Computer
|
36,083 | 2 | % | (12 | %) | 40,947 | 2 | % | ||||||||||||
|
||||||||||||||||||||
Total revenue
|
$ | 2,277,186 | 100 | % | 14 | % | $ | 1,991,513 | 100 | % | ||||||||||
|
14
Three Months Ended | Three Months Ended | |||||||||||||||||||
July 30, 2011 | July 31, 2010 | |||||||||||||||||||
Revenue | % of Revenue* | Y/Y% | Revenue | % of Revenue* | ||||||||||||||||
Converters
|
$ | 337,266 | 44 | % | 0 | % | $ | 337,168 | 47 | % | ||||||||||
Amplifiers / Radio frequency
|
197,494 | 26 | % | 7 | % | 183,932 | 26 | % | ||||||||||||
Other analog
|
106,690 | 14 | % | 25 | % | 85,237 | 12 | % | ||||||||||||
|
||||||||||||||||||||
Subtotal analog signal processing
|
641,450 | 85 | % | 6 | % | 606,337 | 84 | % | ||||||||||||
Power management & reference
|
54,924 | 7 | % | 3 | % | 53,412 | 7 | % | ||||||||||||
|
||||||||||||||||||||
Total analog products
|
$ | 696,374 | 92 | % | 6 | % | $ | 659,749 | 92 | % | ||||||||||
|
||||||||||||||||||||
Digital signal processing
|
61,528 | 8 | % | 2 | % | 60,541 | 8 | % | ||||||||||||
|
||||||||||||||||||||
Total revenue
|
$ | 757,902 | 100 | % | 5 | % | $ | 720,290 | 100 | % | ||||||||||
|
* | The sum of the individual percentages does not equal the total due to rounding. |
Nine Months Ended | Nine Months Ended | |||||||||||||||||||
July 30, 2011 | July 31, 2010 | |||||||||||||||||||
Revenue | % of Revenue* | Y/Y% | Revenue | % of Revenue | ||||||||||||||||
Converters
|
$ | 1,020,219 | 45 | % | 9 | % | $ | 937,918 | 47 | % | ||||||||||
Amplifiers / Radio frequency
|
605,694 | 27 | % | 21 | % | 501,505 | 25 | % | ||||||||||||
Other analog
|
309,124 | 14 | % | 28 | % | 241,836 | 12 | % | ||||||||||||
|
||||||||||||||||||||
Subtotal analog signal processing
|
1,935,037 | 85 | % | 15 | % | 1,681,259 | 84 | % | ||||||||||||
Power management & reference
|
164,368 | 7 | % | 18 | % | 139,032 | 7 | % | ||||||||||||
|
||||||||||||||||||||
Total analog products
|
$ | 2,099,405 | 92 | % | 15 | % | $ | 1,820,291 | 91 | % | ||||||||||
|
||||||||||||||||||||
Digital signal processing
|
177,781 | 8 | % | 4 | % | 171,222 | 9 | % | ||||||||||||
|
||||||||||||||||||||
Total revenue
|
$ | 2,277,186 | 100 | % | 14 | % | $ | 1,991,513 | 100 | % | ||||||||||
|
* | The sum of the individual percentages does not equal the total due to rounding. |
Three Months Ended | Nine Months Ended | |||||||||||||||
Region | July 30, 2011 | July 31, 2010 | July 30, 2011 | July 31, 2010 | ||||||||||||
United States
|
$ | 132,124 | $ | 129,933 | $ | 408,720 | $ | 375,256 | ||||||||
Rest of North and
South America
|
39,794 | 40,189 | 125,526 | 108,052 | ||||||||||||
Europe
|
215,751 | 186,035 | 638,371 | 504,031 | ||||||||||||
Japan
|
97,196 | 109,530 | 294,143 | 325,751 | ||||||||||||
China
|
157,877 | 132,119 | 460,569 | 347,642 | ||||||||||||
Rest of Asia
|
115,160 | 122,484 | 349,857 | 330,781 | ||||||||||||
|
||||||||||||||||
Total revenue
|
$ | 757,902 | $ | 720,290 | $ | 2,277,186 | $ | 1,991,513 | ||||||||
|
15
16
July 30, 2011 | October 30, 2010 | |||||||||||||||||||||||||||
Fair Value measurement at | Fair Value measurement at | |||||||||||||||||||||||||||
Reporting Date using: | Reporting Date using: | |||||||||||||||||||||||||||
Quoted | Quoted | |||||||||||||||||||||||||||
Prices in | Prices in | |||||||||||||||||||||||||||
Active | Active | |||||||||||||||||||||||||||
Markets | Significant | Significant | Markets | Significant | ||||||||||||||||||||||||
for | Other | Other | for | Other | ||||||||||||||||||||||||
Identical | Observable | Unobservable | Identical | Observable | ||||||||||||||||||||||||
Assets | Inputs | Inputs | Assets | Inputs | ||||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | (Level 1) | (Level 2) | Total | ||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||||||
Cash equivalents:
|
||||||||||||||||||||||||||||
Available-for-sale:
|
