# UNITED	STATES

# SECURITIES	AND	EXCHANGE	COMMISSION

# (Mark	One)

þ ANNUAL	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

# For	the	fiscal	year	ended	October	29,	2011

# o TRANSITION	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

# For	the	transition	period	from											to

# Analog	Devices,	Inc.

(Exact	name	of	registrant	as	specified	in	its	charter)

Massachusetts

(State	or	other	jurisdiction	of incorporation	or	organization)

One	Technology	Way,	Norwood,	MA

(Address	of	principal	executive	offices)

(Registrant's	telephone	number,	including	area	code)

# Securities	registered	pursuant	to	Section	12(b)	of	the	Act:

Title	of	Each	Class

(Zip	Code)

New	York	Stock	Exchange

Name	of	Each	Exchange	on	Which	Registered

# Securities	registered	pursuant	to	Section	12(g)	of	the	Act:

Title	of	Class

Indicate	by	check	mark	if	the	registrant	is	a	well-known	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act.		YES	þ					NO	o

Indicate	by	check	mark	if	the	registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	Section	15(d)	of	the	Act.		YES	o					NO	þ

Indicate	by	check	mark	whether	the	registrant	(1)	has	filed	all	reports	required	to	be	filed	by	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934	during	the	preceding	12	months	(or	for	such	shorter	period that	the	registrant	was	required	to	file	such	reports),	and	(2)	has	been	subject	to	such	filing	requirements	for	the	past	90	days.		YES	þ					NO	o

Indicate	by	check	mark	whether	the	registrant	has	submitted	electronically	and	posted	on	its	corporate	Web	site,	if	any,	every	Interactive	Data	File	required	to	be	submitted	and	posted	pursuant	to	Rule	405	of Regulation	S-T	during	the	preceding	12	months	(or	for	such	shorter	period	that	the	registrant	was	required	to	submit	and	post	such	files).		YES	þ					NO	o

Indicate	by	check	mark	if	disclosure	of	delinquent	filers	pursuant	to	Item	405	of	Regulation	S-K	is	not	contained	herein,	and	will	not	be	contained,	to	the	best	of	registrant's	knowledge,	in	definitive	proxy	or information	statements	incorporated	by	reference	in	Part	III	of	this	Form	10-K	or	any	amendment	to	this	Form	10-K.		þ

Indicate	by	check	mark	whether	the	registrant	is	a	large	accelerated	filer,	an	accelerated	filer,	a	non-accelerated	filer,	or	a	smaller	reporting	company.	See	the	definitions	of	"large	accelerated	filer,"	"accelerated filer"	and	"smaller	reporting	company"	in	Rule	12b-2	of	the	Exchange	Act.	(Check	one):

Large	accelerated	filer	þ Accelerated	filer	o Non-accelerated	filer	o (Do	not	check	if	a	smaller	reporting	company) Smaller	reporting	company	o

Indicate	by	check	mark	whether	the	registrant	is	a	shell	company	(as	defined	in	Rule	12b-2	of	the	Act).		YES	o					NO	þ

The	aggregate	market	value	of	the	voting	and	non-voting	common	equity	held	by	nonaffiliates	of	the	registrant	was	approximately	$9,291,000,000	based	on	the	last	reported	sale	of	the	Common	Stock	on	the	New York	Stock	Exchange	Composite	Tape	reporting	system	on	April	30,	2011.	Shares	of	voting	and	non-voting	stock	beneficially	owned	by	executive	officers,	directors	and	holders	of	more	than	5%	of	the	outstanding	stock have	been	excluded	from	this	calculation	because	such	persons	or	institutions	may	be	deemed	affiliates.	This	determination	of	affiliate	status	is	not	a	conclusive	determination	for	other	purposes.

# Documents	Incorporated	by	Reference

# Document	Description

Portions	of	the	Registrant's	Proxy	Statement	for	the	Annual	Meeting	of	Shareholders	to	be	held	March	13,	2012

Form	10-K	Part III

# Note	About	Forward-Looking	Statements

This	Annual	Report	on	Form	10-K,	including	in	particular	the	section	entitled	"Outlook,"	contained	in	Item	7,	"Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of Operations",	contains	forward-looking	statements	regarding	future	events	and	our	future	results	that	are	subject	to	the	safe	harbor	created	under	the	Private	Securities	Litigation	Reform	Act	of	1995. These	statements	are	based	on	current	expectations,	estimates,	forecasts,	and	projections	about	the	industries	in	which	we	operate	and	the	beliefs	and	assumptions	of	our	management.	Words	such	as "expects,"	"anticipates,"	"targets,"	"goals,"	"projects,"	"intends,"	"plans,"	"believes,"	"seeks,"	"estimates,"	"continues,"	"may,"	variations	of	such	words	and	similar	expressions	are	intended	to	identify such	forward-looking	statements.	In	addition,	any	statements	that	refer	to	projections	regarding	our	future	financial	performance,	particularly	in	light	of	sovereign	debt	issues	globally;	declines	in customer	demand	for	our	products;	our	anticipated	growth	and	trends	in	our	businesses;	our	future	capital	needs	and	capital	expenditures;	our	future	market	position	and	expected	competitive	changes	in the	marketplace	for	our	products;	our	ability	to	innovate	new	products	and	technologies;	the	timing	or	the	effectiveness	of	our	efforts	to	refocus	our	operations	and	reduce	our	cost	structure	and	the expected	amounts	of	any	cost	savings	related	to	those	efforts;	our	ability	to	access	credit	or	capital	markets;	our	ability	to	pay	dividends	or	repurchase	stock;	our	ability	to	service	our	outstanding	debt; our	expected	tax	rate;	the	future	actions	of	our	third-party	suppliers;	our	reliance	on	assembly	and	test	subcontractors,	third	party	wafer	fabricators	and	independent	distributors;	the	expected	outcomes	of intellectual	property	and	litigation	matters;	the	ability	to	safeguard	our	patents	and	intellectual	property;	potential	acquisitions	or	divestitures;	the	expected	activities	of	our	key	personnel;	the	global nature	of	our	operations;	the	effect	of	new	accounting	pronouncements;	and	other	characterizations	of	future	events	or	circumstances	are	forward-looking	statements.	Readers	are	cautioned	that	these forward-looking	statements	are	only	predictions	and	are	subject	to	risks,	uncertainties,	and	assumptions	that	are	difficult	to	predict,	including	those	identified	in	Part	I,	Item	1A.	Risk	Factors	and	elsewhere in	our	Annual	Report	on	Form	10-K.	Therefore,	actual	results	may	differ	materially	and	adversely	from	those	expressed	in	any	forward-looking	statements.	We	undertake	no	obligation	to	revise	or	update any	forward-looking	statements	except	to	the	extent	required	by	law.

# PART	I

# ITEM	1. BUSINESS

# Company	Overview

We	are	a	world	leader	in	the	design,	manufacture	and	marketing	of	a	broad	portfolio	of	high-performance	analog,	mixed-signal	and	digital	signal	processing	integrated	circuits	(ICs)	used	in virtually	all	types	of	electronic	equipment.	Since	our	inception	in	1965,	we	have	focused	on	solving	the	engineering	challenges	associated	with	signal	processing	in	electronic	equipment.	Our	signal processing	products	play	a	fundamental	role	in	converting,	conditioning,	and	processing	real-world	phenomena	such	as	temperature,	pressure,	sound,	light,	speed	and	motion	into	electrical	signals	to	be used	in	a	wide	array	of	electronic	devices.	As	new	generations	of	digital	applications	evolve,	new	needs	for	high-performance	analog	signal	processing	and	digital	signal	processing	(DSP)	technology	are generated.	As	a	result,	we	produce	a	wide	range	of	innovative	products	—	including	data	converters,	amplifiers	and	linear	products,	radio	frequency	(RF)	ICs,	power	management	products,	sensors	based on	micro-electro	mechanical	systems	(MEMS)	technology	and	other	sensors,	and	processing	products,	including	DSP	and	other	processors	—	that	are	designed	to	meet	the	needs	of	a	broad	base	of customers.

We	focus	on	key	strategic	markets	where	our	signal	processing	technology	is	often	a	critical	differentiator	in	our	customers'	products,	in	particular,	the	industrial,	automotive,	consumer	and communications	markets.	Used	by	over	60,000	customers	worldwide,	our	products	are	embedded	inside	many	different	types	of	electronic	equipment	including:

•	Industrial	process	control	systems •	Medical	imaging	equipment

•	Factory	automation	systems •	Patient	monitoring	devices

•	Instrumentation	and	measurement	systems •	Wireless	infrastructure	equipment

•	Energy	management	systems •	Networking	equipment

•	Aerospace	and	defense	electronics •	Optical	systems

•	Automobiles •	Digital	cameras

•	Digital	televisions •	Portable	electronic	devices

We	were	founded	in	1965	and	are	incorporated	in	Massachusetts.	Our	headquarters	are	near	Boston,	in	Norwood,	Massachusetts.	In	addition,	we	have	manufacturing	facilities	in	Massachusetts, Ireland,	and	the	Philippines,	and	have	more	than	thirty	design	facilities	worldwide.	Our	common	stock	is	listed	on	the	New	York	Stock	Exchange,	or	NYSE,	under	the	symbol	ADI	and	is	included	in	the Standard	&	Poor's	500	Index.

# Available	Information

We	maintain	a	website	with	the	address	www.analog.com.	We	are	not	including	the	information	contained	on	our	website	as	a	part	of,	or	incorporating	it	by	reference	into,	this	Annual	Report	on Form	10-K.	We	make	available	free	of	charge	through	our	website	our	Annual	Reports	on	Form	10-K,	Quarterly	Reports	on	Form	10-Q	and	Current	Reports	on	Form	8-K	(including	exhibits),	and amendments	to	these	reports,	as	soon	as	reasonably	practicable	after	we	electronically	file	such	material	with,	or	furnish	such	material	to,	the	Securities	and	Exchange	Commission,	or	SEC.	We	also	make available	on	our	website	our	corporate	governance	guidelines,	the	charters	for	our	audit	committee,	compensation	committee,	and	nominating	and	corporate	governance	committee,	our	equity	award granting	policies,	our	code	of	business	conduct	and	ethics	which	applies	to	our	directors,	officers	and	employees,	and	our	related	person	transaction	policy,	and	such	information	is	available	in	print	and free	of	charge	to	any	shareholder	of	Analog	Devices	who	requests	it.	In	addition,	we	intend	to	disclose	on	our	website	any	amendments	to,	or	waivers	from,	our	code	of	business	conduct	and	ethics	that are	required	to	be	publicly	disclosed	pursuant	to	rules	of	the	SEC	or	the	NYSE.

# Industry	Background

Semiconductor	components	are	the	electronic	building	blocks	used	in	electronic	systems	and	equipment.	These	components	are	classified	as	either	discrete	devices	(such	as	individual	transistors) or	integrated	circuits	(in	which	a	number	of	transistors	and	other	elements	are	combined	to	form	a	more	complicated	electronic	circuit).	Integrated	circuits	may	be	divided	into	two	general	categories, digital	and	analog.	Digital	circuits,	such	as	memory

devices	and	microprocessors,	generally	process	on-off	electrical	signals,	represented	by	binary	digits,	"1"	and	"0."	In	contrast,	analog	integrated	circuits	monitor,	condition,	amplify	or	transform continuous	analog	signals	associated	with	physical	properties,	such	as	temperature,	pressure,	weight,	light,	sound	or	motion,	and	play	an	important	role	in	bridging	between	real	world	phenomena	and	a variety	of	electronic	systems.	Analog	ICs	also	provide	voltage	regulation	and	power	control	to	electronic	systems.

# Organizational	Structure

We	operate	in	one	reporting	segment,	which	is	comprised	of	two	separate	groups,	one	focused	on	products	and	one	focused	on	end	markets.	The	product	group	is	focused	on	core	technology development	and	leadership	in	converters,	amplifiers	and	RF,	MEMS,	power	management,	and	DSP.	The	end	market-focused	organization	is	dedicated	to	understanding,	selecting,	and	resourcing initiatives	that	are	more	customized	to	a	particular	market	or	application.	The	focus	of	this	team	is	to	apply	the	full	expanse	of	our	broad	technology	portfolio	to	more	integrated	and	targeted	product strategies	for	the	industrial,	automotive,	consumer,	and	communications	markets.	The	end	market	group	includes	our	sales	organization.

These	two	groups	collaborate	at	all	levels.	On	the	one	hand,	our	product	group	develops	key	technology	for	use	by	the	end	market	groups,	which	apply	these	technologies	to	specific	applications. Equally	important,	the	applications	expertise	within	each	end	market	group	is	used	to	enhance	core	technology	development	by	our	product	group.

# Principal	Products

We	design,	manufacture	and	market	a	broad	line	of	high-performance	ICs	that	incorporate	analog,	mixed-signal	and	digital	signal	processing	technologies.	Our	ICs	are	designed	to	address	a	wide range	of	real-world	signal	processing	applications.	Our	product	portfolio	includes	both	general-purpose	products	used	by	a	broad	range	of	customers	and	applications,	as	well	as	application-specific products	designed	for	specific	clusters	of	customers	in	key	target	markets.	By	using	readily	available,	high-performance,	general-purpose	products	in	their	systems,	our	customers	can	reduce	the	time	they need	to	bring	new	products	to	market.	Given	the	high	cost	of	developing	more	customized	ICs,	our	standard	products	often	provide	a	cost-effective	solution	for	many	low	to	medium	volume	applications. However,	for	some	industrial,	automotive,	consumer,	and	communications	products,	we	focus	on	working	with	leading	customers	to	design	application-specific	solutions.	We	begin	with	our	existing	core technologies	in	data	conversion,	amplification,	RF,	MEMS,	power	management	and	DSP,	and	devise	a	solution	to	more	closely	meet	the	needs	of	a	specific	customer	or	group	of	customers.	Because	we have	already	developed	the	core	technology	for	our	general-purpose	products,	we	can	create	application-specific	solutions	quickly.

We	produce	and	market	several	thousand	products	and	operate	in	one	reporting	segment.	Our	ten	highest	revenue	products,	in	the	aggregate,	accounted	for	approximately	8%	of	our	revenue	for fiscal	2011.	A	breakdown	of	our	fiscal	2011	revenue	by	product	category	follows.

# Analog	Products

Our	analog	and	mixed	signal	IC	technology	has	been	the	foundation	of	our	business	for	over	four	decades,	and	we	are	one	of	the	world's	largest	suppliers	of	high-performance	analog	ICs.	Our analog	signal	processing	ICs	are	primarily	high-performance	devices,	offering	higher	dynamic	range,	greater	bandwidth,	and	other	enhanced	features.	The	principal	advantages	these	products	have	versus competitors'	products	include	higher	accuracy,	higher	speed,	lower	cost	per	function,	smaller	size,	lower	power	consumption	and	fewer	components,	resulting	in

improved	reliability.	Our	product	portfolio	includes	several	thousand	analog	ICs,	any	one	of	which	can	have	as	many	as	several	hundred	customers.	Our	analog	ICs	typically	have	long	product	life cycles.	Our	analog	IC	customers	include	original	equipment	manufacturers	OEMs	and	customers	who	build	electronic	subsystems	for	integration	into	larger	systems.

Converters	—	We	are	a	leading	supplier	of	data	converter	products.	Data	converters	translate	real-world	analog	signals	into	digital	data	and	also	translate	digital	data	into	analog	signals.	Data converters	remain	our	largest	and	most	diverse	product	family	and	an	area	where	we	are	continuously	innovating	to	enable	our	customers	to	redefine	and	differentiate	their	products.	Our	converter products	combine	sampling	rates	and	accuracy	with	the	low	noise,	power,	price	and	small	package	size	required	by	industrial,	automotive,	consumer,	and	communications	electronics.

Amplifiers/Radio	Frequency	—	We	are	also	a	leading	supplier	of	high-performance	amplifiers.	Amplifiers	are	used	to	condition	analog	signals.	High	performance	amplifiers	emphasize	the performance	dimensions	of	speed	and	precision.	Within	this	product	portfolio	we	provide	precision,	instrumentation,	high	speed,	intermediate	frequency/RF,	broadband,	and	other	amplifiers.	We	also offer	an	extensive	portfolio	of	precision	voltage	references	that	are	used	in	a	wide	variety	of	applications.	Our	analog	product	line	also	includes	a	broad	portfolio	of	high	performance	RF	ICs	covering	the entire	RF	signal	chain,	from	industry-leading	stand-alone	RF	function	blocks	such	as	phase	locked	loops,	frequency	synthesizers,	mixers,	modulators,	demodulators,	and	power	detectors,	to	highly integrated	broadband	and	short-range	single	chip	transceiver	solutions.	Our	high	performance	RF	ICs	support	the	high	performance	requirements	of	cellular	infrastructure	and	a	broad	range	of applications	in	our	target	markets.

Other	Analog	—	Also	within	our	analog	technology	portfolio	are	products	that	are	based	on	Micro-ElectroMechanical	Systems	(MEMS)	technology.	This	technology	enables	us	to	build extremely	small	sensors	that	incorporate	an	electromechanical	structure	and	the	supporting	analog	circuitry	for	conditioning	signals	obtained	from	the	sensing	element.	Our	MEMS	product	portfolio includes	accelerometers	used	to	sense	acceleration,	gyroscopes	used	to	sense	rotation,	inertial	measurement	units	used	to	sense	multiple	degrees	of	freedom	combining	multiple	sensing	types	along multiple	axis,	and	MEMS	microphones	used	to	sense	audio.	The	majority	of	our	current	revenue	from	MEMS	products	is	derived	from	the	automotive,	industrial,	healthcare,	and	consumer	end	markets. In	addition	to	our	MEMs	our	other	analog	product	category	includes	isolators	that	enable	designers	to	implement	isolation	in	designs	without	the	cost,	size,	power,	performance,	and	reliability	constraints found	with	optocouplers.	Our	isolators	have	been	designed	into	hundreds	of	applications,	such	as	universal	serial	bus	isolation	in	patient	monitors,	where	it	allows	hospitals	and	physicians	to	adopt	the latest	advances	in	computer	technology	to	supervise	patient	health	and	wirelessly	transmit	medical	records.	In	smart	metering	applications,	our	isolators	provide	reliable	electrostatic	discharge performance	that	helps	reduce	meter	tampering.	Likewise,	in	satellites,	where	any	malfunction	can	be	catastrophic,	our	isolators	help	protect	the	power	system	while	enabling	designers	to	achieve	small form	factors.

Power	Management	&	Reference	—	Power	management	&	reference	products	make	up	the	balance	of	our	analog	sales.	Those	products	that	include	functions	such	as	power	conversion,	driver monitoring,	sequencing	and	energy	management,	are	developed	to	complement	analog	signal	chain	components	across	core	market	segments	from	micro	power,	energy-sensitive	battery	applications	to efficient,	high	performance	power	systems	in	infrastructure	and	industrial	applications.

# Digital	Signal	Processing	Products

Digital	Signal	Processing	products	(DSPs)	complete	our	product	portfolio.	DSPs	are	optimized	for	high-speed	numeric	calculations,	which	are	essential	for	instantaneous,	or	real-time,	processing of	digital	data	generated,	in	most	cases,	from	analog	to	digital	signal	conversion.	Our	DSPs	are	designed	to	be	fully	programmable	and	to	efficiently	execute	specialized	software	programs,	or	algorithms, associated	with	processing	digitized	real-time,	real-world	data.	Programmable	DSPs	are	designed	to	provide	the	flexibility	to	modify	the	device's	function	quickly	and	inexpensively	using	software.	Our general-purpose	DSP	IC	customers	typically	write	their	own	algorithms	using	software	development	tools	provided	by	us	and	third-party	suppliers.	Our	DSPs	are	designed	in	families	of

products	that	share	common	architectures	and	therefore	can	execute	the	same	software	across	a	range	of	products.	We	support	these	products	with	easy-to-use	development	tools,	which	are	designed	to reduce	our	customers'	product	development	costs	and	time-to-market.	Our	customers	use	our	products	to	solve	a	wide	range	of	signal	processing	challenges	across	our	core	market	and	segment	focus areas	within	the	industrial,	automotive,	consumer	and	communications	end	markets.	As	an	integrated	part	of	our	customer's	signal	chain,	there	are	typically	many	other	Analog	Devices	products connected	to	our	processors	including	converters,	audio	and	video	codecs	and	power	management	solutions.

# Markets	and	Applications

During	fiscal	year	2011,	we	consolidated	the	computer	end	market,	which	represented	approximately	1%	of	fiscal	2011	revenue,	into	the	consumer	end	market,	and	reclassified	handset	revenue, which	represented	approximately	3%	of	fiscal	2011	revenue,	from	the	communications	end	market	to	the	consumer	end	market	for	all	periods	presented.	The	breakdown	of	our	fiscal	2011	revenue	by	end market	is	set	out	in	the	table	below.

* The	sum	of	the	individual	percentages	do	not	equal	100%	due	to	rounding.

The	following	describes	some	of	the	characteristics	of,	and	customer	products	within,	our	major	end	markets:

Industrial	—	Our	industrial	market	includes	the	following	sectors:

Industrial	and	Instrumentation	—	Our	industrial	automation	applications	generally	require	ICs	that	offer	performance	greater	than	that	available	from	commodity-level	ICs	but	generally	do	not have	production	volumes	that	warrant	custom	ICs.	There	is	a	trend	towards	development	of	products	focused	on	particular	sub-applications,	which	incorporate	combinations	of	analog,	mixed-signal,	and DSP	ICs	to	achieve	the	necessary	functionality.	Our	instrumentation	customers	differentiate	themselves	by	using	the	highest	performance	analog	and	mixed-signal	ICs	available.	Our	industrial	and instrumentation	market	includes	applications	such	as:

•	Process	control	systems •	Oscilloscopes

•	Robotics •	Lab,	chemical,	and	environmental	analyzers

•	Environmental	control	systems •	Weigh	scales

Defense/Aerospace	—	The	defense,	commercial	avionics	and	space	markets	all	require	high-performance	ICs	that	meet	rigorous	environmental	and	reliability	specifications.	Many	of	our	analog

ICs	can	be	supplied	in	versions	that	meet	these	standards.	In	addition,	many	products	can	be	supplied	to	meet	the	standards	required	for	broadcast	satellites	and	other	commercial	space	applications.	Most of	our	products	sold	in	this	market	are	specially	tested	versions	of	products	derived	from	our	standard	product	offering.	Customer	products	include:

•	Navigation	systems •	Radar	systems

•	Space	and	satellite	communications •	Security	devices

Energy	Management	—	The	desire	to	improve	energy	efficiency,	conservation,	reliability,	and	cleanliness	is	driving	investments	in	renewable	energy,	power	transmission	and	distribution

systems,	electric	meters,	and	other	innovative	areas.	The	common	characteristic	behind	these	efforts	is	the	addition	of	sensing,	measurement,	and	communication	technologies	to	electrical	infrastructure.

Our	offerings	include	both	standard	and	application-specific	products	and	are	used	in	applications	such	as:

•	Utility	meters •	Wind	turbines

•	Meter	communication	modules

•	Substation	relays	and	automation	equipment

•	Solar	inverters

•	Building	energy	automation/control

Healthcare	—	Two	significant	trends	in	the	healthcare	market	today	are	the	increasing	need	for	higher	channel	counts	in	medical	systems	to	improve	resolution	and	throughput	while	achieving	a lower	cost	per	channel,	and	the	movement	of	highly	accurate	patient	monitoring	devices	from	the	hospital	environment	to	the	home,	improving	patient	care	and	reducing	overall	healthcare	costs.	Our innovative	technologies	are	designed	into	a	variety	of	high	performance	imaging,	patient	monitoring,	medical	instrumentation,	and	home	health	devices.	Our	offerings	include	both	standard	and application-specific	products	and	are	used	in	applications	such	as:

•	Ultrasound •	Infusion	pumps

•	CT	scanners •	Clinical	lab	instrumentation

•	Digital	x-ray •	Surgical	instrumentation

•	Multi-parameter	patient	monitors •	Blood	analyzers

•	Pulse	oximeters •	Activity	monitors

Automotive	—	We	develop	differentiated	high	performance	signal	processing	solutions	that	enable	sophisticated	automotive	systems	addressing	the	three	industry	macrotrends	namely	greener,

safer	and	more	comfort.	Through	collaboration	with	manufacturers	worldwide,	ADI	has	achieved	significant	market	share	through	a	broad	portfolio	of	analog,	digital	and	MEMS	ICs	that	increase	fuel efficiency,	enhance	vehicle	stability	and	improve	the	audio/video	experience	of	the	passengers.	Specifically,	we	have	developed	products	used	in	applications	such	as:

Green Safety Comfort •Hybrid	electric	/	electric	vehicles •Crash	sensors	in	airbag	systems •Car	audio	amplifiers •Intelligent	battery	sensors •Electronic	stability	systems •Head	unit	solutions •Battery	monitoring	and	management	systems •Advanced	driver	assistance	systems	(RADAR/Vision) •Rear	seat	entertainment	systems •Vehicle	dynamic	control	systems

Consumer	—	Market	demand	for	digital	entertainment	systems	and	the	consumer	demand	for	high	quality	voice	transmissions,	music,	movies	and	photographs	with	a	high	degree	of	interactivity have	allowed	us	to	combine	analog	and	digital	design	capability	to	provide	solutions	that	meet	the	rigorous	cost	and	time-to-market	requirements	of	the	consumer	electronics	market.	The	emergence	of high-performance,	feature-rich	consumer	products	has	created	a	market	for	our	high-performance	ICs	with	a	high	level	of	specific	functionality.	These	products	include:

•	Digital	cameras •	High-performance	audio/video	equipment

•	High-definition	televisions	and	DVD	recorders/players •	Portable	media	devices	(cellular	handsets,	smart	phones	and	tablets)

•	Home	theater	systems •	Computers

Communications	—	The	development	of	broadband,	wireless	and	Internet	infrastructures	around	the	world	has	created	an	important	market	for	our	communications	products.	Communications technology	involves	the	acquisition	of	analog	signals	that	are	converted	from	analog	to	digital	and	digital	to	analog	form	during	the	process	of	transmitting	and	receiving	data.	The	need	for	higher	speed and	reduced	power	consumption,	coupled	with	more	reliable,	bandwidth-efficient	communications,	has	been	creating	demand	for	our	products.	Our	products	are	used	in	the	full	spectrum	of	signal processing	for	internet	protocol,	video	streaming	and	voice	communication.	In	wireless	and	broadband	communication	applications,	our	products	are	incorporated	into:

•Cellular	basestation	equipment •	 Wired	networking	equipment

•	 Wireless	backhowl	systems •Satellite	systems

See	Note	4	in	the	Notes	to	our	Consolidated	Financial	Statements	contained	in	Item	8	of	this	Annual	Report	on	Form	10-K	for	further	information	about	our	products	by	category	and	end	market.

# Research	and	Development

Our	markets	are	characterized	by	rapid	technological	changes	and	advances.	Accordingly,	we	make	substantial	investments	in	the	design	and	development	of	new	products	and	manufacturing processes,	and	the	improvement	of	existing	products	and	manufacturing	processes.	We	spent	approximately	$506	million	during	fiscal	2011	on	the	design,	development	and	improvement	of	new	and existing	products	and	manufacturing	processes,	compared	to	approximately	$492	million	during	fiscal	2010	and	approximately	$447	million	during	fiscal	2009.

Our	research	and	development	strategy	focuses	on	building	technical	leadership	in	core	technologies	of	converters,	amplifiers	and	RF,	MEMS,	power	management,	and	DSP.	In	support	of	our research	and	development	activities,	we	employ	thousands	of	engineers	involved	in	product	and	manufacturing	process	development	throughout	the	world.

# Patents	and	Other	Intellectual	Property	Rights

We	seek	to	establish	and	maintain	our	proprietary	rights	in	our	technology	and	products	through	the	use	of	patents,	copyrights,	mask	works,	trademarks	and	trade	secrets.	We	have	a	program	to file	applications	for	and	obtain	patents,	copyrights,	mask	works	and	trademarks	in	the	United	States	and	in	selected	foreign	countries	where	we	believe	filing	for	such	protection	is	appropriate.	We	also seek	to	maintain	our	trade	secrets	and	confidential	information	by	nondisclosure	policies	and	through	the	use	of	appropriate	confidentiality	agreements.	We	have	obtained	a	substantial	number	of	patents and	trademarks	in	the	United	States	and	in	other	countries.	As	of	October	29,	2011,	we	held	approximately	1,700	U.S.	patents	and	approximately	700	non-provisional	pending	U.S.	patent	applications. There	can	be	no	assurance,	however,	that	the	rights	obtained	can	be	successfully	enforced	against	infringing	products	in	every	jurisdiction.	While	our	patents,	copyrights,	mask	works,	trademarks	and trade	secrets	provide	some	advantage	and	protection,	we	believe	our	competitive	position	and	future	success	is	largely	determined	by	such	factors	as	the	system	and	application	knowledge,	innovative skills,	technological	expertise	and	management	ability	and	experience	of	our	personnel;	the	range	and	success	of	new	products	being	developed	by	us;	our	market	brand	recognition	and	ongoing marketing	efforts;	and	customer	service	and	technical	support.	It	is	generally	our	policy	to	seek	patent	protection	for	significant	inventions	that	may	be	patented,	though	we	may	elect,	in	certain	cases,	not to	seek	patent	protection	even	for	significant	inventions,	if	we	determine	other	protection,	such	as	maintaining	the	invention	as	a	trade	secret,	to	be	more	advantageous.	We	also	have	trademarks	that	are used	in	the	conduct	of	our	business	to	distinguish	genuine	Analog	Devices	products	and	we	maintain	cooperative	advertising	programs	to	promote	our	brands	and	identify	products	containing	genuine Analog	Devices	components.

# Sales	Channels

We	sell	our	products	globally	through	a	direct	sales	force,	third-party	distributors,	independent	sales	representatives	and	via	our	website.	We	have	direct	sales	offices,	sales	representatives	and/or distributors	in	over	40	countries	outside	North	America.

We	support	our	worldwide	technical	direct	field	sales	efforts	by	an	extensive	promotional	program	that	includes	editorial	coverage	and	paid	advertising	in	trade	publications,	direct	mail	programs, promotional	brochures,	technical	seminars	and	participation	in	trade	shows.	We	publish	and	distribute	product	catalogs,	applications	guides,	technical	handbooks	and	detailed	data	sheets	for	individual products.	We	also	provide	this	information	and	sell	products	via	our	website.	We	maintain	a	staff	of	field	application	engineers	who	aid	customers	in	incorporating	our	products	into	their	products.	In addition,	we	offer	a	variety	of	web-based	tools	that	ease	product	selection	and	aid	in	the	design	process	for	our	customers.

We	derived	approximately	55%	of	our	fiscal	2011	revenue	from	sales	made	through	distributors.	These	distributors	typically	maintain	an	inventory	of	our	products.	Some	of	them	also	sell products	that	compete	with	our	products,	including	those	for	which	we	are	an	alternate	source.	In	all	regions	of	the	world,	we	defer	revenue	and	the	related	cost	of	sales	on	shipments	to	distributors	until the	distributors	resell	the	products	to	their	customers.	We	make	sales	to	distributors	under	agreements	that	allow	distributors	to	receive	price	adjustment	credits	and	to	return	qualifying	products	for	credit, as	determined	by	us,	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	our	shipments	to that	distributor	during	the	prior	quarter.	In	addition,	distributors	are	allowed	to	return	unsold	products	if	we	terminate	the	relationship	with	the	distributor.	Additional	information	relating	to	our	sales	to distributors	is	set	forth	in	Note	2n	in	the	Notes	to	Consolidated	Financial	Statements	contained	in	Item	8	of	this	Annual	Report	on	Form	10-K.

# Segment	Financial	Information	and	Geographic	Information

We	operate	and	track	our	results	in	one	reportable	segment	based	on	the	aggregation	of	five	operating	segments.

Through	subsidiaries	and	affiliates,	we	conduct	business	in	numerous	countries	outside	the	United	States.	During	fiscal	2011,	we	derived	approximately	82%	of	our	revenue	from	customers	in international	markets.	Our	international	business	is	subject	to	risks	customarily	encountered	in	foreign	operations,	including	fluctuations	in	foreign	currency	exchange	rates	and	controls,	import	and export	controls,	and	other	laws,	policies	and	regulations	of	foreign	governments.	Although	we	engage	in	hedging	transactions	to	reduce	our	exposure	to	currency	exchange	rate	fluctuations,	our competitive	position	may	be	adversely	affected	by	changes	in	the	exchange	rate	of	the	United	States	dollar	against	other	currencies.

The	categorization	of	sales	into	geographic	regions	set	forth	below	is	based	upon	the	location	of	the	customer.

For	further	detail	regarding	revenue	and	financial	information	about	our	industry,	segment	and	geographic	areas,	see	our	Consolidated	Financial	Statements	and	Note	4	in	the	related	Notes contained	in	Item	8	of	this	Annual	Report	on	Form	10-K.

# Customers

We	have	tens	of	thousands	of	customers	worldwide.	No	sales	to	an	individual	customer	accounted	for	more	than	10%	of	fiscal	year	2011,	2010,	or	2009	revenue.	These	customers	used	hundreds of	different	types	of	our	products	in	a	wide	range	of	applications	spanning	the	industrial,	automotive,	consumer	and	communication	markets.	Our	largest	single	customer,	excluding	distributors, represented	approximately	4%	of	our	fiscal	2011	revenue.	Our	20	largest	customers,	excluding	distributors,	accounted	for	approximately	32%	of	our	fiscal	2011	revenue.

# Seasonality

Sales	to	customers	during	our	first	fiscal	quarter	may	be	lower	than	other	quarters	due	to	plant	shutdowns	at	some	of	our	customers	during	the	holiday	season.	In	general,	the	seasonality	for	any specific	period	of	time	has	not	had	a	material	impact	on	our	results	of	operations.	In	addition,	as	explained	in	our	risk	factors	contained	in	Item	1A	of	this	Annual	Report	on	Form	10-K,	our	revenue	is more	likely	to	be	influenced	on	a	quarter	to	quarter	basis	by	cyclicality	in	the	semiconductor	industry.

# Production	and	Raw	Materials

Monolithic	integrated	circuit	components	are	manufactured	in	a	sequence	of	semiconductor	production	steps	that	include	wafer	fabrication,	wafer	testing,	cutting	the	wafer	into	individual "chips,"	or	dice,	assembly	of	the	dice	into	packages	and	electrical	testing	of	the	devices	in	final	packaged	form.	The	raw	materials	used	to	manufacture	these	devices	include	silicon	wafers,	processing chemicals	(including	liquefied	gases),	precious	metals	and	ceramic	and	plastic	used	for	packaging.

We	develop	and	employ	a	wide	variety	of	proprietary	manufacturing	processes	that	are	specifically	tailored	for	use	in	fabricating	high-performance	analog,	DSP,	mixed-signal	and	MEMS	ICs. We	also	use	bipolar	and	complementary	metal-oxide	semiconductor,	or	CMOS,	wafer	fabrication	processes.

Our	IC	products	are	fabricated	both	at	our	production	facilities	and	by	third-party	wafer	fabricators.	Our	products	are	manufactured	in	our	own	wafer	fabrication	facilities	using	proprietary processes	and	at	third-party	wafer-fabrication	foundries	using	sub-micron	digital	CMOS	processes.	A	significant	portion	of	our	revenue	in	fiscal	years	2011,	2010	and	2009	was	from	products	fabricated at	third-party	wafer-fabrication	facilities,	primarily	Taiwan	Semiconductor	Manufacturing	Company,	or	TSMC.	We	operate	wafer	fabrication	facilities	in	Wilmington,

Massachusetts	and	Limerick,	Ireland.	We	also	operate	test	facilities	located	in	the	Philippines	and	use	third-party	subcontractors	for	the	assembly	and	testing	of	our	products.

Capital	spending	was	approximately	$123.0	million	in	fiscal	2011,	compared	with	approximately	$111.6	million	in	fiscal	2010.	We	currently	plan	to	make	capital	expenditures	in	the	range	of approximately	$100	million	to	$125	million	in	fiscal	2012.

Our	products	require	a	wide	variety	of	components,	raw	materials	and	external	foundry	services,	most	of	which	we	purchase	from	third-party	suppliers.	We	have	multiple	sources	for	many	of	the components	and	materials	that	we	purchase	and	incorporate	into	our	products.	However,	a	large	portion	of	our	external	wafer	purchases	and	foundry	services	are	from	a	limited	number	of	suppliers, primarily	TSMC.	If	TSMC	or	any	of	our	other	key	suppliers	are	unable	or	unwilling	to	manufacture	and	deliver	sufficient	quantities	of	components	to	us,	on	the	time	schedule	and	of	the	quality	that	we require,	we	may	be	forced	to	seek	to	engage	additional	or	replacement	suppliers,	which	could	result	in	significant	expenses	and	disruptions	or	delays	in	manufacturing,	product	development	and	shipment of	product	to	our	customers.	Although	we	have	experienced	shortages	of	components,	materials	and	external	foundry	services	from	time	to	time,	these	items	have	generally	been	available	to	us	as	needed.

# Backlog

Backlog	at	the	end	of	fiscal	2011	was	approximately	$379	million,	down	from	approximately	$563	million	at	the	end	of	fiscal	2010.	We	define	backlog	as	of	a	particular	date	to	mean	firm	orders from	a	customer	or	distributor	with	a	requested	delivery	date	within	thirteen	weeks.	Backlog	is	impacted	by	the	tendency	of	customers	to	rely	on	shorter	lead	times	available	from	suppliers,	including	us, in	periods	of	depressed	demand.	In	periods	of	increased	demand,	there	is	a	tendency	towards	longer	lead	times	that	has	the	effect	of	increasing	backlog	and,	in	some	instances,	we	may	not	have manufacturing	capacity	sufficient	to	fulfill	all	orders.	As	is	customary	in	the	semiconductor	industry,	we	allow	most	orders	to	be	cancelled	or	deliveries	to	be	delayed	by	customers	without	significant penalty.	Accordingly,	we	believe	that	our	backlog	at	any	time	should	not	be	used	as	an	indication	of	our	future	revenue.

We	typically	do	not	have	long-term	sales	contracts	with	our	customers.	In	some	of	our	markets	where	end-user	demand	may	be	particularly	volatile	and	difficult	to	predict,	some	customers	place orders	that	require	us	to	manufacture	product	and	have	it	available	for	shipment,	even	though	the	customer	is	unwilling	to	make	a	binding	commitment	to	purchase	all,	or	even	any,	of	the	product.	In	other instances,	we	manufacture	product	based	on	forecasts	of	customer	demand.	As	a	result,	we	may	incur	inventory	and	manufacturing	costs	in	advance	of	anticipated	sales	and	are	subject	to	the	risk	of cancellation	of	orders	leading	to	a	sharp	reduction	of	sales	and	backlog.	Further,	those	orders	or	forecasts	may	be	for	products	that	meet	the	customer's	unique	requirements	so	that	those	cancelled	orders would,	in	addition,	result	in	an	inventory	of	unsaleable	products,	resulting	in	potential	inventory	write-offs.	As	a	result	of	lengthy	manufacturing	cycles	for	some	of	our	products	that	are	subject	to	these uncertainties,	the	amount	of	unsaleable	product	could	be	substantial.

# Government	Contracts

We	estimate	that	approximately	3%	of	our	fiscal	2011	revenue	was	attributable	to	sales	to	the	U.S.	government	and	U.S.	government	contractors	and	subcontractors.	Our	government	contract business	is	predominantly	in	the	form	of	negotiated,	firm,	fixed-price	subcontracts.	Most	of	these	contracts	and	subcontracts	contain	standard	provisions	relating	to	termination	at	the	election	of	the U.S.	government.

# Acquisitions,	Divestitures	and	Investments

An	element	of	our	business	strategy	involves	expansion	through	the	acquisition	of	businesses,	assets,	products	or	technologies	that	allow	us	to	complement	our	existing	product	offerings,	expand our	market	coverage,	increase	our	engineering	workforce	or	enhance	our	technological	capabilities.	From	time	to	time,	we	consider	acquisitions	and	divestitures	that	may	strengthen	our	business.

Additional	information	relating	to	our	acquisition	and	divestiture	activities	during	fiscal	2011,	2010	and	2009	is	set	forth	in	Note	2u	and	Note	6	of	the	Notes	to	Consolidated	Financial	Statements contained	in	Item	8	of	this	Annual	Report	on	Form	10-K.

# Competition

We	believe	that	competitive	performance	in	the	marketplace	for	signal	processing	products	depends	upon	multiple	factors,	including	technological	innovation,	strength	of	brand,	diversity	of product	portfolio,	product	performance,	technical	support,	delivery	capabilities,	customer	service	quality,	reliability	and	price,	with	the	relative	importance	of	these	factors	varying	among	products, markets,	and	customers.

We	compete	with	a	number	of	semiconductor	companies	in	markets	that	are	highly	competitive.	Our	competitors	include	but	are	not	limited	to:

•	Broadcom	Corporation •	Maxim	Integrated	Products,	Inc.

•	Linear	Technology	Corporation

We	believe	that	our	technical	innovation	emphasizing	product	performance	and	reliability,	supported	by	our	commitment	to	strong	customer	service	and	technical	support,	enables	us	to	make	a fundamental	difference	to	our	customers'	competiveness	in	our	chosen	markets.

# Environment,	Health	and	Safety

We	are	committed	to	protecting	the	environment	and	the	health	and	safety	of	our	employees,	customers	and	the	public.	We	endeavor	to	adhere	to	applicable	environmental,	health	and	safety (EHS)	regulatory	and	industry	standards	across	all	of	our	facilities,	and	to	encourage	pollution	prevention,	reduce	our	water	and	energy	consumption,	reduce	waste	generation,	and	strive	towards continual	improvement.	We	strive	to	achieve	excellence	in	EHS	management	practices	as	an	integral	part	of	our	total	quality	management	system.

Our	management	systems	are	certified	to	ISO	14001,	OHSAS	18001,	ISO	9001	and	TS16949.	We	are	a	member	of	the	Electronic	Industry	Citizenship	Coalition,	(EICC).	Our	Sustainability Report,	first	published	in	2009,	states	our	commitment	to	consuming	less	energy	and	applying	fair	labor	standards,	among	other	things.	We	are	not	including	the	information	contained	in	our Sustainability	Report	in,	or	incorporating	it	by	reference	into	this	Annual	Report	on	Form	10-K.

Our	manufacturing	facilities	are	subject	to	numerous	and	increasingly	strict	federal,	state	local	and	foreign	EHS	laws	and	regulations,	particularly	with	respect	to	the	transportation,	storage, handling,	use,	emission,	discharge	and	disposal	of	certain	chemicals	used	or	produced	in	the	semiconductor	manufacturing	process.	Our	products	are	subject	to	increasingly	stringent	regulations regarding	chemical	content	in	jurisdictions	where	we	sell	products,	including	the	Restriction	of	Hazardous	Substances	(RoHS)	directive	in	the	European	Union	and	China	and	the	Registration,	Evaluation, Authorization	and	Restriction	of	Chemicals	(REACH)	directive	in	the	European	Union.	Contracts	with	many	of	our	customers	reflect	these	and	additional	EHS	compliance	standards.	Compliance	with these	laws	and	regulations	has	not	had	a	material	impact	on	our	capital	expenditures,	earnings,	financial	condition	or	competitive	position.	There	can	be	no	assurance,	however,	that	current	or	future environmental	laws	and	regulations	will	not	impose	costly	requirements	upon	us.	Any	failure	by	us	to	comply	with	applicable	environmental	laws,	regulations	and	contractual	obligations	could	result	in fines,	suspension	of	production,	the	need	to	alter	manufacturing	processes	and	legal	liability.

# Employees

As	of	October	29,	2011,	we	employed	approximately	9,200	individuals	worldwide.	Our	future	success	depends	in	large	part	on	the	continued	service	of	our	key	technical	and	senior	management personnel,	and	on	our	ability	to	continue	to	attract,	retain	and	motivate	qualified	employees,	particularly	those	highly-skilled	design,	process,	test	and	applications	engineers	involved	in	the	design,	support and	manufacture	of	new	and	existing	products	and	processes.	We	believe	that	relations	with	our	employees	are	good;	however,	the	competition	for	such	personnel	is	intense,	and	the	loss	of	key	personnel could	have	a	material	adverse	impact	on	our	results	of	operations	and	financial	condition.

# ITEM	1A. RISK	FACTORS

Set	forth	below	and	elsewhere	in	this	report	and	in	other	documents	we	file	with	the	SEC	are	descriptions	of	the	risks	and	uncertainties	that	could	cause	our	actual	results	to	differ	materially	from the	results	contemplated	by	the	forward-looking	statements	contained	in	this	report.

# Disruptions	in	global	credit	and	financial	markets	could	materially	and	adversely	affect	our	business	and	results	of	operations.

There	is	significant	uncertainty	about	the	stability	of	global	credit	and	financial	markets.	These	economic	uncertainties	affect	businesses	such	as	ours	in	a	number	of	ways,	making	it	difficult	to accurately	forecast	and	plan	our	future	business	activities.	High	unemployment	rates,	weakness	in	commercial	and	residential	real	estate	markets	and	the	tightening	of	credit	by	financial	institutions	may lead	consumers	and	businesses	to	postpone	spending,	which	may	cause	our	customers	to	cancel,	decrease	or	delay	their	existing	and	future	orders	for	our	products.	In	addition,	financial	difficulties experienced	by	our	suppliers	or	distributors	could	result	in	product	delays,	increased	accounts	receivable	defaults	and	inventory	challenges.	Financial	turmoil	may	cause	financial	institutions	to consolidate	or	go	out	of	business,	which	increases	the	risk	that	the	actual	amounts	realized	in	the	future	on	our	financial	instruments	could	differ	significantly	from	the	fair	value	assigned	to	them.	During the	past	few	years,	many	governments	adopted	stimulus	or	spending	programs	designed	to	ease	the	economic	impact	of	the	crisis.	Some	of	our	businesses	benefited	from	these	stimulus	programs	and	as these	programs	conclude,	those	businesses	could	be	negatively	impacted.	The	continuing	debt	crisis	in	certain	European	countries	could	cause	the	value	of	the	Euro	to	deteriorate,	thus	reducing	the purchasing	power	of	our	European	customers.	In	addition,	the	recent	downgrade	of	the	U.S.	credit	rating	and	the	ongoing	European	debt	crisis	have	contributed	to	the	instability	in	global	credit	markets. We	are	unable	to	predict	the	impact	of	these	events,	and	if	economic	conditions	deteriorate,	we	may	record	additional	charges	relating	to	restructuring	costs	or	the	impairment	of	assets	and	our	business and	results	of	operations	could	be	materially	and	adversely	affected.

# Our	future	revenue,	gross	margins,	operating	results	and	net	income	are	difficult	to	predict	and	may	materially	fluctuate.

Our	future	revenue,	gross	margins,	operating	results	and	net	income	are	difficult	to	predict	and	may	be	materially	affected	by	a	number	of	factors,	including:

•	the	effects	of	adverse	economic	conditions	in	the	United	States	and	international	markets;

•	changes	in	customer	demand	for	our	products	and	for	end	products	that	incorporate	our	products;

•	the	effectiveness	of	our	efforts	to	refocus	our	operations,	including	our	ability	to	reduce	our	cost	structure	in	both	the	short	term	and	over	a	longer	duration;

•	the	timing	of	new	product	announcements	or	introductions	by	us,	our	customers	or	our	competitors;

•	competitive	pricing	pressures;

•	fluctuations	in	manufacturing	yields,	adequate	availability	of	wafers	and	other	raw	materials,	and	manufacturing,	assembly	and	test	capacity;

•	the	ability	of	our	third	party	suppliers,	subcontractors	and	manufacturers	to	supply	us	with	sufficient	quantities	of	products	or	components;

•	any	significant	decline	in	our	backlog;

•	the	timing,	delay	or	cancellation	of	significant	customer	orders	and	our	ability	to	manage	inventory;

•	our	ability	to	hire,	retain	and	motivate	adequate	numbers	of	engineers	and	other	qualified	employees	to	meet	the	demands	of	our	customers;

•	changes	in	geographic,	product	or	customer	mix;

•	our	ability	to	utilize	our	manufacturing	facilities	at	efficient	levels;

•	potential	significant	litigation-related	costs;

•	the	difficulties	inherent	in	forecasting	future	operating	expense	levels,	including	with	respect	to	costs	associated	with	labor,	utilities,	transportation	and	raw	materials;

•	the	costs	related	to	compliance	with	increasing	worldwide	environmental	regulations;

•	changes	in	our	effective	tax	rates	in	the	United	States,	Ireland	or	worldwide;	and

•	the	effects	of	public	health	emergencies,	natural	disasters,	widespread	travel	disruptions,	security	risks,	terrorist	activities,	international	conflicts	and	other	events	beyond	our	control.

In	addition,	the	semiconductor	market	has	historically	been	cyclical	and	subject	to	significant	economic	upturns	and	downturns.	Our	business	is	subject	to	rapid	technological	changes	and	there can	be	no	assurance,	depending	on	the	mix	of	future	business,	that	products	stocked	in	our	inventory	will	not	be	rendered	obsolete	before	we	ship	them.	As	a	result	of	these	and	other	factors,	there	can	be no	assurance	that	we	will	not	experience	material	fluctuations	in	future	revenue,	gross	margins,	operating	results	and	net	income	on	a	quarterly	or	annual	basis.	In	addition,	if	our	revenue,	gross	margins, operating	results	and	net	income	do	not	meet	the	expectations	of	securities	analysts	or	investors,	the	market	price	of	our	common	stock	may	decline.

# Changes	in	our	effective	tax	rate	may	impact	our	results	of	operations.

A	number	of	factors	may	increase	our	future	effective	tax	rate,	including:	increases	in	tax	rates	in	various	jurisdictions;	the	jurisdictions	in	which	profits	are	earned	and	taxed;	the	resolution	of issues	arising	from	tax	audits	with	various	tax	authorities;	changes	in	the	valuation	of	our	deferred	tax	assets	and	liabilities;	adjustments	to	income	taxes	upon	finalization	of	various	tax	returns;	increases in	expenses	not	deductible	for	tax	purposes,	including	write-offs	of	acquired	in-process	research	and	development	and	impairments	of	goodwill	in	connection	with	acquisitions;	the	lack	of	sufficient excess	tax	benefits	(credits)	in	our	additional	paid	in	capital	(APIC)	pool	in	situations	where	our	realized	tax	deductions	for	certain	stock-based	compensation	awards	are	less	than	those	originally anticipated;	changes	in	available	tax	credits;	and	changes	in	tax	laws	or	the	interpretation	of	such	tax	laws.	Any	significant	increase	in	our	future	effective	tax	rates	could	adversely	impact	our	net	income for	future	periods.

Long-term	contracts	are	not	typical	for	us	and	reductions,	cancellations	or	delays	in	orders	for	our	products	could	adversely	affect	our	operating	results.

We	typically	do	not	have	long-term	sales	contracts	with	our	customers.	In	certain	markets	where	end-user	demand	may	be	particularly	volatile	and	difficult	to	predict,	some	customers	place orders	that	require	us	to	manufacture	product	and	have	it	available	for	shipment,	even	though	the	customer	is	unwilling	to	make	a	binding	commitment	to	purchase	all,	or	even	any,	of	the	product.	In	other instances,	we	manufacture	product	based	on	forecasts	of	customer	demands.	As	a	result,	we	may	incur	inventory	and	manufacturing	costs	in	advance	of	anticipated	sales	and	are	subject	to	the	risk	of cancellations	of	orders,	leading	to	a	sharp	reduction	of	sales	and	backlog.	Further,	orders	or	forecasts	may	be	for	products	that	meet	the	customer's	unique	requirements	so	that	those	cancelled	or unrealized	orders	would,	in	addition,	result	in	an	inventory	of	unsaleable	products,	causing	potential	inventory	write-offs.	As	a	result	of	lengthy	manufacturing	cycles	for	certain	of	the	products	that	are subject	to	these	uncertainties,	the	amount	of	unsaleable	product	could	be	substantial.	Incorrect	forecasts,	or	reductions,	cancellations	or	delays	in	orders	for	our	products	could	adversely	affect	our operating	results.

Our	future	success	depends	upon	our	ability	to	continue	to	innovate,	improve	our	products,	develop	and	market	new	products,	and	identify	and	enter	new	markets.

Our	success	significantly	depends	on	our	continued	ability	to	improve	our	products	and	develop	and	market	innovative	new	products.	Product	development,	innovation	and	enhancement	is	often a	complex,	time-consuming	and	costly	process	involving	significant	investment	in	research	and	development,	with	no	assurance	of	return	on	investment.	There	can	be	no	assurance	that	we	will	be	able	to develop	and	introduce	new	and	improved	products	in	a	timely	or	efficient	manner	or	that	new	and	improved	products,	if	developed,	will	achieve	market	acceptance.	Our	products	generally	must	conform to	various	evolving	and	sometimes	competing	industry	standards,	which	may	adversely	affect	our	ability	to	compete	in	certain	markets	or	require	us	to	incur	significant	costs.	In	addition,	our

customers	generally	impose	very	high	quality	and	reliability	standards	on	our	products,	which	often	change	and	may	be	difficult	or	costly	to	satisfy.	Any	inability	to	satisfy	customer	quality	standards	or comply	with	industry	standards	and	technical	requirements	may	adversely	affect	demand	for	our	products	and	our	results	of	operations.	In	addition,	our	growth	is	dependent	on	our	continued	ability	to identify	and	penetrate	new	markets	where	we	have	limited	experience	and	competition	is	intense.	Also,	some	of	our	customers	in	these	markets	are	less	established,	which	could	subject	us	to	increased credit	risk.	There	can	be	no	assurance	that	the	markets	we	serve	will	grow	in	the	future,	that	our	existing	and	new	products	will	meet	the	requirements	of	these	markets,	that	our	products	will	achieve customer	acceptance	in	these	markets,	that	competitors	will	not	force	price	reductions	or	take	market	share	from	us,	or	that	we	can	achieve	or	maintain	adequate	gross	margins	or	profits	in	these	markets. Furthermore,	a	decline	in	demand	in	one	or	several	of	our	end-user	markets	could	have	a	material	adverse	effect	on	the	demand	for	our	products	and	our	results	of	operations.

We	may	not	be	able	to	compete	successfully	in	markets	within	the	semiconductor	industry	in	the	future.

We	face	intense	technological	and	pricing	competition	in	the	semiconductor	industry,	and	we	expect	this	competition	to	increase	in	the	future,	including	from	companies	located	outside	the United	States.	Many	other	companies	offer	products	that	compete	with	our	products.	Some	have	(or	as	a	result	of	consolidation	within	the	industry	may	have)	greater	financial,	manufacturing,	technical, sales	and	marketing	resources	than	we	have.	Some	of	our	competitors	may	have	more	advantageous	supply	or	development	relationships	with	our	current	and	potential	customers	or	suppliers.	Our competitors	also	include	emerging	companies	selling	specialized	products	in	markets	we	serve.	Competition	is	generally	based	on	design	and	quality	of	products,	product	performance,	features	and functionality,	and	product	pricing,	availability	and	capacity,	with	the	relative	importance	of	these	factors	varying	among	products,	markets	and	customers.	Existing	or	new	competitors	may	develop products	or	technologies	that	more	effectively	address	the	demands	of	our	customers	and	markets	with	enhanced	performance,	features	and	functionality,	lower	power	requirements,	greater	levels	of integration	or	lower	cost.	Increased	competition	in	certain	markets	has	resulted	in	and	may	continue	to	result	in	declining	average	selling	prices,	reduced	gross	margins	and	loss	of	market	share	in	those markets.	There	can	be	no	assurance	that	we	will	be	able	to	compete	successfully	in	the	future	against	existing	or	new	competitors,	or	that	our	operating	results	will	not	be	adversely	affected	by	increased competition.

We	rely	on	third-party	suppliers,	subcontractors	and	manufacturers	for	some	industry-standard	wafers,	manufacturing	processes	and	assembly	and	test	services,	and	generally	cannot	control	their availability	or	conditions	of	supply.

We	rely,	and	plan	to	continue	to	rely,	on	suppliers,	assembly	and	test	subcontractors,	and	third-party	wafer	fabricators	to	supply	most	of	our	wafers	that	can	be	manufactured	using	industry- standard	submicron	processes.	This	reliance	involves	several	risks,	including	reduced	control	over	availability,	capacity	utilization,	delivery	schedules,	manufacturing	yields,	and	costs.	Additionally,	we utilize	a	limited	number	of	third-party	wafer	fabricators,	primarily	Taiwan	Semiconductor	Manufacturing	Company,	or	TSMC.	In	addition,	these	suppliers	often	provide	manufacturing	services	to	our competitors	and	therefore	periods	of	increased	industry	demand	may	result	in	capacity	constraints.	In	certain	instances,	the	third	party	supplier	is	the	sole	source	of	highly	specialized	processing	services. If	our	suppliers	are	unable	or	unwilling	to	manufacture	and	deliver	components	to	us	on	the	time	schedule	and	of	the	quality	or	quantity	that	we	require	or	provide	us	with	required	manufacturing processes,	we	may	be	forced	to	seek	to	engage	additional	or	replacement	suppliers,	which	could	result	in	additional	expenses	and	delays	in	product	development	or	shipment	of	product	to	our	customers. If	replacement	suppliers	or	manufacturing	processes	are	not	available,	we	may	also	experience	delays	in	product	development	or	shipment	which	could,	in	turn,	result	in	the	temporary	or	permanent	loss of	customers.	A	significant	portion	of	our	revenue	for	fiscal	2011	was	from	products	fabricated	at	third-party	wafer-fabrication	facilities,	primarily	TSMC.

The	markets	for	semiconductor	products	are	cyclical,	and	increased	production	may	lead	to	overcapacity	and	lower	prices,	and	conversely,	we	may	not	be	able	to	satisfy	unexpected	demand	for	our products.

The	cyclical	nature	of	the	semiconductor	industry	has	resulted	in	periods	when	demand	for	our	products	has	increased	or	decreased	rapidly.	If	we	expand	our	operations	and	workforce	too	rapidly or	procure	excessive

resources	in	anticipation	of	increased	demand	for	our	products,	and	that	demand	does	not	materialize	at	the	pace	at	which	we	expect	or	declines,	or	if	we	overbuild	inventory	in	a	period	of	decreased demand,	our	operating	results	may	be	adversely	affected	as	a	result	of	increased	operating	expenses,	reduced	margins,	underutilization	of	capacity	or	asset	impairment	charges.	These	capacity	expansions by	us	and	other	semiconductor	manufacturers	could	also	lead	to	overcapacity	in	our	target	markets	which	could	lead	to	price	erosion	that	would	adversely	impact	our	operating	results.	Conversely,	during periods	of	rapid	increases	in	demand,	our	available	capacity	may	not	be	sufficient	to	satisfy	the	demand.	In	addition,	we	may	not	be	able	to	expand	our	workforce	and	operations	in	a	sufficiently	timely manner,	procure	adequate	resources,	or	locate	suitable	third-party	suppliers,	to	respond	effectively	to	changes	in	demand	for	our	existing	products	or	to	the	demand	for	new	products	requested	by	our customers,	and	our	current	or	future	business	could	be	materially	and	adversely	affected.

Our	semiconductor	products	are	complex	and	we	may	be	subject	to	product	warranty	and	indemnity	claims,	which	could	result	in	significant	costs	and	damage	to	our	reputation	and	adversely	affect	the market	acceptance	of	our	products.

Semiconductor	products	are	highly	complex	and	may	contain	defects	when	they	are	first	introduced	or	as	new	versions	are	developed.	We	generally	warrant	our	products	to	our	customers	for	one year	from	the	date	title	passes	from	us.	We	invest	significant	resources	in	the	testing	of	our	products;	however,	if	any	of	our	products	contain	defects,	we	may	be	required	to	incur	additional	development and	remediation	costs,	pursuant	to	warranty	and	indemnification	provisions	in	our	customer	contracts	and	purchase	orders.	These	problems	may	divert	our	technical	and	other	resources	from	other product	development	efforts	and	could	result	in	claims	against	us	by	our	customers	or	others,	including	liability	for	costs	associated	with	product	recalls,	which	may	adversely	impact	our	operating results.	We	may	also	be	subject	to	customer	indemnity	claims.	Our	customers	have	on	occasion	been	sued,	and	may	in	the	future	be	sued,	by	third	parties	with	respect	to	infringement	or	other	product matters,	and	those	customers	may	seek	indemnification	from	us	under	the	terms	and	conditions	of	our	sales	contracts	with	them.	In	certain	cases,	our	potential	indemnification	liability	may	be	significant. If	any	of	our	products	contains	defects,	or	has	reliability,	quality	or	compatibility	problems,	our	reputation	may	be	damaged,	which	could	make	it	more	difficult	for	us	to	sell	our	products	to	existing	and prospective	customers	and	could	adversely	affect	our	operating	results.

We	have	manufacturing	processes	that	utilize	a	substantial	amount	of	technology	as	the	fabrication	of	integrated	circuits	is	a	highly	complex	and	precise	process.	Minute	impurities,	contaminants in	the	manufacturing	environment,	difficulties	in	the	fabrication	process,	defects	in	the	masks	used	in	the	wafer	manufacturing	process,	manufacturing	equipment	failures,	wafer	breakage	or	other	factors can	cause	a	substantial	percentage	of	wafers	to	be	rejected	or	numerous	dice	on	each	wafer	to	be	nonfunctional.	While	we	have	significant	expertise	in	semiconductor	manufacturing,	it	is	possible	that some	processes	could	become	unstable.	This	instability	could	result	in	manufacturing	delays	and	product	shortages,	which	could	have	a	material	adverse	effect	on	our	operating	results.

We	are	involved	in	frequent	litigation,	including	regarding	intellectual	property	rights,	which	could	be	costly	to	bring	or	defend	and	could	require	us	to	redesign	products	or	pay	significant	royalties.

The	semiconductor	industry	is	characterized	by	frequent	claims	and	litigation	involving	patent	and	other	intellectual	property	rights,	including	claims	arising	under	our	contractual	obligations	to indemnify	our	customers.	Other	companies	or	individuals	have	obtained	patents	covering	a	variety	of	semiconductor	designs	and	processes,	and	we	might	be	required	to	obtain	licenses	under	some	of these	patents	or	be	precluded	from	making	and	selling	infringing	products,	if	those	patents	are	found	to	be	valid.	From	time	to	time,	we	receive	claims	from	third	parties	asserting	that	our	products	or processes	infringe	their	patents	or	other	intellectual	property	rights.	In	the	event	a	third	party	makes	a	valid	intellectual	property	claim	against	us	and	a	license	is	not	available	to	us	on	commercially reasonable	terms,	or	at	all,	we	could	be	forced	either	to	redesign	or	to	stop	production	of	products	incorporating	that	intellectual	property,	and	our	operating	results	could	be	materially	and	adversely affected.	Litigation	may	be	necessary	to	enforce	our	patents	or	other	of	our	intellectual	property	rights	or	to	defend	us	against	claims	of	infringement,	and	this	litigation	could	be	costly	and	divert	the attention	of	our	key	personnel.	We	could	be	subject	to	warranty	or	product	liability	claims	that	could	lead	to	significant	costs	and	expenses	as	we	defend	those	claims	or	pay	damage	awards.	There	can	be no	assurance	that	we	are	adequately	insured	to	protect	against	all	claims	and

potential	liabilities.	We	may	incur	costs	and	expenses	relating	to	a	recall	of	our	customers'	products	due	to	an	alleged	failure	of	components	we	supply.	An	adverse	outcome	in	litigation	could	have	a material	adverse	effect	on	our	financial	position	or	on	our	operating	results	or	cash	flows	in	the	period	in	which	the	litigation	is	resolved.

# We	may	be	unable	to	adequately	protect	our	proprietary	rights,	which	may	limit	our	ability	to	compete	effectively.

Our	success	depends,	in	part,	on	our	ability	to	protect	our	intellectual	property.	We	primarily	rely	on	patent,	mask	work,	copyright,	trademark	and	trade	secret	laws,	as	well	as	nondisclosure agreements	and	other	methods,	to	protect	our	proprietary	technologies	and	processes.	Despite	our	efforts	to	protect	our	proprietary	technologies	and	processes,	it	is	possible	that	competitors	or	other unauthorized	third	parties	may	obtain,	copy,	use	or	disclose	our	technologies,	products	and	processes.	Moreover,	the	laws	of	foreign	countries	in	which	we	design,	manufacture,	market	and	sell	our products	may	afford	little	or	no	effective	protection	of	our	proprietary	technology.

There	can	be	no	assurance	that	the	claims	allowed	in	our	issued	patents	will	be	sufficiently	broad	to	protect	our	technology.	In	addition,	any	of	our	existing	or	future	patents	may	be	challenged, invalidated	or	circumvented.	As	such,	any	rights	granted	under	these	patents	may	not	provide	us	with	meaningful	protection.	We	may	not	have	foreign	patents	or	pending	applications	corresponding	to our	U.S.	patents	and	applications.	Even	if	foreign	patents	are	granted,	effective	enforcement	in	foreign	countries	may	not	be	available.	If	our	patents	and	mask	works	do	not	adequately	protect	our technology,	our	competitors	may	be	able	to	offer	products	similar	to	ours.	Our	competitors	may	also	be	able	to	develop	similar	technology	independently	or	design	around	our	patents.

We	generally	enter	into	confidentiality	agreements	with	our	employees,	consultants	and	strategic	partners.	We	also	try	to	control	access	to	and	distribution	of	our	technologies,	documentation	and other	proprietary	information.	Despite	these	efforts,	internal	or	external	parties	may	attempt	to	copy,	disclose,	obtain	or	use	our	products	or	technology	without	our	authorization.	Also,	former	employees may	seek	employment	with	our	business	partners,	customers	or	competitors,	and	there	can	be	no	assurance	that	the	confidential	nature	of	our	proprietary	information	will	be	maintained	in	the	course	of such	future	employment.

We	may	be	subject	to	network	disruptions	or	security	breaches	that	could	damage	our	reputation	and	harm	our	business	and	operating	results.

We	may	be	subject	to	network	disruptions	or	security	breaches	caused	by	computer	viruses,	illegal	break-ins	or	hacking,	sabotage,	acts	of	vandalism	by	third	parties	or	terrorism.	Our	security measures	or	those	of	our	third	party	service	providers	may	not	detect	or	prevent	such	security	breaches.	Any	such	compromise	of	our	information	security	could	result	in	the	unauthorized	publication	of our	confidential	business	or	proprietary	information,	cause	an	interruption	in	our	operations,	result	in	the	unauthorized	release	of	customer	or	employee	data,	result	in	a	violation	of	privacy	or	other	laws, expose	us	to	a	risk	of	litigation	or	damage	our	reputation,	which	could	harm	our	business	and	operating	results.

If	we	do	not	retain	our	key	personnel,	our	ability	to	execute	our	business	strategy	will	be	adversely	affected.

Our	continued	success	depends	to	a	significant	extent	upon	the	recruitment,	retention	and	effective	succession	of	our	executive	officers	and	key	management	and	technical	personnel,	particularly our	experienced	engineers.	The	competition	for	these	employees	is	intense.	The	loss	of	the	services	of	one	or	more	of	our	key	personnel	could	have	a	material	adverse	effect	on	our	operating	results.	In addition,	there	could	be	a	material	adverse	effect	on	our	business	should	the	turnover	rates	for	engineers	and	other	key	personnel	increase	significantly	or	if	we	are	unable	to	continue	to	attract	qualified personnel.	We	do	not	maintain	any	key	person	life	insurance	policy	on	any	of	our	officers	or	employees.

To	remain	competitive,	we	may	need	to	acquire	other	companies,	purchase	or	license	technology	from	third	parties,	or	enter	into	other	strategic	transactions	in	order	to	introduce	new	products	or enhance	our	existing	products.

An	element	of	our	business	strategy	involves	expansion	through	the	acquisitions	of	businesses,	assets,	products	or	technologies	that	allow	us	to	complement	our	existing	product	offerings,	expand our	market	coverage,	increase	our	engineering	workforce	or	enhance	our	technological	capabilities.	We	may	not	be	able	to	find	businesses	that

have	the	technology	or	resources	we	need	and,	if	we	find	such	businesses,	we	may	not	be	able	to	purchase	or	license	the	technology	or	resources	on	commercially	favorable	terms	or	at	all.	Acquisitions and	technology	licenses	are	difficult	to	identify	and	complete	for	a	number	of	reasons,	including	the	cost	of	potential	transactions,	competition	among	prospective	buyers	and	licensees,	the	need	for regulatory	approvals,	and	difficulties	related	to	integration	efforts.	Both	in	the	U.S.	and	abroad,	governmental	regulation	of	acquisitions	has	become	more	complex,	increasing	the	costs	and	risks	of undertaking	significant	acquisitions.	In	order	to	finance	a	potential	transaction,	we	may	need	to	raise	additional	funds	by	issuing	securities	or	borrowing	money.	We	may	not	be	able	to	find	financing	on favorable	terms,	and	the	sale	of	our	stock	may	result	in	the	dilution	of	our	existing	shareholders	or	the	issuance	of	securities	with	rights	that	are	superior	to	the	rights	of	our	common	shareholders.

Acquisitions	also	involve	a	number	of	risks,	including:

•	difficulty	integrating	acquired	technologies,	operations	and	personnel	with	our	existing	businesses;

•	diversion	of	management	attention	in	connection	with	both	negotiating	the	acquisitions	and	integrating	the	assets;

•	strain	on	managerial	and	operational	resources	as	management	tries	to	oversee	larger	operations;

•	the	future	funding	requirements	for	acquired	companies,	which	may	be	significant;

•	potential	loss	of	key	employees;

•	exposure	to	unforeseen	liabilities	of	acquired	companies;	and

•	increased	risk	of	costly	and	time-consuming	litigation.

If	we	are	unable	to	successfully	address	these	risks,	we	may	not	realize	some	or	all	of	the	expected	benefits	of	the	acquisition,	which	may	have	an	adverse	effect	on	our	business	plans	and operating	results.

We	rely	on	manufacturing	capacity	located	in	geologically	unstable	areas,	which	could	affect	the	availability	of	supplies	and	services.

We,	like	many	companies	in	the	semiconductor	industry,	rely	on	internal	manufacturing	capacity,	wafer	fabrication	foundries	and	other	sub-contractors	in	geologically	unstable	locations	around the	world.	This	reliance	involves	risks	associated	with	the	impact	of	earthquakes	on	us	and	the	semiconductor	industry,	including	temporary	loss	of	capacity,	availability	and	cost	of	key	raw	materials, utilities	and	equipment	and	availability	of	key	services,	including	transport	of	our	products	worldwide.	For	example,	in	March	2011,	a	severe	earthquake	and	tsunami	hit	Japan,	which	together	with resulting	damage	to	certain	nuclear	power	plants	created	widespread	destruction	and	economic	uncertainty	in	that	region.	Japan	represented	approximately	13%	of	our	revenue	in	fiscal	2011.	Any prolonged	inability	to	utilize	one	of	our	manufacturing	facilities,	or	those	of	our	subcontractors	or	third-party	wafer	fabrication	foundries,	as	a	result	of	fire,	natural	disaster,	unavailability	of	utilities	or otherwise,	could	result	in	a	temporary	or	permanent	loss	of	customers	for	affected	products,	which	could	have	a	material	adverse	effect	on	our	results	of	operations	and	financial	condition.

# We	are	exposed	to	business,	economic,	political,	legal	and	other	risks	through	our	significant	worldwide	operations.

We	have	significant	operations	and	manufacturing	facilities	outside	the	United	States,	including	in	Ireland	and	the	Philippines.	During	fiscal	2011,	we	derived	approximately	82%	of	our	revenue from	customers	in	international	markets.	Although	we	engage	in	hedging	transactions	to	reduce	our	exposure	to	currency	exchange	rate	fluctuations,	there	can	be	no	assurance	that	our	competitive position	will	not	be	adversely	affected	by	changes	in	the	exchange	rate	of	the	United	States	dollar	against	other	currencies.	Potential	interest	rate	increases,	as	well	as	high	energy	costs,	could	have	an adverse	impact	on	industrial	and	consumer	spending	patterns	and	could	adversely	impact	demand	for	our	products.	At	October	29,	2011,	our	principal	source	of	liquidity	was	$3,592.5	million	of	cash	and cash	equivalents	and	short-term	investments.	As	of	October	29,	2011,	approximately	$1,170.5	million	of	our	cash	and	cash	equivalents	and	short-term	investments	was	held	in	the	United	States	and	the remaining	balance	was	held	outside	the	United	States	in	various	foreign	subsidiaries.	As	we	intend	to	reinvest	certain	of	our	foreign

earnings	indefinitely,	this	cash	held	outside	the	United	States	is	not	readily	available	to	meet	certain	of	our	cash	requirements	in	the	United	States.	We	require	a	substantial	amount	of	cash	in	the	United States	for	operating	requirements,	stock	repurchases,	cash	dividends	and	acquisitions.	If	we	are	unable	to	address	our	U.S.	cash	requirements	through	operations,	through	borrowings	under	our	current credit	facility	or	from	other	sources	of	cash	obtained	at	an	acceptable	cost,	it	may	be	necessary	for	us	to	consider	repatriation	of	earnings	that	are	permanently	reinvested,	and	we	may	be	required	to	pay additional	taxes	under	current	tax	laws,	which	could	have	a	material	effect	on	our	results	of	operations	and	financial	condition.

In	addition	to	being	exposed	to	the	ongoing	economic	cycles	in	the	semiconductor	industry,	we	are	also	subject	to	the	economic,	political	and	legal	risks	inherent	in	international	operations, including	the	risks	associated	with	the	recent	crisis	in	global	credit	and	financial	markets,	ongoing	uncertainties	and	political	and	economic	instability	in	many	countries	around	the	world,	as	well	as economic	disruption	from	acts	of	terrorism	and	the	response	to	them	by	the	United	States	and	its	allies.	Other	business	risks	associated	with	global	operations	include	increased	managerial	complexities, air	transportation	disruptions,	expropriation,	currency	controls,	currency	exchange	rate	movement,	additional	costs	related	to	foreign	taxes,	tariffs	and	freight	rate	increases,	exposure	to	different	business practices	and	legal	standards,	particularly	with	respect	to	price	protection,	competition	practices,	intellectual	property,	anti-corruption	and	environmental	compliance,	trade	and	travel	restrictions, pandemics,	import	and	export	license	requirements	and	restrictions,	difficulties	in	staffing	and	managing	worldwide	operations,	and	accounts	receivable	collections.

We	expect	to	continue	to	expand	our	business	and	operations	in	China.	Our	success	in	the	Chinese	markets	may	be	adversely	affected	by	China's	continuously	evolving	laws	and	regulations, including	those	relating	to	taxation,	import	and	export	tariffs,	currency	controls,	environmental	regulations,	and	intellectual	property	rights	and	enforcement	of	those	rights.	Enforcement	of	existing	laws or	agreements	may	be	inconsistent.	In	addition,	changes	in	the	political	environment,	governmental	policies	or	U.S.-China	relations	could	result	in	revisions	to	laws	or	regulations	or	their	interpretation and	enforcement,	exposure	of	our	proprietary	intellectual	property,	increased	taxation,	restrictions	on	imports,	import	duties	or	currency	revaluations,	which	could	have	an	adverse	effect	on	our	business plans	and	operating	results.

# Our	operating	results	are	dependent	on	the	performance	of	independent	distributors.

A	significant	portion	of	our	sales	are	through	independent	distributors	that	are	not	under	our	control.	These	independent	distributors	generally	represent	product	lines	offered	by	several companies	and	thus	could	reduce	their	sales	efforts	applied	to	our	products	or	they	could	terminate	their	representation	of	us.	We	generally	do	not	require	letters	of	credit	from	our	distributors	and	are	not protected	against	accounts	receivable	default	or	declarations	of	bankruptcy	by	these	distributors.	Our	inability	to	collect	open	accounts	receivable	could	adversely	affect	our	operating	results.	Termination of	a	significant	distributor,	whether	at	our	initiative	or	the	distributor's	initiative,	could	disrupt	our	current	business,	and	if	we	are	unable	to	find	suitable	replacements,	our	operating	results	could	be adversely	affected.

We	are	subject	to	increasingly	strict	environmental	health	and	safety	(EHS)	regulations,	which	could	increase	our	expenses	and	affect	our	operating	results.

Our	industry	is	subject	to	increasingly	strict	EHS	requirements,	particularly	those	environmental	requirements	that	control	and	restrict	the	use,	transportation,	emission,	discharge,	storage	and disposal	of	certain	chemicals	used	or	produced	in	the	semiconductor	manufacturing	process.	Public	attention	to	environmental	concerns	continues	to	increase,	and	our	customers	routinely	include stringent	environmental	standards	in	their	contracts	with	us.	Changes	in	environmental	laws	or	regulations	may	require	us	to	invest	in	costly	equipment	or	alter	the	way	our	products	are	made.	In	addition, we	use	hazardous	and	other	regulated	materials	that	subject	us	to	risks	of	strict	liability	for	damages	caused	by	potential	or	actual	releases	of	such	materials.	Any	failure	to	control	such	materials adequately	or	to	comply	with	statutory	or	regulatory	standards	or	contractual	obligations	could	result	in	liability	for	damages,	penalties,	and	civil	and	criminal	fines,	and	might	damage	our	reputation, increase	our	expenses,	and	adversely	affect	our	operating	results.

New	climate	change	laws	and	regulations	could	require	us	to	change	our	manufacturing	processes	or	obtain	substitute	materials	that	may	cost	more	or	be	less	available	for	our	manufacturing operations.	In	addition,	new	restrictions	on	emissions	of	carbon	dioxide	or	other	greenhouse	gases	could	result	in	significant	costs	for	us.	The	Commonwealth	of	Massachusetts	has	adopted	greenhouse gas	regulations,	and	the	U.S.	Congress	may	pass	federal	greenhouse	gas	legislation	in	the	future.	The	U.S.	Environmental	Protection	Agency	(EPA)	has	issued	greenhouse	gas	reporting	regulations	that may	apply	to	certain	of	our	operations.	EPA	is	developing	other	climate	change-based	regulations,	as	are	certain	states,	that	also	may	increase	our	expenses	and	adversely	affect	our	operating	results.	We expect	increased	worldwide	regulatory	activity	relating	to	climate	change	in	the	future.	Compliance	with	these	laws	and	regulations	has	not	had	a	material	impact	on	our	capital	expenditures,	earnings, financial	condition	or	competitive	position.	There	is	no	assurance	that	the	cost	to	comply	with	current	or	future	EHS	laws	and	regulations	will	not	exceed	our	estimates	or	adversely	affect	our	financial condition	or	results	of	operations.	Additionally,	any	failure	by	us	to	comply	with	applicable	EHS	requirements	or	contractual	obligations	could	result	in	penalties,	civil	and	criminal	fines,	suspension	of	or changes	to	production,	legal	liability	and	damage	to	our	reputation.

If	we	are	unable	to	generate	sufficient	cash	flow,	we	may	not	be	able	to	service	our	debt	obligations,	including	making	payments	on	our	two	issuances	of	$375	million	senior	unsecured	notes	or	our $145	million	term	loan	facility.

In	fiscal	2009,	we	issued	in	a	public	offering	$375	million	aggregate	principal	amount	of	5.0%	senior	unsecured	notes	due	July	1,	2014.	In	April	2011,	we	issued	in	a	public	offering	$375	million aggregate	principal	amount	of	3.0%	senior	unsecured	notes	due	April	15,	2016.	In	December	2010,	Analog	Devices	Holdings	B.V.,	a	wholly	owned	subsidiary	of	ours,	entered	into	a	$145	million	term loan	facility	which	matures	on	December	22,	2013.	Our	ability	to	make	payments	of	principal	and	interest	on	our	indebtedness	when	due	depends	upon	our	future	performance,	which	will	be	subject	to general	economic	conditions,	industry	cycles	and	financial,	business	and	other	factors	affecting	our	consolidated	operations,	many	of	which	are	beyond	our	control.	If	we	are	unable	to	generate	sufficient cash	flow	from	operations	in	the	future	to	service	our	debt,	we	may	be	required	to,	among	other	things:

•	seek	additional	financing	in	the	debt	or	equity	markets;

•	refinance	or	restructure	all	or	a	portion	of	our	indebtedness,	including	the	notes;

•	sell	selected	assets;

•	reduce	or	delay	planned	capital	expenditures;	or

•	reduce	or	delay	planned	operating	expenditures.

Such	measures	might	not	be	sufficient	to	enable	us	to	service	our	debt,	including	the	notes	or	our	term	loan	facility,	which	could	negatively	impact	our	financial	results.	In	addition,	any	such financing,	refinancing	or	sale	of	assets	might	not	be	possible	on	economically	favorable	terms.

# Restrictions	in	our	revolving	credit	and	term	loan	facilities	and	outstanding	debt	instruments	may	limit	our	activities.

Our	current	revolving	credit	and	term	loan	facilities	and	our	5.0%	and	3.0%	senior	unsecured	notes	impose,	and	future	debt	instruments	to	which	we	may	become	subject,	may	impose	restrictions that	limit	our	ability	to	engage	in	activities	that	could	otherwise	benefit	our	company,	including	to	undertake	certain	transactions,	to	create	certain	liens	on	our	assets	and	to	incur	certain	subsidiary indebtedness.	Our	ability	to	comply	with	these	financial	restrictions	and	covenants	is	dependent	on	our	future	performance,	which	is	subject	to	prevailing	economic	conditions	and	other	factors,	including factors	that	are	beyond	our	control	such	as	foreign	exchange	rates,	interest	rates,	changes	in	technology	and	changes	in	the	level	of	competition.	In	addition,	our	credit	and	term	loan	facilities	require	us	to maintain	compliance	with	specified	financial	ratios.	If	we	breach	any	of	the	covenants	under	our	credit	or	term	loan	facilities	or	the	indenture	governing	our	outstanding	notes	and	do	not	obtain appropriate	waivers,	then,	subject	to	applicable	cure	periods,	our	outstanding	indebtedness	thereunder	could	be	declared	immediately	due	and	payable.

# Our	stock	price	may	be	volatile.

The	market	price	of	our	common	stock	has	been	volatile	in	the	past	and	may	be	volatile	in	the	future,	as	it	may	be	significantly	affected	by	the	following	factors:

•	crises	in	global	credit,	debt	and	financial	markets;

•	actual	or	anticipated	fluctuations	in	our	revenue	and	operating	results;

•	changes	in	financial	estimates	by	securities	analysts	or	our	failure	to	perform	in	line	with	those	estimates	or	our	published	guidance;

•	changes	in	market	valuations	of	other	semiconductor	companies;

•	announcements	by	us	or	our	competitors	of	significant	new	products,	technical	innovations,	acquisitions	or	dispositions,	litigation	or	capital	commitments;

•	departures	of	key	personnel;

•	actual	or	perceived	noncompliance	with	corporate	responsibility	or	ethics	standards	by	us	or	any	of	our	employees,	officers	or	directors;	and

•	negative	media	publicity	targeting	us	or	our	competitors.

The	stock	market	has	historically	experienced	volatility,	especially	within	the	semiconductor	industry,	that	often	has	been	unrelated	to	the	performance	of	particular	companies.	These	market fluctuations	may	cause	our	stock	price	to	fall	regardless	of	our	operating	results.

# ITEM	1B. UNRESOLVED	STAFF	COMMENTS

None.

# ITEM	2. PROPERTIES

Our	corporate	headquarters	is	located	in	Norwood,	Massachusetts.	Manufacturing	and	other	operations	are	conducted	in	several	locations	worldwide.	The	following	tables	provide	certain information	about	our	principal	general	offices	and	manufacturing	facilities:

period

In	addition	to	the	principal	leased	properties	listed	in	the	above	table,	we	also	lease	sales	offices	and	other	premises	at	21	locations	in	the	United	States	and	36	locations	internationally	under operating	lease	agreements.	These	leases	expire	at	various	dates	through	the	year	2022.	We	do	not	anticipate	experiencing	significant	difficulty	in	retaining	occupancy	of	any	of	our	manufacturing,	office or	sales	facilities	through	lease	renewals	prior	to	expiration	or	through	month-to-month	occupancy,	or	in	replacing	them	with	equivalent	facilities.	For	information	concerning	our	obligations	under	all operating	leases	see	Note	11	in	the	Notes	to	Consolidated	Financial	Statements	contained	in	Item	8	of	this	Annual	Report	on	Form	10-K.

# ITEM	3. LEGAL	PROCEEDINGS

From	time	to	time	in	the	ordinary	course	of	our	business,	various	claims,	charges	and	litigation	are	asserted	or	commenced	against	us	arising	from,	or	related	to,	contractual	matters,	patents, trademarks,	personal	injury,	environmental	matters,	product	liability,	insurance	coverage	and	personnel	and	employment	disputes.	As	to	such	claims	and	litigation,	we	can	give	no	assurance	that	we	will prevail.	We	do	not	believe	that	any	current	legal	matters	will	have	a	material	adverse	effect	on	our	financial	position,	results	of	operations	or	cash	flows.

# ITEM	4. (REMOVED	AND	RESERVED)

# EXECUTIVE	OFFICERS	OF	THE	COMPANY

The	following	table	sets	forth	(i)	the	name,	age	and	position	of	each	of	our	executive	officers	and	(ii)	the	business	experience	of	each	person	named	in	the	table	during	at	least	the	past	five	years.

There	is	no	family	relationship	among	any	of	our	executive	officers.

Executive	Officer Age Position(s) Business	Experience William	Matson 	52 Vice	President,	Human	Resources Vice	President,	Human	Resources	since	November	2006;	Chief Human	Resource	Officer	of	Lenovo,	an	international	computer manufacturer,	from	January	2005	to	June	2006;	General	Manager	of IBM	Business	Transformation	Outsourcing	from	September	2003	to April	2005;	Vice	President,	Human	Resources	of	IBM	Asia	Pacific Region	from	December	1999	to	September	2003. Robert	McAdam 	60 Vice	President,	Core	Products	and	Technologies Group Vice	President,	Core	Products	and	Technologies	Group	since October	2009;	Vice	President	and	General	Manager,	Analog Semiconductor	Components	from	February	1994	to	September 2009;	Vice	President	and	General	Manager,	Analog	Devices, B.V.	—	Limerick,	Ireland	from	January	1991	to	February	1994; Product	Line	Manager,	Analog	Devices,	B.V.	—	Limerick,	Ireland from	October	1988	to	January	1991. Vincent	Roche 	51 Vice	President,	Strategic	Market	Segments	Group Vice	President,	Strategic	Segments	Group	and	Global	Sales	since October	2009;	Vice	President,	Worldwide	Sales	from	March	2001	to October	2009;	Vice	President	and	General	Manager,	Silicon	Valley Business	Units	and	Computer	&	Networking	from	1999	to	March 2001;	Product	Line	Director	from	1995	to	1999;	Product	Marketing Manager	from	1988	to	1995. Margaret	K.	Seif 	50 Vice	President,	General	Counsel	and	Secretary Vice	President,	General	Counsel	and	Secretary	since	January	2006; Senior	Vice	President,	General	Counsel	and	Secretary	of	RSA Security	Inc.	from	January	2000	to	November	2005;	Vice	President, General	Counsel	and	Secretary	of	RSA	Security	Inc.	from	June	1998 to	January	2000.

# PART	II

# ITEM	5. MARKET	FOR	REGISTRANT'S	COMMON	EQUITY,	RELATED	STOCKHOLDER	MATTERS	AND	ISSUER	PURCHASES	OF	EQUITY	SECURITIES

Our	common	stock	is	listed	on	the	New	York	Stock	Exchange	under	the	symbol	ADI.	The	tables	below	set	forth	the	high	and	low	sales	prices	per	share	of	our	common	stock	on	the	New	York Stock	Exchange	and	the	dividends	declared	for	each	quarterly	period	within	our	two	most	recent	fiscal	years.

# High	and	Low	Sales	Prices	of	Common	Stock

|  | Fiscal	2011 | Fiscal	2011 | Fiscal	2010 | Fiscal	2010 |
| :--- | :--- | :--- | :--- | :--- |
| Period | High | Low | High | Low |
| First\tQuarter | $39.86 | $33.18 | $32.19 | $25.26 |
| Second\tQuarter | $41.66 | $36.29 | $31.50 | $26.38 |
| Third\tQuarter | $43.28 | $34.02 | $31.37 | $26.28 |
| Fourth\tQuarter | $37.75 | $29.23 | $34.09 | $27.45 |

# Dividends	Declared	Per	Outstanding	Share	of	Common	Stock

In	fiscal	2011	and	fiscal	2010,	we	paid	a	cash	dividend	in	each	quarter	as	follows:

| Period | Fiscal	2011 | Fiscal	2010 |
| :--- | :--- | :--- |
| First\tQuarter | $0.22 | $0.20 |
| Second\tQuarter | $0.22 | $0.20 |
| Third\tQuarter | $0.25 | $0.22 |
| Fourth\tQuarter | $0.25 | $0.22 |

During	the	first	quarter	of	fiscal	2012,	on	November	18,	2011,	our	Board	of	Directors	declared	a	cash	dividend	of	$0.25	per	outstanding	share	of	common	stock.	The	dividend	will	be	paid	on December	21,	2011	to	all	shareholders	of	record	at	the	close	of	business	on	December	2,	2011.	The	payment	of	future	dividends,	if	any,	will	be	based	on	several	factors	including	our	financial performance,	outlook	and	liquidity.

Information	regarding	our	equity	compensation	plans	and	the	securities	authorized	for	issuance	thereunder	is	set	forth	in	Item	12	below.

# Issuer	Purchases	of	Equity	Securities

| Period | Total	Number	of<br>Shares<br>Purchased(a) | Average	Price	Paid<br>Per	Share(b) | Total	Number	of	Shares<br>Purchased	as	Part	of<br>Publicly	Announced<br>Plans	or	Programs(c) | Approximate	Dollar<br>Value	of	Shares	that<br>May	Yet	Be	Purchased<br>Under	the	Plans	or<br>Programs |
| :--- | :--- | :--- | :--- | :--- |
| July\t31,\t2011\tthrough\tAugust\t27,\t2011 | 205,946 | $31.72 | 205,946 | $797,794,699 |
| August\t28,\t2011\tthrough\tSeptember\t24,\t2011 | 486,038 | $32.72 | 485,027 | $781,928,623 |
| September\t25,\t2011\tthrough\tOctober\t29,\t2011 | 1,847,688 | $32.71 | 1,847,099 | $721,510,868 |
| Total | 2,539,672 | $32.63 | 2,538,072 | $721,510,868 |

(a) Includes	1,600	shares	paid	to	us	by	employees	to	satisfy	employee	tax	obligations	upon	vesting	of	restricted	stock	granted	to	our	employees	under	our	equity	compensation	plans.

(b) The	average	price	paid	per	share	of	stock	repurchased	under	the	stock	repurchase	program	includes	the	commissions	paid	to	the	brokers.

(c) Shares	repurchased	pursuant	to	the	stock	repurchase	program	publicly	announced	on	August	12,	2004.	In	the	aggregate,	our	Board	of	Directors	has	authorized	us	to	repurchase	$5	billion	of	our common	stock.	Under	the	repurchase	program,	we	may	repurchase	outstanding	shares	of	our	common	stock	from	time	to	time	in	the	open	market	and	through	privately	negotiated	transactions. Unless	terminated	earlier	by	resolution	of	our	Board	of	Directors,	the	repurchase	program	will	expire	when	we	have	repurchased	all	shares	authorized	for	repurchase	under	the	repurchase program.

The	number	of	holders	of	record	of	our	common	stock	at	November	16,	2011	was	2,769.	This	number	does	not	include	shareholders	for	whom	shares	are	held	in	a	"nominee"	or	"street"	name. On	October	28,	2011,	the	last	reported	sales	price	of	our	common	stock	on	the	New	York	Stock	Exchange	was	$37.70	per	share.

# Comparative	Stock	Performance	Graph

The	following	graph	compares	cumulative	total	shareholder	return	on	our	common	stock	since	October	28,	2006	with	the	cumulative	total	return	of	the	Standard	&	Poor's	500	Index	and	the Standard	&	Poor's	Semiconductors	Index.	This	graph	assumes	the	investment	of	$100	on	October	28,	2006	in	our	common	stock,	the	S&P	500	Index	and	the	S&P	Semiconductors	Index	and	assumes	all dividends	are	reinvested.	Measurement	points	are	the	last	trading	day	for	each	respective	fiscal	year.

# ITEM	6. SELECTED	FINANCIAL	DATA

The	following	table	includes	selected	financial	data	for	each	of	our	last	five	fiscal	years	and	includes	adjustments	to	reflect	the	classification	of	our	Baseband	Chipset	Business	and	our	CPU voltage	regulation	and	PC	thermal	monitoring	business	as	discontinued	operations.	See	Note	2u	in	the	Notes	to	Consolidated	Financial	Statements	contained	in	Item	8	of	this	Annual	Report	on Form	10-K	for	information	on	discontinued	operations.

| (thousands,	except	per	share	amounts) | 2011 | 2010 | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Statement\tof\tOperations\tdata: |  |  |  |  |  |
| Total\trevenue\tfrom\tcontinuing\toperations | $2,993,320 | $2,761,503 | $2,014,908 | $2,582,931 | $2,464,721 |
| Income\tfrom\tcontinuing\toperations,\tnet\tof\ttax | 860,894 | 711,225 | 247,408 | 525,177 | 502,123 |
| Total\tincome\t(loss)\tfrom\tdiscontinued\toperations,\tnet\tof\ttax | 6,500 | 859 | 364 | 261,107 | (5,216) |
| Net\tincome | 867,394 | 712,084 | 247,772 | 786,284 | 496,907 |
| Income\tper\tshare\tfrom\tcontinuing\toperations,\tnet\tof\ttax: |  |  |  |  |  |
| Basic | 2.88 | 2.39 | 0.85 | 1.79 | 1.55 |
| Diluted | 2.79 | 2.33 | 0.85 | 1.77 | 1.51 |
| Net\tincome\tper\tshare |  |  |  |  |  |
| Basic | 2.90 | 2.39 | 0.85 | 2.69 | 1.54 |
| Diluted | 2.81 | 2.33 | 0.85 | 2.65 | 1.50 |
| Cash\tdividends\tdeclared\tper\tcommon\tshare | 0.94 | 0.84 | 0.80 | 0.76 | 0.70 |
| Balance\tSheet\tdata: |  |  |  |  |  |
| Total\tassets | $5,277,635 | $4,328,831 | $3,369,407 | $3,081,132 | $2,967,276 |
| Long\tterm\tdebt | $886,376 | $400,635 | $379,626 | $—\t $— | $—\t $— |

# ITEM	7. MANAGEMENT'S	DISCUSSION	AND	ANALYSIS	OF	FINANCIAL	CONDITION	AND	RESULTS	OF	OPERATIONS	(all	tabular	amounts	in	thousands	except	per	share amounts)

During	the	first	quarter	of	fiscal	2008,	we	sold	our	baseband	chipset	business	and	related	support	operations,	or	Baseband	Chipset	Business,	to	MediaTek	Inc.	and	sold	our	CPU	voltage regulation	and	PC	thermal	monitoring	business	to	certain	subsidiaries	of	ON	Semiconductor	Corporation.	The	financial	results	of	these	businesses	are	presented	as	discontinued	operations	in	the consolidated	statements	of	income	for	all	periods	presented.	Unless	otherwise	noted,	this	Management's	Discussion	and	Analysis	relates	only	to	financial	results	from	continuing	operations.

# Results	of	Operations

# Overview

|  | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Revenue | $2,993,320 | $2,761,503 | $2,014,908 |
| Gross\tMargin\t% | 66.4% | 65.2% | 55.5% |
| Net\tincome\tfrom\tContinuing\tOperations | $860,894 | $711,225 | $247,408 |
| Net\tincome\tfrom\tContinuing\tOperations\tas\ta\t%\tof\tRevenue | 28.8% | 25.8% | 12.3% |
| Diluted\tEPS\tfrom\tContinuing\tOperations | $2.79 | $2.33 | $0.85 |
| Diluted\tEPS | $2.81 | $2.33 | $0.85 |

The	year-to-year	revenue	changes	by	end	market	and	product	category	are	more	fully	outlined	below	under	Revenue	Trends	by	End	Market	and	Revenue	Trends	by	Product.

During	fiscal	2011,	our	revenue	increased	8%,	as	compared	to	fiscal	2010.	Our	diluted	earnings	per	share	from	continuing	operations	increased	to	$2.79	in	fiscal	2011	from	$2.33	in	fiscal	2010. Cash	flow	from	operations	in	fiscal	2011	was	$900.5	million	or	30%	of	revenue.	We	received	proceeds	of	$515.5	million	during	fiscal	2011	from	the	issuance	of	$375	million	aggregate	principal	amount of	3.0%	senior	unsecured	notes	and	from	a	$145	million	term	loan	facility	entered	into	by	a	wholly	owned	subsidiary	of	ours.	In	addition,	we	received	$217.2	million	in	net	proceeds	from	employee	stock option	exercises.	During	fiscal	2011,	we	repurchased	a	total	of	approximately	9.0	million	shares	of	our	common	stock	for	an	aggregate	of	$330.3	million,	distributed	$281.6	million	to	our	shareholders	in dividend	payments	and	paid	$123.0	million	for	property,	plant	and	equipment	additions.	These	factors	contributed	to	the	net	increase	in	cash	and	cash	equivalents	of	$335.1	million	in	fiscal	2011.

The	year-to-year	increase	in	revenue	and	profitability	for	fiscal	2011	was	primarily	the	result	of	improved	global	macro-economic	conditions	during	the	first	half	of	the	fiscal	year.	The	strong growth	we	experienced	in	the	first	six	months	of	fiscal	2011,	including	a	9%	sequential	revenue	increase	in	our	second	fiscal	quarter,	was	followed	by	sequential	revenue	declines	in	both	the	third	and fourth	fiscal	quarters.	The	9%	sequential	revenue	increase	in	the	second	fiscal	quarter	included	increased	inventory	stocking	by	our	customers	as	a	result	of	the	Japanese	earthquake	and	tsunami	in	March 2011.	During	the	third	and	fourth	quarters,	of	fiscal	2011,	we	began	to	see	revenue	declines	attributable	to	inventory	corrections	following	the	inventory	buildup	in	the	prior	quarters	and	declining	demand as	the	deficit	and	credit	related	crisis	in	Europe	and	the	U.S.	caused	customers	to	become	more	cautious	in	the	second	half	of	fiscal	2011.

# Revenue	Trends	by	End	Market

The	following	table	summarizes	revenue	by	end	market.	The	categorization	of	revenue	by	end	market	is	determined	using	a	variety	of	data	points	including	the	technical	characteristics	of	the product,	the	"sold	to"	customer	information,	the	"ship	to"	customer	information	and	the	end	customer	product	or	application	into	which	our	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,	we	reclassify	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.	During	fiscal	year	2011,	we	consolidated	the	computer	end	market,	which	represented approximately	1%	of	fiscal	2011	revenue,	into	the	consumer	end	market,	and	reclassified	handset

revenue,	which	represented	approximately	3%	of	fiscal	2011	revenue,	from	the	communications	end	market	to	the	consumer	end	market	for	all	periods	presented.

|  | 2011 | 2011 |  | 2010 | 2010 | 2009 | 2009 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Revenue | %\tof\nTotal\nProduct\nRevenue* | Y/Y% | Revenue | %\tof\nTotal\nProduct\nRevenue | Revenue | %\tof\nTotal\nProduct\nRevenue |
| Industrial | $1,397,634 | 47% | 10% | $1,267,736 | 46% | $860,696 | 43% |
| Automotive | 415,444 | 14% | 25% | 333,644 | 12% | 200,329 | 10% |
| Consumer | 586,945 | 20% | (6)% | 626,565 | 23% | 508,848 | 25% |
| Communications | 593,297 | 20% | 11% | 533,558 | 19% | 445,035 | 22% |
| Total\tRevenue | $2,993,320 | 100% | 8% | $2,761,503 | 100% | $2,014,908 | 100% |

* The	sum	of	the	individual	percentages	do	not	equal	the	total	due	to	rounding.

Industrial	—	The	year-to-year	increase	in	revenue	from	fiscal	2010	to	fiscal	2011	in	industrial	end	market	revenue	was	primarily	the	result	of	a	broad-based	increase	in	demand	in	this	end	market, which	was	most	significant	for	products	sold	into	the	automation	and	instrumentation	sectors	and,	to	a	lesser	extent,	products	sold	into	the	energy	and	healthcare	sectors.	The	year-to-year	increase	in revenue	from	fiscal	2009	to	fiscal	2010	in	industrial	end	market	revenue	was	primarily	the	result	of	a	broad-based	increase	in	demand	in	this	end	market,	which	was	most	significant	for	products	sold	into the	instrumentation	and	automation	sectors.

Automotive	—	The	year-to-year	increase	in	revenue	from	fiscal	2010	to	fiscal	2011	in	automotive	end	market	revenue	was	primarily	the	result	of	a	general	increase	in	the	electronic	content	found in	vehicles	and,	to	a	lesser	extent,	a	general	increase	in	demand	by	our	customers.	The	year-to-year	increase	in	revenue	from	fiscal	2009	to	fiscal	2010	in	automotive	end	market	revenue	was	primarily	the result	of	increased	demand	due	to	various	government-initiated	incentive	programs,	inventory	replenishment	and	a	general	increase	in	the	electronic	content	found	in	vehicles.

Consumer	—	The	year-to-year	decrease	in	revenue	from	fiscal	2010	to	fiscal	2011	in	consumer	end	market	revenue	was	primarily	the	result	of	a	decrease	in	demand	for	products	in	the	digital camera	and	home	entertainment	sector	primarily	as	a	result	of	the	impact	of	the	earthquake	and	tsunami	that	occurred	in	Japan	in	March	2011,	partially	offset	by	an	increase	in	demand	for	products	used in	portable	devices	in	this	end	market.	The	year-to-year	increase	in	revenue	from	fiscal	2009	to	fiscal	2010	in	consumer	end	market	revenue	was	primarily	the	result	of	a	broad-based	increase	in	demand for	products	used	in	digital	cameras	and	other	consumer	applications.

Communications	—	The	year-to-year	increase	in	revenue	from	fiscal	2010	to	fiscal	2011	in	communications	end	market	revenue	was	primarily	the	result	of	a	broad-based	increase	in	demand	in this	end	market,	which	was	most	significant	for	the	basestation	end	market	sector.	The	year-to-year	increase	in	revenue	from	fiscal	2009	to	fiscal	2010	in	communications	end	market	revenue	was primarily	the	result	of	a	broad-based	increase	in	demand	in	this	end	market,	which	was	most	significant	for	the	infrastructure	sector.

# Revenue	Trends	by	Product

The	following	table	summarizes	revenue	by	product	categories.	The	categorization	of	our	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	we	reclassify	the	amounts	in	the	product	categories	for	all	prior	periods.	Such	reclassifications	typically	do	not	materially change	the	sizing	of,	or	the	underlying	trends	of	results	within,	each	product	category.

|  | 2011 | 2011 |  | 2010 | 2010 | 2009 | 2009 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Revenue | %\tof\nTotal\nProduct\nRevenue | Y/Y% | Revenue | %\tof\nTotal\nProduct\nRevenue | Revenue | %\tof\nTotal\nProduct\nRevenue* |
| Converters | $1,343,492 | 45% | 4% | $1,295,678 | 47% | $1,005,004 | 50% |
| Amplifiers/Radio\tfrequency | 788,498 | 26% | 12% | 701,634 | 25% | 501,942 | 25% |
| Other\tanalog | 410,233 | 14% | 23% | 334,649 | 12% | 216,473 | 11% |
| Subtotal\tanalog\tsignal\tprocessing | 2,542,223 | 85% | 9% | 2,331,961 | 84% | 1,723,419 | 86% |
| Power\tmanagement\t&amp;\treference | 217,501 | 7% | 12% | 194,699 | 7% | 118,148 | 6% |
| Total\tanalog\tproducts | $2,759,724 | 92% | 9% | $2,526,660 | 91% | $1,841,567 | 91% |
| Digital\tsignal\tprocessing | 233,596 | 8% | (1)% | 234,843 | 9% | 173,341 | 9% |
| Total\tRevenue | $2,993,320 | 100% | 8% | $2,761,503 | 100% | $2,014,908 | 100% |

The	increase	in	total	revenue	from	fiscal	2010	to	fiscal	2011	and	from	fiscal	2009	to	fiscal	2010	was	the	result	of	a	broad-based	increase	in	sales	across	all	of	our	product	categories.

# Revenue	Trends	by	Geographic	Region

Revenue	by	geographic	region,	based	upon	customer	location,	for	the	last	three	fiscal	years	is	as	follows:

|  | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| United\tStates | $532,011 | $508,187 | $401,608 |
| Rest\tof\tNorth\tand\tSouth\tAmerica | 164,079 | 153,962 | 92,954 |
| Europe | 838,719 | 703,717 | 502,602 |
| Japan | 400,456 | 441,826 | 349,907 |
| China | 596,433 | 508,489 | 376,080 |
| Rest\tof\tAsia | 461,622 | 445,322 | 291,757 |
| Total\trevenue | $2,993,320 | $2,761,503 | $2,014,908 |

In	fiscal	years	2011,	2010	and	2009,	the	predominant	countries	comprising	"Rest	of	North	and	South	America"	are	Canada	and	Mexico;	the	predominant	countries	comprising	"Europe"	are Germany,	Sweden,	France	and	the	United	Kingdom;	and	the	predominant	countries	comprising	"Rest	of	Asia"	are	Taiwan	and	South	Korea.

Sales	increased	in	all	geographic	regions,	except	Japan,	in	fiscal	2011	as	compared	to	fiscal	2010,	primarily	as	a	result	of	increases	in	sales	activity	in	the	industrial,	automotive	and communications	end	market	sectors.	The	year-to-year	decrease	in	sales	in	Japan	was	primarily	the	result	of	lower	sales	activity	in	the	consumer	end	market	sector	in	this	region	due	to	the	earthquake	and tsunami	that	occurred	in	Japan	in	March	2011.

Sales	increased	in	all	geographic	regions	in	fiscal	2010	as	compared	to	fiscal	2009,	with	sales	in	Europe	and	the	Rest	of	Asia	experiencing	the	largest	increases.	The	increase	in	sales	was	the	result of	an	increase	in	demand	for	our	products	primarily	as	a	result	of	improving	economic	conditions	worldwide.

|  | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Gross\tMargin | $1,986,541 | $1,799,422 | $1,118,637 |
| Gross\tMargin\t% | 66.4% | 65.2% | 55.5% |

Gross	margin	percentage	was	higher	in	fiscal	2011	by	120	basis	points,	as	compared	to	fiscal	2010	primarily	as	a	result	of	an	increase	in	sales	of	$231.8	million,	increased	operating	levels	in	our manufacturing	facilities	and	the	impact	of	efforts	to	reduce	overall	manufacturing	costs,	including	the	savings	realized	as	a	result	of	our	wafer	fabrication	consolidation	actions.	Additionally,	a	higher proportion	of	our	revenues	were	from	products	sold	into	the	instrumentation	and	automation	sectors	of	the	industrial	end	market,	which	earn	higher	margins	as	compared	to	products	sold	into	our	other end	markets.

Gross	margin	percentage	was	higher	in	fiscal	2010	by	970	basis	points	as	compared	to	fiscal	2009	primarily	as	a	result	of	an	increase	in	sales	of	$746.6	million,	increased	operating	levels	in	our manufacturing	facilities	and	the	impact	of	ongoing	efforts	to	reduce	overall	manufacturing	costs,	including	the	savings	realized	as	a	result	of	our	wafer	fabrication	facility	consolidations.	Additionally,	a higher	proportion	of	our	revenues	were	from	products	sold	into	the	instrumentation	and	automation	sectors	of	the	industrial	end	market,	which	earn	higher	margins	as	compared	to	products	sold	into	our other	end	markets.

# Research	and	Development	(R&D)

|  | 2011 | Fiscal	Year<br>2010 | 2009 |
| :--- | :--- | :--- | :--- |
| R&amp;D\tExpenses | $505,570 | $492,305 | $446,980 |
| R&amp;D\tExpenses\tas\ta\t%\tof\tRevenue | 16.9% | 17.8% | 22.2% |

R&D	expenses	increased	$13.3	million,	or	3%,	in	fiscal	2011	as	compared	to	fiscal	2010.	The	increase	was	primarily	the	result	of	higher	employee	salary	and	benefit	expense	due	to	salary increases	that	were	effective	at	the	beginning	of	the	second	quarter	of	fiscal	2011,	increased	headcount,	and	a	general	increase	in	spending.	These	increases	were	partially	offset	by	lower	variable compensation	expense,	which	is	a	variable	expense	linked	to	our	overall	profitability	and	revenue	growth.

Research	and	development,	or	R&D,	expenses	in	fiscal	2010	increased	$45.3	million,	or	10%,	from	fiscal	2009.	The	increase	was	primarily	the	result	of	an	increase	in	variable	compensation expense,	which	was	a	variable	expense	linked	to	our	overall	profitability,	partially	offset	by	the	impact	of	actions	we	took	over	the	prior	two	years	to	control	discretionary	spending	and	permanently reduce	operating	expenses.

R&D	expenses	as	a	percentage	of	revenue	will	fluctuate	from	year-to-year	depending	on	the	amount	of	revenue	and	the	success	of	new	product	development	efforts,	which	we	view	as	critical	to our	future	growth.	At	any	point	in	time	we	have	hundreds	of	R&D	projects	underway,	and	we	believe	that	none	of	these	projects	is	material	on	an	individual	basis.	We	expect	to	continue	the	development of	innovative	technologies	and	processes	for	new	products,	and	we	believe	that	a	continued	commitment	to	R&D	is	essential	in	order	to	maintain	product	leadership	with	our	existing	products	and	to provide	innovative	new	product	offerings,	and	therefore,	we	expect	to	continue	to	make	significant	R&D	investments	in	the	future.

# Selling,	Marketing,	General	and	Administrative	(SMG&A)

|  | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| SMG&amp;A\tExpenses | $406,707 | $390,560 | $333,184 |
| SMG&amp;A\tExpenses\tas\ta\t%\tof\tRevenue | 13.6% | 14.1% | 16.5% |

Selling,	marketing,	general	and	administrative,	or	SMG&A,	expenses	increased	$16.1	million,	or	4%,	in	fiscal	2011	as	compared	to	fiscal	2010.	The	increase	was	primarily	the	result	of	higher employee	salary	and	benefit	expense	due	to	salary	increases	that	were	effective	at	the	beginning	of	the	second	quarter	of	fiscal	2011,	increased	headcount	and	a	general	increase	in	spending.	These increases	were	partially	offset	by	lower	variable	compensation	expense,	which	is	a	variable	expense	linked	to	our	overall	profitability	and	revenue	growth.

SMG&A	expenses	in	fiscal	2010	increased	$57.4	million,	or	17%,	from	fiscal	2009.	The	increase	was	primarily	the	result	of	an	increase	in	variable	compensation	expense,	which	was	a	variable expense	linked	to	our	overall	profitability,	and	higher	sales	commission	expenses,	which	are	variable	expenses	linked	to	our	sales.	These	increases	were	offset	by	the	impact	of	actions	we	took	over	the prior	two	years	to	control	discretionary	spending	and	permanently	reduce	operating	expenses.

# Special	Charges

# Closure	of	Wafer	Fabrication	Facility	in	Sunnyvale

We	ceased	production	at	our	California	wafer	fabrication	facility	in	November	2006.	We	paid	the	related	lease	obligation	costs	on	a	monthly	basis	over	the	remaining	lease	term,	which	expired	in March	2010.	We	recorded	a	one-time	settlement	charge	of	$0.4	million	in	fiscal	2010	related	to	the	termination	of	the	lease.	This	action	was	completed	during	fiscal	2010.

# Consolidation	of	a	Wafer	Fabrication	Facility	in	Limerick

During	fiscal	2007	through	fiscal	2010,	we	recorded	special	charges	of	$16.4	million	as	a	result	of	our	decision	to	only	use	eight-inch	technology	at	our	wafer	fabrication	facility	in	Limerick. These	special	charges	included	$14.9	million	for	severance	and	fringe	benefit	costs	in	accordance	with	our	ongoing	benefit	plan	for	150	manufacturing	employees	and	$1.5	million	for	clean-up	and closure	costs	that	we	expensed	as	incurred.	The	production	in	the	six-inch	wafer	fabrication	facility	ceased	during	the	fourth	quarter	of	fiscal	2009.	This	action	was	completed	during	fiscal	2010.	This action	resulted	in	annual	cost	savings	of	approximately	$25	million	per	year.

# Reduction	of	Operating	Costs

During	fiscal	2008	through	fiscal	2010,	in	order	to	further	reduce	our	operating	cost	structure,	we	recorded	special	charges	of	approximately	$43.3	million.	These	special	charges	included: $39.1	million	for	severance	and	fringe	benefit	costs	in	accordance	with	our	ongoing	benefit	plan	or	statutory	requirements	at	foreign	locations	for	245	manufacturing	employees	and	470	engineering	and SMG&A	employees;	$2.1	million	for	lease	obligation	costs	for	facilities	that	we	ceased	using	during	the	first	quarter	of	fiscal	2009;	$0.8	million	for	the	write-off	of	property,	plant	and	equipment; $0.5	million	for	contract	termination	costs;	$0.3	million	for	clean-up	and	closure	costs	that	we	expensed	as	incurred;	and	$0.5	million	related	to	the	impairment	of	intellectual	property.	This	action resulted	in	annual	cost	savings	of	approximately	$52	million	per	year.	We	terminated	the	employment	of	all	employees	associated	with	this	action	and	we	are	paying	amounts	owed	to	them	as	income continuance.

During	fiscal	2011,	in	order	to	further	reduce	our	operating	cost	structure,	we	recorded	a	special	charge	of	approximately	$2.2	million.	This	special	charge	was	for	severance	and	fringe	benefit costs	in	accordance	with	our	ongoing	benefit	plan	or	statutory	requirements	at	foreign	locations	for	25	engineering	and	SMG&A	employees.	As	of	October	29,	2011,	we	still	employed	13	of	the 25	employees	included	in	this	cost	reduction	action.	These	employees	must	continue	to	be	employed	by	us	until	their	employment	is	involuntarily	terminated	in	order	to	receive	the	severance	benefit.	We estimate	this	action	will	result	in	annual	savings	in	SMG&A	expenses	of	approximately	$4	million	once	fully	implemented.

# Closure	of	a	Wafer	Fabrication	Facility	in	Cambridge

During	fiscal	2009	and	fiscal	2010,	we	recorded	special	charges	of	$26.8	million	as	a	result	of	our	decision	to	consolidate	our	Cambridge,	Massachusetts	wafer	fabrication	facility	into	our	existing Wilmington,	Massachusetts	facility.	These	special	charges	included:	$7.4	million	for	severance	and	fringe	benefit	costs	recorded	in	accordance	with	our	ongoing	benefit	plan	for	124	manufacturing employees	and	9	SMG&A	employees;	$14.6	million	for	the	impairment	of	manufacturing	assets;	$3.4	million	for	lease	obligation	costs	for	the	Cambridge	wafer	fabrication	facility,	which	we	ceased using	in	the	first	quarter	of	fiscal	2010;	and	$1.4	million	for	clean-up	and	closure	costs	that	we	expensed	as	incurred.	This	action	was	completed	during	the	third	quarter	of	fiscal	2011.	This	action	resulted in	annual	cost	savings	of	approximately	$43	million	per	year.

# Operating	Income	from	Continuing	Operations

|  | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Operating\tincome\tfrom\tContinuing\tOperations | $1,072,025 | $900,074 | $284,817 |
| Operating\tincome\tfrom\tContinuing\tOperations\tas\ta\t%\tof\tRevenue | 35.8% | 32.6% | 14.1% |

The	$172.0	million,	or	19%,	increase	in	operating	income	from	continuing	operations	in	fiscal	2011	as	compared	to	fiscal	2010	was	primarily	the	result	of	an	increase	in	revenue	of	$231.8	million and	a	120	basis	point	increase	in	gross	margin	percentage.

The	$615.3	million,	or	216%,	increase	in	operating	income	from	continuing	operations	in	fiscal	2010	as	compared	to	fiscal	2009	was	primarily	the	result	of	an	increase	in	revenue	of $746.6	million,	a	970	basis	point	increase	in	gross	margin	percentage,	and	lower	special	charges	recorded	in	fiscal	2010	as	compared	to	fiscal	2009.

# Nonoperating	(Income)	Expense

|  | 2011 | Fiscal	Year<br>2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Interest\texpense | $19,146 | $10,429 | $4,094 |
| Interest\tincome | (9,060) | (9,837) | (15,621) |
| Other,\tnet | 492 | (2,183) | (1,100) |
| Total\tnonoperating\texpense\t(income) | $10,578 | $(1,591) | $(12,627) |

Nonoperating	(income)	expense	was	higher	by	$12.2	million	in	fiscal	2011	as	compared	to	fiscal	2010.	The	increase	was	primarily	due	to	an	increase	in	interest	expense	incurred	as	a	result	of	the issuance	of	$375	million	aggregate	principal	amount	of	3.0%	senior	unsecured	notes	on	April	4,	2011,	and	the	$145	million	term	loan	facility	entered	into	by	a	wholly	owned	subsidiary	of	ours	in December	2010.	In	addition,	we	earned	lower	interest	income	as	a	result	of	lower	interest	rates	in	fiscal	2011	as	compared	to	fiscal	2010,	which	was	partially	offset	by	interest	earned	on	higher	cash balances	in	fiscal	2011.

Nonoperating	income	was	lower	by	$11	million	in	fiscal	2010	as	compared	to	fiscal	2009.	The	increase	was	primarily	due	to	higher	interest	expense	incurred	during	fiscal	2010	as	a	result	of	the issuance	of	$375	million	aggregate	principal	5.0%	senior	unsecured	notes	on	June	30,	2009,	resulting	in	a	partial	year	of	interest	expense	in	2009	compared	to	a	full	year	in	2010.	In	addition,	we	earned lower	interest	income	on	investments	as	a	result	of	lower	interest	rates	in	fiscal	2010	as	compared	to	fiscal	2009.

# Provision	for	Income	Taxes

|  | 2011 | Fiscal	Year<br>2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Provision\tfor\tIncome\tTaxes | $200,553 | $190,440 | $50,036 |
| Effective\tIncome\tTax\tRate | 18.9% | 21.1% | 16.8% |

Our	effective	tax	rate	reflects	the	applicable	tax	rate	in	effect	in	the	various	tax	jurisdictions	around	the	world	where	our	income	is	earned.

Our	effective	tax	rate	for	fiscal	2011	was	lower	by	220	basis	points	compared	to	our	effective	tax	rate	for	fiscal	2010.	The	tax	rate	for	fiscal	2011	included	the	following	items	which	caused	a decrease	in	our	tax	rate:	the	reinstatement	of	the	federal	R&D	tax	credit	in	December	2010	retroactive	to	January	1,	2010,	resulting	in	a	$6.0	million	income	tax	savings;	a	$6.7	million	reduction	in	the state	tax	credit	valuation	reserve	that	we	believe	we	can	now	recover;	a	$0.5	million	tax	benefit	from	the	increase	in	Irish	deferred	taxes	as	a	result	of	the	increase	in	the	Irish	manufacturing	tax	rate	from 10%	to	12.5%;	and	a	net	$10.8	million	tax	benefit	related	to	the	settlement	with	the	Appeals	Office	of	the	Internal	Revenue	Service	of	certain	tax	matters	for	the	fiscal	2004	through	fiscal	2007	tax	years. Fiscal	2010	also	included	a	higher	special	charge,	a	majority	of	which	provided	a	tax	benefit	at	the	higher	U.S.	tax	rate	as	compared	to	the	special	charge	recorded	in	fiscal	2011.

Our	effective	tax	rate	for	fiscal	2010	was	higher	compared	to	our	effective	tax	rate	for	fiscal	2009	primarily	as	a	result	of	a	change	in	the	mix	of	our	income	to	jurisdictions	where	income	is	taxed at	a	higher	rate.	In	addition,	higher	special	charges	recorded	in	fiscal	2009,	a	majority	of	which	provided	a	tax	benefit	at	the	higher	U.S.	tax	rate,	contributed	to	a	higher	effective	tax	rate	for	fiscal	2010	as compared	to	fiscal	2009.

# Income	from	Continuing	Operations,	Net	of	Tax

|  | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Income\tfrom\tContinuing\tOperations,\tnet\tof\ttax | $860,894 | $711,225 | $247,408 |
| Income\tfrom\tContinuing\tOperations,\tnet\tof\ttax\tas\ta\t%\tof\tRevenue | 28.8% | 25.8% | 12.3% |
| Diluted\tEPS\tfrom\tContinuing\tOperations | $2.79 | $2.33 | $0.85 |

Net	income	from	continuing	operations	in	fiscal	2011	was	higher	than	in	fiscal	2010	by	approximately	$149.7	million	primarily	as	a	result	of	the	$172.0	million	increase	in	operating	income	from continuing	operations,	offset	by	lower	nonoperating	income	and	a	higher	provision	for	income	taxes	in	fiscal	2011	than	in	fiscal	2010.

Income	from	continuing	operations,	net	of	tax,	in	fiscal	2010	was	higher	than	in	fiscal	2009	by	approximately	$463.8	million	primarily	as	a	result	of	the	$615.3	million	increase	in	operating income	that	was	partially	offset	by	a	higher	provision	for	income	taxes	in	fiscal	2010.

The	impact	of	inflation	and	foreign	currency	exchange	rate	movement	on	our	results	of	operations	during	the	past	three	fiscal	years	has	not	been	significant.

# Discontinued	Operations

|  | 2011 | Fiscal	Year<br>2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Income\tfrom\tDiscontinued\tOperations,\tnet\tof\ttax | $— | $— | $364 |
| Gain\ton\tsale\tof\tDiscontinued\tOperations,\tnet\tof\ttax | 6,500 | 859 | — |
| Total\tincome\tfrom\tDiscontinued\tOperations,\tnet\tof\ttax | $6,500 | $859 | $364 |
| Diluted\tearnings\tper\tshare\tfrom\tDiscontinued\tOperations | $0.02 | $ 0.00 | $ 0.00 |

We	sold	our	Baseband	Chipset	Business	to	MediaTek	Inc.	and	our	CPU	voltage	regulation	and	PC	thermal	monitoring	business	to	certain	subsidiaries	of	ON	Semiconductor	Corporation	during the	first	quarter	of	fiscal	2008.	Accordingly,	the	results	of	the	operations	of	these	businesses	have	been	presented	as	discontinued	operations	within	the	consolidated	financial	statements.

# Acquisitions

In	fiscal	2006,	we	acquired	substantially	all	the	outstanding	stock	of	privately-held	Integrant	Technologies,	Inc.	(Integrant)	of	Seoul,	Korea.	The	acquisition	enabled	us	to	enter	the	mobile	TV market	and	strengthened	our

presence	in	the	Asia	region.	We	paid	$8.4	million	related	to	the	purchase	of	shares	from	the	founder	of	Integrant	during	the	period	from	July	2007	through	July	2009.	We	recorded	these	payments	as additional	goodwill.

In	fiscal	2006,	we	acquired	all	the	outstanding	stock	of	privately-held	AudioAsics	A/S	(AudioAsics)	of	Roskilde,	Denmark.	The	acquisition	of	AudioAsics	allowed	us	to	continue	developing	low- power	audio	solutions,	while	expanding	our	presence	in	the	Nordic	and	Eastern	European	regions.	We	paid	additional	cash	payments	of	$3.1	million	during	fiscal	2009	for	the	achievement	of	revenue- based	milestones	during	the	period	from	October	2006	through	January	2009,	which	we	recorded	as	additional	goodwill.	In	addition,	in	accordance	with	the	terms	of	the	acquisition	documents,	we	paid $3.2	million	during	fiscal	2009	based	on	the	achievement	of	technological	milestones	during	the	period	from	October	2006	through	January	2009,	which	we	recorded	as	compensation	expense	in	fiscal 2008.	All	revenue	and	technological	milestones	related	to	this	acquisition	have	been	met	and	no	additional	payments	will	be	made.

In	fiscal	2011,	we	acquired	privately-held	Lyric	Semiconductor,	Inc.	(Lyric)	of	Cambridge,	Massachusetts.	The	acquisition	of	Lyric	gives	us	the	potential	to	achieve	an	order	of	magnitude improvement	in	power	efficiency	in	mixed	signal	processing.	The	acquisition-date	fair	value	of	the	consideration	transferred	totaled	$27.8	million,	which	consisted	of	$14.0	million	in	initial	cash payments	at	closing	and	contingent	consideration	of	up	to	$13.8	million.	The	contingent	consideration	arrangement	requires	additional	cash	payments	to	the	former	equity	holders	of	Lyric	upon	the achievement	of	certain	technological	and	product	development	milestones	payable	during	the	period	from	June	2011	through	June	2016.	As	of	October	29,	2011,	no	contingent	payments	have	been	made and	the	fair	value	of	the	contingent	consideration	was	approximately	$14.0	million.	We	allocated	the	purchase	price	to	the	tangible	and	intangible	assets	acquired	and	liabilities	assumed	based	on	their estimated	fair	values	at	the	date	of	acquisition,	resulting	in	the	recognition	of	$12.2	million	of	in-process	research	and	development,	$18.9	million	of	goodwill	and	$3.3	million	of	net	deferred	tax liabilities.	In	addition,	we	will	be	obligated	to	pay	royalties	to	the	former	equity	holders	of	Lyric	on	revenue	recognized	from	the	sale	of	Lyric	products	and	licenses	through	the	earlier	of	20	years	or	the accrual	of	a	maximum	of	$25	million.	Royalty	payments	to	Lyric	employees	require	post-acquisition	services	to	be	rendered	and,	as	such,	we	will	record	these	amounts	as	compensation	expense	in	the related	periods.	As	of	October	29,	2011,	no	royalty	payments	have	been	made.	We	recognized	$0.2	million	of	acquisition	related	costs	that	we	expensed	in	the	third	quarter	of	fiscal	2011.	These	costs	are included	in	operating	expenses	in	the	consolidated	statement	of	income.

We	have	not	provided	pro	forma	results	of	operations	for	Integrant,	AudioAsics	and	Lyric	in	this	report	as	they	were	not	material	to	us	on	either	an	individual	or	an	aggregate	basis.	We	included the	results	of	operations	of	each	acquisition	in	our	consolidated	statement	of	income	from	the	date	of	such	acquisition.

# Liquidity	and	Capital	Resources

|  | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Net\tCash\tProvided\tby\tOperations | $900,529 | $991,175 | $432,148 |
| Net\tCash\tProvided\tby\tOperations\tas\ta\t%\tof\tRevenue | 30.1% | 35.9% | 21.4% |

At	October	29,	2011,	cash	and	cash	equivalents	totaled	$1,405.1	million.	The	primary	sources	of	funds	for	fiscal	2011	were	net	cash	generated	from	operating	activities	of	$900.5	million, proceeds	of	$515.5	million	relating	to	the	issuance	of	$375	million	aggregate	principal	amount	of	3.0%	senior	unsecured	notes	due	April	15,	2016	and	the	$145	million	term	loan	facility	we	entered	into through	a	wholly	owned	subsidiary.	In	addition,	we	received	$217.2	million	in	net	proceeds	from	employee	stock	option	exercises.	The	principal	uses	of	funds	for	fiscal	2011	were	the	repurchase	of approximately	9	million	shares	of	our	common	stock	for	an	aggregate	of	$330.3	million,

dividend	payments	of	$281.6	million	and	additions	to	property,	plant	and	equipment	of	$123.0	million.	These	factors	contributed	to	the	net	increase	in	cash	and	cash	equivalents	of	$335.1	million	in	fiscal 2011.

# Fiscal	Year

|  | 2011 | 2010 |
| :--- | :--- | :--- |
| Accounts\tReceivable | $348,416 | $387,169 |
| Days\tSales\tOutstanding* | 44 | 46 |
| Inventory | $295,081 | $277,478 |
| Days\tCost\tof\tSales\tin\tInventory* | 105 | 100 |

* We	use	the	annualized	fourth	quarter	revenue	in	our	calculation	of	days	sales	outstanding	and	we	use	the	annualized	fourth	quarter	cost	of	sales	in	our	calculation	of	days	cost	of	sales	in	inventory.

Accounts	receivable	at	October	29,	2011	decreased	$38.8	million,	or	10%,	from	the	end	of	the	fourth	quarter	of	fiscal	2010.	The	decrease	in	receivables	was	primarily	the	result	of	lower	revenue in	the	fourth	quarter	of	fiscal	2011	as	compared	to	the	fourth	quarter	of	fiscal	2010.	Days	sales	outstanding	decreased	by	two	days	as	a	result	of	lower	product	shipments	in	the	final	month	of	the	fourth quarter	of	fiscal	2011	as	compared	to	the	final	month	of	the	fourth	quarter	of	fiscal	2010.

Inventory	at	October	29,	2011	increased	by	$17.6	million,	or	6%,	from	the	end	of	the	fourth	quarter	of	fiscal	2010.	The	increase	in	inventory	relates	primarily	to	an	increase	in	manufacturing production	to	support	the	higher	revenue	levels	recorded	in	fiscal	2011.	Days	cost	of	sales	in	inventory	increased	five	days	primarily	due	to	lower	manufacturing	costs,	which	resulted	in	cost	of	sales increasing	only	1%	from	the	fourth	quarter	of	fiscal	2010	as	compared	to	the	fourth	quarter	of	fiscal	2011,	compared	to	a	6%	increase	in	inventory	during	this	same	time	period.

Current	liabilities	decreased	to	$525.0	million	at	October	29,	2011,	a	decrease	of	$118.5	million,	or	18%,	from	$643.5	million	at	the	end	of	fiscal	2010.	This	decrease	was	primarily	due	to	a decrease	in	income	tax	payable	as	a	result	of	the	settlement	with	the	Appeals	Office	of	the	Internal	Revenue	Service	of	certain	tax	matters	for	the	fiscal	2004	through	fiscal	2007	tax	years.	In	addition, accrued	liabilities	declined	as	a	result	of	a	decrease	in	accruals	related	to	variable	compensation	expense.

As	of	October	29,	2011	and	October	30,	2010,	we	had	gross	deferred	revenue	of	$311.3	million	and	$327.2	million,	respectively,	and	gross	deferred	cost	of	sales	of	$78.1	million	and $84.4	million,	respectively.	Deferred	income	on	shipments	to	distributors	decreased	by	approximately	$9.6	million	in	fiscal	2011	primarily	as	a	result	of	the	distributors'	sales	to	their	customers	in	fiscal 2011	exceeding	our	shipments	to	our	distributors	during	this	same	time	period.	Sales	to	distributors	are	made	under	agreements	that	allow	distributors	to	receive	price-adjustment	credits	and	to	return qualifying	products	for	credit,	as	determined	by	us,	in	order	to	reduce	the	amounts	of	slow-moving,	discontinued	or	obsolete	product	from	their	inventory.	Given	the	uncertainties	associated	with	the levels	of	price-adjustment	credits	to	be	granted	to	distributors,	the	sales	price	to	the	distributors	is	not	fixed	or	determinable	until	the	distributors	resell	the	products	to	their	customers.	Therefore,	we	defer revenue	recognition	from	sales	to	distributors	until	the	distributors	have	sold	the	products	to	their	customers.	The	amount	of	price-adjustments	is	dependent	on	future	overall	market	conditions,	and therefore	the	levels	of	these	adjustments	could	fluctuate	significantly	from	period	to	period.	To	the	extent	that	we	experience	a	significant	increase	in	the	amount	of	credits	we	issue	to	our	distributors, there	could	be	a	material	impact	on	the	ultimate	revenue	and	gross	margin	recognized	relating	to	these	transactions.

Net	additions	to	property,	plant	and	equipment	were	$123.0	million	in	fiscal	2011	and	were	funded	with	a	combination	of	cash	on	hand	and	cash	generated	from	operations.	We	expect	capital expenditures	to	be	in	the	range	of	approximately	$100	million	to	$125	million	in	fiscal	2012	to	be	used	primarily	in	our	manufacturing	facilities.

During	fiscal	2011,	our	Board	of	Directors	declared	cash	dividends	totaling	$0.94	per	outstanding	share	of	common	stock	resulting	in	aggregate	dividend	payments	of	$281.6	million.	After	the end	of	fiscal	2011,	on	November	18,	2011,	our	Board	of	Directors	declared	a	cash	dividend	of	$0.25	per	outstanding	share	of	our	common	stock.	The	dividend	is	payable	on	December	21,	2011	to shareholders	of	record	on	December	2,	2011	and	is	expected	to	total	approximately	$75	million.	We	currently	expect	quarterly	dividends	to	continue	at	$0.25	per	share,

although	they	remain	subject	to	declaration	by	our	Board	of	Directors.	The	payment	of	future	dividends,	if	any,	will	be	based	on	several	factors,	including	our	financial	performance,	outlook	and liquidity.

Our	common	stock	repurchase	program	has	been	in	place	since	August	2004.	In	the	aggregate,	the	Board	of	Directors	has	authorized	us	to	repurchase	$5	billion	of	our	common	stock	under	the program.	Under	the	program,	we	may	repurchase	outstanding	shares	of	our	common	stock	from	time	to	time	in	the	open	market	and	through	privately	negotiated	transactions.	Unless	terminated	earlier	by resolution	of	our	Board	of	Directors,	the	repurchase	program	will	expire	when	we	have	repurchased	all	shares	authorized	under	the	program.	As	of	October	29,	2011,	we	had	repurchased	a	total	of approximately	125.0	million	shares	of	our	common	stock	for	approximately	$4,278.5	million	under	this	program.	As	of	October	29,	2011,	an	additional	$721.5	million	remained	available	for	repurchase of	shares	under	the	current	authorized	program.	The	repurchased	shares	are	held	as	authorized	but	unissued	shares	of	common	stock.	We	also	from	time	to	time	repurchase	shares	in	settlement	of employee	tax	withholding	obligations	due	upon	the	vesting	of	restricted	stock	or	restricted	stock	units	or	the	exercise	of	stock	options,	or	in	certain	limited	circumstances	to	satisfy	the	exercise	price	of options	granted	to	our	employees	under	our	equity	compensation	plans.	Any	future	common	stock	repurchases	will	be	based	on	several	factors	including	our	financial	performance,	outlook,	liquidity	and the	amount	of	cash	we	have	available	in	the	United	States.

On	June	30,	2009,	we	issued	$375	million	aggregate	principal	amount	of	5.0%	senior	unsecured	notes	due	July	1,	2014	(the	5.0%	Notes)	with	annual	interest	payments	of	5.0%	paid	in	two installments	on	January	1	and	July	1	of	each	year,	commencing	January	1,	2010.	The	net	proceeds	of	the	offering	were	$370.4	million,	after	issuing	at	a	discount	and	deducting	expenses,	underwriting discounts	and	commissions,	which	will	be	amortized	over	the	term	of	the	5.0%	Notes.	We	swapped	the	fixed	interest	portion	of	these	Notes	for	a	variable	interest	rate	based	on	the	three-month	LIBOR plus	2.05%	(2.42%	as	of	October	29,	2011).	The	variable	interest	payments	based	on	the	variable	annual	rate	are	payable	quarterly.	The	LIBOR	based	rate	is	set	quarterly	three	months	prior	to	the	date	of the	interest	payment.	The	indenture	governing	the	5.0%	Notes	contains	covenants	that	may	limit	our	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	our	assets	to	any	other party.	As	of	October	29,	2011,	we	were	compliant	with	these	covenants.

On	December	22,	2010,	Analog	Devices	Holdings	B.V.,	a	wholly	owned	subsidiary	of	ours,	entered	into	a	credit	agreement	with	Bank	of	America,	N.A.,	London	Branch	as	administrative	agent. The	borrower's	obligations	are	guaranteed	by	us.	The	credit	agreement	provides	for	a	term	loan	facility	of	$145	million,	which	matures	on	December	22,	2013.	The	terms	of	the	agreement	provide	for	a three-year	principal	amortization	schedule	with	$3.6	million	payable	quarterly	every	March,	June,	September	and	December	with	the	balance	payable	upon	the	maturity	date.	During	the	third	quarter	of fiscal	2011	we	made	an	additional	principal	payment	of	$17.5	million.	The	loan	will	bear	interest	at	a	fluctuating	rate	for	each	period	equal	to	the	LIBOR	rate	corresponding	with	the	tenor	of	the	interest period	plus	a	spread	of	1.25%	(1.61%	as	of	October	29,	2011).	The	terms	of	this	facility	include	limitations	on	subsidiary	indebtedness	and	on	liens	against	our	assets	and	the	assets	of	our	subsidiaries, and	also	include	financial	covenants	that	require	us	to	maintain	a	minimum	interest	coverage	ratio	and	not	exceed	a	maximum	leverage	ratio.	As	of	October	29,	2011,	we	were	compliant	with	these covenants.	The	proceeds	of	this	loan	are	being	used	to	restructure	our	captive	finance	subsidiaries.

On	April	4,	2011,	we	issued	$375	million	aggregate	principal	amount	of	3.0%	senior	unsecured	notes	due	April	15,	2016	(the	3.0%	Notes)	with	semi-annual	fixed	interest	payments	due	on	April 15	and	October	15	of	each	year,	commencing	October	15,	2011.	The	net	proceeds	of	the	offering	were	$370.5	million,	after	issuing	at	a	discount	and	deducting	expenses,	underwriting	discounts	and commissions,	which	will	be	amortized	over	the	term	of	the	3.0%	Notes.	The	indenture	governing	the	3.0%	Notes	contains	covenants	that	may	limit	our	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	our	assets	to,	any	other	party.	As	of	October	29,	2011,	we	were	compliant	with	these	covenants.

In	addition,	we	have	a	five-year	$165	million	unsecured	revolving	credit	facility	that	expires	in	May	2013.	To	date,	we	have	not	borrowed	under	this	credit	facility	but	we	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.	The	terms	of	this	facility	also	include	financial	covenants	that	require	us	to	maintain	a	minimum	interest	coverage	ratio	and	not	exceed	a	maximum leverage	ratio.	As	of	October	29,	2011,	we	were	compliant	with	these	covenants.

At	October	29,	2011,	our	principal	source	of	liquidity	was	$3,592.5	million	of	cash	and	cash	equivalents	and	short-term	investments,	of	which	approximately	$1,170.5	million	was	held	in	the United	States.	The	balance	of	our	cash	and	cash	equivalents	and	short-term	investments	was	held	outside	the	United	States	in	various	foreign	subsidiaries.	As	we	intend	to	reinvest	certain	of	our	foreign earnings	indefinitely,	this	cash	held	outside	the	United	States	is	not	available	to	meet	certain	of	our	cash	requirements	in	the	United	States,	including	for	cash	dividends	and	common	stock	repurchases. Our	cash	and	cash	equivalents	consist	of	highly	liquid	investments	with	maturities	of	three	months	or	less	at	the	time	of	acquisition	and	our	short-term	investments	consist	primarily	of	liquid	money market	funds	and	corporate	obligations,	such	as	commercial	paper,	bonds	and	bank	time	deposits.	We	maintain	these	balances	with	high	credit	quality	counterparties,	continually	monitor	the	amount	of credit	exposure	to	any	one	issuer	and	diversify	our	investments	in	order	to	minimize	our	credit	risk.

We	believe	that	our	existing	sources	of	liquidity	and	cash	expected	to	be	generated	from	future	operations,	together	with	existing	and	anticipated	available	long-term	financing,	will	be	sufficient to	fund	operations,	capital	expenditures,	research	and	development	efforts,	dividend	payments	(if	any)	and	repurchases	of	our	stock	(if	any)	under	our	stock	repurchase	program	in	the	immediate	future and	for	at	least	the	next	twelve	months.

The	table	below	summarizes	our	contractual	obligations	and	the	amounts	we	owe	under	these	contracts	in	specified	periods	as	of	October	29,	2011:

|  |  | Less	than |  |  | More	than |
| :--- | :--- | :--- | :--- | :--- | :--- |
| (thousands) | Total | 1\tYear | 1-3\tYears | 3-5\tYears | 5\tYears |
| Contractual\tobligations: |  |  |  |  |  |
| Operating\tleasesa | $66,055 | $17,590 | $19,675 | $9,318 | $19,472 |
| Long-term\tdebt\tobligations | 866,608 | 14,500 | 477,108 | 375,000 | — |
| Interest\tpayments\tassociated\twith\tlong-term\tdebt\tobligationsb | 110,599 | 31,808 | 61,916 | 16,875 | — |
| Payments\tdue\tunder\tinterest\trate\tswap\tagreementsc | 25,281 | 9,184 | 16,097 | — | — |
| Deferred\tcompensation\tpland | 26,410 | — | — | — | 26,410 |
| Pension\tfundinge | 3,673 | 3,673 | — | — | — |
| Total | $1,098,626 | $76,755 | $574,796 | $401,193 | $45,882 |

(a) Certain	of	our	operating	lease	obligations	include	escalation	clauses.	These	escalating	payment	requirements	are	reflected	in	the	table.

(b) The	interest	payments	related	to	our	5%	senior	unsecured	notes	are	expected	to	be	fully	offset	by	the	proceeds	from	our	interest	rate	swap	agreements.	The	interest	payments	related	to	our	term loan	facility	are	based	on	LIBOR	plus	a	spread	of	1.25%	(1.61%	as	of	October	29,	2011).	The	actual	payments	will	be	based	on	the	LIBOR	rate	corresponding	to	the	tenor	of	the	interest	period chosen,	plus	a	spread	of	1.25%	which	is	set	two	business	days	prior	to	the	start	of	the	new	interest	period.

(c) These	interest	payments	are	based	on	a	variable	interest	rate	based	on	the	three	month	LIBOR	plus	2.05%	(2.42%	as	of	October	29,	2011).	The	actual	payments	will	be	based	on	the	LIBOR	based rate	which	is	set	quarterly	three	months	prior	to	the	due	date	of	the	interest	payments	plus	2.05%.

(d) These	payments	relate	to	obligations	under	our	deferred	compensation	plan.	The	deferred	compensation	plan	allows	certain	members	of	management	and	other	highly-compensated	employees and	non-employee	directors	to	defer	receipt	of	all	or	any	portion	of	their	compensation.	The	amount	in	the	"More	than	5	Years"	column	of	the	table	represents	the	remaining	total	balance	under the	deferred	compensation	plan	to	be	paid	to	participants	who	have	not	terminated	employment.	Since	we	cannot	reasonably	estimate	the	timing	of	withdrawals	for

participants	who	have	not	yet	terminated	employment,	we	have	included	the	future	obligation	to	these	participants	in	the	"More	than	5	Years"	column	of	the	table.

(e) Our	funding	policy	for	our	foreign	defined	benefit	plans	is	consistent	with	the	local	requirements	of	each	country.	The	payment	obligations	in	the	table	are	estimates	of	our	expected	contributions to	these	plans	for	fiscal	year	2012.	The	actual	future	payments	may	differ	from	the	amounts	presented	in	the	table	and	reasonable	estimates	of	payments	beyond	one	year	are	not	practical	because of	potential	future	changes	in	variables,	such	as	plan	asset	performance,	interest	rates	and	the	rate	of	increase	in	compensation	levels.

Purchase	orders	for	the	purchase	of	raw	materials	and	other	goods	and	services	are	not	included	in	the	table	above.	We	are	not	able	to	determine	the	total	amount	of	these	purchase	orders	that represent	contractual	obligations,	as	purchase	orders	may	represent	authorizations	to	purchase	rather	than	binding	agreements.	In	addition,	our	purchase	orders	generally	allow	for	cancellation	without significant	penalties.	We	do	not	have	significant	agreements	for	the	purchase	of	raw	materials	or	other	goods	specifying	minimum	quantities	or	set	prices	that	exceed	our	expected	short-term requirements.

Our	2011	acquisition	of	Lyric	Semiconductor	involves	the	potential	payment	of	contingent	consideration.	The	table	above	does	not	reflect	any	such	obligations,	as	the	timing	and	amounts	are uncertain.	See	Note	6	in	the	Notes	to	our	Consolidated	Financial	Statements	contained	in	Item	8	of	this	Annual	Report	on	Form	10-K	for	more	information	regarding	our	acquisitions.

As	of	October	29,	2011,	our	total	liabilities	associated	with	uncertain	tax	positions	was	$20.8	million,	which	are	included	in	"Other	non-current	liabilities"	in	our	consolidated	balance	sheet contained	in	Item	8	of	this	Annual	Report	on	Form	10-K.	Due	to	the	complexity	associated	with	our	tax	uncertainties,	we	cannot	make	a	reasonably	reliable	estimate	of	the	period	in	which	we	expect	to settle	the	non-current	liabilities	associated	with	these	uncertain	tax	positions.	Therefore,	we	have	not	included	these	uncertain	tax	positions	in	the	above	contractual	obligations	table.

The	expected	timing	of	payments	and	the	amounts	of	the	obligations	discussed	above	are	estimated	based	on	current	information	available	as	of	October	29,	2011.

# Off-balance	Sheet	Financing

As	of	October	29,	2011,	we	had	no	off-balance	sheet	financing	arrangements.

# Outlook

The	following	statements	are	based	on	current	expectations.	These	statements	are	forward-looking,	and	actual	results	may	differ	materially.	Unless	specifically	mentioned,	these	statements	do	not give	effect	to	the	potential	impact	of	any	mergers,	acquisitions,	divestitures,	or	business	combinations	that	may	be	announced	or	closed	after	the	date	of	filing	this	report.	These	statements	supersede	all prior	statements	regarding	our	business	outlook	made	by	us.

We	are	planning	for	revenue	in	the	first	quarter	of	fiscal	2012	to	be	down	approximately	5%	to	10%	from	the	fourth	quarter	of	fiscal	2011.	Our	plan	is	for	gross	margin	percentage	for	the	first quarter	of	fiscal	2012	to	be	approximately	63.0%	plus	or	minus	50	basis	points.	We	are	planning	for	operating	expenses	in	the	first	quarter	of	fiscal	2012	to	be	in	the	range	of	$226	million	to	$229	million. As	a	result,	our	plan	is	for	diluted	EPS	to	be	approximately	$0.44	to	$0.51	in	the	first	quarter	of	fiscal	2012.

# New	Accounting	Pronouncements

# Standards	Implemented

# Multiple-Deliverable	Revenue	Arrangements

In	October	2009,	the	Financial	Accounting	Standards	Board	(FASB)	issued	Accounting	Standards	Update	No.	2009-13	—	Revenue	Recognition	(Topic	605):	Multiple-Deliverable	Revenue Arrangements	(formerly	EITF	Issue	No.	08-1)	(ASU	No.	2009-13).	This	standard	modifies	the	revenue	recognition	guidance	for	arrangements	that	involve	the	delivery	of	multiple	elements,	such	as product,	software,	services	or	support,	to	a	customer	at	different

times	as	part	of	a	single	revenue	generating	transaction.	This	standard	provides	principles	and	application	guidance	to	determine	whether	multiple	deliverables	exist,	how	the	individual	deliverables should	be	separated	and	how	to	allocate	the	revenue	in	the	arrangement	among	those	separate	deliverables.	The	standard	also	expands	the	disclosure	requirements	for	multiple-deliverable	revenue arrangements.	ASU	No.	2009-13	is	effective	for	fiscal	years	that	begin	on	or	after	June	15,	2010,	which	is	our	fiscal	year	2011.	The	adoption	of	ASU	2009-13	in	the	first	quarter	of	fiscal	2011	did	not have	a	material	impact	on	our	financial	condition	and	results	of	operations.

# Standards	to	be	Implemented

# Business	Combinations

In	December	2010,	the	FASB	issued	ASU	No.	2010-29,	Business	Combinations	(ASC	Topic	805)	—	Disclosure	of	Supplementary	Pro	Forma	Information	for	Business	Combinations	(ASU No.	2010-29).	ASU	No.	2010-29	requires	a	public	entity	to	disclose	revenue	and	earnings	of	the	combined	entity	as	though	the	business	combination	that	occurred	during	the	current	year	had	occurred	as of	the	beginning	of	the	prior	year.	It	also	requires	a	description	of	the	nature	and	amount	of	material,	nonrecurring	adjustments	directly	attributable	to	the	business	combination	included	in	the	reported revenue	and	earnings.	The	new	disclosure	will	be	effective	for	our	first	quarter	of	fiscal	year	2012.	The	adoption	of	ASU	No.	2010-29	will	require	additional	disclosure	in	the	event	of	a	business combination	but	will	not	have	a	material	impact	on	our	financial	condition	and	results	of	operations.

# Intangibles	—	Goodwill	and	Other

In	December	2010,	the	FASB	issued	ASU	No.	2010-28,	Intangibles-Goodwill	and	Other	(ASC	Topic	350)	(ASU	No.	2010-28).	ASU	No.	2010-28	modifies	Step	1	of	the	goodwill	impairment	test for	reporting	units	with	zero	or	negative	carrying	amounts.	For	those	reporting	units,	an	entity	is	required	to	perform	Step	2	of	the	goodwill	impairment	test	if	it	is	more	likely	than	not	that	a	goodwill impairment	exists.	In	determining	whether	it	is	more	likely	than	not	that	a	goodwill	impairment	exists,	an	entity	should	consider	whether	there	are	any	adverse	qualitative	factors	indicating	that	an impairment	may	exist.	ASU	2010-28	is	effective	for	fiscal	years	that	begin	after	December	15,	2010,	which	is	our	fiscal	year	2012.	We	do	not	expect	the	adoption	of	ASU	No.	2010-28	to	impact	our financial	condition	and	results	of	operations.

# Fair	Value	Measurement

In	May	2011,	the	FASB	issued	ASU	No.	2011-04,	Amendments	to	Achieve	Common	Fair	Value	Measurements	and	Disclosure	Requirements	in	U.S.	GAAP	and	IFRSs	(ASU	No.	2011-04).	ASU No.	2011-04	amended	ASC	820,	Fair	Value	Measurements	and	Disclosures,	to	converge	the	fair	value	measurement	guidance	in	U.S.	GAAP	and	International	Financial	Reporting	Standards	(IFRSs). Some	of	the	amendments	clarify	the	application	of	existing	fair	value	measurement	requirements,	while	other	amendments	change	a	particular	principle	in	ASC	820.	In	addition,	ASU	No.	2011-04 requires	additional	fair	value	disclosures.	The	amendments	are	to	be	applied	prospectively	and	are	effective	for	interim	and	annual	periods	beginning	after	December	15,	2011,	which	is	our	second	quarter of	fiscal	year	2012.	We	are	currently	evaluating	the	impact,	if	any,	that	ASU	No.	2011-04	may	have	on	our	financial	condition	and	results	of	operations.

# Comprehensive	Income

In	June	2011,	the	FASB	issued	ASU	No.	2011-05,	Presentation	of	Comprehensive	Income	(ASU	No.	2011-05).	ASU	No.	2011-05	amended	ASC	320,	Comprehensive	Income,	to	converge	the presentation	of	comprehensive	income	between	U.S	GAAP	and	IFRS.	ASU	No.	2011-05	requires	that	all	nonowner	changes	in	stockholders'	equity	be	presented	in	either	a	single	continuous	statement	of comprehensive	income	or	in	two	separate	but	consecutive	statements	and	also	requires	reclassification	adjustments	for	items	that	are	reclassified	from	other	comprehensive	income	to	net	income	in	the statement(s)	where	the	components	of	net	income	and	the	components	of	other	comprehensive	income	are	presented.	ASU	No.	2011-05	eliminates	the	option	to	present	the	components	of	other comprehensive	income	as	part	of	the	statement	of	changes	in	stockholders'	equity.	ASU	2011-05	is	effective	for	fiscal	years,	and	interim	periods	within	those	years,	beginning	after	December	15,	2011, which	is	our	fiscal	year

2013.	The	adoption	of	ASU	No.	2011-05	will	affect	the	presentation	of	comprehensive	income	but	will	not	impact	our	financial	condition	or	results	of	operations.

# Intangibles	—	Goodwill	and	Other:	Testing	Goodwill	for	Impairment

In	September	2011,	the	FASB	issued	ASU	No.	2011-08,	Intangibles	—	Goodwill	and	Other	(ASC	Topic	350):	Testing	for	Goodwill	Impairment	(ASU	No.	2011-08).	ASU	No.	2011-08	provides a	company	the	option	to	first	assess	qualitative	factors	to	determine	whether	the	existence	of	certain	conditions	leads	to	a	determination	that	it	is	more	likely	than	not	that	the	fair	value	of	a	reporting	unit is	less	than	its	carrying	amount.	If,	after	assessing	the	totality	of	events	or	circumstances,	a	company	determines	it	is	not	more	likely	than	not	that	the	fair	value	of	a	reporting	unit	is	less	than	its	carrying amount,	then	performing	the	two-step	goodwill	impairment	test	is	unnecessary.	However,	if	a	company	concludes	otherwise,	then	it	is	required	to	perform	the	two-step	goodwill	impairment	test.	ASU No.	2011-08	is	effective	for	fiscal	years	that	begin	after	December	15,	2011,	which	is	our	fiscal	year	2013.	We	are	currently	evaluating	the	impact,	if	any,	that	ASU	No.	2011-08	may	have	on	our financial	condition	and	results	of	operations.

# Critical	Accounting	Policies	and	Estimates

Management's	discussion	and	analysis	of	the	financial	condition	and	results	of	operations	is	based	upon	the	consolidated	financial	statements,	which	have	been	prepared	in	accordance	with U.S.	generally	accepted	accounting	principles.	The	preparation	of	these	financial	statements	requires	us	to	make	estimates	and	judgments	that	affect	the	reported	amounts	of	assets,	liabilities,	revenue	and expenses,	and	related	disclosure	of	contingent	assets	and	liabilities.	We	base	our	estimates	and	judgments	on	historical	experience,	knowledge	of	current	conditions	and	beliefs	of	what	could	occur	in	the future	based	on	available	information.	We	consider	the	following	accounting	policies	to	be	both	those	most	important	to	the	portrayal	of	our	financial	condition	and	those	that	require	the	most	subjective judgment.	If	actual	results	differ	significantly	from	management's	estimates	and	projections,	there	could	be	a	material	effect	on	our	financial	statements.	We	also	have	other	policies	that	we	consider	key accounting	policies,	such	as	our	policy	for	revenue	recognition,	including	the	deferral	of	revenue	on	sales	to	distributors	until	the	products	are	sold	to	the	end	user;	however,	the	application	of	these policies	does	not	require	us	to	make	significant	estimates	or	judgments	that	are	difficult	or	subjective.

# Inventory	Valuation

We	value	inventories	at	the	lower	of	cost	(first-in,	first-out	method)	or	market.	Because	of	the	cyclical	nature	of	the	semiconductor	industry,	changes	in	inventory	levels,	obsolescence	of technology,	and	product	life	cycles,	we	write	down	inventories	to	net	realizable	value.	We	employ	a	variety	of	methodologies	to	determine	the	net	realizable	value	of	inventory.	While	a	portion	of	the calculation	is	determined	via	reference	to	the	age	of	inventory	and	lower	of	cost	or	market	calculations,	an	element	of	the	calculation	is	subject	to	significant	judgments	made	by	us	about	future	demand for	our	inventory.	If	actual	demand	for	our	products	is	less	than	our	estimates,	additional	adjustments	to	existing	inventories	may	need	to	be	recorded	in	future	periods.	To	date,	our	actual	results	have	not been	materially	different	than	our	estimates,	and	we	do	not	expect	them	to	be	materially	different	in	the	future.

# Allowance	for	Doubtful	Accounts

We	maintain	allowances	for	doubtful	accounts,	when	appropriate,	for	estimated	losses	resulting	from	the	inability	of	our	customers	to	make	required	payments.	If	the	financial	condition	of	our customers	were	to	deteriorate,	our	actual	losses	may	exceed	our	estimates,	and	additional	allowances	would	be	required.	To	date,	our	actual	results	have	not	been	materially	different	than	our	estimates, and	we	do	not	expect	them	to	be	materially	different	in	the	future.

# Long-Lived	Assets

We	review	property,	plant,	and	equipment	and	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	measured	by	comparison	of	their	carrying	value	to	future	undiscounted	cash	flows	that	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.	Although	we	have	recognized	no	material impairment	adjustments	related	to	our	property,	plant,	and	equipment	and	identified	intangible	assets	during	the	past	three	fiscal	years,	except	those	made	in	conjunction	with	restructuring	actions, deterioration	in	our	business	in	the	future	could	lead	to	such	impairment	adjustments	in	future	periods.	Evaluation	of	impairment	of	long-lived	assets	requires	estimates	of	future	operating	results	that	are used	in	the	preparation	of	the	expected	future	undiscounted	cash	flows.	Actual	future	operating	results	and	the	remaining	economic	lives	of	our	long-lived	assets	could	differ	from	the	estimates	used	in assessing	the	recoverability	of	these	assets.	These	differences	could	result	in	impairment	charges,	which	could	have	a	material	adverse	impact	on	our	results	of	operations.	In	addition,	in	certain	instances, assets	may	not	be	impaired	but	their	estimated	useful	lives	may	have	decreased.	In	these	situations,	we	amortize	the	remaining	net	book	values	over	the	revised	useful	lives.	We	review	indefinite-lived intangible	assets	for	impairment	annually,	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	the	comparison	of the	fair	value	of	the	intangible	asset	with	its	carrying	amount.

# Goodwill

Goodwill	is	subject	to	annual	impairment	tests	or	more	frequently	if	indicators	of	potential	impairment	exist	and	suggest	that	the	carrying	value	of	goodwill	may	not	be	recoverable	from estimated	discounted	future	cash	flows.	We	test	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 (on	or	about	August	1)	or	more	frequently	if	we	believe	indicators	of	impairment	exist.	For	our	latest	annual	impairment	assessment	that	occurred	on	July	31,	2011,	we	identified	our	reporting	units	to	be our	five	operating	segments,	which	meet	the	aggregation	criteria	for	one	reportable	segment.	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.	We	generally	determine	the	fair	value	of	our	reporting	units	using	the	income approach	methodology	of	valuation	that	includes	the	discounted	cash	flow	method	as	well	as	other	generally	accepted	valuation	methodologies,	which	requires	significant	judgment	by	management.	If the	carrying	amount	of	a	reporting	unit	exceeds	the	reporting	unit's	fair	value,	we	perform	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	unit's	goodwill	with	the	carrying	value	of	that	goodwill.	These	impairment	tests	may	result	in	impairment losses	that	could	have	a	material	adverse	impact	on	our	results	of	operations.

# Value	of	Contingent	Consideration	related	to	Business	Combination

We	record	contingent	consideration	resulting	from	a	business	combination	at	its	fair	value	on	the	acquisition	date.	We	generally	determine	the	fair	value	of	the	contingent	consideration	using	the income	approach	methodology	of	valuation.	Each	reporting	period	thereafter,	we	revalue	these	obligations	and	record	increases	or	decreases	in	their	fair	value	as	an	adjustment	to	operating	expenses within	the	consolidated	statement	of	income.	Changes	in	the	fair	value	of	the	contingent	consideration	can	result	from	changes	in	assumed	discount	periods	and	rates,	and	from	changes	pertaining	to	the achievement	of	the	defined	milestones.	Significant	judgment	is	employed	in	determining	the	appropriateness	of	these	assumptions	as	of	the	acquisition	date	and	for	each	subsequent	period.	Accordingly, future	business	and	economic	conditions,	as	well	as	changes	in	any	of	the	assumptions	described	above,	can	materially	impact	the	amount	of	contingent	consideration	expense	we	record	in	any	given period.

# Accounting	for	Income	Taxes

We	must	make	certain	estimates	and	judgments	in	determining	income	tax	expense	for	financial	statement	purposes.	These	estimates	and	judgments	occur	in	the	calculation	of	tax	credits,	benefits, and	deductions,	and	in	the	calculation	of	certain	tax	assets	and	liabilities,	which	arise	from	differences	in	the	timing	of	the	recognition	of	revenue	and	expense	for	tax	and	financial	statement	purposes,	as well	as	the	interest	and	penalties	relating	to	these	uncertain	tax	positions.	We	assessed	the	likelihood	of	the	realization	of	deferred	tax	assets	and	concluded	that	a	valuation	allowance	is	needed	to	reserve the	amount	of	the	deferred	tax	assets	that	may	not	be	realized	due	to	the

uncertainty	of	the	timing	and	amount	of	the	realization	of	certain	state	credit	carryovers.	In	reaching	our	conclusion,	we	evaluated	certain	relevant	criteria	including	the	existence	of	deferred	tax	liabilities that	can	be	used	to	absorb	deferred	tax	assets,	the	taxable	income	in	prior	carryback	years	in	the	impacted	state	jurisdictions	that	can	be	used	to	absorb	net	operating	losses	and	taxable	income	in	future years.	Our	judgments	regarding	future	profitability	may	change	due	to	future	market	conditions,	changes	in	U.S.	or	international	tax	laws	and	other	factors.	These	changes,	if	any,	may	require	material adjustments	to	these	deferred	tax	assets,	resulting	in	a	reduction	in	net	income	or	an	increase	in	net	loss	in	the	period	when	such	determinations	are	made,	which	in	turn,	may	result	in	an	increase	or decrease	to	our	tax	provision	in	a	subsequent	period.

We	account	for	uncertain	tax	positions	by	determining	if	it	is	"more	likely	than	not"	that	a	tax	position	will	be	sustained	by	the	appropriate	taxing	authorities	prior	to	recording	any	benefit	in	the financial	statements.	An	uncertain	income	tax	position	is	not	recognized	if	it	has	less	than	a	50%	likelihood	of	being	sustained.	For	those	tax	positions	where	it	is	more	likely	than	not	that	a	tax	benefit will	be	sustained,	we	have	recorded	the	largest	amount	of	tax	benefit	with	a	greater	than	50%	likelihood	of	being	realized	upon	ultimate	settlement	with	a	taxing	authority	that	has	full	knowledge	of	all relevant	information.	For	those	income	tax	positions	where	it	is	not	more	likely	than	not	that	a	tax	benefit	will	be	sustained,	no	tax	benefit	has	been	recognized	in	the	financial	statements.	We	reevaluate these	uncertain	tax	positions	on	a	quarterly	basis.	This	evaluation	is	based	on	factors	including,	but	not	limited	to,	changes	in	known	facts	or	circumstances,	changes	in	tax	law,	effectively	settled	issues under	audit,	and	new	audit	activity.	A	change	in	these	factors	would	result	in	the	recognition	of	a	tax	benefit	or	an	additional	charge	to	the	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	and	royalty	arrangements	among	related	entities.	Although	we	believe	our	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	our	historical	income	tax	provisions	and	accruals.	In	the	event	our	assumptions	are	incorrect,	the	differences	could	have	a	material	impact	on	our	income	tax provision	and	operating	results	in	the	period	in	which	such	determination	is	made.	In	addition	to	the	factors	described	above,	our	current	and	expected	effective	tax	rate	is	based	on	then-current	tax	law. Significant	changes	during	the	year	in	enacted	tax	law	could	affect	these	estimates.

# Stock-Based	Compensation

Stock-based	compensation	expense	associated	with	stock	options	and	related	awards	is	recognized	in	the	statement	of	income.	Determining	the	amount	of	stock-based	compensation	to	be recorded	requires	us	to	develop	estimates	to	be	used	in	calculating	the	grant-date	fair	value	of	stock	options.	We	calculate	the	grant-date	fair	values	using	the	Black-Scholes	valuation	model.	The	use	of valuation	models	requires	us	to	make	estimates	of	the	following	assumptions:

Expected	volatility	—	We	are	responsible	for	estimating	volatility	and	have	considered	a	number	of	factors,	including	third-party	estimates,	when	estimating	volatility.	We	currently	believe	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	market's	current	expectations	of	future	volatility.	In evaluating	the	appropriateness	of	exclusively	relying	on	implied	volatility,	we	concluded	that:	(1)	options	in	our	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	remaining	maturities	of	the	traded	options	used	to	estimate	volatility are	at	least	one	year.

Expected	term	—	We	use	historical	employee	exercise	and	option	expiration	data	to	estimate	the	expected	term	assumption	for	the	Black-Scholes	grant-date	valuation.	We	believe	that	this historical	data	is	currently	the	best	estimate	of	the	expected	term	of	a	new	option,	and	that	generally,	all	of	our	employees	exhibit	similar	exercise	behavior.	In	general,	the	longer	the	expected	term	used	in the	Black-Scholes	valuation	model,	the	higher	the	grant-date	fair	value	of	the	option.

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	our	Board	of	Directors	for	the	current	quarter	and	dividing	that	result	by	the	closing stock	price	on	the	date	of	grant	of	the	option.	Until	such	time	as	our	Board	of	Directors	declares	a	cash	dividend	for	an	amount	that	is	different	from	the	current	quarter's	cash	dividend,	the	current dividend	will	be	used	in	deriving	this	assumption.	Cash	dividends	are	not	paid	on	options,	restricted	stock	or	restricted	stock	units.

The	amount	of	stock-based	compensation	expense	recognized	during	a	period	is	based	on	the	value	of	the	portion	of	the	awards	that	are	ultimately	expected	to	vest.	Forfeitures	are	estimated	at	the time	of	grant	and	revised,	if	necessary,	in	subsequent	periods	if	actual	forfeitures	differ	from	those	estimates.	The	term	"forfeitures"	is	distinct	from	"cancellations"	or	"expirations"	and	represents	only the	unvested	portion	of	the	surrendered	option.	Based	on	an	analysis	of	our	historical	forfeitures,	we	have	applied	an	annual	forfeiture	rate	of	4.3%	to	all	unvested	stock-based	awards	as	of	October	29, 2011.	The	rate	of	4.3%	represents	the	portion	that	is	expected	to	be	forfeited	each	year	over	the	vesting	period.	This	analysis	is	re-evaluated	quarterly	and	the	forfeiture	rate	is	adjusted	as	necessary. Ultimately,	the	actual	expense	recognized	over	the	vesting	period	will	only	be	for	those	awards	that	vest.

# Contingencies

From	time	to	time,	we	receive	demands	from	third	parties	alleging	that	our	products	or	manufacturing	processes	infringe	the	patent	or	intellectual	property	rights	of	these	parties.	We	periodically assess	each	matter	to	determine	if	a	contingent	liability	should	be	recorded.	In	making	this	determination,	we	may,	depending	on	the	nature	of	the	matter,	consult	with	internal	and	external	legal	counsel and	technical	experts.	Based	on	the	information	we	obtain,	combined	with	our	judgment	regarding	all	the	facts	and	circumstances	of	each	matter,	we	determine	whether	it	is	probable	that	a	contingent loss	may	be	incurred	and	whether	the	amount	of	such	loss	can	be	reasonably	estimated.	If	a	loss	is	probable	and	reasonably	estimable,	we	record	a	contingent	loss.	In	determining	the	amount	of	a contingent	loss,	we	consider	advice	received	from	experts	in	the	specific	matter,	current	status	of	legal	proceedings,	settlement	negotiations	that	may	be	ongoing,	prior	case	history	and	other	factors.	If the	judgments	and	estimates	made	by	us	are	incorrect,	we	may	need	to	record	additional	contingent	losses	that	could	materially	adversely	impact	our	results	of	operations.

# ITEM	7A. QUANTITATIVE	AND	QUALITATIVE	DISCLOSURES	ABOUT	MARKET	RISK

# Interest	Rate	Exposure

Our	interest	income	and	expense	are	sensitive	to	changes	in	the	general	level	of	interest	rates.	In	this	regard,	changes	in	interest	rates	affect	the	interest	earned	on	our	marketable	securities	and short	term	investments,	as	well	as	the	fair	value	of	our	investments,	debt	and	interest-rate	swap	agreement.

Based	on	our	marketable	securities	and	short-term	investments	outstanding	as	of	October	29,	2011	and	October	30,	2010,	our	annual	interest	income	would	change	by	approximately	$38	million and	$27	million,	respectively,	for	each	100	basis	point	increase	in	interest	rates.

To	provide	a	meaningful	assessment	of	the	interest	rate	risk	associated	with	our	investment	portfolio,	we	performed	a	sensitivity	analysis	to	determine	the	impact	a	change	in	interest	rates	would have	on	the	value	of	our	investment	portfolio	assuming	a	100	basis	point	parallel	shift	in	the	yield	curve.	Based	on	investment	positions	as	of	October	29,	2011	and	October	30,	2010,	a	hypothetical 100	basis	point	increase	in	interest	rates	across	all	maturities	would	result	in	a	$4	million	decline	in	each	year	in	the	fair	market	value	of	the	portfolio.	Such	losses	would	only	be	realized	if	we	sold	the investments	prior	to	maturity.

As	of	October	29,	2011,	we	had	$750	million	in	principal	amount	of	senior	unsecured	notes	outstanding,	which	consisted	of	$375	million	5%	senior	unsecured	notes,	due	July	1,	2014	and $375	million	3%	senior	unsecured	notes,	due	April	15,	2016.	As	of	October	29,	2011,	a	hypothetical	100	basis	point	increase	in	market	interest	rates	would	reduce	the	fair	value	of	our	$375	million	of 3%	senior	unsecured	notes	outstanding	by	approximately	$16	million.	As	of	October	29,	2011	and	October	30,	2010	a	similar	increase	in	market	interest	rates	would	not	change	the	fair	value	of	our $375	million	5%	senior	unsecured	notes	which	have	been	hedged	by	an	interest	rate	swap	agreement.	Any	changes	to	fair	value	of	the	5%	senior	unsecured	notes	would	be	offset	by	the	change	in	the	fair value	of	the	corresponding	interest	rate	swap.

We	hold	an	interest	rate	swap	agreement	to	hedge	the	benchmark	interest	rate	of	our	$375	million	5.0%	senior	unsecured	notes	due	July	1,	2014.	The	effect	of	the	swap	is	to	convert	our	5.0% fixed	interest	rate	to	a	variable	interest	rate	based	on	the	three-month	LIBOR	plus	2.05%	(2.42%	as	of	October	29,	2011).	In	addition,	we	have	a	term	loan	facility	of	$145	million	that	bears	interest	at	a fluctuating	rate	for	each	period	equal	to	the	LIBOR	rate	corresponding	with	the	tenor	of	the	interest	period	plus	a	spread	of	1.25%	(1.61%	as	of	October	29,	2011).	If	LIBOR	increases	by	100	basis	points, our	annual	interest	expense	would	increase	by	approximately	$5	million.	However,	this	hypothetical	change	in	interest	rates	would	not	impact	the	interest	expense	on	our	$375	million	of	3%	fixed-rate debt,	which	is	not	hedged.	As	of	October	30,	2010,	a	similar	100	basis	point	increase	in	LIBOR	would	have	resulted	in	an	increase	of	approximately	$4	million	to	our	annual	interest	expense.

# Foreign	Currency	Exposure

As	more	fully	described	in	Note	2i	in	the	Notes	to	Consolidated	Financial	Statements	contained	in	Item	8	of	this	Annual	Report	on	Form	10-K,	we	regularly	hedge	our	non-U.S.	dollar-based exposures	by	entering	into	forward	foreign	currency	exchange	contracts.	The	terms	of	these	contracts	are	for	periods	matching	the	duration	of	the	underlying	exposure	and	generally	range	from	one month	to	twelve	months.	Currently,	our	largest	foreign	currency	exposure	is	the	Euro,	primarily	because	our	European	operations	have	the	highest	proportion	of	our	local	currency	denominated	expenses. Relative	to	foreign	currency	exposures	existing	at	October	29,	2011	and	October	30,	2010,	a	10%	unfavorable	movement	in	foreign	currency	exchange	rates	over	the	course	of	the	year	would	expose	us to	approximately	$6	million	in	losses	in	earnings	or	cash	flows.

The	market	risk	associated	with	our	derivative	instruments	results	from	currency	exchange	rates	that	are	expected	to	offset	the	market	risk	of	the	underlying	transactions,	assets	and	liabilities being	hedged.	The	counterparties	to	the	agreements	relating	to	our	foreign	exchange	instruments	consist	of	a	number	of	major	international	financial	institutions	with	high	credit	ratings.	Based	on	the credit	ratings	of	our	counterparties	as	of	October	29,	2011,	we	do	not	believe	that	there	is	significant	risk	of	nonperformance	by	them.	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	our	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	our	obligations	to the	counterparties.

The	following	table	illustrates	the	effect	that	a	10%	unfavorable	or	favorable	movement	in	foreign	currency	exchange	rates,	relative	to	the	U.S.	dollar,	would	have	on	the	fair	value	of	our	forward exchange	contracts	as	of	October	29,	2011	and	October	30,	2010:

The	calculation	assumes	that	each	exchange	rate	would	change	in	the	same	direction	relative	to	the	U.S.	dollar.	In	addition	to	the	direct	effects	of	changes	in	exchange	rates,	such	changes	typically affect	the	volume	of	sales	or	the	foreign	currency	sales	price	as	competitors'	products	become	more	or	less	attractive.	Our	sensitivity	analysis	of	the	effects	of	changes	in	foreign	currency	exchange	rates does	not	factor	in	a	potential	change	in	sales	levels	or	local	currency	selling	prices.

# ITEM	8. FINANCIAL	STATEMENTS	AND	SUPPLEMENTARY	DATA

# CONSOLIDATED	STATEMENTS	OF	INCOME

| (thousands,	except	per	share	amounts) | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Revenue |  |  |  |
| Revenue | $2,993,320 | $2,761,503 | $2,014,908 |
| Costs\tand\tExpenses |  |  |  |
| Cost\tof\tsales(1) | 1,006,779 | 962,081 | 896,271 |
| Gross\tmargin | 1,986,541 | 1,799,422 | 1,118,637 |
| Operating\texpenses: |  |  |  |
| Research\tand\tdevelopment(1) | 505,570 | 492,305 | 446,980 |
| Selling,\tmarketing,\tgeneral\tand\tadministrative(1) | 406,707 | 390,560 | 333,184 |
| Special\tcharges | 2,239 | 16,483 | 53,656 |
|  | 914,516 | 899,348 | 833,820 |
| Operating\tincome\tfrom\tcontinuing\toperations | 1,072,025 | 900,074 | 284,817 |
| Nonoperating\t(income)\texpenses: |  |  |  |
| Interest\texpense | 19,146 | 10,429 | 4,094 |
| Interest\tincome | (9,060) | (9,837) | (15,621) |
| Other,\tnet | 492 | (2,183) | (1,100) |
|  | 10,578 | (1,591) | (12,627) |
| Earnings |  |  |  |
| Income\tfrom\tcontinuing\toperations\tbefore\tincome\ttaxes | 1,061,447 | 901,665 | 297,444 |
| Provision\tfor\tincome\ttaxes: |  |  |  |
| Payable\tcurrently | 198,849 | 200,306 | 38,441 |
| Deferred | 1,704 | (9,866) | 11,595 |
|  | 200,553 | 190,440 | 50,036 |
| Income\tfrom\tcontinuing\toperations,\tnet\tof\ttax | 860,894 | 711,225 | 247,408 |
| Discontinued\toperations,\tnet\tof\ttax: |  |  |  |
| Income\tfrom\tdiscontinued\toperations | — | — | 364 |
| Gain\ton\tsale\tof\tdiscontinued\toperations | 6,500 | 859 | — |
| Total\tincome\tfrom\tdiscontinued\toperations,\tnet\tof\ttax | 6,500 | 859 | 364 |
| Net\tincome | $867,394 | $712,084 | $247,772 |
| Shares\tused\tto\tcompute\tearnings\tper\tshare\t—\tBasic | 299,417 | 297,387 | 291,385 |
| Shares\tused\tto\tcompute\tearnings\tper\tshare\t—\tDiluted | 308,236 | 305,861 | 292,698 |
| Earnings\tper\tshare\t—\tBasic |  |  |  |
| Income\tfrom\tcontinuing\toperations,\tnet\tof\ttax | $2.88 | $2.39 | $0.85 |
| Net\tincome | $2.90 | $2.39 | $0.85 |
| Earnings\tper\tshare\t—\tDiluted |  |  |  |
| Income\tfrom\tcontinuing\toperations,\tnet\tof\ttax | $2.79 | $2.33 | $0.85 |
| Net\tincome | $2.81 | $2.33 | $0.85 |
| Dividends\tdeclared\tand\tpaid\tper\tshare | $0.94 | $0.84 | $0.80 |
| (1)\tIncludes\tstock-based\tcompensation\texpense\tas\tfollows: |  |  |  |
| Cost\tof\tsales | $7,294 | $7,333 | $7,469 |
| Research\tand\tdevelopment | $23,289 | $23,342 | $22,666 |
| Selling,\tmarketing,\tgeneral\tand\tadministrative | $21,775 | $21,077 | $18,478 |

See	accompanying	Notes.

# CONSOLIDATED	BALANCE	SHEETS

| (thousands,	except	per	share	amounts) | 2011 | 2010 |
| :--- | :--- | :--- |
| ASSETS |  |  |
| Current\tAssets |  |  |
| Cash\tand\tcash\tequivalents | $1,405,100 | $1,070,000 |
| Short-term\tinvestments | 2,187,362 | 1,617,768 |
| Accounts\treceivable\tless\tallowances\tof\t$1,465\t($1,581\tin\t2010) | 348,416 | 387,169 |
| Inventories(1) | 295,081 | 277,478 |
| Deferred\ttax\tassets | 82,171 | 74,710 |
| Prepaid\tincome\ttax | 22,002 | — |
| Prepaid\texpenses\tand\tother\tcurrent\tassets | 46,216 | 51,874 |
| Total\tcurrent\tassets | 4,386,348 | 3,478,999 |
| Property,\tPlant\tand\tEquipment,\tat\tCost |  |  |
| Land\tand\tbuildings | 430,453 | 401,277 |
| Machinery\tand\tequipment | 1,606,150 | 1,578,493 |
| Office\tequipment | 51,960 | 56,449 |
| Leasehold\timprovements | 48,338 | 65,326 |
|  | 2,136,901 | 2,101,545 |
| Less\taccumulated\tdepreciation\tand\tamortization | 1,658,062 | 1,628,880 |
| Net\tproperty,\tplant\tand\tequipment | 478,839 | 472,665 |
| Other\tAssets |  |  |
| