Document and Entity Information
Document and Entity Information | 6 Months Ended |
May 05, 2018shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | ANALOG DEVICES INC |
Entity Central Index Key | 6,281 |
Current Fiscal Year End Date | --11-03 |
Entity Filer Category | Large Accelerated Filer |
Document Type | 10-Q |
Document Period End Date | May 5, 2018 |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | 370,897,292 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
May 05, 2018 | Apr. 29, 2017 | May 05, 2018 | Apr. 29, 2017 | ||
Income Statement [Abstract] | |||||
Revenue | $ 1,513,053 | $ 1,147,982 | $ 3,031,677 | $ 2,132,431 | |
Cost of sales | [1] | 479,241 | 507,539 | 962,675 | 843,484 |
Gross margin | 1,033,812 | 640,443 | 2,069,002 | 1,288,947 | |
Operating expenses: | |||||
Research and development | [1] | 289,472 | 235,232 | 578,069 | 419,186 |
Selling, marketing, general and administrative | [1] | 172,146 | 190,686 | 349,054 | 321,345 |
Amortization of intangibles | 107,129 | 68,690 | 214,148 | 86,850 | |
Special charges | 1,089 | 0 | 58,407 | 49,463 | |
Total operating expenses | 569,836 | 494,608 | 1,199,678 | 876,844 | |
Operating income | 463,976 | 145,835 | 869,324 | 412,103 | |
Nonoperating expense (income): | |||||
Interest expense | 64,792 | 71,636 | 132,822 | 114,250 | |
Interest income | (1,912) | (12,421) | (4,004) | (22,421) | |
Other, net | (451) | (94) | 105 | 251 | |
Nonoperating expense (income) | 62,429 | 59,121 | 128,923 | 92,080 | |
Income before income taxes | 401,547 | 86,714 | 740,401 | 320,023 | |
Provision (benefit) for income taxes | 21,716 | (6,850) | 92,398 | 9,330 | |
Net income | $ 379,831 | $ 93,564 | $ 648,003 | $ 310,693 | |
Shares used to compute earnings per common share – basic (in shares) | 370,384 | 341,316 | 369,685 | 325,051 | |
Shares used to compute earnings per common share – diluted (in shares) | 374,778 | 345,654 | 374,430 | 329,365 | |
Basic earnings per common share (in dollars per share) | $ 1.02 | $ 0.27 | $ 1.75 | $ 0.96 | |
Diluted earnings per common share (in dollars per share) | 1.01 | 0.27 | 1.72 | 0.94 | |
Dividends declared and paid per share (in dollars per share) | $ 0.48 | $ 0.45 | $ 0.93 | $ 0.87 | |
Cost of sales | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Stock-based compensation expense | $ 3,820 | $ 2,566 | $ 8,041 | $ 4,510 | |
Research and development | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Stock-based compensation expense | 22,018 | 11,910 | 41,746 | 18,931 | |
Selling, marketing, general and administrative | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Stock-based compensation expense | $ 13,076 | $ 8,010 | $ 27,029 | $ 15,574 | |
[1] | Includes stock-based compensation expense as follows: Cost of sales$3,820 $2,566 $8,041 $4,510 Research and development$22,018 $11,910 $41,746 $18,931 Selling, marketing, general and administrative$13,076 $8,010 $27,029 $15,574 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
May 05, 2018 | Apr. 29, 2017 | May 05, 2018 | Apr. 29, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 379,831 | $ 93,564 | $ 648,003 | $ 310,693 |
Foreign currency translation adjustments | (3,419) | 6,140 | 6,752 | 1,178 |
Change in fair value of available-for-sale securities (net of taxes of $0, $5, $0 and $9, respectively) | 5 | (675) | 3 | (456) |
Change in fair value of derivative instruments designated as cash flow hedges (net of taxes of $771, $912, $1,323 and $2,307, respectively) | (6,613) | 4,481 | 1,737 | 6,566 |
Changes in pension plans including prior service cost, transition obligation, net actuarial loss and foreign currency translation adjustments (net of taxes of $99, $103, $202 and $205 respectively) | 1,373 | (359) | (144) | (180) |
Other comprehensive (loss) income | (8,654) | 9,587 | 8,348 | 7,108 |
Comprehensive income | $ 371,177 | $ 103,151 | $ 656,351 | $ 317,801 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
May 05, 2018 | Apr. 29, 2017 | May 05, 2018 | Apr. 29, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Tax effect of change in fair value of available-for-sale securities classified as short-term investments | $ 0 | $ 5 | $ 0 | $ 9 |
Tax effect of change in fair value of derivative instruments designated as cash flow hedges | 771 | 912 | 1,323 | 2,307 |
Tax effect of changes in pension plans including prior service cost, transition obligation, net actuarial loss and foreign currency translation adjustments | $ 99 | $ 103 | $ 202 | $ 205 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | May 05, 2018 | Oct. 28, 2017 | |
Current Assets | |||
Cash and cash equivalents | $ 806,517 | $ 1,047,838 | |
Accounts receivable | 759,557 | 688,953 | |
Inventories | [1] | 551,220 | 550,816 |
Prepaid income tax | 5,534 | 3,522 | |
Prepaid expenses and other current assets | 65,446 | 60,209 | |
Total current assets | 2,188,274 | 2,351,338 | |
Property, Plant and Equipment, at Cost | |||
Land and buildings | 805,103 | 794,456 | |
Machinery and equipment | 2,452,229 | 2,368,215 | |
Office equipment | 72,175 | 66,493 | |
Leasehold improvements | 86,269 | 75,263 | |
Property, Plant and Equipment, at Cost | 3,415,776 | 3,304,427 | |
Less accumulated depreciation and amortization | 2,301,197 | 2,197,123 | |
Net property, plant and equipment | 1,114,579 | 1,107,304 | |
Other Assets | |||
Deferred compensation plan investments | 37,367 | 32,572 | |
Other investments | 26,994 | 24,838 | |
Goodwill | 12,258,185 | 12,217,455 | |
Intangible assets, net | 5,066,191 | 5,319,425 | |
Deferred tax assets | 29,661 | 32,322 | |
Other assets | 55,203 | 56,040 | |
Total other assets | 17,473,601 | 17,682,652 | |
Total assets | 20,776,454 | 21,141,294 | |
Current Liabilities | |||
Accounts payable | 213,267 | 236,629 | |
Deferred income on shipments to distributors, net | 565,668 | 473,972 | |
Income taxes payable | 105,085 | 86,905 | |
Debt, current | 56,000 | 300,000 | |
Accrued liabilities | 492,843 | 498,826 | |
Total current liabilities | 1,432,863 | 1,596,332 | |
Non-current liabilities | |||
Long-term debt | 6,926,441 | 7,551,084 | |
Deferred income taxes | 943,117 | 1,674,683 | |
Deferred compensation plan liability | 37,367 | 32,572 | |
Income taxes payable | 737,494 | 49,583 | |
Other non-current liabilities | 113,817 | 75,500 | |
Total non-current liabilities | 8,758,236 | 9,383,422 | |
Commitments and contingencies | |||
Shareholders’ Equity | |||
Preferred stock, $1.00 par value, 471,934 shares authorized, none outstanding | 0 | 0 | |
Common stock, $0.16 2/3 par value, 1,200,000,000 shares authorized, 370,897,292 shares outstanding (368,635,788 on October 28, 2017) | 61,817 | 61,441 | |
Capital in excess of par value | 5,362,608 | 5,250,519 | |
Retained earnings | 5,213,941 | 4,910,939 | |
Accumulated other comprehensive loss | (53,011) | (61,359) | |
Total shareholders’ equity | 10,585,355 | 10,161,540 | |
Liabilities and Shareholders' Equity | $ 20,776,454 | $ 21,141,294 | |
[1] | Includes $5,360 and $5,373 related to stock-based compensation at May 5, 2018 and October 28, 2017, respectively. |
Condensed Consolidated Balance6
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | May 05, 2018 | Oct. 28, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 471,934 | 471,934 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.166667 | $ 0.166667 |
Common stock, shares authorized (in shares) | 1,200,000,000 | 1,200,000,000 |
Common stock, shares outstanding (in shares) | 370,897,292 | 368,635,788 |
Stock based compensation expense | $ 5,360 | $ 5,373 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
May 05, 2018 | Apr. 29, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 648,003 | $ 310,693 |
Adjustments to reconcile net income to net cash provided by operations: | ||
Depreciation | 113,004 | 83,151 |
Amortization of intangibles | 285,004 | 108,717 |
Cost of goods sold for inventory acquired | 0 | 121,113 |
Stock-based compensation expense | 76,816 | 39,015 |
Deferred income taxes | (734,214) | (87,035) |
Other non-cash activity | 10,104 | 24,149 |
Changes in operating assets and liabilities | 708,465 | 262,106 |
Total adjustments | 459,179 | 551,216 |
Net cash provided by operating activities | 1,107,182 | 861,909 |
Cash flows from investing activities: | ||
Purchases of short-term available-for-sale investments | 0 | (705,448) |
Maturities of short-term available-for-sale investments | 0 | 3,091,873 |
Sales of short-term available-for-sale investments | 0 | 357,388 |
Additions to property, plant and equipment | (117,122) | (75,266) |
Payments for acquisitions, net of cash acquired | (52,339) | (9,687,533) |
Changes in other assets | (1,029) | (12,063) |
Net cash used for investing activities | (170,490) | (7,031,049) |
Cash flows from financing activities: | ||
Proceeds from debt | 743,778 | 11,156,164 |
Payments of deferred financing fees | 0 | (5,625) |
Proceeds from derivative instruments | 0 | 3,904 |
Debt repayments | (1,620,000) | 0 |
Dividend payments to shareholders | (345,001) | (268,997) |
Repurchase of common stock | (29,908) | (26,980) |
Proceeds from employee stock plans | 65,557 | 87,273 |
Contingent consideration payment | (542) | 0 |
Changes in other financing activities | 7,945 | (16) |
Net cash (used for) provided by financing activities | (1,178,171) | 10,945,723 |
Effect of exchange rate changes on cash | 158 | 28 |
Net (decrease) increase in cash and cash equivalents | (241,321) | 4,776,611 |
Cash and cash equivalents at beginning of period | 1,047,838 | 921,132 |
Cash and cash equivalents at end of period | $ 806,517 | $ 5,697,743 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
May 05, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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 28, 2017 (fiscal 2017 ) and related notes. The results of operations for the interim periods shown in this report are not necessarily indicative of the results that may be expected for the fiscal year ending November 3, 2018 (fiscal 2018 ) or any future period. On March 10, 2017 (Acquisition Date), the Company completed the acquisition of Linear Technology Corporation (Linear), a designer, manufacturer and marketer of high performance analog integrated circuits. The acquisition of Linear is referred to as the Acquisition. The condensed consolidated financial statements included in this Quarterly Report on Form 10-Q include the financial results of Linear prospectively from the Acquisition Date. See Note 13, Acquisitions , of these Notes to Condensed Consolidated Financial Statements for further information. Certain amounts reported in previous periods have been reclassified to conform to the fiscal 2018 presentation. In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). As a result of the adoption of ASU 2016-09 in the first quarter of fiscal 2018, excess tax benefits from share-based payments are presented within operating activities in the Consolidated Statements of Cash Flows. We applied this change in presentation retrospectively and have adjusted the prior year presentation by removing the reclass of $26.0 million of excess tax benefit-stock options from net cash provided by operating activities to net cash provided by financing activities. All other reclassified amounts are immaterial. The Company has a 52-53 week fiscal year that ends on the Saturday closest to the last day in October. Fiscal 2018 is a 53 -week fiscal year and fiscal 2017 was a 52 -week fiscal year. The additional week in fiscal 2018 was included in the first quarter ended February 3, 2018. Therefore, the first six months of fiscal 2018 included an additional week of operations as compared to the first six months of fiscal 2017. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
May 05, 2018 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Revenue Recognition Revenue from product sales to customers is generally recognized when title passes, which is upon shipment in the U.S. and in certain foreign countries. Revenue from product sales to customers in other foreign countries is recognized subsequent to product shipment. Title for shipments to these other foreign countries ordinarily passes within a week of shipment. Accordingly, the Company defers the revenue recognized relating to these other foreign countries until title has passed. For multiple element arrangements, the Company allocates arrangement consideration among the elements based on the relative fair values of those elements as determined using vendor-specific objective evidence or third-party evidence. The Company uses its best estimate of selling price to allocate arrangement consideration between the deliverables in cases where neither vendor-specific objective evidence nor third-party evidence is available. A reserve for sales returns and allowances for customers is recorded based on historical experience or specific identification of an event necessitating a reserve. Revenue from contracts with the United States government, government prime contractors and some commercial customers is generally recorded on a percentage of completion basis using either units delivered or costs incurred as the measurement basis for progress towards completion. The output measure is used to measure results directly and is generally the best measure of progress toward completion in circumstances in which a reliable measure of output can be established. Estimated revenue in excess of amounts billed is reported as unbilled receivables. Contract accounting requires judgment in estimating costs and assumptions related to technical issues and delivery schedule. Contract costs include material, subcontractor costs, labor and an allocation of indirect costs. The estimation of costs at completion of a contract is subject to numerous variables involving contract costs and estimates as to the length of time to complete the contract. Changes in contract performance, estimated gross margin, including the impact of final contract settlements, and estimated losses are recognized in the period in which the changes or losses are determined. Product sales to certain international distributors are made under agreements that permit limited stock return privileges but not sales price rebates. Revenue on these sales is recognized upon shipment at which time title passes. The Company defers revenue and the related cost of sales on shipments to U.S. distributors and certain international distributors until the distributors resell the products to their customers. As a result, the Company’s revenue fully reflects end customer purchases and is not impacted by distributor inventory levels. Sales to certain of these distributors are made under agreements that allow such distributors to receive price-adjustment credits, as discussed below, and to return qualifying products for credit, as determined by the Company, in order to reduce the amounts of slow-moving, discontinued or obsolete product from their inventory. These agreements limit such returns to a certain percentage of the value of the Company’s shipments to that distributor during the prior quarter. In addition, such distributors are allowed to return unsold products if the Company terminates the relationship with the distributor. Certain distributors are granted price-adjustment credits for sales to their customers when the distributor’s standard cost (i.e., the Company’s sales price to the distributor) does not provide the distributor with an appropriate margin on its sales to its customers. As distributors negotiate selling prices with their customers, the final sales price agreed upon with the customer will be influenced by many factors, including the particular product being sold, the quantity ordered, the particular customer, the geographic location of the distributor and the competitive landscape. As a result, the distributor may request and receive a price-adjustment credit from the Company to allow the distributor to earn an appropriate margin on the transaction. Certain distributors are also granted price-adjustment credits in the event of a price decrease subsequent to the date the product was shipped and billed to the distributor. Generally, the Company will provide a credit equal to the difference between the price paid by the distributor (less any prior credits on such products) and the new price for the product multiplied by the quantity of the specific product in the distributor’s inventory at the time of the price decrease. Given the uncertainties associated with the levels of price-adjustment credits to be granted to certain distributors, the sales price to the distributor is not fixed or determinable until the distributor resells the products to their customers. Therefore, the Company defers revenue recognition from sales to certain distributors until the distributors have sold the products to their customers. Generally, title to the inventory transfers to the distributor at the time of shipment or delivery to the distributor, and payment from the distributor is due in accordance with the Company’s standard payment terms. These payment terms are not contingent upon the distributors’ sale of the products to their customers. Upon title transfer to distributors, inventory is reduced for the cost of goods shipped, the margin (sales less cost of sales) is recorded as “deferred income on shipments to distributors, net” and an account receivable is recorded. Shipping costs are charged to cost of sales as incurred. The deferred costs of sales to distributors have historically had very little risk of impairment due to the margins the Company earns on sales of its products and the relatively long life-cycle of the Company’s products. Product returns from distributors that are ultimately scrapped have historically been immaterial. In addition, price protection and price-adjustment credits granted to distributors historically have not exceeded the margins the Company earns on sales of its products. The Company continuously monitors the level and nature of product returns and is in frequent contact with the distributors to ensure reserves are established for all known material issues. As of May 5, 2018 and October 28, 2017 , the Company had gross deferred revenue of $701.3 million and $589.5 million , respectively, and gross deferred cost of sales of $135.6 million and $115.5 million , respectively. The Company generally offers a twelve -month warranty for its products. The Company’s warranty policy provides for replacement of defective products. Specific accruals are recorded for known product warranty issues. Product warranty expenses during each of the three- and six-month period s ended May 5, 2018 and April 29, 2017 were not material . |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
May 05, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation A summary of the Company’s stock option activity as of May 5, 2018 and changes during the three- and six-month period s then ended is presented below: Activity during the Three Months Ended May 5, 2018 Options Outstanding (in thousands) Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term in Years Aggregate Options outstanding at February 3, 2018 8,243 $54.04 Options granted 569 $91.12 Options exercised (604 ) $46.65 Options forfeited (34 ) $65.85 Options outstanding at May 5, 2018 8,174 $57.11 6.4 $271,525 Options exercisable at May 5, 2018 4,712 $47.50 5.0 $201,532 Options vested or expected to vest at May 5, 2018 (1) 7,859 $56.44 6.3 $266,299 (1) In addition to the vested options, the Company expects a portion of the unvested options to vest at some point in the future. The number of options expected to vest is calculated by applying an estimated forfeiture rate to the unvested options. Activity during the Six Months Ended May 5, 2018 Options Outstanding (in thousands) Weighted- Average Exercise Price Per Share Options outstanding at October 28, 2017 9,347 $52.47 Options granted 590 $91.13 Options exercised (1,609 ) $41.04 Options forfeited (147 ) $63.18 Options expired (7 ) $29.91 Options outstanding at May 5, 2018 8,174 $57.11 During the three- and six-month period s ended May 5, 2018 , the total intrinsic value of options exercised (i.e., the difference between the market price at exercise and the price paid by the employee to exercise the options) was $28.7 million and $82.5 million , respectively, and the total amount of proceeds received by the Company from the exercise of these options was $27.7 million and $65.6 million , respectively. During the three- and six-month period s ended April 29, 2017 , the total intrinsic value of options exercised (i.e., the difference between the market price at exercise and the price paid by the employee to exercise the options) was $53.5 million and $89.1 million , respectively, and the total amount of proceeds received by the Company from the exercise of these options was $52.8 million and $87.3 million , respectively. A summary of the Company’s restricted stock unit/award activity as of May 5, 2018 and changes during the three- and six-month period s then ended is presented below: Activity during the Three Months Ended May 5, 2018 Restricted Stock Units/Awards Outstanding (in thousands) Weighted- Average Grant- Date Fair Value Per Share Restricted stock units/awards outstanding at February 3, 2018 5,547 $72.66 Units/Awards granted 1,250 $87.36 Restrictions lapsed (720 ) $59.17 Forfeited (87 ) $56.59 Restricted stock units/awards outstanding at May 5, 2018 5,990 $77.38 Activity during the Six Months Ended May 5, 2018 Restricted Stock Units/Awards Outstanding (in thousands) Weighted- Average Grant- Date Fair Value Per Share Restricted stock units/awards outstanding at October 28, 2017 5,680 $71.88 Units/Awards granted 1,531 $87.32 Restrictions lapsed (961 ) $63.17 Forfeited (260 ) $66.17 Restricted stock units/awards outstanding at May 5, 2018 5,990 $77.38 As of May 5, 2018 , there was $430.9 million of total unrecognized compensation cost related to unvested stock-based awards comprised of stock options and restricted stock units/awards. That cost is expected to be recognized over a weighted-average period of 1.8 years . The total grant-date fair value of shares that vested during the three- and six-month period s ended May 5, 2018 was approximately $64.1 million and $84.5 million , respectively. The total grant-date fair value of shares that vested during the three- and six-month period s ended April 29, 2017 was approximately $61.8 million and $66.9 million , respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