||||||||||||||||||||||||||||
Institutional money market funds
|
$ | 1,285,049 | $ | | $ | | $ | 1,285,049 | $ | 921,034 | $ | | $ | 921,034 | ||||||||||||||
Corporate obligations
|
| 39,983 | | 39,983 | | 99,959 | 99,959 | |||||||||||||||||||||
Short term investments:
|
||||||||||||||||||||||||||||
Available-for-sale:
|
||||||||||||||||||||||||||||
Securities with one year or less to
maturity:
|
||||||||||||||||||||||||||||
Corporate obligations (1)
|
| 2,123,434 | | 2,123,434 | | 1,520,220 | 1,520,220 | |||||||||||||||||||||
Floating rate notes, issued at par
|
| | | | | 50,000 | 50,000 | |||||||||||||||||||||
Securities with greater than one year
to maturity:
|
||||||||||||||||||||||||||||
Floating rate notes (1)
|
| 17,664 | | 17,664 | | 17,548 | 17,548 | |||||||||||||||||||||
Other assets:
|
||||||||||||||||||||||||||||
Forward foreign currency exchange
contracts (2)
|
| 4,957 | | 4,957 | | 7,256 | 7,256 | |||||||||||||||||||||
Deferred compensation investments
|
26,930 | | | 26,930 | 8,690 | | 8,690 | |||||||||||||||||||||
Other investments
|
1,316 | | | 1,316 | 1,317 | | 1,317 | |||||||||||||||||||||
Interest rate swap agreements
|
| 22,619 | | 22,619 | | 26,801 | 26,801 | |||||||||||||||||||||
|
||||||||||||||||||||||||||||
Total assets measured at fair value
|
$ | 1,313,295 | $ | 2,208,657 | $ | | $ | 3,521,952 | $ | 931,041 | $ | 1,721,784 | $ | 2,652,825 | ||||||||||||||
|
||||||||||||||||||||||||||||
Liabilities
|
||||||||||||||||||||||||||||
Long-term debt
|
||||||||||||||||||||||||||||
$375 million aggregate principle 5.0%
debt (3)
|
$ | | $ | 396,690 | $ | | $ | 396,690 | $ | | $ | 400,635 | $ | 400,635 | ||||||||||||||
Contingent consideration (4)
|
| | 13,790 | 13,790 | | | | |||||||||||||||||||||
|
||||||||||||||||||||||||||||
Total liabilities measured at fair value
|
$ | | $ | 396,690 | $ | 13,790 | $ | 410,480 | $ | | $ | 400,635 | $ | 400,635 | ||||||||||||||
|
(1) | The amortized cost of the Companys investments classified as available-for-sale as of July 30, 2011 and October 30, 2010 was $2,142.7 million and $1,639.1 million, respectively. | |
(2) | The Company has a master netting arrangement by counterparty with respect to derivative contracts. As of July 30, 2011 and October 30, 2010, contracts in a liability position of $0.6 million and $0.8 million, respectively, were netted against contracts in an asset position in the condensed consolidated balance sheets. | |
(3) | Equal to the accreted notional value of the debt plus the mark-to-market of the interest rate component of the long-term debt to fair value. The fair value of the long-term debt as of July 30, 2011 and October 30, 2010 was $413.5 million and $416.3 million, respectively. | |
(4) | As of July 30, 2011 there was no significant change to the fair value of the contingent consideration related to the Lyric acquisition since the date the acquisition was completed. |
17
18
Income Statement | July 30, 2011 | July 31, 2010 | ||||||||||||||||||||||
Classification | Loss on Swaps | Gain on Note | Net Income Effect | Gain on Swaps | Loss on Note | Net Income Effect | ||||||||||||||||||
Other income
|
$ | (4,182 | ) | $ | 4,182 | $ | | $ | 15,893 | $ | (15,893 | ) | $ | |
Fair Value at | Fair Value at | |||||||||||
Balance Sheet Location | July 30, 2011 | October 30, 2010 | ||||||||||
Interest rate swap agreements
|
Other assets | $ | 22,619 | $ | 26,801 | |||||||
Forward foreign currency exchange contracts
|
Prepaid expenses and other current assets | $ | 4,952 | $ | 7,542 |
Three Months Ended | ||||||||
July 30, 2011 | July 31, 2010 | |||||||
Loss recognized in OCI on derivatives (net of tax of $351 in 2011 and $356 in 2010)
|
$ | (2,311 | ) | $ | (1,816 | ) | ||
(Gain) loss reclassified from OCI into income (net of tax of $432 in 2011 and $668 in 2010)
|
$ | (2,844 | ) | $ | 3,404 |
