Analog Devices (ADI) 10-Q 18 May 10 2010 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information (USD $)
	6 Months Ended May. 01, 2010	May. 02, 2009
Document and Entity Information [Abstract]
Entity Registrant Name	ANALOG DEVICES INC
Entity Central Index Key	0000006281
Document Type	10-Q
Document Period End Date	2010-05-01
Amendment Flag	false
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--10-30
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float		$5,181,000,000
Entity Common Stock, Shares Outstanding	297,981,270

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income (Unaudited) (USD $)
In Thousands, except Per Share data	3 Months Ended May. 01, 2010		3 Months Ended May. 02, 2009		6 Months Ended May. 01, 2010		6 Months Ended May. 02, 2009
Condensed Consolidated Statements of Income
Revenue	$668,240		$474,748		$1,271,223		$951,317
Cost of sales	233,725	[1]	213,196	[1]	468,232	[1]	420,763	[1]
Gross margin	434,515		261,552		802,991		530,554
Operating expenses:
Research and development	122,780	[1]	109,448	[1]	237,178	[1]	229,276	[1]
Selling, marketing, general and administrative	97,660	[1]	82,276	[1]	186,141	[1]	170,122	[1]
Special charge			11,919		16,483		53,656
Total operating expenses	220,440		203,643		439,802		453,054
Operating income	214,075		57,909		363,189		77,500
Nonoperating (income) expense:
Interest expense	2,568				5,106
Interest income	(2,025)		(3,527)		(4,205)		(11,323)
Other, net	(488)		(797)		1		(1,368)
Total nonoperating (income) expenses	55		(4,324)		902		(12,691)
Income from continuing operations before income taxes	214,020		62,233		362,287		90,191
Provision for income taxes	46,880		10,479		75,547		13,852
Income from continuing operations, net of tax					286,740		76,339
Discontinued operations:
Income from discontinued operations, net of tax							364
Gain on sale of discontinued operations, net of tax					859
Total income from discontinued operations, net of tax					859		364
Net income	167,140		51,754		287,599		76,703
Shares used to compute earnings per share - basic	297,825		291,227		296,718		291,207
Shares used to compute earnings per share - diluted	305,836		292,446		305,354		291,847
Basic earnings per share from continuing operations	$0		$0		0.97		0.26
Basic earnings per share	0.56		0.18		0.97		0.26
Diluted earnings per share from continuing operations	$0		$0		0.94		0.26
Diluted earnings per share	0.55		0.18		0.94		0.26
Dividends declared and paid per share	0.2		0.2		0.4		0.4
Includes stock-based compensation expense as follows:
Cost of sales	1,860		1,812		3,531		3,392
Research and development	5,968		6,051		11,327		11,372
Selling, marketing, general and administrative	$5,427		$4,703		$10,232		$9,213
[1]Includes stock-based compensation expense as follows:

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Thousands	3 Months Ended May. 01, 2010		12 Months Ended Oct. 31, 2009
Assets
Cash and cash equivalents	$1,008,372		$639,729
Short-term investments	1,378,367		1,176,244
Accounts receivable, net	332,157		301,036
Inventory:
Raw materials	14,938	[1]	13,373	[1]
Work in process	164,965	[1]	173,696	[1]
Finished goods	67,759	[1]	66,092	[1]
Total inventory	247,662	[1]	253,161	[1]
Deferred tax assets	71,647		78,740
Deferred compensation plan investments	1,637		1,363
Prepaid expenses and other current assets	38,466		40,363
Total current assets	3,078,308		2,490,636
Property, plant and equipment, at cost:
Land and buildings	396,654		395,151
Machinery and equipment	1,520,201		1,511,822
Office equipment	55,512		56,294
Leasehold improvements	67,700		66,847
Gross property, plant and equipment	2,040,067		2,030,114
Less accumulated depreciation and amortization	1,586,723		1,553,598
Net property, plant and equipment	453,344		476,516
Deferred compensation plan investments	7,422		6,580
Other investments	1,640		1,485
Goodwill	255,538		250,881
Intangible assets, net	2,580		6,855
Deferred tax assets	79,906		73,646
Other assets	49,359		35,658
Non-current assets of discontinued operations	0		62,037
Total other assets	396,445		437,142
Total assets	3,928,097		3,404,294
Liabilities and Shareholders' Equity
Accounts payable	104,183		107,334
Deferred income on shipments to distributors, net	206,651		149,278
Income taxes payable	84,787		6,445
Deferred compensation plan liability	1,637		1,363
Accrued liabilities	167,459		122,193
Total current liabilities	564,717		386,613
Long-term debt	383,306		379,626
Deferred income taxes	34,079		36,232
Deferred compensation plan liability	7,412		6,577
Other non-current liabilities	48,333		66,097
Total non-current liabilities	473,130		488,532
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, 297,981,270 shares issued and outstanding (291,861,767 on October 31, 2009)	49,665		48,645
Capital in excess of par value	251,682		56,306
Retained earnings	2,603,619		2,434,446
Accumulated other comprehensive loss	(14,716)		(10,248)
Total shareholders' equity	2,890,250		2,529,149
Total liabilities and shareholders' equity	$3,928,097		$3,404,294
[1]Includes $2,354 and $2,718 related to stock-based compensation at May 1, 2010 and October 31, 2009, respectively.

1_Condensed Consolidated Balanc

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)
In Thousands, except Share data	May. 01, 2010	Oct. 31, 2009
Inventory:
Amount related to stock based compensation	$2,354	$2,718
Shareholders' Equity
Preferred stock, par value	1	1
Preferred stock, shares authorized	471,934	471,934
Preferred stock, shares outstanding	0	0
Common stock, par value	0.166	0.166
Common stock, shares authorized	1,200,000,000	1,200,000,000
Common stock, shares issued	297,981,270	291,861,767
Common stock, shares outstanding	297,981,270	291,861,767

2_Condensed Consolidated Statem

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands	6 Months Ended May. 01, 2010	6 Months Ended May. 02, 2009
Cash flows from operating activities:
Net income	$287,599	$76,703
Adjustments to reconcile net income to net cash provided by operations:
Depreciation	58,194	72,195
Amortization of intangibles	3,580	3,548
Stock-based compensation expense	25,090	23,977
Gain on sale of business	(859)
Excess tax benefit-stock options	(125)	(5)
Deferred income taxes	(8,478)	(1,934)
Non-cash portion of special charge	487	13,768
Other non-cash activity	349	529
Changes in operating assets and liabilities	126,256	(52,875)
Total adjustments	204,494	59,203
Net cash provided by operating activities	492,093	135,906
Cash flows from investing activities:
Purchases of short-term available-for-sale investments	(1,588,302)	(847,583)
Maturities of short-term available-for-sale investments	1,386,041	952,240
Net proceeds (expenditures) from sale of business	63,036	(1,340)
Additions to property, plant and equipment	(34,669)	(34,281)
Decrease (increase) in other assets	841	(4,269)
Net cash (used for) provided by investing activities	(173,053)	64,767
Cash flows from financing activities:
Dividend payments to shareholders	(118,426)	(116,402)
Repurchase of common stock		(3,580)
Net proceeds from employee stock plans	169,153	2,920
Excess tax benefit-stock options	125	5
Net cash provided by (used for) financing activities	50,852	(117,057)
Effect of exchange rate changes on cash	(1,249)	(336)
Net increase in cash and cash equivalents	368,643	83,280
Cash and cash equivalents at beginning of period	639,729	593,599
Cash and cash equivalents at end of period	$1,008,372	$676,879

Basis of Presentation

Basis of Presentation
	6 Months Ended May. 01, 2010
Basis of Presentation [Abstract]
Basis of Presentation	Note 1 Basis of Presentation In the opinion of management, the information furnished in the accompanying condensed consolidated financial statements reflects all normal recurring adjustments that are necessary to fairly state the results for these interim periods and should be read in conjunction with the Companys Annual Report on Form 10-K for the fiscal year ended October31, 2009 and related notes. The results of operations for the interim period shown in this report are not necessarily indicative of the results that may be expected for the fiscal year ending October30, 2010 or any future period. The Company sold its baseband chipset business and related support operations (Baseband Chipset Business) to MediaTek Inc. and sold its CPU voltage regulation and PC thermal monitoring business to certain subsidiaries of ON Semiconductor Corporation during the first quarter of fiscal 2008. The Company has reflected the financial results of these businesses as discontinued operations in the consolidated statements of income for all periods presented. The assets and liabilities of these businesses are reflected as assets and liabilities of discontinued operations in the consolidated balance sheet as of October31, 2009. The Company has a 52-53week fiscal year that ends on the Saturday closest to the last day in October. Fiscal 2010 and fiscal 2009 are 52-week fiscal years. Certain amounts reported in previous years have been reclassified to conform to the fiscal 2010 presentation. Such reclassified amounts were immaterial.

Revenue Recognition

Revenue Recognition
	6 Months Ended May. 01, 2010
Revenue Recognition [Abstract]
Revenue Recognition	Note 2 Revenue Recognition Revenue from product sales to customers is generally recognized when title passes, which for shipments to certain foreign countries is subsequent to product shipment. Title for these shipments ordinarily passes within a week of shipment. A reserve for sales returns and allowances for customers is recorded based on historical experience or specific identification of an event necessitating a reserve. In all regions of the world, the Company defers revenue and the related cost of sales on shipments to distributors until the distributors resell the products to their customers. Therefore, the Companys product revenue fully reflects end customer purchases and is not impacted by distributor inventory levels. Sales to distributors are made under agreements that allow 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 Companys shipments to that distributor during the prior quarter. In addition, distributors are allowed to return unsold products if the Company terminates the relationship with the distributor. Distributors are granted price-adjustment credits related to many of their sales to their customers. Price adjustment credits are granted when the distributors standard cost (i.e., the Companys 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 to 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. 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 such product in the distributors inventory at the time of the price decrease. Given the uncertainties associated with the levels of price adjustment credits to be granted to 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 distributors until the distributors have sold the products to their customers. 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 Companys standard payment terms. The