May 05, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following table provides the changes in accumulated other comprehensive income (loss) (OCI) by component and the related tax effects during the first six months of fiscal 2018 . Foreign currency translation adjustment Unrealized holding gains on available for sale securities Unrealized holding (losses) on available for sale securities Unrealized holding gains (losses) on derivatives Pension plans Total October 28, 2017 $ (22,489 ) $ 1 $ (1 ) $ (10,879 ) $ (27,991 ) $ (61,359 ) Other comprehensive income (loss) before reclassifications 6,752 3 — 8,307 (779 ) 14,283 Amounts reclassified out of other comprehensive income (loss) — — — (5,247 ) 837 (4,410 ) Tax effects — — — (1,323 ) (202 ) (1,525 ) Other comprehensive income (loss) 6,752 3 — 1,737 (144 ) 8,348 May 5, 2018 $ (15,737 ) $ 4 $ (1 ) $ (9,142 ) $ (28,135 ) $ (53,011 ) The amounts reclassified out of accumulated OCI with presentation location during each period were as follows: Three Months Ended Six Months Ended Comprehensive Income Component May 5, 2018 April 29, 2017 May 5, 2018 April 29, 2017 Location Unrealized holding losses (gains) on derivatives Currency forwards $ (590 ) $ 1,248 $ (1,865 ) $ 2,948 Cost of sales (714 ) 494 (1,783 ) 1,508 Research and development (787 ) 702 (1,756 ) 1,795 Selling, marketing, general and administrative Interest rate derivatives (473 ) 464 157 993 Interest expense (2,564 ) 2,908 (5,247 ) 7,244 Total before tax 131 (534 ) 475 (1,389 ) Tax $ (2,433 ) $ 2,374 $ (4,772 ) $ 5,855 Net of tax Amortization of pension components Transition obligation $ 2 $ 3 $ 4 $ 6 (a) Prior service credit 1 (2 ) 1 (4 ) (a) Actuarial losses 407 466 832 921 (a) 410 467 837 923 Total before tax (99 ) (103 ) (202 ) (204 ) Tax $ 311 $ 364 $ 635 $ 719 Net of tax Total amounts reclassified out of accumulated other comprehensive income (loss), net of tax $ (2,122 ) $ 2,738 $ (4,137 ) $ 6,574 ______________ (a) The amortization of pension components is included in the computation of net periodic pension cost. For further information see Note 13, Retirement Plans , contained in Item 8 of the Annual Report on Form 10-K for the fiscal year ended October 28, 2017 . The Company estimates $1.0 million , net of tax, of forward foreign currency derivative instruments included in OCI will be reclassified into earnings within the next 12 months. There was no material ineffectiveness related to designated forward foreign currency derivative instruments in the three- and six-month period s ended May 5, 2018 and April 29, 2017 . As of May 5, 2018 , the Company held 12 investment securities, 5 of which were in an unrealized loss position with immaterial gross unrealized losses and an aggregate fair value of $79.9 million . As of October 28, 2017 , the Company held 18 investment securities, 8 of which were in an unrealized loss position with immaterial gross unrealized losses and an aggregate fair value of $143.9 million . These unrealized losses were primarily related to corporate obligations that earn lower interest rates than current market rates. None of these investments have been in a loss position for more than twelve months. As the Company does not intend to sell these investments and it is unlikely that the Company will be required to sell the investments before recovery of their amortized basis, which will be at maturity, the Company does not consider those investments to be other-than-temporarily impaired at May 5, 2018 and October 28, 2017 . Realized gains or losses on investments are determined based on the specific identification basis and are recognized in nonoperating expense (income). There were no material net realized gains or losses from the sales of available-for-sale investments during any of the fiscal periods presented. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
May 05, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed based only on the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common shares outstanding during the period, plus the dilutive effect of potential future issuances of common stock relating to stock option programs and other potentially dilutive securities using the treasury stock method. In calculating diluted earnings per share, the dilutive effect of stock options and restricted stock units is computed using the average market price for the respective period. In addition, the assumed proceeds under the treasury stock method include the average unrecognized compensation expense of stock options that are in-the-money and restricted stock units. This results in the “assumed” buyback of additional shares, thereby reducing the dilutive impact of in-the-money stock options. Potential shares related to certain of the Company’s outstanding stock options and restricted stock units were excluded because they were anti-dilutive. Those potential shares, determined based on the weighted average exercise prices during the respective periods, could be dilutive in the future. In connection with the Acquisition, the Company granted restricted stock awards to replace outstanding restricted stock awards of Linear employees. These restricted stock awards entitle recipients to voting and nonforfeitable dividend rights from the date of grant. These unvested stock-based compensation awards are considered participating securities and the two-class method is used for purposes of calculating earnings per share. Under the two-class method, a portion of net income is allocated to these participating securities and therefore is excluded from the calculation of earnings per share allocated to common stock, as shown in the table below. The difference between the income allocated to participating securities under the basic and diluted two-class methods is not material. The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended Six Months Ended May 5, 2018 April 29, 2017 May 5, 2018 April 29, 2017 Net Income $ 379,831 $ 93,564 $ 648,003 $ 310,693 Less: income allocated to participating securities 1,532 — 2,827 82 Net income allocated to common stockholders $ 378,299 $ 93,564 $ 645,176 $ 310,611 Basic shares: Weighted-average shares outstanding 370,384 341,316 369,685 325,051 Earnings per common share basic: $ 1.02 $ 0.27 $ 1.75 $ 0.96 Diluted shares: Weighted-average shares outstanding 370,384 341,316 369,685 325,051 Assumed exercise of common stock equivalents 4,394 4,338 4,745 4,314 Weighted-average common and common equivalent shares 374,778 345,654 374,430 329,365 Earnings per common share diluted: $ 1.01 $ 0.27 $ 1.72 $ 0.94 Anti-dilutive shares related to: Outstanding share-based awards 1,990 1,580 1,731 823 |
Special Charges
Special Charges | 6 Months Ended |
May 05, 2018 | |
Restructuring and Related Activities [Abstract] | |
Special Charges | Special Charges The Company monitors global macroeconomic conditions on an ongoing basis and continues to assess opportunities for improved operational effectiveness and efficiency, as well as a better alignment of expenses with revenues. As a result of these assessments, the Company has undertaken various restructuring actions over the past several years. These actions are described below. The following tables display the special charges taken for ongoing actions and a roll-forward from October 28, 2017 to May 5, 2018 of the employee separation and exit cost accruals established related to these actions. Closure of Manufacturing Facilities Reduction of Operating Costs Action Early Retirement Action Total Special Charges Statements of Income Fiscal 2016 - Workforce reductions $ — $ 13,684 $ — 13,684 Fiscal 2017 - Workforce reductions $ — $ 8,126 $ 41,337 $ 49,463 Fiscal 2018 - Workforce reductions $ 42,290 $ 16,117 $ — $ 58,407 Accrued Restructuring Closure of Manufacturing Facilities Reduction of Operating Costs Action Early Retirement Action Balance at October 28, 2017 $ — $ 5,137 $ 32,211 Fiscal 2018 special charges 41,201 16,117 — Severance and other payments — (2,798 ) (6,461 ) Effect of foreign currency on accrual — 66 — Balance at February 3, 2018 $ 41,201 $ 18,522 $ 25,750 Fiscal 2018 special charges 1,089 — — Severance and other payments — (8,316 ) (6,234 ) Effect of foreign currency on accrual — (21 ) — Balance at May 5, 2018 $ 42,290 $ 10,185 $ 19,516 Closure of Manufacturing Facilities During the first quarter of fiscal 2018, the Company recorded a special charge of $41.2 million as a result of its decision to consolidate certain wafer and test facility operations acquired as part of the Acquisition. Over the next three to five years, the Company plans to close its Hillview wafer fabrication facility located in Milpitas, California and its Singapore test facility. The Company intends to transfer Hillview wafer fabrication production to its other internal facilities and to external foundries. In addition, the Company is planning to transition testing operations currently handled in its Singapore facility to its facilities in Penang, Malaysia and the Philippines, in addition to its outsourced assembly and test partners. The special charge was for severance and fringe benefit costs in accordance with the Company's ongoing benefit plan or statutory requirements at foreign locations for 1,249 manufacturing, engineering and selling, marketing, general and administrative (SMG&A) employees. During the second quarter of fiscal 2018, the Company recorded special charges of $1.1 million related to one-time termination benefits for employees included in this action. These one-time termination benefits are being recognized over the future service period required for employees to earn these benefits. Employees included in this action must continue to be employed by the Company until their employment is terminated in order to receive the severance benefits. The accrual related to this action is included in other non-current liabilities in the condensed consolidated balance sheet as of May 5, 2018 . Reduction of Operating Costs Action During the second quarter of the fiscal year ended October 29, 2016 (fiscal 2016), the Company recorded special charges of approximately $ 13.7 million for severance and fringe benefit costs in accordance with the Company's ongoing benefit plan for 123 manufacturing, engineering and SMG&A employees. As of May 5, 2018 , the Company still employed 5 of the 123 employees included in this cost reduction action. These employees must continue to be employed by the Company until their employment is involuntarily terminated in order to receive the severance benefits. During the first quarter of fiscal 2017, the Company recorded special charges of approximately $ 8.1 million for severance and fringe benefit costs in accordance with the Company's ongoing benefit plan or statutory requirements at foreign locations for 177 manufacturing, engineering and SMG&A employees. As of May 5, 2018 , the Company still employed 3 of the 177 employees included in this cost reduction action. These employees must continue to be employed by the Company until their employment is terminated in order to receive the severance benefits. During the first quarter of fiscal 2018, the Company recorded special charges of approximately $ 16.1 million for severance and fringe benefit costs in accordance with the Company's ongoing benefit plan or statutory requirements at foreign locations for 126 manufacturing, engineering and SMG&A employees. As of May 5, 2018 , the Company still employed 11 of the 126 employees included in this cost reduction action. These employees must continue to be employed by the Company until their employment is terminated in order to receive the severance benefits. The accrual related to these actions is included in accrued liabilities in the condensed consolidated balance sheet as of May 5, 2018. Early Retirement Offer Action During the first quarter of fiscal 2017, the Company initiated an early retirement offer. This resulted in a special charge of approximately $ 41.3 million for severance, related benefits and other costs in accordance with this program for 225 manufacturing, engineering and SMG&A employees. As of May 5, 2018 , the Company still employed 2 of the 225 employees included in these cost reduction actions. These employees must continue to be employed by the Company until their employment is terminated in order to receive the severance benefits. The accrual related to this action is included in accrued liabilities in the condensed consolidated balance sheet as of May 5, 2018 . |
Segment Information
Segment Information | 6 Months Ended |
May 05, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information In the first quarter of fiscal 2018, the Company completed organizational changes designed to integrate the operations of Linear into the Company’s organizational structure and to reflect the evolution of the Company's markets. As a result of these organizational changes, the Company re-evaluated its reporting structure under the new organization and concluded that the Company continues to operate in one reportable segment based on the aggregation of eight operating segments. The Company designs, develops, manufactures and markets a broad range of integrated circuits (ICs). The Chief Executive Officer has been identified as the Company's Chief Operating Decision Maker. The Company has determined that all of the Company's operating segments share the following similar economic characteristics, and therefore meet the criteria established for operating segments to be aggregated into one reportable segment, namely: • The primary source of revenue for each operating segment is the sale of ICs. • The ICs sold by each of the Company's operating segments are manufactured using similar semiconductor manufacturing processes and raw materials in either the Company’s own production facilities or by third-party wafer fabricators using proprietary processes. • The Company sells its products to tens of thousands of customers worldwide. Many of these customers use products spanning all operating segments in a wide range of applications. • The ICs marketed by each of the Company's operating segments are sold globally through a direct sales force, third-party distributors, independent sales representatives and via the Company's website to the same types of customers. All of the Company's operating segments share similar economic characteristics, including long-term gross margins. The causes for variation in operating and financial performance are the same among the Company's operating segments and include factors such as (i) life cycle and price and cost fluctuations, (ii) number of competitors, (iii) product differentiation and (iv) size of market opportunity. Additionally, each operating segment is subject to the overall cyclical nature of the semiconductor industry. Lastly, the number and composition of employees and the amounts and types of tools and materials required for production of products are proportionately similar for each operating segment. Revenue Trends by End Market The following table summarizes revenue by end market for the three- and six-month periods ended May 5, 2018 and April 29, 2017 . 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 evolve and improve, the categorization of products by end market can vary over time. When this occurs, the Company reclassifies revenue by end market for prior periods. Such reclassifications typically do not materially change the sizing of, or the underlying trends of results within, each end market. Three Months Ended May 5, 2018 April 29, 2017 Revenue % of Revenue Y/Y% Revenue % of Revenue Industrial $ 788,281 52 % 47 % $ 536,437 47 % Automotive 238,839 16 % 28 % 185,871 16 % Consumer 198,063 13 % (6 )% 211,575 18 % Communications 287,870 19 % 34 % 214,099 19 % Total revenue $ 1,513,053 100 % 32 % $ 1,147,982 100 % Six Months Ended May 5, 2018 April 29, 2017 Revenue % of Revenue* Y/Y% Revenue % of Revenue Industrial $ 1,529,179 50 % 64 % $ 932,865 44 % Automotive 492,477 16 % 50 % 329,234 15 % Consumer 437,031 14 % (9 )% 481,928 23 % Communications 572,990 19 % 48 % 388,404 18 % Total revenue $ 3,031,677 100 % 42 % $ 2,132,431 100 % * The sum of the individual percentages may not equal the total due to rounding. Revenue Trends by Geographic Region Revenue by geographic region, based on the primary end customer location, for the three- and six-month period s ended May 5, 2018 and April 29, 2017 were as follows: Three Months Ended Six Months Ended Region May 5, 2018 April 29, 2017 May 5, 2018 April 29, 2017 United States $ 502,258 $ 422,328 $ 1,042,033 $ 853,326 Rest of North and South America 26,208 27,630 50,694 50,587 Europe 364,563 293,178 722,799 519,513 Japan 183,003 96,289 364,228 185,180 China 282,465 198,209 550,589 351,192 Rest of Asia 154,556 110,348 301,334 172,633 Total revenue $ 1,513,053 $ 1,147,982 $ 3,031,677 $ 2,132,431 In the three- and six-month period s ended May 5, 2018 and April 29, 2017 , the predominant country comprising “Rest of North and South America” is Canada; the predominant countries comprising “Europe” are Germany, the Netherlands and Sweden; and the predominant countries comprising “Rest of Asia” are South Korea and Taiwan. |
Fair Value
Fair Value | 6 Months Ended |
May 05, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value | 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 are accounted for at fair value on a recurring basis as of May 5, 2018 and October 28, 2017 . The tables exclude cash on hand and assets and liabilities that are measured at historical cost or any basis other than fair value. As of May 5, 2018 and October 28, 2017 , the Company held $342.9 million and $296.2 million , respectively, of cash and held-to-maturity investments that were excluded from the tables below. May 5, 2018 Fair Value measurement at Reporting Date using: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Total Assets Cash equivalents: Available-for-sale: Government and institutional money market funds $ 298,914 $ — $ 298,914 Corporate obligations (1) — 164,739 164,739 Other assets: Deferred compensation investments 38,433 — 38,433 Interest rate derivatives — 5,603 5,603 Total assets measured at fair value $ 337,347 $ 170,342 $ 507,689 Liabilities Forward foreign currency exchange contracts (2) — 1,875 1,875 Total liabilities measured at fair value $ — $ 1,875 $ 1,875 (1) The amortized cost of the Company’s investments classified as available-for-sale as of May 5, 2018 was $164.8 million . (2) The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 9, Derivatives, of these Notes to Condensed Consolidated Financial Statements for more information related to the Company's master netting arrangements. October 28, 2017 Fair Value measurement at Reporting Date using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Total Assets Cash equivalents: Available-for-sale: Government and institutional money market funds $ 512,882 $ — $ 512,882 Corporate obligations (1) — 238,796 238,796 Other assets: Deferred compensation investments 33,510 — 33,510 Interest rate derivatives — 2,966 2,966 Total assets measured at fair value $ 546,392 $ 241,762 $ 788,154 Liabilities Forward foreign currency exchange contracts (2) — 1,527 1,527 Total liabilities measured at fair value $ — $ 1,527 $ 1,527 (1) The amortized cost of the Company’s investments classified as available-for-sale as of October 28, 2017 was $238.9 million . (2) The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 9, Derivatives, of these Notes to Condensed Consolidated Financial Statements for more information related to the Company's master netting arrangements. In addition to the above, the Company has recognized contingent consideration payable at fair value (Level 3 measurement) of $9.5 million and $7.8 million as of May 5, 2018 and October 28, 2017 , respectively. The changes in fair value in those periods were not material. The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments: Cash equivalents and short-term investments — 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. Interest rate derivatives — The fair value of the interest rate derivatives is estimated using a discounted cash flow analysis based on the contractual terms of the derivative. Contingent consideration — The fair value of the contingent consideration was estimated utilizing the income approach and is based upon significant inputs not observable in the market. The income approach is based on two steps. The first step involves a projection of the cash flows that is based on the Company’s estimates of the timing and probability of achieving the defined milestones. The second step involves converting the cash flows into a present value equivalent through discounting. The discount rate reflects the Baa costs of debt plus the relevant risk associated with the asset and the time value of money. Financial Instruments Not Recorded at Fair Value on a Recurring Basis The table below presents the estimated fair value of certain financial instruments not recorded at fair value on a recurring basis. The carrying amounts of the term loans approximate fair value. The term loans are classified as Level 2 measurements according to the fair value hierarchy. 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. May 5, 2018 October 28, 2017 Principal Amount Outstanding Fair Value Principal Amount Outstanding Fair Value 3-Year term loan $ 1,080,000 1,080,000 1,950,000 1,950,000 5-Year term loan 1,350,000 1,350,000 2,100,000 2,100,000 2020 Notes, due March 2020 300,000 298,710 — — 2021 Notes, due January 2021 450,000 446,030 — — 2021 Notes, due December 2021 400,000 387,367 400,000 399,530 2023 Notes, due June 2023 500,000 479,674 500,000 498,582 2023 Notes, due December 2023 550,000 532,478 550,000 554,411 2025 Notes, due December 2025 850,000 843,016 850,000 884,861 2026 Notes, due December 2026 900,000 858,347 900,000 902,769 2036 Notes, due December 2036 250,000 245,621 250,000 259,442 2045 Notes, due December 2045 400,000 434,831 400,000 460,588 Total Debt $ 7,030,000 $ 6,956,074 $ 7,900,000 $ 8,010,183 |
Derivatives
Derivatives | 6 Months Ended |
May 05, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | 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 Philippine Peso, the Japanese Yen and the British Pound. 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 designated and documented at the inception of the respective hedges as cash flow hedges and are evaluated for effectiveness monthly. Derivative instruments are employed to eliminate or minimize certain foreign currency exposures that can be confidently identified and quantified. As the terms of the contract and the underlying transaction are matched at inception, forward contract effectiveness is calculated by comparing the change in fair value of the contract to the change in the forward value of the anticipated transaction, with the effective portion of the gain or loss on the derivative reported as a component of accumulated OCI in shareholders’ equity and reclassified into earnings in the same period during which the hedged transaction affects earnings. Any residual change in fair value of the instruments, or ineffectiveness, is recognized immediately in other (income) expense. The total notional amount of forward foreign currency derivative instruments designated as hedging instruments of cash flow hedges denominated in Euros, British Pounds, Philippine Pesos and Japanese Yen as of May 5, 2018 and October 28, 2017 was $193.1 million and $194.3 million , respectively. The fair value of forward foreign currency derivative instruments designated as hedging instruments in the Company’s condensed consolidated balance sheets as of May 5, 2018 and October 28, 2017 was as follows: Fair Value At Balance Sheet Location May 5, 2018 October 28, 2017 Forward foreign currency exchange contracts Prepaid expenses and other current assets $ — $ 257 Forward foreign currency exchange contracts Accrued liabilities $ 1,093 $ — Additionally, the Company enters into forward foreign currency contracts that economically hedge the gains and losses generated by the re-measurement of certain recorded assets and liabilities in a non-functional currency. Changes in the fair value of these undesignated hedges are recognized in other (income) expense immediately as an offset to the changes in the fair value of the asset or liability being hedged. As of May 5, 2018 and October 28, 2017 , the total notional amount of these undesignated hedges was $61.8 million and $100.4 million , respectively. The fair value of these hedging instruments in the Company’s condensed consolidated balance sheets as of May 5, 2018 and October 28, 2017 was a liability of $0.8 million and $1.8 million , respectively. 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 sheet on a net basis. As of May 5, 2018 and October 28, 2017 , none of the master netting arrangements involved collateral. The following table presents the gross amounts of the Company's derivative assets and liabilities and the net amounts recorded in the Company's condensed consolidated balance sheet: May 5, 2018 October 28, 2017 Gross amount of recognized liabilities $ (4,355 ) $ (5,039 ) Gross amounts of recognized assets offset in the condensed consolidated balance sheet 2,480 3,512 Net liabilities presented in the condensed consolidated balance sheet $ (1,875 ) $ (1,527 ) Interest Rate Exposure Management — The Company's current and future debt may be subject to interest rate risk. The Company utilizes interest rate derivatives to alter interest rate exposure in an attempt to reduce the effects of these changes. 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 May 5, 2018 and October 28, 2017 , nonperformance is not perceived to be a significant 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. The Company records the fair value of its derivative financial instruments in its condensed consolidated financial statements in other current assets, other assets or accrued liabilities, depending on their net position, regardless of the purpose or intent for holding the derivative contract. Changes in the fair value of the derivative financial instruments are either recognized periodically in earnings or in shareholders’ equity as a component of OCI. Changes in the fair value of cash flow hedges are recorded in OCI and reclassified into earnings when the underlying contract matures and, for interest rate exposure derivatives, over the term of the corresponding debt instrument. Changes in the fair values of derivatives not qualifying for hedge accounting or the ineffective portion of designated hedges are reported in earnings as they occur. For information on the unrealized holding gains (losses) on derivatives included in and reclassified out of accumulated other comprehensive income into the condensed consolidated statement of income related to forward foreign currency exchange contracts, see Note 4, Accumulated Other Comprehensive Income (Loss) of these Notes to Condensed Consolidated Financial Statements for further information. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
May 05, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The Company evaluates goodwill for impairment annually, as well as whenever events or changes in circumstances suggest that the carrying value of goodwill may not be recoverable. The Company tests goodwill for impairment at the reporting unit level, which we have determined is consistent with our operating segments, on an annual basis on the first day of the fourth quarter (on or about August 1 ) or more frequently if indicators of impairment exist or the Company reorganizes its reporting units. In the first quarter of fiscal 2018, the Company completed organizational changes designed to integrate the operations of Linear into the Company’s organizational structure and to reflect the evolution of the Company's markets. The Company performed an impairment analysis immediately prior to and subsequent to the reorganization and evaluated goodwill for impairment as of the date of reorganization. The goodwill impairment test requires an entity to compare the fair value of a reporting unit with its carrying amount. The Company determines the fair value of its reporting units using a weighting of the income and market approaches. Under the income approach, the Company uses a discounted cash flow methodology which requires management to make significant estimates and assumptions related to forecasted revenues, gross profit margins, operating income margins, working capital cash flow, perpetual growth rates, and long-term discount rates, among others. For the market approach, the Company uses the guideline public company method. Under this method, the Company utilizes information from comparable publicly traded companies with similar operating and investment characteristics as the reporting units, to create valuation multiples that are applied to the operating performance of the reporting unit being tested, in order to estimate their respective fair values. In order to assess the reasonableness of the calculated reporting unit fair values, the Company reconciles the aggregate estimated fair values of its reporting units determined to its current market capitalization, allowing for a reasonable control premium. If the carrying amount of a reporting unit, calculated using the above approaches, exceeds the reporting unit’s fair value, an impairment loss is recognized for the amount of the carrying value that exceeds the amount of the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit. Additionally, the Company considers income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. There was no impairment of goodwill in any period presented. The Company's next annual impairment assessment will be performed as of the first day of the fourth quarter of fiscal 2018 unless indicators arise that would require the Company to re-evaluate at an earlier date. The following table presents the changes in goodwill during the first six months of fiscal 2018 : Six Months Ended May 5, 2018 Balance as of October 28, 2017 $ 12,217,455 Goodwill related to other acquisitions (1) 36,756 Foreign currency translation adjustment 3,974 Balance as of May 5, 2018 $ 12,258,185 (1) Represents goodwill related to acquisitions that were not material to the Company on either an individual or aggregate basis. Intangible Assets The Company reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of assets may not be recoverable. Recoverability of these assets is determined by comparison of their carrying value to the estimated future undiscounted cash flows the assets are expected to generate over their remaining estimated useful lives. If such assets are considered to be impaired, the impairment to be recognized in earnings equals the amount by which the carrying value of the assets exceeds their estimated fair value determined by either a quoted market price, if any, or a value determined by utilizing a discounted cash flow technique. Indefinite-lived intangible assets are tested for impairment on an annual basis on the first day of the fourth quarter (on or about August 1 ) or more frequently if indicators of impairment exist. The impairment test involves a qualitative assessment on the indefinite-lived intangible assets to determine whether it is more likely-than not that the indefinite-lived intangible asset is impaired. If it is determined that the fair value of the indefinite-lived intangible asset is less than the carrying value, the Company would recognize into earnings the amount by which the carrying value of the assets exceeds the estimated fair value. No impairment of intangible assets resulted from the impairment tests in any of the periods presented. Definite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives or on an accelerated method of amortization that is expected to reflect the estimated pattern of economic use. In-process research and development (IPR&D) assets are considered indefinite-lived intangible assets until completion or abandonment of the associated research and development (R&D) efforts. Upon completion of the projects, the IPR&D assets are reclassified to technology-based intangible assets and amortized over their estimated useful lives. As of May 5, 2018 and October 28, 2017 , the Company’s intangible assets consisted of the following: May 5, 2018 October 28, 2017 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer relationships $ 4,694,597 $ 658,049 $ 4,683,461 $ 449,369 Technology-based 1,120,204 172,621 1,097,025 101,920 Trade-name 73,589 12,297 72,800 6,906 IPR&D 20,768 — 24,334 — Total (1)(2) $ 5,909,158 $ 842,967 $ 5,877,620 $ 558,195 ___________ (1) Foreign intangible asset carrying amounts are affected by foreign currency translation. (2) Increases in intangible assets relate to acquisitions that were not material to the Company on either an individual or aggregate basis. Intangible assets, along with the related accumulated amortization, are removed from the table above at the end of the fiscal year they become fully amortized. For the three- and six-month period s ended May 5, 2018 , amortization expense related to finite-lived intangible assets was $143.0 million and $285.0 million , respectively. For the three- and six-month period s ended April 29, 2017 , amortization expense related to finite-lived intangible assets was $88.8 million and $108.7 million , respectively. The remaining amortization expense will be recognized over an estimated weighted average life of approximately 5.0 years. The Company expects annual amortization expense for intangible assets to be: Fiscal Year Amortization Expense Remainder of fiscal 2018 $285,198 2019 $569,407 2020 $568,884 2021 $568,348 2022 $565,418 |
Debt
Debt | 6 Months Ended |
May 05, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt On March 12, 2018, in an underwritten public offering , the Company issued $300.0 million aggregate principal amount of 2.850% senior unsecured notes due March 12, 2020 (the 2020 Notes) and $450.0 million aggregate principal amount of 2.950% senior unsecured notes due January 12, 2021 (the January 2021 Notes and, together with the 2020 Notes, the Notes). Interest on the 2020 Notes is payable on March 12 and September 12 of each year, beginning on September 12, 2018. Interest on the January 2021 Notes is payable on January 12 and July 12 of each year, beginning on July 12, 2018. The net proceeds of the offering were $743.8 million , after discount and issuance costs, which were used to repay a portion of the Company’s outstanding 5 -year unsecured term loan. Debt discount and issuance costs will be amortized through interest expense over the term of the Notes. At any time prior to the applicable maturity date of the Notes, the Company may, at its option, redeem some or all of the applicable series of Notes by paying a make-whole premium, plus accrued and unpaid interest, if any, to the date of redemption. The Notes are unsecured and rank equally in right of payment with all of the Company’s other unsecured senior indebtedness. The Notes were issued pursuant to an indenture, as supplemented by a supplemental indenture, and the indenture and supplemental indenture contain certain covenants, events of default and other customary provisions. As of May 5, 2018, the Company was compliant with these covenants. On November 10, 2017, the Company paid $300.0 million of principal on its 3 -year unsecured term loan using cash on hand as of October 28, 2017. This amount was not contractually due under the terms of the loan. As such, this amount was classified as current in the condensed consolidated balance sheet as of October 28, 2017. During the six -month period ended May 5, 2018, the Company made additional principal payments of $570.0 million on its 3 -year unsecured term loan and $750.0 million on its 5 -year unsecured term loan. These amounts were not contractually due under the terms of the loans. As of May 5, 2018, $56.0 million of principal on the 3 -year unsecured term loan was classified as current debt as the Company intends to utilize cash on hand as of May 5, 2018 to repay this amount of debt within the next twelve months. |
Inventories
Inventories | 6 Months Ended |
May 05, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories are valued at the lower of cost (first-in, first-out method) or market. The valuation of inventory requires the Company to estimate obsolete or excess inventory as well as inventory that is not of saleable quality. The Company employs a variety of methodologies to determine the net realizable value of its inventory. While a portion of the calculation to record inventory at its net realizable value is based on the age of the inventory and lower of cost or market calculations, a key factor in estimating obsolete or excess inventory requires the Company to estimate the future demand for its products. If actual demand is less than the Company’s estimates, impairment charges, which are recorded to cost of sales, may need to be recorded in future periods. Inventory in excess of saleable amounts is not valued, and the remaining inventory is valued at the lower of cost or market. Inventories at May 5, 2018 and October 28, 2017 were as follows: May 5, 2018 October 28, 2017 Raw materials $ 34,234 $ 35,436 Work in process 355,273 376,476 Finished goods 161,713 138,904 Total inventories $ 551,220 $ 550,816 |
Acquisitions
Acquisitions | 6 Months Ended |
May 05, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Linear Technology Corporation On March 10, 2017 (Acquisition Date), the Company completed its acquisition of all of the voting interests of Linear, an independent manufacturer of high performance analog integrated circuits. The total consideration paid to acquire Linear, which consisted of cash, common stock of the Company and share-based compensation awards, was approximately $15.8 billion . The Company believes that the combination creates the premier analog technology company with the industry’s most comprehensive suite of high-performance analog offerings. The results of operations of Linear from the Acquisition Date are included in the Company’s condensed consolidated statements of income, condensed consolidated balance sheet, and condensed consolidated statement of cash flows for the three- and six-month period s ended May 5, 2018 and April 29, 2017. During the first quarter of fiscal 2018, the Company recorded acquisition accounting adjustments of $1.6 million to goodwill comprised of $4.7 million to intangible assets, $2.7 million to accounts receivable, $2.4 million to assumed liabilities and $1.1 million to deferred tax liabilities. The Acquisition accounting was completed during the second quarter of fiscal 2018. The following unaudited pro forma consolidated financial information combines the unaudited results of the Company for the three- and six-month period s ended April 29, 2017 and the unaudited results of Linear for the three- and six-month period s ended April 29, 2017 and assumes that the Acquisition, which closed on March 10, 2017, was completed on November 1, 2015 (the first day of fiscal 2016). 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, transaction-related costs, a step-up in the value of acquired inventory and property, plant and equipment, compensation expense for ongoing share-based compensation arrangements replaced and interest expense for the debt incurred to fund 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 1, 2015. 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. (thousands, except per share data) Pro Forma Three Months Ended Pro Forma Six Months Ended April 29, 2017 April 29, 2017 Revenue $ 1,346,540 $ 2,708,987 Net income $ 128,462 $ 364,463 Basic net income per common share $ 0.35 $ 1.00 Diluted net income per common share $ 0.35 $ 0.98 Other Acquisitions The Company has not provided pro forma results of operations for any other acquisitions completed in the three- and six-month period s ended May 5, 2018 or April 29, 2017 herein as they were not material to the Company on either an individual or an aggregate basis. The Company included the results of operations of each acquisition in its consolidated statement of income from the date of each acquisition. |
Income Taxes
Income Taxes | 6 Months Ended |
May 05, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company has provided for potential tax liabilities due in the various jurisdictions in which the Company operates. Judgment is required in determining the worldwide income tax provision. In the ordinary course of global business, there are many transactions and calculations where the ultimate tax outcome is uncertain. Some of these uncertainties arise as a consequence of cost reimbursement arrangements among related entities. Although the Company believes its estimates are reasonable, no assurance can be given that the final tax outcome of these matters will not be different from that which is reflected in the historical income tax provisions and accruals. Such differences could have a material impact on the Company’s income tax provision and operating results in the period in which such determination is made. The Company’s effective tax rate reflects the applicable tax rate in effect in the various tax jurisdictions around the world where the Company's income is earned. The Company's effective tax rate is generally lower than the U.S. federal statutory rate, primarily due to lower statutory tax rates applicable to the Company's operations in jurisdictions in which the Company earns a portion of its income. The Tax Cuts and Jobs Act of 2017 (Tax Legislation), enacted on December 22, 2017, contains significant changes to U.S. tax law, including lowering the U.S. corporate income tax rate to 21.0% , implementing a territorial tax system, and imposing a one-time tax on deemed repatriated earnings of foreign subsidiaries. As of May 5, 2018 , the Company has not completed its accounting for the tax effects of the enactment of the Tax Legislation. However, as described below, the Company has made reasonable estimates of the effects on its existing deferred tax balances and the one-time transition tax in the first six months of fiscal 2018. The Tax Legislation reduces the U.S. statutory tax rate from 35.0% to 21.0% , effective January 1, 2018, which results in a blended statutory income tax rate for the Company of 23.4% for fiscal 2018. For the fiscal year ending November 2, 2019 (fiscal 2019), the Company’s statutory income tax rate will be 21.0% . In the first quarter of fiscal year 2018, the Company recorded a $639.7 million discrete tax benefit for the re-measurement of deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21.0% . There was no material change to this provisional estimate in the second quarter of fiscal year 2018. This provisional benefit is subject to revision based on further analysis and interpretation of the Tax Legislation and to the extent that future results differ from currently available projections. The Tax Legislation also implements a territorial tax system. As part of transitioning to the territorial tax system, the Tax Legislation includes a one-time transition tax based on our total post-1986 undistributed foreign earnings and profits that were previously deferred from U.S. income tax. In the first quarter of fiscal year 2018, the Company recorded a provisional tax expense amount for the one-time transition tax of $687.1 million , which is comprised of the $751.1 million transition tax liability less a deferred tax liability of $64.0 million recorded in prior years. There was no material change to this provisional estimate in the second quarter of fiscal year 2018. This provisional estimate may be impacted by a number of additional considerations, including, but not limited to, the issuance of final tax regulations, the Company's ongoing analysis of the Tax Legislation, the Company's earnings and profits subject to the one-time transition tax, and estimated earnings and profits and foreign tax credit pools for fiscal 2018 as well as the amount of earnings and profits held in cash or other specified assets. The Company intends to elect to pay this transition tax starting in fiscal 2019 without incurring interest over a period of eight years. As a result, $60.1 million of the transition tax is classified as current taxes payable and $691.0 million is classified as non-current taxes payable. For the six months ended May 5, 2018 , the Company recorded a total of $18.2 million in discrete benefits for excess tax benefits from share-based payments, pursuant to ASU 2016-09, which became effective for fiscal 2018. This consists of an $8.2 million discrete benefit arising in the second quarter of fiscal 2018 in addition to the $10.0 million discrete benefit from the first quarter of fiscal 2018. Additionally, the Tax Legislation subjects a U.S. shareholder to tax on global intangible low-taxed income (GILTI) earned by certain foreign subsidiaries for tax years starting on or after January 1, 2018. The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income , states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. The Company is still evaluating the effects of the GILTI provisions and has not yet determined its accounting policy relating to deferred taxes and as such, no tax impacts are included in the Company's financial statements for the six-month period ended May 5, 2018 . The Company historically asserted its intent to reinvest substantially all of its foreign earnings in foreign operations indefinitely. The Company is still in the process of analyzing the impact that the Tax Legislation has on its indefinite reinvestment assertion. Accordingly, no additional income taxes or withholding taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax, or any outside basis difference inherent in these entities. On December 22, 2017, the Securities and Exchange Commission issued guidance under Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118) directing taxpayers to consider the impact of the Tax Legislation as “provisional” when it does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the change in tax law. Also in March 2018, the Financial Accounting Standards Board (FASB) issued ASU 2018-05, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 , to add various SEC paragraphs pursuant to the issuance of SAB 118, to Accounting Standards Codification topic 740, Income Taxes (ASC 740). In accordance with SAB 118, the amount reported for the tax benefit from re-measuring the Company’s net deferred tax liabilities to the lower 21.0% statutory rate and the amount reported for the additional U.S. income tax resulting from the one-time mandatory deemed repatriation including the ongoing evaluation of the impact on the Company’s indefinite reinvestment assertions regarding undistributed earnings and profits, represents the Company's best estimate as it continues to accumulate and process data to finalize its underlying calculations and to review further guidance that regulators are expected to issue. The Company is also analyzing other provisions of the Tax Legislation to determine if they will impact the Company's effective rate for fiscal 2018 or in the future. The Company will continue to refine its adjustments through the permissible measurement period, which is not to extend beyond one year after the enactment date. Many provisions in the Tax Legislation may have U.S. state and local income tax implications. While some states automatically adopt federal tax law changes, others may conform their laws on a specific date or may choose to decouple from the new federal tax law provisions. As such, the Company has not sufficiently analyzed the impact of the new Tax Legislation on its state and local income taxes, and therefore did not record a provisional amount, but instead continues to apply ASC 740, based on the provisions of the tax law that were in effect immediately prior to the Tax Legislation being enacted. The Company expects to complete its analysis of the effects on state and local income taxes on or before December 22, 2018 as allowed by SAB 118. All of the Company’s U.S. federal tax returns prior to fiscal year 2014 are no longer subject to examination. An IRS audit for the pre-acquisition fiscal year 2015 has been initiated for Linear. All of the Company’s Ireland tax returns prior to fiscal year 2012 are no longer subject to examination. |
New Accounting Pronouncements
New Accounting Pronouncements | 6 Months Ended |
May 05, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Standards Implemented Stock Compensation In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years, and interim periods within those annual periods, beginning after December 15, 2016 and allows for prospective, retrospective or modified retrospective adoption, depending on the area covered in the update, with early adoption permitted. The Company adopted ASU 2016-09 in the first quarter of fiscal 2018. The Company recorded total excess tax benefits of $18.2 million in the six-month period ended May 5, 2018 from its share-based payments within income tax expense in its condensed consolidated statements of income. These excess tax benefits are presented within operating activities in the condensed consolidated statements of cash flows. The Company applied this change in presentation retrospectively and has adjusted the prior year presentation by removing the reclass of $26.0 million of excess tax benefit-stock options from net cash provided by operating activities to net cash provided by financing activities. The Company elected not to change its policy on accounting for forfeitures and continues to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period. The adoption of ASU 2016-09 also changed the calculation of fully diluted shares outstanding for the three months ended February 3, 2018. The excess tax benefits have been excluded from the calculation of assumed proceeds in the Company's calculation of diluted weighted shares under the new standard. The Company's diluted weighted shares outstanding as of February 3, 2018 increased by approximately 1.0 million shares due to the adoption of the new standard. Equity Method Investments In March 2016, the FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting (ASU 2016-07). ASU 2016-07 eliminates the requirement that when an investment, initially accounted for under a method other than the equity method of accounting, subsequently qualifies for use of the equity method, an investor must retrospectively apply the equity method in prior periods in which it held the investment. This requires an investor to determine the fair value of the investee’s underlying assets and liabilities retrospectively at each investment date and revise all prior periods as if the equity method had always been applied. The new guidance requires the investor to apply the equity method prospectively from the date the investment qualifies for the equity method. The investor will add the carrying value of the existing investment to the cost of the additional investment to determine the initial cost basis of the equity method investment. ASU 2016-07 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, and early adoption is permitted. The Company adopted ASU 2016-07 in the first quarter of fiscal 2018. The adoption of ASU 2016-07 in the first quarter of fiscal 2018 did not impact the Company's financial position or results of operations. Inventory In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330) - Simplifying the Measurement of Inventory (ASU 2015-11) , which simplifies the subsequent measurement of inventories by replacing the lower of cost or market test with a lower of cost and net realizable value test. The guidance applies only to inventories for which cost is determined by methods other than last-in first-out and the retail inventory method. The guidance in ASU 2015-11 is effective for fiscal years beginning after December 15, 2016 and early adoption is permitted. The Company adopted ASU 2015-11 in the first quarter of fiscal 2018. The adoption of ASU 2015-11 in the first quarter of fiscal 2018 did not impact the Company's financial position or results of operations. Standards to Be Implemented Comprehensive Income In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-01). ASU 2018-01 allows for reclassification of stranded tax effects resulting from the Tax Legislation from accumulated other comprehensive income to retained earnings. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the adoption date and the impact, if any, adoption will have on its financial position and results of operations. Business Combinations In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business (ASU 2017-01). ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company will adopt ASU 2017-01 in the first quarter of fiscal 2019. The impact of the adoption on the Company's financial position and results of operations will be dependent upon any future acquisitions or disposals. Income Taxes In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) (ASU 2016-16) . ASU 2016-16 will require an entity to recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted as of the beginning of an annual reporting period for which financial statements have not been issued or made available for issuance. ASU 2016-16 is effective for the Company in the first quarter of fiscal 2019. The Company is currently evaluating the adoption date and the impact, if any, adoption will have on its financial position and results of operations. Statement of Cash Flows In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15). ASU 2016-15 provides guidance on several specific cash flow issues, including debt prepayment or extinguishment costs, settlement of certain debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of certain insurance claims and distributions received from equity method investees. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted in any interim or annual period. ASU 2016-15 is effective for the Company in the first quarter of fiscal 2019. The Company is currently evaluating the adoption date but does not expect the adoption of ASU 2016-15 will have a material impact on its consolidated financial statements. Derivatives and Hedging In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12), which amends and simplifies existing guidance in order to allow companies to more accurately present the economic effects of risk management activities in the financial statements. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018, including interim periods within those years. Early adoption is permitted. ASU 2017-12 is effective for the Company in the first quarter of the fiscal year ending October 31, 2020 (fiscal 2020). The Company is currently evaluating the adoption date but does not expect the adoption of ASU 2017-12 will have a material impact on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments (ASU 2016-06). ASU 2016-06 clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. An entity performing the assessment under ASU 2016-06 is required to assess the embedded call (put) options solely in accordance with the four-step decision sequence. ASU 2016-06 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. ASU 2016-06 is effective for the Company in the first quarter of fiscal 2019. The Company is currently evaluating the adoption date but does not expect the adoption of ASU 2016-06 will have a material impact on its consolidated financial statements. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (ASU 2016-02). ASU 2016-02 requires a lessee to recognize most leases on the balance sheet but recognize expenses on the income statement in a manner similar to current practice. The update states that a lessee will recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying assets for the lease term. Leases will continue to be classified as either financing or operating, with classification affecting the recognition, measurement and presentation of expenses and cash flows arising from a lease. In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842 (ASU 2018-01). ASU 2018-01 permits an entity to elect an optional transition practical expedient to not evaluate land easements that exist or expired before the entity’s adoption of Topic 842 and that were not previously accounted for as leases under Topic 840. ASU 2016-02 and ASU 2018-01 are effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. ASU 2016-02 and ASU 2018-01 are effective for the Company in the first quarter of fiscal 2020. The Company is currently evaluating the adoption date and the impact adoption will have on its financial position and results of operations. Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (ASU 2016-13). ASU 2016-13 requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years. ASU 2016-13 is effective for the Company in the first quarter of fiscal 2020. The Company is currently evaluating the adoption date and the impact, if any, adoption will have on its financial position and results of operations. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01). ASU 2016-01 requires equity investments to be measured at fair value with changes in fair value recognized in net income; simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet or the accompanying notes to the financial statements; and clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU 2016-01 is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. ASU 2016-01 is effective for the Company in the first quarter of fiscal 2019. The Company is currently evaluating the impact adoption will have on its financial position and results of operations. Stock Compensation In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting (ASU 2017-09) . The new guidance clarifies when a change to the terms or conditions of a share-based payment award must be accounted for as a modification. ASU 2017-09 is effective for fiscal years, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. ASU 2017-09 is effective for the Company in the first quarter of fiscal 2019. The Company is currently evaluating the adoption date and the impact, if any, adoption will have on its financial position and results of operations. Revenue Recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has issued several amendments and updates to the new revenue standard, including guidance related to when an entity should recognize revenue gross as a principal or net as an agent and how an entity should identify performance obligations. As amended, ASU 2014-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, which is the Company's first quarter of fiscal 2019. The Company has developed a project plan for the implementation of the guidance, including a review of all revenue streams to identify any differences in the timing, measurement or presentation of revenue recognition. The Company has reviewed its revenue streams and is nearing completion in assessing all potential impacts of the standard, including any impacts from recently issued amendments, and retrospectively adjusting financial information for prior fiscal years. The Company has also made progress on its impact assessment of the recent acquisition of Linear. While the Company is still in the process of completing its evaluation of the standard, it currently believes the most significant impact will be related to the timing of recognition of sales to certain distributors. As described in Note 2, Revenue Recognition , of these Notes to the condensed consolidated financial statements, the Company currently defers revenue and the related cost of sales on shipments to certain distributors until the distributors resell the products to their customers. Upon adoption of ASU 2014-09, the Company will no longer be permitted to defer revenue until sale by the distributor to the end customer, but rather, will be required to estimate the effects of returns and allowances provided to distributors and record revenue at the time of sale to the distributor. The Company is continuing to evaluate the future impact and method of adoption of ASU 2014-09 and related amendments on its consolidated financial statements and related disclosures. The Company will adopt ASU 2014-09, using the full retrospective method, upon its effective date for the Company which is the Company’s first quarter of fiscal 2019. |
Subsequent Events
Subsequent Events | 6 Months Ended |
May 05, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On May 29, 2018 , the Board of Directors of the Company declared a cash dividend of $0.48 per outstanding share of common stock. The dividend will be paid on June 19, 2018 to all shareholders of record at the close of business on June 8, 2018 . |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
May 05, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Reclassification | Certain amounts reported in previous periods have been reclassified to conform to the fiscal 2018 presentation. In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). As a result of the adoption of ASU 2016-09 in the first quarter of fiscal 2018, excess tax benefits from share-based payments are presented within operating activities in the Consolidated Statements of Cash Flows. We applied this change in presentation retrospectively and have adjusted the prior year presentation by removing the reclass of $26.0 million of excess tax benefit-stock options from net cash provided by operating activities to net cash provided by financing activities. All other reclassified amounts are immaterial. |
Fiscal Period | The Company has a 52-53 week fiscal year that ends on the Saturday closest to the last day in October. Fiscal 2018 is a 53 -week fiscal year and fiscal 2017 was a 52 -week fiscal year. The additional week in fiscal 2018 was included in the first quarter ended February 3, 2018. Therefore, the first six months of fiscal 2018 included an additional week of operations as compared to the first six months of fiscal 2017. |
Revenue Recognition | Revenue from product sales to customers is generally recognized when title passes, which is upon shipment in the U.S. and in certain foreign countries. Revenue from product sales to customers in other foreign countries is recognized subsequent to product shipment. Title for shipments to these other foreign countries ordinarily passes within a week of shipment. Accordingly, the Company defers the revenue recognized relating to these other foreign countries until title has passed. For multiple element arrangements, the Company allocates arrangement consideration among the elements based on the relative fair values of those elements as determined using vendor-specific objective evidence or third-party evidence. The Company uses its best estimate of selling price to allocate arrangement consideration between the deliverables in cases where neither vendor-specific objective evidence nor third-party evidence is available. A reserve for sales returns and allowances for customers is recorded based on historical experience or specific identification of an event necessitating a reserve. Revenue from contracts with the United States government, government prime contractors and some commercial customers is generally recorded on a percentage of completion basis using either units delivered or costs incurred as the measurement basis for progress towards completion. The output measure is used to measure results directly and is generally the best measure of progress toward completion in circumstances in which a reliable measure of output can be established. Estimated revenue in excess of amounts billed is reported as unbilled receivables. Contract accounting requires judgment in estimating costs and assumptions related to technical issues and delivery schedule. Contract costs include material, subcontractor costs, labor and an allocation of indirect costs. The estimation of costs at completion of a contract is subject to numerous variables involving contract costs and estimates as to the length of time to complete the contract. Changes in contract performance, estimated gross margin, including the impact of final contract settlements, and estimated losses are recognized in the period in which the changes or losses are determined. Product sales to certain international distributors are made under agreements that permit limited stock return privileges but not sales price rebates. Revenue on these sales is recognized upon shipment at which time title passes. The Company defers revenue and the related cost of sales on shipments to U.S. distributors and certain international distributors until the distributors resell the products to their customers. As a result, the Company’s revenue fully reflects end customer purchases and is not impacted by distributor inventory levels. Sales to certain of these distributors are made under agreements that allow such distributors to receive price-adjustment credits, as discussed below, and to return qualifying products for credit, as determined by the Company, in order to reduce the amounts of slow-moving, discontinued or obsolete product from their inventory. These agreements limit such returns to a certain percentage of the value of the Company’s shipments to that distributor during the prior quarter. In addition, such distributors are allowed to return unsold products if the Company terminates the relationship with the distributor. Certain distributors are granted price-adjustment credits for sales to their customers when the distributor’s standard cost (i.e., the Company’s sales price to the distributor) does not provide the distributor with an appropriate margin on its sales to its customers. As distributors negotiate selling prices with their customers, the final sales price agreed upon with the customer will be influenced by many factors, including the particular product being sold, the quantity ordered, the particular customer, the geographic location of the distributor and the competitive landscape. As a result, the distributor may request and receive a price-adjustment credit from the Company to allow the distributor to earn an appropriate margin on the transaction. Certain distributors are also granted price-adjustment credits in the event of a price decrease subsequent to the date the product was shipped and billed to the distributor. Generally, the Company will provide a credit equal to the difference between the price paid by the distributor (less any prior credits on such products) and the new price for the product multiplied by the quantity of the specific product in the distributor’s inventory at the time of the price decrease. Given the uncertainties associated with the levels of price-adjustment credits to be granted to certain distributors, the sales price to the distributor is not fixed or determinable until the distributor resells the products to their customers. Therefore, the Company defers revenue recognition from sales to certain distributors until the distributors have sold the products to their customers. Generally, title to the inventory transfers to the distributor at the time of shipment or delivery to the distributor, and payment from the distributor is due in accordance with the Company’s standard payment terms. These payment terms are not contingent upon the distributors’ sale of the products to their customers. Upon title transfer to distributors, inventory is reduced for the cost of goods shipped, the margin (sales less cost of sales) is recorded as “deferred income on shipments to distributors, net” and an account receivable is recorded. Shipping costs are charged to cost of sales as incurred. The deferred costs of sales to distributors have historically had very little risk of impairment due to the margins the Company earns on sales of its products and the relatively long life-cycle of the Company’s products. Product returns from distributors that are ultimately scrapped have historically been immaterial. In addition, price protection and price-adjustment credits granted to distributors historically have not exceeded the margins the Company earns on sales of its products. The Company continuously monitors the level and nature of product returns and is in frequent contact with the distributors to ensure reserves are established for all known material issues. As of May 5, 2018 and October 28, 2017 , the Company had gross deferred revenue of $701.3 million and $589.5 million , respectively, and gross deferred cost of sales of $135.6 million and $115.5 million , respectively. The Company generally offers a twelve -month warranty for its products. The Company’s warranty policy provides for replacement of defective products. Specific accruals are recorded for known product warranty issues. Product warranty expenses during each of the three- and six-month period s ended May 5, 2018 and April 29, 2017 were not material . |
Earnings Per Share | Basic earnings per share is computed based only on the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common shares outstanding during the period, plus the dilutive effect of potential future issuances of common stock relating to stock option programs and other potentially dilutive securities using the treasury stock method. In calculating diluted earnings per share, the dilutive effect of stock options and restricted stock units is computed using the average market price for the respective period. In addition, the assumed proceeds under the treasury stock method include the average unrecognized compensation expense of stock options that are in-the-money and restricted stock units. This results in the “assumed” buyback of additional shares, thereby reducing the dilutive impact of in-the-money stock options. Potential shares related to certain of the Company’s outstanding stock options and restricted stock units were excluded because they were anti-dilutive. Those potential shares, determined based on the weighted average exercise prices during the respective periods, could be dilutive in the future. |
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 are accounted for at fair value on a recurring basis as of May 5, 2018 and October 28, 2017 . The tables exclude cash on hand and assets and liabilities that are measured at historical cost or any basis other than fair value. As of May 5, 2018 and October 28, 2017 , the Company held $342.9 million and $296.2 million , respectively, of cash and held-to-maturity investments that were excluded from the tables below. May 5, 2018 Fair Value measurement at Reporting Date using: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Total Assets Cash equivalents: Available-for-sale: Government and institutional money market funds $ 298,914 $ — $ 298,914 Corporate obligations (1) — 164,739 164,739 Other assets: Deferred compensation investments 38,433 — 38,433 Interest rate derivatives — 5,603 5,603 Total assets measured at fair value $ 337,347 $ 170,342 $ 507,689 Liabilities Forward foreign currency exchange contracts (2) — 1,875 1,875 Total liabilities measured at fair value $ — $ 1,875 $ 1,875 (1) The amortized cost of the Company’s investments classified as available-for-sale as of May 5, 2018 was $164.8 million . (2) The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 9, Derivatives, of these Notes to Condensed Consolidated Financial Statements for more information related to the Company's master netting arrangements. October 28, 2017 Fair Value measurement at Reporting Date using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Total Assets Cash equivalents: Available-for-sale: Government and institutional money market funds $ 512,882 $ — $ 512,882 Corporate obligations (1) — 238,796 238,796 Other assets: Deferred compensation investments 33,510 — 33,510 Interest rate derivatives — 2,966 2,966 Total assets measured at fair value $ 546,392 $ 241,762 $ 788,154 Liabilities Forward foreign currency exchange contracts (2) — 1,527 1,527 Total liabilities measured at fair value $ — $ 1,527 $ 1,527 (1) The amortized cost of the Company’s investments classified as available-for-sale as of October 28, 2017 was $238.9 million . (2) The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 9, Derivatives, of these Notes to Condensed Consolidated Financial Statements for more information related to the Company's master netting arrangements. In addition to the above, the Company has recognized contingent consideration payable at fair value (Level 3 measurement) of $9.5 million and $7.8 million as of May 5, 2018 and October 28, 2017 , respectively. The changes in fair value in those periods were not material. The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments: Cash equivalents and short-term investments — 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. Interest rate derivatives — The fair value of the interest rate derivatives is estimated using a discounted cash flow analysis based on the contractual terms of the derivative. Contingent consideration — The fair value of the contingent consideration was estimated utilizing the income approach and is based upon significant inputs not observable in the market. The income approach is based on two steps. The first step involves a projection of the cash flows that is based on the Company’s estimates of the timing and probability of achieving the defined milestones. The second step involves converting the cash flows into a present value equivalent through discounting. The discount rate reflects the Baa costs of debt plus the relevant risk associated with the asset and the time value of money. |
Derivatives | Interest Rate Exposure Management — The Company's current and future debt may be subject to interest rate risk. The Company utilizes interest rate derivatives to alter interest rate exposure in an attempt to reduce the effects of these changes. 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 May 5, 2018 and October 28, 2017 , nonperformance is not perceived to be a significant 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. The Company records the fair value of its derivative financial instruments in its condensed consolidated financial statements in other current assets, other assets or accrued liabilities, depending on their net position, regardless of the purpose or intent for holding the derivative contract. Changes in the fair value of the derivative financial instruments are either recognized periodically in earnings or in shareholders’ equity as a component of OCI. Changes in the fair value of cash flow hedges are recorded in OCI and reclassified into earnings when the underlying contract matures and, for interest rate exposure derivatives, over the term of the corresponding debt instrument. Changes in the fair values of derivatives not qualifying for hedge accounting or the ineffective portion of designated hedges are reported in earnings as they occur. 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 Philippine Peso, the Japanese Yen and the British Pound. 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 designated and documented at the inception of the respective hedges as cash flow hedges and are evaluated for effectiveness monthly. Derivative instruments are employed to eliminate or minimize certain foreign currency exposures that can be confidently identified and quantified. As the terms of the contract and the underlying transaction are matched at inception, forward contract effectiveness is calculated by comparing the change in fair value of the contract to the change in the forward value of the anticipated transaction, with the effective portion of the gain or loss on the derivative reported as a component of accumulated OCI in shareholders’ equity and reclassified into earnings in the same period during which the hedged transaction affects earnings. Any residual change in fair value of the instruments, or ineffectiveness, is recognized immediately in other (income) expense. |
Goodwill and Intangible Assets | Goodwill The Company evaluates goodwill for impairment annually, as well as whenever events or changes in circumstances suggest that the carrying value of goodwill may not be recoverable. The Company tests goodwill for impairment at the reporting unit level, which we have determined is consistent with our operating segments, on an annual basis on the first day of the fourth quarter (on or about August 1 ) or more frequently if indicators of impairment exist or the Company reorganizes its reporting units. In the first quarter of fiscal 2018, the Company completed organizational changes designed to integrate the operations of Linear into the Company’s organizational structure and to reflect the evolution of the Company's markets. The Company performed an impairment analysis immediately prior to and subsequent to the reorganization and evaluated goodwill for impairment as of the date of reorganization. The goodwill impairment test requires an entity to compare the fair value of a reporting unit with its carrying amount. The Company determines the fair value of its reporting units using a weighting of the income and market approaches. Under the income approach, the Company uses a discounted cash flow methodology which requires management to make significant estimates and assumptions related to forecasted revenues, gross profit margins, operating income margins, working capital cash flow, perpetual growth rates, and long-term discount rates, among others. For the market approach, the Company uses the guideline public company method. Under this method, the Company utilizes information from comparable publicly traded companies with similar operating and investment characteristics as the reporting units, to create valuation multiples that are applied to the operating performance of the reporting unit being tested, in order to estimate their respective fair values. In order to assess the reasonableness of the calculated reporting unit fair values, the Company reconciles the aggregate estimated fair values of its reporting units determined to its current market capitalization, allowing for a reasonable control premium. If the carrying amount of a reporting unit, calculated using the above approaches, exceeds the reporting unit’s fair value, an impairment loss is recognized for the amount of the carrying value that exceeds the amount of the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit. Additionally, the Company considers income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. There was no impairment of goodwill in any period presented. The Company's next annual impairment assessment will be performed as of the first day of the fourth quarter of fiscal 2018 unless indicators arise that would require the Company to re-evaluate at an earlier date. Intangible Assets The Company reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of assets may not be recoverable. Recoverability of these assets is determined by comparison of their carrying value to the estimated future undiscounted cash flows the assets are expected to generate over their remaining estimated useful lives. If such assets are considered to be impaired, the impairment to be recognized in earnings equals the amount by which the carrying value of the assets exceeds their estimated fair value determined by either a quoted market price, if any, or a value determined by utilizing a discounted cash flow technique. Indefinite-lived intangible assets are tested for impairment on an annual basis on the first day of the fourth quarter (on or about August 1 ) or more frequently if indicators of impairment exist. The impairment test involves a qualitative assessment on the indefinite-lived intangible assets to determine whether it is more likely-than not that the indefinite-lived intangible asset is impaired. If it is determined that the fair value of the indefinite-lived intangible asset is less than the carrying value, the Company would recognize into earnings the amount by which the carrying value of the assets exceeds the estimated fair value. No impairment of intangible assets resulted from the impairment tests in any of the periods presented. Definite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives or on an accelerated method of amortization that is expected to reflect the estimated pattern of economic use. In-process research and development (IPR&D) assets are considered indefinite-lived intangible assets until completion or abandonment of the associated research and development (R&D) efforts. Upon completion of the projects, the IPR&D assets are reclassified to technology-based intangible assets and amortized over their estimated useful lives. |
Inventory | Inventories are valued at the lower of cost (first-in, first-out method) or market. The valuation of inventory requires the Company to estimate obsolete or excess inventory as well as inventory that is not of saleable quality. The Company employs a variety of methodologies to determine the net realizable value of its inventory. While a portion of the calculation to record inventory at its net realizable value is based on the age of the inventory and lower of cost or market calculations, a key factor in estimating obsolete or excess inventory requires the Company to estimate the future demand for its products. If actual demand is less than the Company’s estimates, impairment charges, which are recorded to cost of sales, may need to be recorded in future periods. Inventory in excess of saleable amounts is not valued, and the remaining inventory is valued at the lower of cost or market. |
Income Tax | The Company has provided for potential tax liabilities due in the various jurisdictions in which the Company operates. Judgment is required in determining the worldwide income tax provision. In the ordinary course of global business, there are many transactions and calculations where the ultimate tax outcome is uncertain. Some of these uncertainties arise as a consequence of cost reimbursement arrangements among related entities. Although the Company believes its estimates are reasonable, no assurance can be given that the final tax outcome of these matters will not be different from that which is reflected in the historical income tax provisions and accruals. Such differences could have a material impact on the Company’s income tax provision and operating results in the period in which such determination is made |
New Accounting Pronouncements | Standards Implemented Stock Compensation In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years, and interim periods within those annual periods, beginning after December 15, 2016 and allows for prospective, retrospective or modified retrospective adoption, depending on the area covered in the update, with early adoption permitted. The Company adopted ASU 2016-09 in the first quarter of fiscal 2018. The Company recorded total excess tax benefits of $18.2 million in the six-month period ended May 5, 2018 from its share-based payments within income tax expense in its condensed consolidated statements of income. These excess tax benefits are presented within operating activities in the condensed consolidated statements of cash flows. The Company applied this change in presentation retrospectively and has adjusted the prior year presentation by removing the reclass of $26.0 million of excess tax benefit-stock options from net cash provided by operating activities to net cash provided by financing activities. The Company elected not to change its policy on accounting for forfeitures and continues to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period. The adoption of ASU 2016-09 also changed the calculation of fully diluted shares outstanding for the three months ended February 3, 2018. The excess tax benefits have been excluded from the calculation of assumed proceeds in the Company's calculation of diluted weighted shares under the new standard. The Company's diluted weighted shares outstanding as of February 3, 2018 increased by approximately 1.0 million shares due to the adoption of the new standard. Equity Method Investments In March 2016, the FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting (ASU 2016-07). ASU 2016-07 eliminates the requirement that when an investment, initially accounted for under a method other than the equity method of accounting, subsequently qualifies for use of the equity method, an investor must retrospectively apply the equity method in prior periods in which it held the investment. This requires an investor to determine the fair value of the investee’s underlying assets and liabilities retrospectively at each investment date and revise all prior periods as if the equity method had always been applied. The new guidance requires the investor to apply the equity method prospectively from the date the investment qualifies for the equity method. The investor will add the carrying value of the existing investment to the cost of the additional investment to determine the initial cost basis of the equity method investment. ASU 2016-07 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, and early adoption is permitted. The Company adopted ASU 2016-07 in the first quarter of fiscal 2018. The adoption of ASU 2016-07 in the first quarter of fiscal 2018 did not impact the Company's financial position or results of operations. Inventory In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330) - Simplifying the Measurement of Inventory (ASU 2015-11) , which simplifies the subsequent measurement of inventories by replacing the lower of cost or market test with a lower of cost and net realizable value test. The guidance applies only to inventories for which cost is determined by methods other than last-in first-out and the retail inventory method. The guidance in ASU 2015-11 is effective for fiscal years beginning after December 15, 2016 and early adoption is permitted. The Company adopted ASU 2015-11 in the first quarter of fiscal 2018. The adoption of ASU 2015-11 in the first quarter of fiscal 2018 did not impact the Company's financial position or results of operations. Standards to Be Implemented Comprehensive Income In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-01). ASU 2018-01 allows for reclassification of stranded tax effects resulting from the Tax Legislation from accumulated other comprehensive income to retained earnings. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the adoption date and the impact, if any, adoption will have on its financial position and results of operations. Business Combinations In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business (ASU 2017-01). ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company will adopt ASU 2017-01 in the first quarter of fiscal 2019. The impact of the adoption on the Company's financial position and results of operations will be dependent upon any future acquisitions or disposals. Income Taxes In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) (ASU 2016-16) . ASU 2016-16 will require an entity to recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted as of the beginning of an annual reporting period for which financial statements have not been issued or made available for issuance. ASU 2016-16 is effective for the Company in the first quarter of fiscal 2019. The Company is currently evaluating the adoption date and the impact, if any, adoption will have on its financial position and results of operations. Statement of Cash Flows In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15). ASU 2016-15 provides guidance on several specific cash flow issues, including debt prepayment or extinguishment costs, settlement of certain debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of certain insurance claims and distributions received from equity method investees. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted in any interim or annual period. ASU 2016-15 is effective for the Company in the first quarter of fiscal 2019. The Company is currently evaluating the adoption date but does not expect the adoption of ASU 2016-15 will have a material impact on its consolidated financial statements. Derivatives and Hedging In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12), which amends and simplifies existing guidance in order to allow companies to more accurately present the economic effects of risk management activities in the financial statements. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018, including interim periods within those years. Early adoption is permitted. ASU 2017-12 is effective for the Company in the first quarter of the fiscal year ending October 31, 2020 (fiscal 2020). The Company is currently evaluating the adoption date but does not expect the adoption of ASU 2017-12 will have a material impact on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments (ASU 2016-06). ASU 2016-06 clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. An entity performing the assessment under ASU 2016-06 is required to assess the embedded call (put) options solely in accordance with the four-step decision sequence. ASU 2016-06 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. ASU 2016-06 is effective for the Company in the first quarter of fiscal 2019. The Company is currently evaluating the adoption date but does not expect the adoption of ASU 2016-06 will have a material impact on its consolidated financial statements. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (ASU 2016-02). ASU 2016-02 requires a lessee to recognize most leases on the balance sheet but recognize expenses on the income statement in a manner similar to current practice. The update states that a lessee will recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying assets for the lease term. Leases will continue to be classified as either financing or operating, with classification affecting the recognition, measurement and presentation of expenses and cash flows arising from a lease. In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842 (ASU 2018-01). ASU 2018-01 permits an entity to elect an optional transition practical expedient to not evaluate land easements that exist or expired before the entity’s adoption of Topic 842 and that were not previously accounted for as leases under Topic 840. ASU 2016-02 and ASU 2018-01 are effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. ASU 2016-02 and ASU 2018-01 are effective for the Company in the first quarter of fiscal 2020. The Company is currently evaluating the adoption date and the impact adoption will have on its financial position and results of operations. Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (ASU 2016-13). ASU 2016-13 requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years. ASU 2016-13 is effective for the Company in the first quarter of fiscal 2020. The Company is currently evaluating the adoption date and the impact, if any, adoption will have on its financial position and results of operations. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01). ASU 2016-01 requires equity investments to be measured at fair value with changes in fair value recognized in net income; simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet or the accompanying notes to the financial statements; and clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU 2016-01 is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. ASU 2016-01 is effective for the Company in the first quarter of fiscal 2019. The Company is currently evaluating the impact adoption will have on its financial position and results of operations. Stock Compensation In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting (ASU 2017-09) . The new guidance clarifies when a change to the terms or conditions of a share-based payment award must be accounted for as a modification. ASU 2017-09 is effective for fiscal years, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. ASU 2017-09 is effective for the Company in the first quarter of fiscal 2019. The Company is currently evaluating the adoption date and the impact, if any, adoption will have on its financial position and results of operations. Revenue Recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has issued several amendments and updates to the new revenue standard, including guidance related to when an entity should recognize revenue gross as a principal or net as an agent and how an entity should identify performance obligations. As amended, ASU 2014-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, which is the Company's first quarter of fiscal 2019. The Company has developed a project plan for the implementation of the guidance, including a review of all revenue streams to identify any differences in the timing, measurement or presentation of revenue recognition. The Company has reviewed its revenue streams and is nearing completion in assessing all potential impacts of the standard, including any impacts from recently issued amendments, and retrospectively adjusting financial information for prior fiscal years. The Company has also made progress on its impact assessment of the recent acquisition of Linear. While the Company is still in the process of completing its evaluation of the standard, it currently believes the most significant impact will be related to the timing of recognition of sales to certain distributors. As described in Note 2, Revenue Recognition , of these Notes to the condensed consolidated financial statements, the Company currently defers revenue and the related cost of sales on shipments to certain distributors until the distributors resell the products to their customers. Upon adoption of ASU 2014-09, the Company will no longer be permitted to defer revenue until sale by the distributor to the end customer, but rather, will be required to estimate the effects of returns and allowances provided to distributors and record revenue at the time of sale to the distributor. The Company is continuing to evaluate the future impact and method of adoption of ASU 2014-09 and related amendments on its consolidated financial statements and related disclosures. The Company will adopt ASU 2014-09, using the full retrospective method, upon its effective date for the Company which is the Company’s first quarter of fiscal 2019. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
May 05, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of the activity under the company's stock option plans | A summary of the Company’s stock option activity as of May 5, 2018 and changes during the three- and six-month period s then ended is presented below: Activity during the Three Months Ended May 5, 2018 Options Outstanding (in thousands) Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term in Years Aggregate Options outstanding at February 3, 2018 8,243 $54.04 Options granted 569 $91.12 Options exercised (604 ) $46.65 Options forfeited (34 ) $65.85 Options outstanding at May 5, 2018 8,174 $57.11 6.4 $271,525 Options exercisable at May 5, 2018 4,712 $47.50 5.0 $201,532 Options vested or expected to vest at May 5, 2018 (1) 7,859 $56.44 6.3 $266,299 (1) In addition to the vested options, the Company expects a portion of the unvested options to vest at some point in the future. The number of options expected to vest is calculated by applying an estimated forfeiture rate to the unvested options. Activity during the Six Months Ended May 5, 2018 Options Outstanding (in thousands) Weighted- Average Exercise Price Per Share Options outstanding at October 28, 2017 9,347 $52.47 Options granted 590 $91.13 Options exercised (1,609 ) $41.04 Options forfeited (147 ) $63.18 Options expired (7 ) $29.91 Options outstanding at May 5, 2018 8,174 $57.11 |
Schedule of share-based compensation, restricted stock units award activity | A summary of the Company’s restricted stock unit/award activity as of May 5, 2018 and changes during the three- and six-month period s then ended is presented below: Activity during the Three Months Ended May 5, 2018 Restricted Stock Units/Awards Outstanding (in thousands) Weighted- Average Grant- Date Fair Value Per Share Restricted stock units/awards outstanding at February 3, 2018 5,547 $72.66 Units/Awards granted 1,250 $87.36 Restrictions lapsed (720 ) $59.17 Forfeited (87 ) $56.59 Restricted stock units/awards outstanding at May 5, 2018 5,990 $77.38 Activity during the Six Months Ended May 5, 2018 Restricted Stock Units/Awards Outstanding (in thousands) Weighted- Average Grant- Date Fair Value Per Share Restricted stock units/awards outstanding at October 28, 2017 5,680 $71.88 Units/Awards granted 1,531 $87.32 Restrictions lapsed (961 ) $63.17 Forfeited (260 ) $66.17 Restricted stock units/awards outstanding at May 5, 2018 5,990 $77.38 |
Accumulated Other Comprehensi26
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
May 05, 2018 | |
Equity [Abstract] | |
Components of accumulated other comprehensive loss, net of tax | The following table provides the changes in accumulated other comprehensive income (loss) (OCI) by component and the related tax effects during the first six months of fiscal 2018 . Foreign currency translation adjustment Unrealized holding gains on available for sale securities Unrealized holding (losses) on available for sale securities Unrealized holding gains (losses) on derivatives Pension plans Total October 28, 2017 $ (22,489 ) $ 1 $ (1 ) $ (10,879 ) $ (27,991 ) $ (61,359 ) Other comprehensive income (loss) before reclassifications 6,752 3 — 8,307 (779 ) 14,283 Amounts reclassified out of other comprehensive income (loss) — — — (5,247 ) 837 (4,410 ) Tax effects — — — (1,323 ) (202 ) (1,525 ) Other comprehensive income (loss) 6,752 3 — 1,737 (144 ) 8,348 May 5, 2018 $ (15,737 ) $ 4 $ (1 ) $ (9,142 ) $ (28,135 ) $ (53,011 ) |
Reclassification out of Accumulated Other Comprehensive Income | The amounts reclassified out of accumulated OCI with presentation location during each period were as follows: Three Months Ended Six Months Ended Comprehensive Income Component May 5, 2018 April 29, 2017 May 5, 2018 April 29, 2017 Location Unrealized holding losses (gains) on derivatives Currency forwards $ (590 ) $ 1,248 $ (1,865 ) $ 2,948 Cost of sales (714 ) 494 (1,783 ) 1,508 Research and development (787 ) 702 (1,756 ) 1,795 Selling, marketing, general and administrative Interest rate derivatives (473 ) 464 157 993 Interest expense (2,564 ) 2,908 (5,247 ) 7,244 Total before tax 131 (534 ) 475 (1,389 ) Tax $ (2,433 ) $ 2,374 $ (4,772 ) $ 5,855 Net of tax Amortization of pension components Transition obligation $ 2 $ 3 $ 4 $ 6 (a) Prior service credit 1 (2 ) 1 (4 ) (a) Actuarial losses 407 466 832 921 (a) 410 467 837 923 Total before tax (99 ) (103 ) (202 ) (204 ) Tax $ 311 $ 364 $ 635 $ 719 Net of tax Total amounts reclassified out of accumulated other comprehensive income (loss), net of tax $ (2,122 ) $ 2,738 $ (4,137 ) $ 6,574 ______________ (a) The amortization of pension components is included in the computation of net periodic pension cost. For further information see Note 13, Retirement Plans , contained in Item 8 of the Annual Report on Form 10-K for the fiscal year ended October 28, 2017 . |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
May 05, 2018 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended Six Months Ended May 5, 2018 April 29, 2017 May 5, 2018 April 29, 2017 Net Income $ 379,831 $ 93,564 $ 648,003 $ 310,693 Less: income allocated to participating securities 1,532 — 2,827 82 Net income allocated to common stockholders $ 378,299 $ 93,564 $ 645,176 $ 310,611 Basic shares: Weighted-average shares outstanding 370,384 341,316 369,685 325,051 Earnings per common share basic: $ 1.02 $ 0.27 $ 1.75 $ 0.96 Diluted shares: Weighted-average shares outstanding 370,384 341,316 369,685 325,051 Assumed exercise of common stock equivalents 4,394 4,338 4,745 4,314 Weighted-average common and common equivalent shares 374,778 345,654 374,430 329,365 Earnings per common share diluted: $ 1.01 $ 0.27 $ 1.72 $ 0.94 Anti-dilutive shares related to: Outstanding share-based awards 1,990 1,580 1,731 823 |
Special Charges (Tables)
Special Charges (Tables) | 6 Months Ended |
May 05, 2018 | |
Restructuring and Related Activities [Abstract] | |
Summary of the Company's special charges, Income Statement | The following tables display the special charges taken for ongoing actions and a roll-forward from October 28, 2017 to May 5, 2018 of the employee separation and exit cost accruals established related to these actions. Closure of Manufacturing Facilities Reduction of Operating Costs Action Early Retirement Action Total Special Charges Statements of Income Fiscal 2016 - Workforce reductions $ — $ 13,684 $ — 13,684 Fiscal 2017 - Workforce reductions $ — $ 8,126 $ 41,337 $ 49,463 Fiscal 2018 - Workforce reductions $ 42,290 $ 16,117 $ — $ 58,407 |
Schedule of Accrued Restructuring | Accrued Restructuring Closure of Manufacturing Facilities Reduction of Operating Costs Action Early Retirement Action Balance at October 28, 2017 $ — $ 5,137 $ 32,211 Fiscal 2018 special charges 41,201 16,117 — Severance and other payments — (2,798 ) (6,461 ) Effect of foreign currency on accrual — 66 — Balance at February 3, 2018 $ 41,201 $ 18,522 $ 25,750 Fiscal 2018 special charges 1,089 — — Severance and other payments — (8,316 ) (6,234 ) Effect of foreign currency on accrual — (21 ) — Balance at May 5, 2018 $ 42,290 $ 10,185 $ 19,516 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
May 05, 2018 | |
Segment Reporting [Abstract] | |
Revenue Trends by End Market | The following table summarizes revenue by end market for the three- and six-month periods ended May 5, 2018 and April 29, 2017 . 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 evolve and improve, the categorization of products by end market can vary over time. When this occurs, the Company reclassifies revenue by end market for prior periods. Such reclassifications typically do not materially change the sizing of, or the underlying trends of results within, each end market. Three Months Ended May 5, 2018 April 29, 2017 Revenue % of Revenue Y/Y% Revenue % of Revenue Industrial $ 788,281 52 % 47 % $ 536,437 47 % Automotive 238,839 16 % 28 % 185,871 16 % Consumer 198,063 13 % (6 )% 211,575 18 % Communications 287,870 19 % 34 % 214,099 19 % Total revenue $ 1,513,053 100 % 32 % $ 1,147,982 100 % Six Months Ended May 5, 2018 April 29, 2017 Revenue % of Revenue* Y/Y% Revenue % of Revenue Industrial $ 1,529,179 50 % 64 % $ 932,865 44 % Automotive 492,477 16 % 50 % 329,234 15 % Consumer 437,031 14 % (9 )% 481,928 23 % Communications 572,990 19 % 48 % 388,404 18 % Total revenue $ 3,031,677 100 % 42 % $ 2,132,431 100 % * The sum of the individual percentages may not equal the total due to rounding. |
Revenue Trends by Geographic Region | Revenue by geographic region, based on the primary end customer location, for the three- and six-month period s ended May 5, 2018 and April 29, 2017 were as follows: Three Months Ended Six Months Ended Region May 5, 2018 April 29, 2017 May 5, 2018 April 29, 2017 United States $ 502,258 $ 422,328 $ 1,042,033 $ 853,326 Rest of North and South America 26,208 27,630 50,694 50,587 Europe 364,563 293,178 722,799 519,513 Japan 183,003 96,289 364,228 185,180 China 282,465 198,209 550,589 351,192 Rest of Asia 154,556 110,348 301,334 172,633 Total revenue $ 1,513,053 $ 1,147,982 $ 3,031,677 $ 2,132,431 |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
May 05, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities | The tables below, set forth by level, presents the Company’s financial assets and liabilities, excluding accrued interest components that are accounted for at fair value on a recurring basis as of May 5, 2018 and October 28, 2017 . The tables exclude cash on hand and assets and liabilities that are measured at historical cost or any basis other than fair value. As of May 5, 2018 and October 28, 2017 , the Company held $342.9 million and $296.2 million , respectively, of cash and held-to-maturity investments that were excluded from the tables below. May 5, 2018 Fair Value measurement at Reporting Date using: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Total Assets Cash equivalents: Available-for-sale: Government and institutional money market funds $ 298,914 $ — $ 298,914 Corporate obligations (1) — 164,739 164,739 Other assets: Deferred compensation investments 38,433 — 38,433 Interest rate derivatives — 5,603 5,603 Total assets measured at fair value $ 337,347 $ 170,342 $ 507,689 Liabilities Forward foreign currency exchange contracts (2) — 1,875 1,875 Total liabilities measured at fair value $ — $ 1,875 $ 1,875 (1) The amortized cost of the Company’s investments classified as available-for-sale as of May 5, 2018 was $164.8 million . (2) The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 9, Derivatives, of these Notes to Condensed Consolidated Financial Statements for more information related to the Company's master netting arrangements. October 28, 2017 Fair Value measurement at Reporting Date using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Total Assets Cash equivalents: Available-for-sale: Government and institutional money market funds $ 512,882 $ — $ 512,882 Corporate obligations (1) — 238,796 238,796 Other assets: Deferred compensation investments 33,510 — 33,510 Interest rate derivatives — 2,966 2,966 Total assets measured at fair value $ 546,392 $ 241,762 $ 788,154 Liabilities Forward foreign currency exchange contracts (2) — 1,527 1,527 Total liabilities measured at fair value $ — $ 1,527 $ 1,527 (1) The amortized cost of the Company’s investments classified as available-for-sale as of October 28, 2017 was $238.9 million . (2) The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 9, Derivatives, of these Notes to Condensed Consolidated Financial Statements for more information related to the Company's master netting arrangements. |
Schedule of Debt | The table below presents the estimated fair value of certain financial instruments not recorded at fair value on a recurring basis. The carrying amounts of the term loans approximate fair value. The term loans are classified as Level 2 measurements according to the fair value hierarchy. 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. May 5, 2018 October 28, 2017 Principal Amount Outstanding Fair Value Principal Amount Outstanding Fair Value 3-Year term loan $ 1,080,000 1,080,000 1,950,000 1,950,000 5-Year term loan 1,350,000 1,350,000 2,100,000 2,100,000 2020 Notes, due March 2020 300,000 298,710 — — 2021 Notes, due January 2021 450,000 446,030 — — 2021 Notes, due December 2021 400,000 387,367 400,000 399,530 2023 Notes, due June 2023 500,000 479,674 500,000 498,582 2023 Notes, due December 2023 550,000 532,478 550,000 554,411 2025 Notes, due December 2025 850,000 843,016 850,000 884,861 2026 Notes, due December 2026 900,000 858,347 900,000 902,769 2036 Notes, due December 2036 250,000 245,621 250,000 259,442 2045 Notes, due December 2045 400,000 434,831 400,000 460,588 Total Debt $ 7,030,000 $ 6,956,074 $ 7,900,000 $ 8,010,183 |
Derivatives (Tables)
Derivatives (Tables) | 6 Months Ended |
May 05, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Hedging Instruments | The fair value of forward foreign currency derivative instruments designated as hedging instruments in the Company’s condensed consolidated balance sheets as of May 5, 2018 and October 28, 2017 was as follows: Fair Value At Balance Sheet Location May 5, 2018 October 28, 2017 Forward foreign currency exchange contracts Prepaid expenses and other current assets $ — $ 257 Forward foreign currency exchange contracts Accrued liabilities $ 1,093 $ — |
Net Amount of Derivative Assets and Liabilities | The following table presents the gross amounts of the Company's derivative assets and liabilities and the net amounts recorded in the Company's condensed consolidated balance sheet: May 5, 2018 October 28, 2017 Gross amount of recognized liabilities $ (4,355 ) $ (5,039 ) Gross amounts of recognized assets offset in the condensed consolidated balance sheet 2,480 3,512 Net liabilities presented in the condensed consolidated balance sheet $ (1,875 ) $ (1,527 ) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
May 05, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in goodwill | The following table presents the changes in goodwill during the first six months of fiscal 2018 : Six Months Ended May 5, 2018 Balance as of October 28, 2017 $ 12,217,455 Goodwill related to other acquisitions (1) 36,756 Foreign currency translation adjustment 3,974 Balance as of May 5, 2018 $ 12,258,185 (1) Represents goodwill related to acquisitions that were not material to the Company on either an individual or aggregate basis. |
Finite lived intangible assets | As of May 5, 2018 and October 28, 2017 , the Company’s intangible assets consisted of the following: May 5, 2018 October 28, 2017 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer relationships $ 4,694,597 $ 658,049 $ 4,683,461 $ 449,369 Technology-based 1,120,204 172,621 1,097,025 101,920 Trade-name 73,589 12,297 72,800 6,906 IPR&D 20,768 — 24,334 — Total (1)(2) $ 5,909,158 $ 842,967 $ 5,877,620 $ 558,195 ___________ (1) Foreign intangible asset carrying amounts are affected by foreign currency translation. (2) Increases in intangible assets relate to acquisitions that were not material to the Company on either an individual or aggregate basis. |
Amortization expense | The Company expects annual amortization expense for intangible assets to be: Fiscal Year Amortization Expense Remainder of fiscal 2018 $285,198 2019 $569,407 2020 $568,884 2021 $568,348 2022 $565,418 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
May 05, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories at May 5, 2018 and October 28, 2017 were as follows: May 5, 2018 October 28, 2017 Raw materials $ 34,234 $ 35,436 Work in process 355,273 376,476 Finished goods 161,713 138,904 Total inventories $ 551,220 $ 550,816 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
May 05, 2018 | |
Business Combinations [Abstract] | |
Unaudited Pro Forma Consolidated Financial Information | The following unaudited pro forma consolidated financial information combines the unaudited results of the Company for the three- and six-month period s ended April 29, 2017 and the unaudited results of Linear for the three- and six-month period s ended April 29, 2017 and assumes that the Acquisition, which closed on March 10, 2017, was completed on November 1, 2015 (the first day of fiscal 2016). 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, transaction-related costs, a step-up in the value of acquired inventory and property, plant and equipment, compensation expense for ongoing share-based compensation arrangements replaced and interest expense for the debt incurred to fund 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 1, 2015. 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. (thousands, except per share data) Pro Forma Three Months Ended Pro Forma Six Months Ended April 29, 2017 April 29, 2017 Revenue $ 1,346,540 $ 2,708,987 Net income $ 128,462 $ 364,463 Basic net income per common share $ 0.35 $ 1.00 Diluted net income per common share $ 0.35 $ 0.98 |
Basis of Presentation (Details)
Basis of Presentation (Details) - Accounting Standards Update 2016-09 - USD ($) $ in Millions | 3 Months Ended | |
May 05, 2018 | Feb. 03, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Excess tax benefit from share-based compensation, operating activities | $ 26 | |
Excess tax benefit from share-based compensation, financing activities | $ 26 | $ 26 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Millions | 6 Months Ended | |
May 05, 2018 | Oct. 28, 2017 | |
Revenue Recognition [Abstract] | ||
Deferred revenue on shipments to distributors, gross | $ 701.3 | $ 589.5 |
Deferred revenue on shipments to distributors, cost of sales | $ 135.6 | $ 115.5 |
Standard product warranty term | 12 months |
Stock-Based Compensation - Outs
Stock-Based Compensation - Outstanding Compensation (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended |
May 05, 2018USD ($)$ / sharesshares | May 05, 2018USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Options outstanding, weighted-average remaining contractual term in years | 6 years 146 days | |
Options exercisable, weighted-average remaining contractual term in years | 5 years | |
Options vested or expected to vest, weighted-average remaining contractual term in years | 6 years 110 days | |
Options outstanding, aggregate intrinsic value | $ | $ 271,525 | $ 271,525 |
Options exercisable, aggregate intrinsic value | $ | 201,532 | 201,532 |
Options vested or expected to vest, aggregate intrinsic value | $ | $ 266,299 | $ 266,299 |
Employee Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Options outstanding, at beginning of period (in shares) | shares | 8,243 | 9,347 |
Options granted (in shares) | shares | 569 | 590 |
Options exercised (in shares) | shares | (604) | (1,609) |
Options forfeited (in shares) | shares | (34) | (147) |
Options expired (in shares) | shares | (7) | |
Options outstanding, at end of period (in shares) | shares | 8,174 | 8,174 |
Options exercisable (in shares) | shares | 4,712 | 4,712 |
Options vested or expected to vest (in shares) | shares | 7,859 | 7,859 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Options outstanding, weighted-average exercise price per share, at beginning of period (in dollars per share) | $ / shares | $ 54.04 | $ 52.47 |
Options granted, weighted-average exercise price per share (in dollars per share) | $ / shares | 91.12 | 91.13 |
Options exercised, weighted-average exercise price per share (in dollars per share) | $ / shares | 46.65 | 41.04 |
Options forfeited, weighted-average exercise price per share (in dollars per share) | $ / shares | 65.85 | 63.18 |
Options expired, weighted-average exercise price per share (in dollars per share) | $ / shares | 29.91 | |
Options outstanding, weighted-average exercise price per share, at end of period (in dollars per share) | $ / shares | 57.11 | 57.11 |
Options exercisable, weighted-average exercise price per share (in dollars per share) | $ / shares | 47.50 | 47.50 |
Options vested or expected to vest, weighted-average exercise price per share (in dollars per share) | $ / shares | $ 56.44 | $ 56.44 |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||
Restricted stock units/awards outstanding, at beginning of period (in shares) | shares | 5,547 | 5,680 |
Units/Awards granted (in shares) | shares | 1,250 | 1,531 |
Restrictions lapsed (in shares) | shares | (720) | (961) |
Forfeited (in shares) | shares | (87) | (260) |
Restricted stock units/awards outstanding, at end of period (in shares) | shares | 5,990 | 5,990 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Restricted stock units/awards outstanding, at beginning of period (in dollar per shares) | $ / shares | $ 72.66 | $ 71.88 |
Units/Awards granted (in dollar per shares) | $ / shares | 87.36 | 87.32 |
Restrictions lapsed (in dollar per shares) | $ / shares | 59.17 | 63.17 |
Forfeited (in dollar shares) | $ / shares | 56.59 | 66.17 |
Restricted stock units/awards outstanding, at end of period (in dollar per shares) | $ / shares | $ 77.38 | $ 77.38 |
Stock-Based Compensation (Textu
Stock-Based Compensation (Textual) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
May 05, 2018 | Apr. 29, 2017 | May 05, 2018 | Apr. 29, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Total intrinsic value of options exercised | $ 28.7 | $ 53.5 | $ 82.5 | $ 89.1 |
Proceeds received from exercise of options | 27.7 | 52.8 | 65.6 | 87.3 |
Total unrecognized compensation cost related to unvested share-based awards, before tax consideration | 430.9 | $ 430.9 | ||
Weighted-average period to recognize compensation cost | 1 year 303 days | |||
Total grant-date fair value of vested stock options | $ 64.1 | $ 61.8 | $ 84.5 | $ 66.9 |
Accumulated Other Comprehensi39
Accumulated Other Comprehensive Income (Loss) (Table) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
May 05, 2018 | Apr. 29, 2017 | May 05, 2018 | Apr. 29, 2017 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 10,161,540 | |||
Other comprehensive income (loss) before reclassifications | 14,283 | |||
Amounts reclassified out of other comprehensive income (loss) | (4,410) | |||
Tax effects | (1,525) | |||
Other comprehensive (loss) income | $ (8,654) | $ 9,587 | 8,348 | $ 7,108 |
Ending balance | 10,585,355 | 10,585,355 | ||
AOCI [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (61,359) | |||
Ending balance | (53,011) | (53,011) | ||
Foreign currency translation adjustment | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (22,489) | |||
Other comprehensive income (loss) before reclassifications | 6,752 | |||
Amounts reclassified out of other comprehensive income (loss) | 0 | |||
Tax effects | 0 | |||
Other comprehensive (loss) income | 6,752 | |||
Ending balance | (15,737) | (15,737) | ||
Unrealized holding gains on available for sale securities | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 1 | |||
Other comprehensive income (loss) before reclassifications | 3 | |||
Amounts reclassified out of other comprehensive income (loss) | 0 | |||
Tax effects | 0 | |||
Other comprehensive (loss) income | 3 | |||
Ending balance | 4 | 4 | ||
Unrealized holding (losses) on available for sale securities | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (1) | |||
Other comprehensive income (loss) before reclassifications | 0 | |||
Amounts reclassified out of other comprehensive income (loss) | 0 | |||
Tax effects | 0 | |||
Other comprehensive (loss) income | 0 | |||
Ending balance | (1) | (1) | ||
Unrealized holding gains (losses) on derivatives | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (10,879) | |||
Other comprehensive income (loss) before reclassifications | 8,307 | |||
Amounts reclassified out of other comprehensive income (loss) | (5,247) | |||
Tax effects | (1,323) | |||
Other comprehensive (loss) income | 1,737 | |||
Ending balance | (9,142) | (9,142) | ||
Pension plans | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (27,991) | |||
Other comprehensive income (loss) before reclassifications | (779) | |||
Amounts reclassified out of other comprehensive income (loss) | 837 | |||
Tax effects | (202) | |||
Other comprehensive (loss) income | (144) | |||
Ending balance | $ (28,135) | $ (28,135) |
Accumulated Other Comprehensi40
Accumulated Other Comprehensive Income (Loss) - Amounts Reclassified Out of Accumulated Other Comprehensive Income (Loss) (Table) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
May 05, 2018 | Apr. 29, 2017 | May 05, 2018 | Apr. 29, 2017 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Cost of sales | [1] | $ 479,241 | $ 507,539 | $ 962,675 | $ 843,484 |
Research and development | [1] | 289,472 | 235,232 | 578,069 | 419,186 |
Selling, marketing, general and administrative | [1] | 172,146 | 190,686 | 349,054 | 321,345 |
Interest expense | 64,792 | 71,636 | 132,822 | 114,250 | |
Total before tax | 401,547 | 86,714 | 740,401 | 320,023 | |
Tax | (21,716) | 6,850 | (92,398) | (9,330) | |
Net income | 379,831 | 93,564 | 648,003 | 310,693 | |
Net of tax | (2,122) | 2,738 | (4,137) | 6,574 | |
Unrealized holding gains (losses) on derivatives | Reclassification out of Accumulated Other Comprehensive Income | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Net income | (2,433) | 2,374 | (4,772) | 5,855 | |
Pension plans | Reclassification out of Accumulated Other Comprehensive Income | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Total before tax | (410) | (467) | (837) | (923) | |
Tax | 99 | 103 | 202 | 204 | |
Net income | (311) | (364) | (635) | (719) | |
Transition obligation | Reclassification out of Accumulated Other Comprehensive Income | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Amortization of pension components | (2) | (3) | (4) | (6) | |
Prior service credit | Reclassification out of Accumulated Other Comprehensive Income | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Amortization of pension components | (1) | 2 | (1) | 4 | |
Actuarial losses | Reclassification out of Accumulated Other Comprehensive Income | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Amortization of pension components | (407) | (466) | (832) | (921) | |
Currency forwards | Unrealized holding gains (losses) on derivatives | Reclassification out of Accumulated Other Comprehensive Income | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Cost of sales | (590) | 1,248 | (1,865) | 2,948 | |
Research and development | (714) | 494 | (1,783) | 1,508 | |
Selling, marketing, general and administrative | (787) | 702 | (1,756) | 1,795 | |
Interest rate derivatives | Unrealized holding gains (losses) on derivatives | Reclassification out of Accumulated Other Comprehensive Income | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Interest expense | (473) | 464 | 157 | 993 | |
Total before tax | (2,564) | 2,908 | (5,247) | 7,244 | |
Tax | $ 131 | $ (534) | $ 475 | $ (1,389) | |
[1] | Includes stock-based compensation expense as follows: Cost of sales$3,820 $2,566 $8,041 $4,510 Research and development$22,018 $11,910 $41,746 $18,931 Selling, marketing, general and administrative$13,076 $8,010 $27,029 $15,574 |
Accumulated Other Comprehensi41
Accumulated Other Comprehensive Income (Loss) (Textual) (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
May 05, 2018USD ($)position | Apr. 29, 2017 | May 05, 2018USD ($)position | Apr. 29, 2017 | Oct. 28, 2017USD ($)position | |
Equity [Abstract] | |||||
Cash flow hedge gain (loss) to be reclassified within twelve months | $ | $ 1 | ||||
Cash flow hedge ineffectiveness | no material ineffectiveness | no material ineffectiveness | no material ineffectiveness | no material ineffectiveness | |
Number of investment positions | position | 12 | 12 | 18 | ||
Number of securities in unrealized loss position | position | 5 | 5 | 8 | ||
Fair value of securities in continuous unrealized loss position | $ | $ 79.9 | $ 79.9 | $ 143.9 |
Earnings Per Share (Tables) (De
Earnings Per Share (Tables) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
May 05, 2018 | Apr. 29, 2017 | May 05, 2018 | Apr. 29, 2017 | |
Earnings per share | ||||
Net income | $ 379,831 | $ 93,564 | $ 648,003 | $ 310,693 |
Less: income allocated to participating securities | 1,532 | 0 | 2,827 | 82 |
Net income allocated to common stockholders | $ 378,299 | $ 93,564 | $ 645,176 | $ 310,611 |
Basic shares: | ||||
Weighted-average shares outstanding (in shares) | 370,384 | 341,316 | 369,685 | 325,051 |
Earnings per common share basic: | ||||
Earnings per common share, basic (in dollars per share) | $ 1.02 | $ 0.27 | $ 1.75 | $ 0.96 |
Diluted shares: | ||||
Weighted-average shares outstanding (in shares) | 370,384 | 341,316 | 369,685 | 325,051 |
Assumed exercise of common stock equivalents (in shares) | 4,394 | 4,338 | 4,745 | 4,314 |
Weighted-average common and common equivalent shares (in shares) | 374,778 | 345,654 | 374,430 | 329,365 |
Earnings per common share diluted: | ||||
Earnings per common share, diluted (in dollars per share) | $ 1.01 | $ 0.27 | $ 1.72 | $ 0.94 |
Anti-dilutive shares related to: | ||||
Outstanding share-based awards (in shares) | 1,990 | 1,580 | 1,731 | 823 |
Special Charges - Workforce Red
Special Charges - Workforce Reductions (Table) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
May 05, 2018 | Feb. 03, 2018 | Apr. 29, 2017 | Jan. 28, 2017 | Apr. 30, 2016 | May 05, 2018 | Apr. 29, 2017 | Oct. 28, 2017 | Oct. 29, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||||||||
Fiscal 2018 special charges | $ 1,089 | $ 0 | $ 58,407 | $ 49,463 | |||||
Workforce Reductions Plan 2016 | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Fiscal 2018 special charges | $ 13,684 | ||||||||
Workforce Reductions Plan 2017 | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Fiscal 2018 special charges | $ 49,463 | ||||||||
Workforce Reductions Plan 2018 | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Fiscal 2018 special charges | 58,407 | ||||||||
Facility Closing | Workforce Reductions Plan 2016 | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Fiscal 2018 special charges | 0 | ||||||||
Facility Closing | Workforce Reductions Plan 2017 | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Fiscal 2018 special charges | 0 | ||||||||
Facility Closing | Workforce Reductions Plan 2018 | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Fiscal 2018 special charges | 1,089 | $ 41,201 | 42,290 | ||||||
Reduction of Operating Costs Action | Workforce Reductions Plan 2016 | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Fiscal 2018 special charges | $ 13,700 | 13,684 | |||||||
Reduction of Operating Costs Action | Workforce Reductions Plan 2017 | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Fiscal 2018 special charges | $ 8,100 | 8,126 | |||||||
Reduction of Operating Costs Action | Workforce Reductions Plan 2018 | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Fiscal 2018 special charges | 0 | 16,117 | |||||||
Early Retirement Action | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Fiscal 2018 special charges | $ 0 | $ 0 | |||||||
Early Retirement Action | Workforce Reductions Plan 2016 | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Fiscal 2018 special charges | $ 0 | ||||||||
Early Retirement Action | Workforce Reductions Plan 2017 | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Fiscal 2018 special charges | $ 41,300 | $ 41,337 | |||||||
Early Retirement Action | Workforce Reductions Plan 2018 | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Fiscal 2018 special charges | $ 0 |
Special Charges - Restructuring
Special Charges - Restructuring (Table) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
May 05, 2018 | Feb. 03, 2018 | Apr. 29, 2017 | May 05, 2018 | Apr. 29, 2017 | |
Summary of the Company's special charges and accruals related to ongoing actions, Balance Sheet | |||||
Fiscal 2018 special charges | $ 1,089 | $ 0 | $ 58,407 | $ 49,463 | |
Facility Closing | |||||
Summary of the Company's special charges and accruals related to ongoing actions, Balance Sheet | |||||
Accrued restructuring, beginning balance | 41,201 | $ 0 | 0 | ||
Severance and other payments | 0 | 0 | |||
Effect of foreign currency on accrual | 0 | 0 | |||
Accrued restructuring, ending balance | 42,290 | 41,201 | 42,290 | ||
Reduction of Operating Costs Action | |||||
Summary of the Company's special charges and accruals related to ongoing actions, Balance Sheet | |||||
Accrued restructuring, beginning balance | 18,522 | 5,137 | 5,137 | ||
Severance and other payments | (8,316) | (2,798) | |||
Effect of foreign currency on accrual | (21) | 66 | |||
Accrued restructuring, ending balance | 10,185 | 18,522 | 10,185 | ||
Early Retirement Action | |||||
Summary of the Company's special charges and accruals related to ongoing actions, Balance Sheet | |||||
Accrued restructuring, beginning balance | 25,750 | 32,211 | 32,211 | ||
Fiscal 2018 special charges | 0 | 0 | |||
Severance and other payments | (6,234) | (6,461) | |||
Effect of foreign currency on accrual | 0 | 0 | |||
Accrued restructuring, ending balance | 19,516 | 25,750 | 19,516 | ||
Workforce Reductions Plan 2018 | |||||
Summary of the Company's special charges and accruals related to ongoing actions, Balance Sheet | |||||
Fiscal 2018 special charges | 58,407 | ||||
Workforce Reductions Plan 2018 | Facility Closing | |||||
Summary of the Company's special charges and accruals related to ongoing actions, Balance Sheet | |||||
Fiscal 2018 special charges | 1,089 | 41,201 | 42,290 | ||
Workforce Reductions Plan 2018 | Reduction of Operating Costs Action | |||||
Summary of the Company's special charges and accruals related to ongoing actions, Balance Sheet | |||||
Fiscal 2018 special charges | $ 0 | $ 16,117 | |||
Workforce Reductions Plan 2018 | Early Retirement Action | |||||
Summary of the Company's special charges and accruals related to ongoing actions, Balance Sheet | |||||
Fiscal 2018 special charges | $ 0 |
Special Charges (Textual) (Deta
Special Charges (Textual) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
May 05, 2018USD ($)employee | Feb. 03, 2018USD ($)employee | Apr. 29, 2017USD ($) | Jan. 28, 2017USD ($)employee | Apr. 30, 2016USD ($)employee | May 05, 2018USD ($)employee | Apr. 29, 2017USD ($) | Oct. 28, 2017USD ($) | Oct. 29, 2016USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||||||
Special charges | $ 1,089 | $ 0 | $ 58,407 | $ 49,463 | |||||
Early Retirement Action | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Special charges | 0 | $ 0 | |||||||
Workforce Reductions Plan 2018 | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Special charges | 58,407 | ||||||||
Workforce Reductions Plan 2018 | Facility Closing | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Special charges | 1,089 | 41,201 | $ 42,290 | ||||||
Number of manufacturing, engineering and selling, marketing, general and administrative employees related to operating costs action | employee | 1,249 | ||||||||
Workforce Reductions Plan 2018 | Reduction of Operating Costs Action | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Special charges | $ 0 | $ 16,117 | |||||||
Number of employees still employed who are planned to be separated | employee | 11 | ||||||||
Workforce Reductions Plan 2018 | Early Retirement Action | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Special charges | $ 0 | ||||||||
Workforce Reductions Plan 2016 | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Special charges | $ 13,684 | ||||||||
Workforce Reductions Plan 2016 | Facility Closing | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Special charges | 0 | ||||||||
Workforce Reductions Plan 2016 | Reduction of Operating Costs Action | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Special charges | $ 13,700 | 13,684 | |||||||
Number of manufacturing, engineering and selling, marketing, general and administrative employees related to operating costs action | employee | 123 | ||||||||
Number of employees still employed who are planned to be separated | employee | 5 | ||||||||
Workforce Reductions Plan 2016 | Early Retirement Action | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Special charges | $ 0 | ||||||||
Workforce Reductions Plan 2017 | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Special charges | $ 49,463 | ||||||||
Workforce Reductions Plan 2017 | Facility Closing | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Special charges | 0 | ||||||||
Workforce Reductions Plan 2017 | Reduction of Operating Costs Action | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Special charges | $ 8,100 | 8,126 | |||||||
Number of manufacturing, engineering and selling, marketing, general and administrative employees related to operating costs action | employee | 126 | 177 | |||||||
Number of employees still employed who are planned to be separated | employee | 3 | ||||||||
Workforce Reductions Plan 2017 | Early Retirement Action | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Special charges | $ 41,300 | $ 41,337 | |||||||
Number of manufacturing, engineering and selling, marketing, general and administrative employees related to operating costs action | employee | 225 | ||||||||
Number of employees still employed who are planned to be separated | employee | 2 |
Segment Information (Textual) (
Segment Information (Textual) (Details) | 3 Months Ended |
May 05, 2018segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Number of operating segments | 8 |
Segment Information - Revenue T
Segment Information - Revenue Trends by Segment (Table) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
May 05, 2018 | Apr. 29, 2017 | May 05, 2018 | Apr. 29, 2017 | |
Revenue Trends | ||||
Revenue | $ 1,513,053 | $ 1,147,982 | $ 3,031,677 | $ 2,132,431 |
Year over Year Change (as percent) | 32.00% | 42.00% | ||
Operating Segments | Industrial | ||||
Revenue Trends | ||||
Revenue | $ 788,281 | $ 536,437 | $ 1,529,179 | $ 932,865 |
Percent of Revenue (as percent) | 52.00% | 47.00% | 50.00% | 44.00% |
Year over Year Change (as percent) | 47.00% | 64.00% | ||
Operating Segments | Automotive | ||||
Revenue Trends | ||||
Revenue | $ 238,839 | $ 185,871 | $ 492,477 | $ 329,234 |
Percent of Revenue (as percent) | 16.00% | 16.00% | 16.00% | 15.00% |
Year over Year Change (as percent) | 28.00% | 50.00% | ||
Operating Segments | Consumer | ||||
Revenue Trends | ||||
Revenue | $ 198,063 | $ 211,575 | $ 437,031 | $ 481,928 |
Percent of Revenue (as percent) | 13.00% | 18.00% | 14.00% | 23.00% |
Year over Year Change (as percent) | (6.00%) | (9.00%) | ||
Operating Segments | Communications | ||||
Revenue Trends | ||||
Revenue | $ 287,870 | $ 214,099 | $ 572,990 | $ 388,404 |
Percent of Revenue (as percent) | 19.00% | 19.00% | 19.00% | 18.00% |
Year over Year Change (as percent) | 34.00% | 48.00% |
Segment Information - Revenue48
Segment Information - Revenue Trends by Geographic Region (Table) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
May 05, 2018 | Apr. 29, 2017 | May 05, 2018 | Apr. 29, 2017 | |
Revenue Trends by Geographic Region [Abstract] | ||||
Revenue | $ 1,513,053 | $ 1,147,982 | $ 3,031,677 | $ 2,132,431 |
United States | ||||
Revenue Trends by Geographic Region [Abstract] | ||||
Revenue | 502,258 | 422,328 | 1,042,033 | 853,326 |
Rest of North and South America | ||||
Revenue Trends by Geographic Region [Abstract] | ||||
Revenue | 26,208 | 27,630 | 50,694 | 50,587 |
Europe | ||||
Revenue Trends by Geographic Region [Abstract] | ||||
Revenue | 364,563 | 293,178 | 722,799 | 519,513 |
Japan | ||||
Revenue Trends by Geographic Region [Abstract] | ||||
Revenue | 183,003 | 96,289 | 364,228 | 185,180 |
China | ||||
Revenue Trends by Geographic Region [Abstract] | ||||
Revenue | 282,465 | 198,209 | 550,589 | 351,192 |
Rest of Asia | ||||
Revenue Trends by Geographic Region [Abstract] | ||||
Revenue | $ 154,556 | $ 110,348 | $ 301,334 | $ 172,633 |
Fair Value - Textual (Details)
Fair Value - Textual (Details) - USD ($) $ in Millions | May 05, 2018 | Oct. 28, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and held to maturity investments | $ 342.9 | $ 296.2 |
Level 3 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 9.5 | $ 7.8 |
Fair Value - Assets and Liabili
Fair Value - Assets and Liabilities (Details) - USD ($) $ in Thousands | May 05, 2018 | Oct. 28, 2017 |
Other assets: | ||
Interest rate derivatives | $ 0 | |
Recurring | ||
Other assets: | ||
Deferred compensation investments | $ 38,433 | 33,510 |
Interest rate derivatives | 5,603 | 2,966 |
Total assets measured at fair value | 507,689 | 788,154 |
Liabilities | ||
Forward foreign currency exchange contracts | 1,875 | 1,527 |
Total liabilities measured at fair value | 1,875 | 1,527 |
Amortized cost | 164,800 | 238,900 |
Recurring | Government and institutional money market funds | ||
Available-for-sale: | ||
Cash equivalents: | 298,914 | 512,882 |
Recurring | Corporate Obligations | ||
Available-for-sale: | ||
Cash equivalents: | 164,739 | 238,796 |
Recurring | Level 1 | ||
Other assets: | ||
Deferred compensation investments | 38,433 | 33,510 |
Interest rate derivatives | 0 | |
Total assets measured at fair value | 337,347 | 546,392 |
Liabilities | ||
Forward foreign currency exchange contracts | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Recurring | Level 1 | Government and institutional money market funds | ||
Available-for-sale: | ||
Cash equivalents: | 298,914 | 512,882 |
Recurring | Level 1 | Corporate Obligations | ||
Available-for-sale: | ||
Cash equivalents: | 0 | 0 |
Recurring | Level 2 | ||
Other assets: | ||
Deferred compensation investments | 0 | 0 |
Interest rate derivatives | 5,603 | 2,966 |
Total assets measured at fair value | 170,342 | 241,762 |
Liabilities | ||
Forward foreign currency exchange contracts | 1,875 | 1,527 |
Total liabilities measured at fair value | 1,875 | 1,527 |
Recurring | Level 2 | Government and institutional money market funds | ||
Available-for-sale: | ||
Cash equivalents: | 0 | 0 |
Recurring | Level 2 | Corporate Obligations | ||
Available-for-sale: | ||
Cash equivalents: | $ 164,739 | $ 238,796 |
Fair Value Fair Value - Debt (
Fair Value Fair Value - Debt (Details) - USD ($) | Nov. 10, 2017 | May 05, 2018 | Oct. 28, 2017 |
3-Year term loan | Unsecured debt term | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt term | 3 years | 3 years | |
5-Year term loan | Unsecured debt term | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt term | 5 years | 5 years | |
Long-term Debt | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Principal | $ 7,030,000,000 | $ 7,900,000,000 | |
Fair Value | 6,956,074,000 | 8,010,183,000 | |
Long-term Debt | 3-Year term loan | Unsecured debt term | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Principal | 1,080,000,000 | 1,950,000,000 | |
Fair Value | 1,080,000,000 | 1,950,000,000 | |
Long-term Debt | 5-Year term loan | Unsecured debt term | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Principal | 1,350,000,000 | 2,100,000,000 | |
Fair Value | 1,350,000,000 | 2,100,000,000 | |
Long-term Debt | 2020 Notes, due March 2020 | Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Principal | 300,000,000 | 0 | |
Fair Value | 298,710,000 | 0 | |
Long-term Debt | 2021 Notes, due January 2021 | Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Principal | 450,000,000 | 0 | |
Fair Value | 446,030,000 | 0 | |
Long-term Debt | 2021 Notes, due December 2021 | Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Principal | 400,000,000 | 400,000,000 | |
Fair Value | 387,367,000 | 399,530,000 | |
Long-term Debt | 2023 Notes, due June 2023 | Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Principal | 500,000,000 | 500,000,000 | |
Fair Value | 479,674,000 | 498,582,000 | |
Long-term Debt | 2023 Notes, due December 2023 | Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Principal | 550,000,000 | 550,000,000 | |
Fair Value | 532,478,000 | 554,411,000 | |
Long-term Debt | 2025 Notes, due December 2025 | Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Principal | 850,000,000 | 850,000,000 | |
Fair Value | 843,016,000 | 884,861,000 | |
Long-term Debt | 2026 Notes, due December 2026 | Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Principal | 900,000,000 | 900,000,000 | |
Fair Value | 858,347,000 | 902,769,000 | |
Long-term Debt | 2036 Notes, due December 2036 | Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Principal | 250,000,000 | 250,000,000 | |
Fair Value | 245,621,000 | 259,442,000 | |
Long-term Debt | 2045 Notes, due December 2045 | Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Principal | 400,000,000 | 400,000,000 | |
Fair Value | $ 434,831,000 | $ 460,588,000 |
Derivatives (Textual) (Details)
Derivatives (Textual) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
May 05, 2018 | Oct. 28, 2017 | |
Derivative [Line Items] | ||
Contracts period | one year or less | |
Term of contract | 1 year | |
Derivative liability | $ 1,875 | $ 1,527 |
Forward Contracts | ||
Derivative [Line Items] | ||
Notional amount of cash flow hedges | 193,100 | 194,300 |
Notional amount of undesignated hedges | 61,800 | 100,400 |
Fair value of derivative | $ 800 | |
Derivative liability | $ 1,800 |
Derivatives - Forward Foreign C
Derivatives - Forward Foreign Currency (Table) (Details) - Forward foreign currency exchange contracts - USD ($) $ in Thousands | May 05, 2018 | Oct. 28, 2017 |
Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency contracts, assets | $ 0 | $ 257 |
Accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency contracts, liability | $ 1,093 | $ 0 |
Derivative - Net Amounts (Table
Derivative - Net Amounts (Table) (Details) - USD ($) $ in Thousands | May 05, 2018 | Oct. 28, 2017 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross amount of recognized liabilities | $ (4,355) | $ (5,039) |
Gross amounts of recognized assets offset in the condensed consolidated balance sheet | 2,480 | 3,512 |
Net liabilities presented in the condensed consolidated balance sheet | $ (1,875) | $ (1,527) |
Goodwill and Intangible Asset55
Goodwill and Intangible Assets (Textual) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
May 05, 2018 | Apr. 29, 2017 | May 05, 2018 | Apr. 29, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 143,000 | $ 88,800 | $ 285,004 | $ 108,717 |
Remaining amortization period | 5 years |
Goodwill and Intangible Asset56
Goodwill and Intangible Assets - Changes in Goodwill (Table) (Details) $ in Thousands | 6 Months Ended |
May 05, 2018USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 12,217,455 |
Goodwill related to acquisitions | 36,756 |
Foreign currency translation adjustment | 3,974 |
Balance at end of period | $ 12,258,185 |
Goodwill and Intangible Asset57
Goodwill and Intangible Assets - Intangible Assets (Table) (Details) - USD ($) $ in Thousands | May 05, 2018 | Oct. 28, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 5,909,158 | $ 5,877,620 |
Accumulated Amortization | 842,967 | 558,195 |
IPR&D | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 20,768 | 24,334 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 4,694,597 | 4,683,461 |
Accumulated Amortization | 658,049 | 449,369 |
Technology-based | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,120,204 | 1,097,025 |
Accumulated Amortization | 172,621 | 101,920 |
Trade-name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 73,589 | 72,800 |
Accumulated Amortization | $ 12,297 | $ 6,906 |
Goodwill and Intangible Asset58
Goodwill and Intangible Assets - Amortization Expense (Table) (Details) $ in Thousands | May 05, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of fiscal 2018 | $ 285,198 |
2,019 | 569,407 |
2,020 | 568,884 |
2,021 | 568,348 |
2,022 | $ 565,418 |
Debt (Textual) (Details)
Debt (Textual) (Details) - USD ($) | Mar. 12, 2018 | Nov. 10, 2017 | May 05, 2018 | Apr. 29, 2017 | Oct. 28, 2017 |
Debt Instrument [Line Items] | |||||
Proceeds from debt | $ 743,778,000 | $ 11,156,164,000 | |||
Repayments of debt | 1,620,000,000 | $ 0 | |||
Debt, current | $ 56,000,000 | $ 300,000,000 | |||
Unsecured debt term | |||||
Debt Instrument [Line Items] | |||||
Proceeds from debt, net | $ 743,800,000 | ||||
Unsecured debt term | 2020 Notes, due March 2020 | |||||
Debt Instrument [Line Items] | |||||
Proceeds from debt | $ 300,000,000 | ||||
Interest rate | 2.85% | ||||
Unsecured debt term | 2021 Notes, due January 2021 | |||||
Debt Instrument [Line Items] | |||||
Proceeds from debt | $ 450,000,000 | ||||
Interest rate | 2.95% | ||||
Unsecured debt term | 5-Year term loan | |||||
Debt Instrument [Line Items] | |||||
Debt term | 5 years | 5 years | |||
Repayments of debt | $ 750,000,000 | ||||
Unsecured debt term | 3-Year term loan | |||||
Debt Instrument [Line Items] | |||||
Debt term | 3 years | 3 years | |||
Repayments of debt | $ 300,000,000 | $ 570,000,000 |
Inventories (Table) (Details)
Inventories (Table) (Details) - USD ($) $ in Thousands | May 05, 2018 | Oct. 28, 2017 | |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 34,234 | $ 35,436 | |
Work in process | 355,273 | 376,476 | |
Finished goods | 161,713 | 138,904 | |
Total inventories | [1] | $ 551,220 | $ 550,816 |
[1] | Includes $5,360 and $5,373 related to stock-based compensation at May 5, 2018 and October 28, 2017, respectively. |
Acquisitions (Textual) (Details
Acquisitions (Textual) (Details) - Linear Technology Corporation - USD ($) $ in Millions | Mar. 10, 2017 | Feb. 03, 2018 |
Business Acquisition [Line Items] | ||
Consideration transferred | $ 15,800 | |
Goodwill adjustment | $ 1.6 | |
Intangibles adjustment | 4.7 | |
Accounts receivable adjustment | 2.7 | |
Liabilities adjustment | 2.4 | |
Deferred tax liabilities adjustment | $ 1.1 |
Acquisitions - Unaudited Pro Fo
Acquisitions - Unaudited Pro Forma Consolidated Financial Information (Table) (Details) - Linear Technology Corporation - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended |
Apr. 29, 2017 | Apr. 29, 2017 | |
Business Acquisition [Line Items] | ||
Revenue | $ 1,346,540 | $ 2,708,987 |
Net income | $ 128,462 | $ 364,463 |
Basic net income per common share (in dollars per share) | $ 0.35 | $ 1 |
Diluted net income per common share (in dollars per share) | $ 0.35 | $ 0.98 |
Income Taxes (Textual) (Details
Income Taxes (Textual) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
May 05, 2018 | Feb. 03, 2018 | Jan. 28, 2017 | May 05, 2018 | Nov. 03, 2018 | |
Operating Loss Carryforwards [Line Items] | |||||
Federal statutory rate (as percent) | 21.00% | 35.00% | |||
Income tax expense (benefit) | $ 639.7 | ||||
Provisional income tax expense | $ 687.1 | ||||
Transition tax | 751.1 | ||||
Tax benefit related to deferred tax liabilities in prior years | 64 | ||||
Foreign earnings, liability, current | 60.1 | $ 60.1 | |||
Foreign earnings, liability, noncurrent | 691 | 691 | |||
Excess tax benefit | $ 8.2 | $ 10 | $ 18.2 | ||
Forecast | |||||
Operating Loss Carryforwards [Line Items] | |||||
Federal statutory rate (as percent) | 23.40% |
New Accounting Pronouncements (
New Accounting Pronouncements (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |
May 05, 2018 | Feb. 03, 2018 | May 05, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Excess tax benefit | $ 8.2 | $ 10 | $ 18.2 |
Accounting Standards Update 2016-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Excess tax benefit from share-based compensation, operating activities | (26) | ||
Excess tax benefit from share-based compensation, financing activities | $ 26 | $ 26 | |
Weighted average number of shares outstanding, increase during period (in Shares) | 1 |
Subsequent Events (Textual) (De
Subsequent Events (Textual) (Details) - Subsequent event | May 29, 2018$ / shares |
Subsequent Event [Line Items] | |
Common stock cash dividends per share, declared (in dollars per share) | $ 0.48 |
Common Stock | |
Subsequent Event [Line Items] | |
Dividends payable, date declared | May 29, 2018 |
Dividends payable, date to be paid | Jun. 19, 2018 |
Dividends payable, date of record | Jun. 8, 2018 |