Nine Months Ended | ||||||||
July 30, 2011 | July 31, 2010 | |||||||
Gain (loss) recognized in OCI on derivatives (net of tax of $693 in 2011 and $1,513 in 2010)
|
$ | 4,344 | $ | (9,058 | ) | |||
(Gain) loss reclassified from OCI into income (net of tax of $1,027 in 2011 and $460 in 2010)
|
$ | (6,856 | ) | $ | $1,880 |
19
Three Months Ended | ||||||||
July 30, 2011 | July 31, 2010 | |||||||
Cost of sales
|
$ | 1,535 | $ | 1,497 | ||||
Research and development
|
$ | 833 | $ | 1,343 | ||||
Selling, marketing, general and administrative
|
$ | 908 | $ | 1,232 |
Nine Months Ended | ||||||||
July 30, 2011 | July 31, 2010 | |||||||
Cost of sales
|
$ | 3,784 | $ | 218 | ||||
Research and development
|
$ | 2,029 | $ | 1,116 | ||||
Selling, marketing, general and administrative
|
$ | 2,070 | $ | 1,006 |
Nine Months Ended | ||||
July 30, 2011 | ||||
Balance at beginning of period
|
$ | 255,580 | ||
Acquisition
of Lyric Semiconductor ( Note 16 )
|
18,865 | |||
Foreign currency translation adjustment
|
6,423 | |||
|
||||
Balance at end of period
|
$ | 280,868 | ||
|
20
July 30, 2011 | October 30, 2010 | |||||||||||||||
Gross | Gross | |||||||||||||||
Carrying | Accumulated | Carrying | Accumulated | |||||||||||||
Amount | Amortization | Amount | Amortization | |||||||||||||
|
||||||||||||||||
Technology-based
|
$ | 6,486 | $ | 6,285 | $ | 7,166 | $ | 6,323 | ||||||||
Customer relationships
|
2,958 | 2,884 | 2,858 | 2,358 | ||||||||||||
In-process research and development
|
12,200 | | | | ||||||||||||
|
||||||||||||||||
Total
|
$ | 21,644 | $ | 9,169 | $ | 10,024 | $ | 8,681 | ||||||||
|
Fiscal | Amortization | |||
Year | Expense | |||
Remainder of 2011
|
$ | 275 |
Three Months Ended | ||||||||
July 30, 2011 | July 31, 2010 | |||||||
|
||||||||
Service cost
|
$ | 2,340 | $ | 1,413 | ||||
Interest cost
|
2,916 | 2,252 | ||||||
Expected return on plan assets
|
(2,797 | ) | (2,598 | ) | ||||
Amortization of initial net obligation (asset)
|
4 | (6 | ) | |||||
Amortization of net loss (gain)
|
417 | (20 | ) | |||||
|
||||||||
Net periodic pension cost
|
$ | 2,880 | $ | 1,041 | ||||
|
21
Nine Months Ended | ||||||||
July 30, 2011 | July 31, 2010 | |||||||
Service cost
|
$ | 6,872 | $ | 4,398 | ||||
Interest cost
|
8,544 | 7,117 | ||||||
Expected return on plan assets
|
(8,202 | ) | (8,219 | ) | ||||
Amortization of initial net obligation (asset)
|
12 | (20 | ) | |||||
Amortization of net loss (gain)
|
1,221 | (69 | ) | |||||
|
||||||||
Net periodic pension cost
|
$ | 8,447 | $ | 3,207 | ||||
|
22
23
Nine Months Ended | ||||||||
July 30, 2011 | July 31, 2010 | |||||||
Gain on sale of discontinued operations before income taxes
|
$ | 10,000 | $ | 1,316 | ||||
Provision for income taxes
|
3,500 | 457 | ||||||
|
||||||||
Gain on sale of discontinued operations, net of tax
|
$ | 6,500 | $ | 859 | ||||
|
24
25
Balance, October 30, 2010
|
$ | 18,447 | ||
Additions based on tax positions related to the prior year
|
9,265 | |||
Reductions for tax positions related to prior years
|
(17,677 | ) | ||
Settlements with taxing authorities
|
(370 | ) | ||
|
||||
Balance, July 30, 2011
|
$ | 9,665 | ||
|
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
Three Months Ended
Nine Months Ended
July 30, 2011
July 31, 2010
July 30, 2011
July 31, 2010
$
757,902
$
720,290
$
2,277,186
$
1,991,513
67.2
%
66.7
%
67.0
%
64.4
%
$
219,935
$
199,491
$
677,367
$
486,231
29.0
%
27.7
%
29.7
%
24.4
%
$
0.71
$
0.65
$
2.19
$
1.59
$
0.71
$
0.65
$
2.21
$
1.59
Three Months Ended
Three Months Ended
July 30, 2011
July 31, 2010
% of
% of
Revenue
Revenue*
Y/Y%
Revenue
Revenue*
$
365,158
48
%
8
%
$
339,629
47
%
101,190
13
%
21
%
83,462
12
%
115,983
15
%
(14
%)
134,379
19
%
164,560
22
%
10
%
149,690
21
%
11,011
1
%
(16
%)
13,130
2
%
$
757,902
100
%
5
%
$
720,290
100
%
*
The sum of the individual percentages does not equal the total due to rounding.
Nine Months Ended
Nine Months Ended
July 30, 2011
July 31, 2010
% of
% of
Revenue
Revenue
Y/Y%
Revenue
Revenue
$
1,085,078
48
%
18
%
$
917,941
46
%
302,056
13
%
26
%
239,206
12
%
346,314
15
%
(8
%)
378,048
19
%
507,655
22
%
22
%
415,371
21
%
36,083
2
%
(12
%)
40,947
2
%
$
2,277,186
100
%
14
%
$
1,991,513
100
%
Three Months Ended
Three Months Ended
July 30, 2011
July 31, 2010
% of
% of
Revenue
Revenue*
Y/Y%
Revenue
Revenue*
$
337,266
44
%
0
%
$
337,168
47
%
197,494
26
%
7
%
183,932
26
%
106,690
14
%
25
%
85,237
12
%
641,450
85
%
6
%
606,337
84
%
54,924
7
%
3
%
53,412
7
%
$
696,374
92
%
6
%
$
659,749
92
%
61,528
8
%
2
%
60,541
8
%
$
757,902
100
%
5
%
$
720,290
100
%
*
The sum of the individual percentages does not equal the total due to rounding.
Nine Months Ended
Nine Months Ended
July 30, 2011
July 31, 2010
% of
% of
Revenue
Revenue*
Y/Y%
Revenue
Revenue
$
1,020,219
45
%
9
%
$
937,918
47
%
605,694
27
%
21
%
501,505
25
%
309,124
14
%
28
%
241,836
12
%
1,935,037
85
%
15
%
1,681,259
84
%
164,368
7
%
18
%
139,032
7
%
$
2,099,405
92
%
15
%
$
1,820,291
91
%
177,781
8
%
4
%
171,222
9
%
$
2,277,186
100
%
14
%
$
1,991,513
100
%
*
The sum of the individual percentages does not equal the total due to rounding.
Three Months Ended
Nine Months Ended
Region
July 30, 2011
July 31, 2010
July 30, 2011
July 31, 2010
$
132,124
$
129,933
$
408,720
$
375,256
39,794
40,189
125,526
108,052
215,751
186,035
638,371
504,031
97,196
109,530
294,143
325,751
157,877
132,119
460,569
347,642
115,160
122,484
349,857
330,781
$
757,902
$
720,290
$
2,277,186
$
1,991,513
Three Months Ended
Nine Months Ended
July 30, 2011
July 31, 2010
July 30, 2011
July 31, 2010
$
509,640
$
480,202
$
1,526,027
$
1,283,193
67.2
%
66.7
%
67.0
%
64.4
%
Three Months Ended
Nine Months Ended
July 30, 2011
July 31, 2010
July 30, 2011
July 31, 2010
$
128,476
$
126,987
$
381,681
$
364,165
17.0
%
17.6
%
16.8
%
18.3
%
Three Months Ended
Nine Months Ended
July 30, 2011
July 31, 2010
July 30, 2011
July 31, 2010
$
102,323
$
102,070
$
307,613
$
288,211
13.5
%
14.2
%
13.5
%
14.5
%
Three Months Ended
Nine Months Ended
July 30, 2011
July 31, 2010
July 30, 2011
July 31, 2010
$
278,841
$
251,145
$
836,733
$
614,334
36.8
%
34.9
%
36.7
%
30.8
%
Three Months Ended
Nine Months Ended
July 30, 2011
July 31, 2010
July 30, 2011
July 31, 2010
$
6,159
$
2,614
$
13,067
$
7,720
(2,395
)
(3,206
)
(6,877
)
(7,411
)
206
416
96
417
$
3,970
$
(176
)
$
6,286
$
726
Three Months Ended
Nine Months Ended
July 30, 2011
July 31, 2010
July 30, 2011
July 31, 2010
$
54,936
$
51,830
$
153,080
$
127,377
20.0
%
20.6
%
18.4
%
20.8
%
Three Months Ended
Nine Months Ended
July 30, 2011
July 31, 2010
July 30, 2011
July 31, 2010
$
219,935
$
199,491
$
677,367
$
486,231
29.0
%
27.7
%
29.7
%
24.4
%
$
0.71
$
0.65
$
2.19
$
1.59
Nine Months Ended
July 30, 2011
July 31, 2010
$
6,500
$
859
$
0.02
$
0.00
Nine Months Ended
July 30, 2011
July 31, 2010
$
670,369
$
716,899
29.4
%
36.0
%
July 30, 2011
October 30, 2010
$
375,011
$
387,169
45
46
$
299,332
$
277,478
110
100
Payment due by period
Less than
More than
(in thousands)
Total
1 Year
1-3 Years
3-5 Years
5 Years
$
495,233
$
14,500
$
105,733
$
375,000
$
60,527
13,345
35,932
11,250
$
555,760
$
27,845
$
141,665
$
386,250
$
the effects of adverse economic conditions in the United States and international
markets;
changes in customer demand for our products and for end products that incorporate our
products;
the effectiveness of our efforts to refocus our operations, including our ability to
reduce our cost structure in both the short term and over a longer duration;
the timing of new product announcements or introductions by us, our customers or our
competitors;
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 products or components;
any significant decline in our backlog;
the timing, delay or cancellation of significant customer orders and our ability to
manage inventory;
our ability to hire, retain and motivate adequate numbers of engineers and other
qualified employees to meet the demands of our customers;
changes in geographic, product or customer mix;
our ability to utilize our manufacturing facilities at efficient levels;
potential significant litigation-related costs;
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 environmental regulations;
changes in our effective tax rates in the United States, Ireland or worldwide; and
the effects of public health emergencies, natural disasters, widespread travel
disruptions, security risks, terrorist activities, international conflicts and other events
beyond our control.
difficulty integrating acquired technologies, operations and personnel with our existing
businesses;
diversion of management attention in connection with both negotiating the acquisitions
and integrating the assets;
strain on managerial and operational resources as management tries to oversee larger
operations;
the future funding requirements for acquired companies, which may be significant;
potential loss of key employees;
exposure to unforeseen liabilities of acquired companies; and
increased risk of costly and time-consuming litigation.
seek additional financing in the debt or equity markets;
refinance or restructure all or a portion of our indebtedness, including the notes;
sell selected assets;
reduce or delay planned capital expenditures; or
reduce or delay planned operating expenditures.
crises in global credit, debt and financial markets;
actual or anticipated fluctuations in our revenue and operating results;
changes in financial estimates by securities analysts or our failure to perform in line
with those estimates or our published guidance;
changes in market valuations of other semiconductor companies;
announcements by us or our competitors of significant new products, technical innovations,
acquisitions or dispositions, litigation or capital commitments;
departures of key personnel;
actual or perceived noncompliance with corporate responsibility or ethics standards by us
or any of our employees, officers or directors; and
negative media publicity targeting us or our competitors.
Approximate Dollar
Total Number of
Value of Shares that
Shares Purchased as
May Yet Be
Total Number of
Part of Publicly
Purchased Under the
Shares Purchased
Average Price Paid
Announced Plans or
Plans or
Period
(a)
Per Share (b)
Programs (c)
Programs
917,963
$
40.74
917,856
$
833,214,619
306,204
$
38.74
306,204
$
821,352,396
450,648
$
37.79
450,486
$
804,326,821
1,674,815
$
39.58
1,674,546
$
804,326,821
(a)
Includes 269 shares paid to us by employees to satisfy employee tax obligations upon
vesting of restricted stock units granted to our employees under our equity compensation
plans.
(b)
The average price paid per share of stock repurchased under the stock repurchase
program includes the commissions paid to the brokers.
(c)
Shares repurchased pursuant to the stock repurchase program publicly announced on
August 12, 2004. On November 19, 2010, our Board of Directors authorized the repurchase by
us of an additional $1 billion of our common stock, increasing the total amount of our
common stock we are authorized to repurchase under the program to $5 billion. 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. 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.
ANALOG DEVICES, INC.
Date: August 16, 2011
By:
/s/ Jerald G. Fishman
Jerald G. Fishman
President and
Chief Executive Officer
(Principal Executive Officer)
Date: August 16, 2011
By:
/s/ David A. Zinsner
David A. Zinsner
Vice President, Finance
and Chief Financial Officer
(Principal Financial Officer)
Exhibit No.
Description
First Amendment to the Analog Devices, Inc. Amended and Restated Deferred Compensation Plan.
Form of Global Non-Qualified Stock Option Agreement for Employees for use under the
Companys 2006 Stock Incentive Plan.
Certification Pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Executive
Officer).
Certification Pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Financial
Officer).
Certification Pursuant to 18 U.S.C. Section 1350 (Chief Executive Officer).
Certification Pursuant to 18 U.S.C. Section 1350 (Chief Financial Officer).
XBRL Instance Document.**
XBRL Schema Document.**
XBRL Calculation Linkbase Document.**
XBRL Labels Linkbase Document.**
XBRL Presentation Linkbase Document.**
XBRL Definition Linkbase Document.**
Filed or furnished herewith.
**
Submitted electronically herewith.
1. | The Plan is amended by deleting Section 2.19 in its entirety and replacing it with the following: | ||
Eligible Employee means (i) a highly compensated or management employee of the Company or a Selected Affiliate who is designated by the Committee in accordance with Section 3.1 as eligible to participate in the Plan, or (ii) any non-employee member of the Board serving from time to time. | |||
2. | By adding a new Paragraph 4 to the end of Schedule A (Definitions), as follows: | ||
Separation from Service or Separates from Service means the termination of services provided to an Employer, whether voluntarily or involuntarily, as determined by the Committee in accordance with Treasury Regulation Section 1.409A-1(h). To avoid doubt, the transfer of an Eligible Employee from his Employer to another Employer shall not constitute a Separation from Service. | |||
3. | By capitalizing the term Separation from Service or Separates from Service in each instance in which each appears in the Plan. |
-1-
ANALOG DEVICES, INC.
|
|||||||||
By: | /s/ William Matson | ||||||||
Vice President Human Resources | |||||||||
-2-
1. | Grant of Option . Subject to the terms and conditions of the Plan and this Agreement, the Company has granted to the Optionee an Option to purchase that number of shares of the Companys Common Stock (the Option Shares) effective on the Date of Grant set forth below: |
Date of Grant:
|
{GRANTDATE} | |
Number of Option Shares Granted:
|
{SOSHARESGRANTED} | |
Option Exercise Price Per Share:
|
{EXERCISEPRICE} |
2. | Vesting and Exercise of Option . Subject to the Optionees continued employment with the Company or the Employer (as defined in 3(h) below) and other limitations set forth in this Agreement and the Plan, the Option will vest as to a set number of shares on each of the vesting dates set out in the following schedule: |
VEST DATE | NUMBER OF SHARES | |
{VESTDATE1}
|
{SHARES1} | |
{VESTDATE2}
|
{SHARES2} | |
{VESTDATE3}
|
{SHARES3} | |
{VESTDATE4}
|
{SHARES4} | |
{VESTDATE5}
|
{SHARES5} |
3. | Term of Option; Termination of Employment . |
(a) | The term of the Option is ten (10) years after the Date of Grant, subject, however, to the early termination provisions set forth herein. | ||
(b) | Except as otherwise provided herein, the Option shall be exercisable by the Optionee (or his/her successor in interest) following the termination of the Optionees employment only to the extent that the Option was vested on or prior to the date of such termination. | ||
(c) | The vesting of the Option shall terminate on the date the Optionee voluntarily terminates employment with the Company or the Employer (as defined in Section 3(h))(except by reason of retirement after attaining age 60 as provided below) or on the date his/her employment is terminated by the Company or the Employer without Cause (as defined in paragraph d), but any Option Shares that are vested on the date of such termination shall continue to be exercisable for a period of three (3) months following such termination date. | ||
(d) | The Option shall terminate on the date the Optionees employment with the Company or the Employer is terminated by the Company or one of its subsidiaries for Cause , and all Option Shares that are then vested shall forthwith cease to be exercisable. Cause for this purpose means unsatisfactory job performance (as determined by the Company), willful misconduct, fraud, gross negligence, disobedience or dishonesty. |
1
(e) | Upon the death of the Optionee while he/she is an employee of the Company or the Employer, the Option shall become immediately vested in full as to all shares on the date of death and shall continue to be exercisable (by the Optionees successor in interest) over the remaining term of the Option. | ||
(f) | If the Optionees employment with the Company or the Employer terminates by reason of the retirement of the Optionee after attaining age 60, the vesting of the Option shall terminate on the date of such retirement, but any Option Shares that are vested on the date of such retirement shall continue to be exercisable over the remaining term of the Option; provided that all then-exercisable Option Shares held by such Optionee shall immediately cease to be exercisable in the event that such Optionee becomes an employee of any competitor of the Company or the Employer (as determined in the sole discretion of the Company). | ||
(g) | If the Optionee becomes Disabled (as defined below), regardless of whether Optionee terminates employment with the Company or the Employer , the Option Shares that are not vested as of the date of disability shall vest on the date or dates (over the remaining term of the Option) that they otherwise would have vested if the Optionee had not become Disabled. Any Option Shares that are vested upon disability prior to giving effect to this provision shall continue to be vested over the remaining term of the Option. For the purpose of this Agreement, Disabled is defined pursuant to Internal Revenue Code Section 22(e)(3) and means the Optionees inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, as determined by the Company. | ||
(h) | For purposes of this Agreement, employment shall include being an employee with the Company. Employment shall also include being an employee with any direct or indirect parent or subsidiary of the Company, or any successor to the Company or any such parent or subsidiary of the Company (the Employer). Should an Optionee transfer employment to become a director, consultant or advisor to the Company or the Employer following the Date of Grant, he or she will be considered employed for vesting purposes until he or she ceases to provide services to the Company or any direct or indirect parent or subsidiary of the company, or any successor to the Company or any such parent or subsidiary of the Company. | ||
(i) | Notwithstanding the provisions in this Section 3, if the Company or the Employer develops a good faith belief that the provisions of this Section 3 may be found to be unlawful, discriminatory or against public policy in any relevant jurisdiction, then the Company in its sole discretion may choose not to apply such provision to this Option, nor any Option grant, in the Optionees jurisdiction. |
4. | Payment of Exercise Price . The following payment methods may be used to purchase Option Shares: |
(a) | A cashless exercise in a manner described in Section 5(f)(2) of the Plan. | ||
(b) | Cash or check payable to the Company. | ||
(c) | Delivery by the Optionee of shares of Common Stock of the Company owned by the Optionee and subject to such other terms and conditions contained in the Plan. | ||
(d) | Any combination of the above methods. |
5. | Non-Transferability of Option . Except in the event of death (whether by beneficiary designation or by will or the laws of descent and distribution ) or as permitted by the Plan, this Option is personal and no rights granted hereunder shall be transferred, assigned, pledged, or hypothecated in any way (whether by operation of law or otherwise), nor shall any such rights be subject to execution, attachment or similar process. | |
6. | Adjustment . This Option is subject to adjustment (including with respect to vesting of the Option Shares) upon certain changes in the Companys common stock and certain other events, including a Change in Control Event or a Reorganization Event, as provided in Section 11 of the Plan. | |
7. | Withholding Taxes . Regardless of any action the Company or the Employer, if different, takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax related items related to the Optionees participation in the Plan and legally applicable to the Optionee (Tax-Related Items), the Optionee acknowledges that the ultimate liability for all Tax-Related Items is and remains the Optionees responsibility and may exceed the amount actually withheld by the Company or the Employer. The Optionee further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option, including, but not limited to, the grant, vesting or exercise of the Option, the subsequent sale of Option Shares acquired pursuant to such exercise and the receipt of any dividends; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Option to reduce or eliminate the Optionees liability for Tax-Related Items or achieve any particular tax result. Further, if the Optionee has become subject to tax in more than one jurisdiction |
2
between the Date of Grant and the date of any relevant taxable or tax withholding event, as applicable, the Optionee acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. | ||
Prior to the relevant taxable or tax withholding event, as applicable, the Optionee will pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, the Optionee authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following: (i) withholding from the Optionees wages or other cash compensation paid to the Optionee by the Company and/or the Employer; or (ii) withholding from proceeds of the sale of Option Shares acquired at exercise of the Option either through a voluntary sale or through a mandatory sale arranged by the Company (on the Optionees behalf pursuant to this authorization); or (iii) withholding a sufficient number of whole Option Shares otherwise issuable upon the exercise of the Option that have an aggregate Fair Market Value (as defined under the Plan) sufficient to pay the minimum Tax-Related Items required to be withheld with respect to the exercised Option. The cash equivalent of the Option Shares withheld will be used to settle the obligation to withhold the Tax-Related Items (determined by reference to the closing price of the Common Stock on the New York Stock Exchange on the applicable exercise date). | ||
To avoid any negative accounting treatment, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates. If the obligation for Tax-Related Items is satisfied by withholding in whole Option Shares, for tax purposes, the Optionee is deemed to have been issued the full number of Option Shares subject to the exercised Options, notwithstanding that a number of the Option Shares are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of the Optionees participation in the Plan. No fractional Option Shares will be withheld or issued pursuant to the grant of the Option and the issuance of Option Shares hereunder. | ||
Finally, the Optionee shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of the Optionees participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the shares or the proceeds of the sale of Option Shares, if the Optionee fails to comply with the Optionees obligations in connection with the Tax-Related Items. |
8. | Nature of Grant . In accepting the Option, the Optionee acknowledges, understands and agrees that: |
(a) | the Plan is established voluntarily by the Company, it is discretionary in nature, and may be amended, suspended or terminated by the Company at any time; | ||
(b) | the grant of the Option is voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted repeatedly in the past; | ||
(c) | all decisions with respect to future option grants, if any, will be at the sole discretion of the Company; | ||
(d) | the Optionees participation in the Plan shall not create a right to further employment with the Employer and shall not interfere with the ability of the Employer to terminate the Optionees employment or service relationship (if any) at any time; | ||
(e) | the Optionee is voluntarily participating in the Plan; | ||
(f) | the Option and any Option Shares acquired under the Plan are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or the Employer; | ||
(g) | the Option grant and the Optionees participation in the Plan will not be interpreted to form an employment or service contract or relationship with the Company or the Employer; | ||
(h) | the future value of the Option Shares underlying the Option is unknown and cannot be predicted with certainty; | ||
(i) | if the underlying Option Shares do not increase in value, the Option will have no value; | ||
(j) | if the Optionee exercises the Option and acquires Option Shares, the value of such Option Shares may increase or decrease in value, even below the Exercise Price; |
3
(k) | for Optionees who reside outside the U.S., the following additional provisions shall apply: |
(i) | the Option and any Option Shares acquired under the Plan are not intended to replace any pension rights or compensation; | ||
(ii) | the Option and any Option Shares acquired under the Plan are extraordinary items that do not constitute compensation of any kind for services of any kind rendered to the Company or the Employer, and which is outside the scope of the Optionees employment or service contract, if any; and | ||
(iii) | no claim or entitlement to compensation or damages shall arise from forfeiture of the Option resulting from termination of the Optionees employment by the Company or the Employer (for any reason whatsoever and whether or not in breach of local labor laws) and in consideration of the grant of the Option to which the Optionee is otherwise not entitled, the Optionee irrevocably agrees never to institute any claim against the Company or the Employer, waive his or her ability, if any, to bring any such claim, and release the Company and the Employer from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, the Optionee shall be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary to request dismissal or withdrawal of such claims. |
9. | No Advice Regarding Grant . The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Optionees participation in the Plan, or the Optionees acquisition or sale of the underlying Option Shares. The Optionee is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan. | |
10. | Data Privacy . This Section 10 applies if the Optionee resides outside the U.S.: The Optionee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Optionees personal data as described in this Agreement and any other Option grant materials by and among, as applicable, the Employer, the Company and its subsidiaries for the exclusive purpose of implementing, administering and managing the Optionees participation in the Plan. | |
The Optionee understands that the Company and the Employer may hold certain personal information about the Optionee, including, but not limited to, the Optionees name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all Options or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in the Optionees favor, for the exclusive purpose of implementing, administering and managing the Plan (Data). | ||
The Optionee understands that Data will be transferred to such other stock plan service provider as may be selected by the Company that assists the Company with the implementation, administration and management of the Plan. The Optionee understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipients country (e.g., the United States) may have different data privacy laws and protections than the Optionees country. The Optionee understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting the Optionees local human resources representative. The Optionee authorizes the Company, the stock plan service provider, and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purpose of implementing, administering and managing his or her participation in the Plan. The Optionee understands that Data will be held only as long as is necessary to implement, administer and manage the Optionees participation in the Plan. The Optionee understands that he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. The Optionee understands, however, that refusing or withdrawing his or her consent may affect the Optionees ability to participate in the Plan. For more information on the consequences of the Optionees refusal to consent or withdrawal of consent, the Optionee understands that he or she may contact his or her local human resources representative. | ||
11. | Governing Law . This Agreement shall be construed, interpreted and enforced in accordance with the internal laws of the Commonwealth of Massachusetts without regard to any applicable conflicts of laws. | |
12. | Electronic Delivery . The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. The Optionee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. |
4
13. | Language . If the Optionee has received this Agreement, or any other document related to the Option and/or the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control. | |
14. | Severability . The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable. | |
15. | Appendix . The Option shall be subject to any special provisions set forth in the Appendix for the Optionees country of residence, if any. If the Optionee relocates to one of the countries included in the Appendix during the life of the Option, the special provisions for such country shall apply to the Optionee, to the extent the Company determines that the application of such provisions is necessary or advisable in order to comply with local law or facilitate the administration of the Plan. The Appendix constitutes part of this Agreement. | |
16. | Imposition of Other Requirements . The Company reserves the right to impose other requirements on the Option and the Option Shares purchased upon exercise of the Option, to the extent the Company determines it is necessary or advisable in order to comply with local laws or facilitate the administration of the Plan, and to require the Optionee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. |
Ray Stata
|
Jerald G. Fishman | |
Chairman of the Board
|
President & Chief Executive Officer |
5
1 | A shadow director is an individual who is not on the board of directors of the Irish subsidiary but who has sufficient control so that the board of directors of the Irish subsidiary acts in accordance with the directions or instructions of the individual. |
1. | I have reviewed this quarterly report on Form 10-Q of Analog Devices, Inc.; | ||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Dated: August 16, 2011 | /s/ Jerald G. Fishman | |||
Jerald G. Fishman | ||||
President and Chief
Executive Officer (Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Analog Devices, Inc.; | ||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Dated: August 16, 2011 | /s/ David A. Zinsner | |||
David A. Zinsner | ||||
Vice President, Finance
and Chief Financial Officer (Principal Financial Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: August 16, 2011 | /s/ Jerald G. Fishman | |||
Jerald G. Fishman | ||||
Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: August 16, 2011 | /s/ David A. Zinsner | |||
David A. Zinsner | ||||
Chief Financial Officer | ||||