Stock-Based Compensation

Stock-Based Compensation
	6 Months Ended May. 01, 2010
Stock-Based Compensation [Abstract]
Stock-Based Compensation	Note 3 Stock-Based Compensation Grant-Date Fair Value The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of an award. Information pertaining to the Companys stock option awards and the related estimated weighted-average assumptions used to calculate the fair value of stock options granted during the three- and six-month periods ended May1, 2010 and May2, 2009 are as follows: Three Months Ended Six Months Ended Stock Options May 1, 2010 May 2, 2009 May 1, 2010 May 2, 2009 Options granted (in thousands) 26 195 1,838 5,615 Weighted-average exercise price per share $ 29.73 $ 19.99 $ 31.53 $ 19.57 Weighted-average grant-date fair value per share $ 6.62 $ 6.17 $ 7.78 $ 7.43 Assumptions: Weighted-average expected volatility 29.1 % 47.8 % 31.4 % 59.1 % Weighted-average expected term (in years) 5.3 5.3 5.3 5.3 Risk-free interest rate 2.4 % 1.7 % 2.6 % 1.7 % Expected dividend yield 2.7 % 4.0 % 2.5 % 4.1 % Expected volatility The Company is responsible for estimating volatility and has considered a number of factors, including third-party estimates, when estimating volatility. The Company currently believes that the exclusive use of implied volatility results in the best estimate of the grant-date fair value of employee stock options because it reflects the markets current expectations of future volatility. In evaluating the appropriateness of exclusively relying on implied volatility, the Company concluded that: (1)options in the Companys common stock are actively traded with sufficient volume on several exchanges; (2)the market prices of both the traded options and the underlying shares are measured at a similar point in time to each other and on a date close to the grant date of the employee share options; (3)the traded options have exercise prices that are both near-the-money and close to the exercise price of the employee share options; and (4)the maturities of the traded options used to estimate volatility are at least one year. Expected term The Company uses historical employee exercise and option expiration data to estimate the expected term assumption for the Black-Scholes grant-date valuation. The Company believes that this historical data is currently the best estimate of the expected term of a new option, and that generally its employees exhibit similar exercise behavior. Risk-free interest rate The yield on zero-coupon U.S. Treasury securities for a period that is commensurate with the expected term assumption is used as the risk-free interest rate. Expected dividend yield Expected dividend yield is calculated by annualizing the cash dividend declared by the Companys Board of Directors for the current quarter and dividing that result by the closing stock price on the date of grant. Until such time as the Companys Board of Directors declares a cash dividend for an amount that is different from the current quarters cash divide

Comprehensive Income

Comprehensive Income
	6 Months Ended May. 01, 2010
Comprehensive Income [Abstract]
Comprehensive Income	Note 4 Comprehensive Income Components of comprehensive income include net income and certain transactions that have generally been reported in the consolidated statement of shareholders equity and consist of the following: Three Months Ended May 1, 2010 May 2, 2009 Net income $ 167,140 $ 51,754 Foreign currency translation adjustments 1,549 5,546 Change in unrealized holding losses (net of taxes of $21 and $54, respectively) on securities classified as short-term investments (158 ) (399 ) Change in unrealized holding gains (net of taxes of $63 and $142, respectively) on securities classified as other investments 117 263 Change in unrealized (losses)gains (net of taxes of $309 and $1,459, respectively) on derivative instruments designated as cash flow hedges (1,761 ) 8,906 Pension plans Prior service cost Transition obligation (1 ) (4 ) Net actuarial gain (loss) 339 (225 ) Other comprehensive income 85 14,087 Comprehensive income $ 167,225 $ 65,841 Six Months Ended May 1, 2010 May 2, 2009 Income from continuing operations, net of tax $ 286,740 $ 76,339 Foreign currency translation adjustments 3,681 4,174 Change in unrealized holding losses (net of taxes of $16 and $350, respectively) on securities classified as short-term investments (122 ) (2,481 ) Change in unrealized holding gains (net of taxes of $54 and $230, respectively) on securities classified as other investments 100 100 Change in unrealized (losses)gains (net of taxes of $1,365 and $2,501, respectively) on derivative instruments designated as cash flow hedges (8,766 ) 17,127 Pension plans Prior service cost (1 ) 1 Transition asset (obligation) 1 (8 ) Net actuarial gain (loss) 639 (901 ) Other comprehensive (loss)income (4,468 ) 18,012 Comprehensive income from continuing operations 282,272 94,351 Income from discontinued operations, net of tax 859 364 Comprehensive income $ 283,131 $ 94,715 The components of accumulated other comprehensive income at May1, 2010 and October31, 2009 consisted of the following: May 1, 2010 October 31, 2009 Foreign currency translation adjustment $ (3,795 ) $ (7,476 ) Unrealized gain on available-for-sale securities 837 932 Unrealized losses on available-for-sale securities (503 ) (576 ) Unrealized (losses)gains on derivative instruments (3,157 ) 5,609 Pension plans Prior service cost (1 ) Transition obligation (48 ) (49 ) Net actuarial loss (8,049 ) (8,688 ) Total accumulated other compr

Earnings Per Share

Earnings Per Share
	6 Months Ended May. 01, 2010
Earnings Per Share [Abstract]
Earnings Per Share	Note 5 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 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, restricted stock, and RSUs that are in-the-money. This results in the assumed buyback of additional shares, thereby reducing the dilutive impact of stock options. Potential shares related to certain of the Companys outstanding stock options were excluded because they were anti-dilutive. Those potential shares, determined based on the weighted average exercise prices during the respective years, related to the Companys outstanding stock options could be dilutive in the future. Three Months Ended May 1, 2010 May 2, 2009 Basic: Net income $ 167,140 $ 51,754 Weighted-average shares outstanding 297,825 291,227 Earnings per share: $ 0.56 $ 0.18 Diluted: Net income $ 167,140 $ 51,754 Weighted-average shares outstanding 297,825 291,227 Assumed exercise of common stock equivalents 8,011 1,219 Weighted-average common and common equivalent shares 305,836 292,446 Earnings per share: $ 0.55 $ 0.18 Anti-dilutive common stock equivalents related to outstanding stock options 19,725 60,695 Six Months Ended May 1, 2010 May 2, 2009 Income from continuing operations, net of tax $ 286,740 $ 76,339 Total income from discontinued operations, net of tax 859 364 Net income $ 287,599 $ 76,703 Basic shares: Weighted-average shares outstanding 296,718 291,207 Earnings per share-basic: Income from continuing operations, net of tax $ 0.97 $ 0.26 Total income from discontinued operations, net of tax 0.00 0.00 Net income $ 0.97 $ 0.26 Diluted shares: Weighted-average shares outstanding 296,718 291,207 Assumed exercise of common stock equivalents 8,636 640 Weighted-average common and common equivalent shares 305,354 291,847 Earnings per share-diluted: Income from continuing operations, net of tax $ 0.94 $ 0.26 Total income from discontinued operations, net of tax

Special Charges

Special Charges
	6 Months Ended May. 01, 2010
Special Charges [Abstract]
Special Charges	Note 6 Special Charges A summary of the Companys special charges is as follows: Consolidation Closure of Closure of Wafer of a Wafer Reduction Wafer Fabrication Fabrication of Fabrication Facility Facility in Operating Facility Total Special Income Statement in Sunnyvale Limerick Costs in Cambridge Charges Fiscal 2005 Charges: Workforce reductions $ 20,315 $ $ $ $ 20,315 Total Fiscal 2005 Charges $ 20,315 $ $ $ $ 20,315 Fiscal 2006 Charges: Facility closure costs Abandonment of equipment Other items Change in estimate (2,029 ) (2,029 ) Workforce reductions Total Fiscal 2006 Charges $ (2,029 ) $ $ $ $ (2,029 ) Fiscal 2007 Charges: Facility closure costs 10,288 10,288 Workforce reductions 13,748 13,748 Other items Change in estimate Total Fiscal 2007 Charges $ 10,288 $ 13,748 $ $ $ 24,036 Fiscal 2008 Charges: Workforce reductions 1,627 1,627 Change in estimate 1,461 1,461 Total Fiscal 2008 Charges $ $ 1,461 $ 1,627 $ $ 3,088 Fiscal 2009 Charges: Workforce reductions 26,583 7,446 34,029 Facility closure costs 1,191 2,411 57 3,659 Non-cash impairment charge 839 14,629 15,468 Other items 500 500 Total Fiscal 2009 Charges $ $ 1,191 $ 30,333 $ 22,132 $ 53,656 Fiscal 2010 Charges: Workforce reductions 10,908 10,908 Facility closure costs 375 4,689 5,064 Non-cash impairment charge 487 487 Other items 24 24 Total Fiscal 2010 Charges $ 375 $ $ 11,419 $ 4,689 $ 16,483 Consolidation Closure of of a Wafer Wafer Closure of Wafer Fabrication Reduction of Fabrication Fabrication Facility Facility in Operating Facility Total Special Balance Sheet in Sunnyvale Limerick Costs in Cambridge Charge

Segment Information

Segment Information
	6 Months Ended May. 01, 2010
Segment Information [Abstract]
Segment Information	Note 7 Segment Information The Company operates and tracks its results in one reportable segment based on the aggregation of five operating segments. The Company designs, develops, manufactures and markets a broad range of integrated circuits. The Chief Executive Officer has been identified as the Chief Operating Decision Maker. Revenue Trends by End Market The categorization of revenue by end market is determined using a variety of data points including the technical characteristics of the product, the sold to customer information, the ship to customer information and the end customer product or application into which the Companys 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 Three Months Ended May 1, 2010 May 2, 2009 % of % of Revenue Revenue* Y/Y% Revenue Revenue Industrial $ 316,203 47 % 54 % $ 205,176 43 % Automotive 83,472 12 % 105 % 40,708 9 % Consumer 119,518 18 % 45 % 82,368 17 % Communications 133,480 20 % (1 %) 134,625 28 % Computer 15,567 2 % 31 % 11,871 3 % Total revenue $ 668,240 100 % 41 % $ 474,748 100 % * The sum of the individual percentages may not equal the total due to rounding. Six Months Ended Six Months Ended May 1, 2010 May 2, 2009 % of % of Revenue Revenue Y/Y% Revenue Revenue Industrial $ 579,193 46 % 36 % $ 426,452 45 % Automotive 156,529 12 % 94 % 80,495 8 % Consumer 236,591 19 % 50 % 158,071 17 % Communications 269,857 21 % 4 % 260,668 27 % Computer 29,053 2 % 13 % 25,631 3 % Total revenue $ 1,271,223 100 % 34 % $ 951,317 100 % Revenue Trends by Product Type The following table summarizes revenue by product categories. The categorization of the Companys products into broad categories is based on the characteristics of the individual products, the specification of the products and in some cases the specific uses that certain products have within applications. The categorization of products into categories is therefore subject to judgment in some cases and can vary over time. In instances where products move between product categories, the Company reclassifies the amounts in the product categories for all prior periods. Such reclassifications typically do not materially change the s

Fair Value

Fair Value
	6 Months Ended May. 01, 2010
Fair Value [Abstract]
Fair Value	Note 8 Fair Value The Company defines fair value as the price that would be received to sell an asset or 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. As of May 1, 2010, the Company held no assets or liabilities valued using Level 3 inputs. The table below sets forth by level the Companys financial assets and liabilities that were accounted for at fair value as of May1, 2010. The table does not include cash on hand and also does not include assets and liabilities that are measured at historical cost or any basis other than fair value. Fair Value measurement at Reporting Date using: Portion of Carrying Quoted Prices Significant Value in Active Other Measured at Markets for Observable Fair Value Identical Assets Inputs May 1, 2010 (Level 1) (Level 2) Assets Cash Equivalents: Institutional money market funds $ 900,027 $ 900,027 $ Corporate Obligations 84,971 84,971 Euro time deposits 4,018 4,018 Shortterm investments: Corporate obligations 1,378,367 1,378,367 Other Assets: Forward foreign currency exchange contracts 46 46 Deferred compensation investments 9,059 9,059 Other investments 1,640 1,640 Interest rate swap agreements 9,630 9,630 Total assets measured at fair value $ 2,387,758 $ 910,726 $ 1,477,032 Liabilities Forward foreign currency exchange contracts (1) $ 4,019 $ $ 4,019 Long-term debt 383,306 383,306 Total liabilities measured at fair value $ 387,325 $ $ 38

Derivatives

Derivatives
	6 Months Ended May. 01, 2010
Derivatives [Abstract]
Derivatives	Note 9 Derivatives Foreign Exchange Exposure Management The Company enters into forward foreign currency exchange contracts to offset certain operational and balance sheet exposures from the impact of changes in foreign currency exchange rates. Such exposures result from the portion of the Companys operations, assets and liabilities that are denominated in currencies other than the U.S. dollar, primarily the Euro; other exposures include the Philippine Peso 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 instrument reported as a component of accumulated other comprehensive (loss)income (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. Additionally, the Company enters into forward foreign currency contracts that economically hedge the gains and losses generated by the remeasurement 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 May1, 2010, the total notional amount of these undesignated hedges was $56.9million. The fair value of these hedging instruments in the Companys condensed consolidated balance sheet as of May1, 2010 was $0.2million. Interest Rate Exposure Management On June30, 2009, the Company entered into interest rate swap transactions related to its outstanding 5% senior unsecured notes where the Company swapped the notional amount of its $375million of fixed rate debt at 5.0% into floating interest rate debt through July1, 2014. Under the terms of the swaps, the Company will (i)receive on the $375million notional amount a 5.0% annual interest payment that is paid in two installments on the 1st of every January and July, commencing January1, 2010 through and ending on the maturity date; and (ii)pay on the $375million notional amount an annual three-month LIBOR plus 2.05% (2.34% as of May1, 2010) interest payment, payable in four installments on the 1st of every January, April, July and October, commencing on

Goodwill and Intangible Assets

Goodwill and Intangible Assets
	6 Months Ended May. 01, 2010
Goodwill and Intangible Assets [Abstract]
Goodwill and Intangible Assets	Note 10 Goodwill and Intangible Assets Goodwill The Company annually evaluates goodwill for impairment 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 (operating segment or one level below an operating segment) on an annual basis in the fourth quarter or more frequently if indicators of impairment exist. The performance of the test involves a two-step process. The first step of the impairment test involves comparing the fair values of the applicable reporting units with their aggregate carrying values, including goodwill. The Company generally determines the fair value of its reporting units using the income approach methodology of valuation that includes the discounted cash flow method as well as other generally accepted valuation methodologies. If the carrying amount of a reporting unit exceeds the reporting units fair value, the Company performs the second step of the goodwill impairment test to determine the amount of impairment loss. The second step of the goodwill impairment test involves comparing the implied fair value of the affected reporting units goodwill with the carrying value of that goodwill. No impairment of goodwill resulted from the Companys most recent impairment evaluation of goodwill, which occurred in the fourth quarter of fiscal 2009. No impairment of goodwill resulted in any of the fiscal years presented. The Companys next annual impairment assessment will be made in the fourth quarter of fiscal 2010 unless indicators arise that would require the Company to reevaluate at an earlier date. The following table presents the changes in goodwill during the first six months of fiscal 2010: Six Months Ended May 1, 2010 Balance at beginning of period $ 250,881 Foreign currency translation adjustment 4,657 Balance at end of period $ 255,538 Intangible Assets The Company reviews identified 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 measured by comparison of their carrying value to future undiscounted cash flows the assets are expected to generate over their remaining economic 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 fair value determined by either a quoted market price, if any, or a value determined by utilizing a discounted cash flow technique. Intangible assets, which will continue to be amortized, consisted of the following: May 1, 2010 October 31, 2009 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Amount Amortization Technology-based $ 39,958 $ 38,134 $ 39,924 $ 34,213 Tradename 1,496 1,496 1,478 1,478 Customer Relationships 4,978 4,222 5,181 4,037

Pension Plans

Pension Plans
	6 Months Ended May. 01, 2010
Pension Plans [Abstract]
Pension Plans	Note 11 Pension Plans The Company has various defined benefit pension and other retirement plans for certain non-U.S. employees that are consistent with local statutory requirements and practices. The Companys funding policy for its foreign defined benefit pension plans is consistent with the local requirements of each country. The plans assets consist primarily of U.S. and non-U.S. equity securities, bonds, property and cash. Net periodic pension cost of non-U.S. plans is presented in the following table: Three Months Ended May 1, 2010 May 2, 2009 Service cost $ 1,478 $ 1,530 Interest cost 2,401 2,277 Expected return on plan assets (2,772 ) (2,556 ) Amortization of prior service cost 1 Amortization of initial net asset (7 ) (9 ) Amortization of net gain (25 ) (124 ) Net periodic pension cost $ 1,075 $ 1,119 Six Months Ended May 1, 2010 May 2, 2009 Service cost $ 2,985 $ 3,082 Interest cost 4,865 4,578 Expected return on plan assets (5,621 ) (5,139 ) Amortization of prior service cost 2 Amortization of initial net asset (14 ) (19 ) Amortization of net gain (49 ) (249 ) Net periodic pension cost $ 2,166 $ 2,255 Pension contributions of $2.1million and $25.3million were made by the Company during the three and six months ended May1, 2010. The Company presently anticipates contributing an additional $3.4million to fund its defined benefit pension plans in fiscal year 2010 for a total of $28.7million.

Revolving Credit Facility

Revolving Credit Facility
	6 Months Ended May. 01, 2010
Revolving Credit Facility [Abstract]
Revolving Credit Facility	Note 12 Revolving Credit Facility As of May1, 2010, the Company had $2,386.7million of cash and cash equivalents and short term investments, of which $728.2million was held in the United States. The balance of the Companys cash and cash equivalents and short term investments was held outside the United States in various foreign subsidiaries. As the Company intends to reinvest certain of its foreign earnings indefinitely, this cash is not available to meet certain of the Companys cash requirements in the United States, including for cash dividends and common stock repurchases. The Company entered into a five-year, $165million unsecured revolving credit facility with certain institutional lenders in May2008. To date, the Company has not borrowed under this credit facility but the Company may borrow in the future and use the proceeds for support of commercial paper issuance, stock repurchases, dividend payments, acquisitions, capital expenditures, working capital and other lawful corporate purposes. Any advances under this credit agreement will accrue interest at rates that are equal to LIBOR plus a margin that is based on the Companys leverage ratio. The terms of this facility also include financial covenants that require the Company to maintain a minimum interest coverage ratio and not exceed a maximum leverage ratio. As of May1, 2010, the Company is compliant with these covenants. The terms of the facility also impose restrictions on the Companys ability to undertake certain transactions, to create certain liens on assets and to incur certain subsidiary indebtedness.

Long-Term Debt

Long-Term Debt
	6 Months Ended May. 01, 2010
Long-Term Debt [Abstract]
Long-Term Debt	Note 13 Long-Term Debt On June30, 2009, the Company issued $375million aggregate principal amount of 5.0% senior unsecured notes due July1, 2014 (the Notes) with semi-annual fixed interest payments on January 1 and July 1 of each year, commencing January1, 2010. The sale of the Notes was made pursuant to the terms of an underwriting agreement dated June25, 2009 between the Company and Credit Suisse Securities (USA)LLC, as representative of the several underwriters named therein. The net proceeds of the offering were $370.4million, after issuing at a discount and deducting expenses, underwriting discounts and commissions, which will be amortized over the term of the Notes. The indenture governing the Notes contains covenants that may limit the Companys ability to: incur, create, assume or guarantee any debt for borrowed money secured by a lien upon a principal property; enter into sale and lease-back transactions with respect to a principal property; and consolidate with or merge into, or transfer or lease all or substantially all of its assets to, any other party. On June30, 2009, the Company entered into interest rate swap transactions where the Company swapped the notional amount of its $375million of fixed rate debt at 5.0% into floating interest rate debt through July1, 2014. Under the terms of the swaps, the Company will (i)receive on the $375million notional amount a 5.0% annual interest payment that is paid in two installments on the 1st of every January and July, commencing January1, 2010 through and ending on the maturity date; and (ii)pay on the $375million notional amount an annual three-month LIBOR plus 2.05% (2.34% as of May1, 2010) interest payment, payable in four installments on the 1st of every January, April, July and October, commencing on October1, 2009 and ending on the maturity date. The LIBOR based rate is set quarterly three months prior to the date of the interest payment. The Company designated these swaps as fair value hedges. The changes in the fair value of the interest rate swaps were reflected in the carrying value of the interest rate swaps in other assets on the balance sheet. The carrying value of the debt on the balance sheet was adjusted by an equal and offsetting amount.

Common Stock Repurchases

Common Stock Repurchases
	6 Months Ended May. 01, 2010
Common Stock Repurchase [Abstract]
Common Stock Repurchase	Note 14 Common Stock Repurchase The Companys common stock repurchase program has been in place since August2004. In the aggregate, the Board of Directors has authorized the Company to repurchase $4billion of the Companys common stock under the program. Under the program, the Company may repurchase outstanding shares of its common stock from time to time in the open market and through privately negotiated transactions. Unless terminated earlier by resolution of the Companys Board of Directors, the repurchase program will expire when the Company has repurchased all shares authorized under the program. As of May1, 2010, the Company had repurchased a total of approximately 114.7million shares of its common stock for approximately $3,908.4million under this program. An additional $91.6million remains available for repurchase of shares under the current authorized program. The repurchased shares are held as authorized but unissued shares of common stock. Any future common stock repurchases will be dependent upon several factors including the amount of cash available to the Company in the United States, and the Companys financial performance, outlook and liquidity. The Company also from time to time repurchases shares in settlement of employee tax withholding obligations due upon the vesting of restricted stock or restricted stock units, or in certain limited circumstances to satisfy the exercise price of options granted to the Companys employees under the Companys equity compensation plans.

Discontinued Operations

Discontinued Operations
	6 Months Ended May. 01, 2010
Discontinued Operations [Abstract]
Discontinued Operations	Note 15 Discontinued Operations In November2007, the Company entered into a purchase and sale agreement with certain subsidiaries of ON Semiconductor Corporation to sell the Companys CPU voltage regulation and PC thermal monitoring business which consisted of core voltage regulator products for the central processing unit in computing and gaming applications and temperature sensors and fan-speed controllers for managing the temperature of the central processing unit. In connection with the purchase and sale agreement, $7.5million was placed into escrow and was excluded from the gain calculations. During the third quarter of fiscal 2008, additional proceeds were released from escrow and an additional pre-tax gain of $6.6million, or $3.8million net of tax, was recorded as a gain on sale of discontinued operations. Additionally, at the time of the sale, the Company entered into a one-year manufacturing supply agreement with a subsidiary of ON Semiconductor Corporation for an additional $37million. The Company has allocated the proceeds from this arrangement based on the fair value of the two elements of this transaction: (i)the sale of a business and (ii)the obligation to manufacture product for a one-year period. As a result, $85million was recorded as a liability related to the manufacturing supply agreement, all of which has been utilized. The liability was included in current liabilities of discontinued operations on the Companys consolidated balance sheet. The Company recorded the revenue associated with this manufacturing supply agreement in discontinued operations. In the first quarter of fiscal 2010, additional proceeds of $1million were released from escrow and, $0.6million net of tax, was recorded as additional gain from the sale of discontinued operations. The Company does not expect any additional proceeds from this sale. In September2007, the Company entered into a definitive agreement to sell its Baseband Chipset Business to MediaTek Inc. The decision to sell the Baseband Chipset Business was due to the Companys decision to focus its resources in areas where its signal processing expertise can provide unique capabilities and earn superior returns. The cash proceeds received were net of a refundable withholding tax of $62million. In connection with the purchase and sale agreement, $10million was placed into escrow and was excluded from the gain calculations. The Company made additional cash payments of $1.7million during fiscal 2009 related to retention payments for employees who transferred to MediaTek Inc. and for the reimbursement of intellectual property license fees incurred by MediaTek Inc. In the first quarter of fiscal 2010, the Company received cash proceeds of $62million as a result of the refund of the withholding tax and also recorded an additional gain on sale of $0.3million, or $0.2million net of tax, due to the settlement of certain items at less than the amounts accrued. The Company may receive additional proceeds of up to $10million, currently held in escrow, upon the resolution of certain contingent items, which would be recorded as additional gain from the sale of discontinued operations. The follow

Income Taxes

Income Taxes
	6 Months Ended May. 01, 2010
Income Taxes [Abstract]
Income Taxes	Note 16 Income Taxes The Company has provided for potential liabilities due in the various jurisdictions in which the Company operates. Judgment is required in determining the worldwide income tax expense 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 than that which is reflected in the historical income tax provisions and accruals. Such differences could have a material impact on the Companys income tax provision and operating results in the period in which such determination is made. Fiscal Year 2004 and 2005 IRS Examination During the fourth quarter of fiscal 2007, the IRS completed its field examination of the Companys fiscal years 2004 and 2005. On January2, 2008, the IRS issued its report for fiscal 2004 and 2005, which included proposed adjustments related to these two fiscal years. The Company has recorded taxes and penalties related to certain of these proposed adjustments. There are four items with an additional potential total tax liability of $46million. The Company has concluded, based on discussions with its tax advisors, that these four items are not likely to result in any additional tax liability. Therefore, the Company has not recorded any additional tax liability for these items and is appealing these proposed adjustments through the normal processes for the resolution of differences between the IRS and taxpayers. The Companys initial meetings with the appellate division of the IRS were held during fiscal year 2009. Two of the unresolved matters are one-time issues and pertain to Section965 of the Internal Revenue Code related to the beneficial tax treatment of dividends from foreign owned companies under The American Jobs Creation Act. The other matters pertain to the computation of research and development (RD) tax credits and the profits earned from manufacturing activities carried on outside the United States. These latter two matters could impact taxes payable for fiscal 2004 and 2005 as well as for subsequent years. Fiscal Year 2006 and 2007 IRS Examination During the third quarter of fiscal 2009, the IRS completed its field examination of the Companys fiscal years 2006 and 2007. The IRS and the Company have agreed on the treatment of a number of issues that have been included in an Issue Resolutions Agreement related to the 2006 and 2007 tax returns. However, no agreement was reached on the tax treatment of a number of issues, including the same RD credit and foreign manufacturing issues mentioned above related to fiscal 2004 and 2005, the pricing of intercompany sales (transfer pricing), and the deductibility of certain stock option compensation expenses. During the third quarter of fiscal 2009, the IRS issued its report for fiscal 2006 and fiscal 2007, which included proposed adjustments related to these two fiscal years. The Company has reco

New Accounting Pronouncements

New Accounting Pronouncements
	6 Months Ended May. 01, 2010
New Accounting Pronouncements [Abstract]
New Accounting Pronouncements	Note 17 New Accounting Pronouncements Subsequent Events In February2010, FASB issued ASU No.2010-09, Amendments to Certain Recognition and Disclosure Requirements (ASC Topic 855) Subsequent Events. The ASU amends the subsequent events disclosure guidance. The amendments include a definition of an SEC filer, require an SEC filer to evaluate subsequent events through the date the financial statements are issued, and remove the requirement for an SEC filer to disclose the date through which subsequent events have been evaluated. ASU 2010-09 was effective upon issuance. The adoption of this guidance required additional disclosures but did not have a material impact on the Companys consolidated results of operations and financial position. Fair Value Measurements and Disclosures In January2010, FASB issued ASU No.2010-06, Fair Value Measurements and Disclosures (ASC Topic 820) Improving Disclosures About Fair Value Measurements. The ASU requires new disclosures about transfers into and out of Levels 1 and 2 and separate disclosures about purchases, sales, issuances, and settlements relating to Level 3 measurements. It also clarifies existing fair value disclosures about the level of disaggregation and about inputs and valuation techniques used to measure fair value. The new disclosures and clarifications of existing disclosures were effective for the Companys first quarter of fiscal year 2010, except for the disclosures about purchases, sales, issuances, and settlements relating to Level 3 measurements, which are effective for the Companys first quarter of fiscal year 2012. The adoption of this new guidance required additional disclosures but did not have a material impact on the Companys consolidated results of operations and financial position. Revenue Arrangements That Include Software Elements In October2009, the FASB issued ASU No.2009-14 Software (Topic 985): Certain Revenue Arrangements That Include Software Elements (formerly EITF Issue No.09-3). This standard removes tangible products from the scope of software revenue recognition guidance and also provides guidance on determining whether software deliverables in an arrangement that includes a tangible product are within the scope of the software revenue guidance. More specifically, if the software sold with or embedded within the tangible product is essential to the functionality of the tangible product, then this software, as well as undelivered software elements that relate to this software, are excluded from the scope of existing software revenue guidance. ASU No.2009-14 is effective for fiscal years that begin on or after June15, 2010, which is the Companys fiscal year 2011. The Company is currently evaluating the impact, if any, that ASU No.2009-14 may have on the Companys financial condition and results of operations. Multiple-Deliverable Revenue Arrangements In October2009, the FASB issued ASU No.2009-13 Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements (formerly EITF Issue No.08-1). This standard modifies the revenue recognition guidance for arrangements that involve the delivery of multiple elements, such as product, sof

Subsequent Event

Subsequent Event
	6 Months Ended May. 01, 2010
Subsequent Event [Abstract]
Subsequent Event	Note 18 Subsequent Event On May17, 2010, the Companys Board of Directors declared a cash dividend of $0.22 per outstanding share of common stock. The dividend will be paid on June16, 2010 to all shareholders of record at the close of business on May28, 2010.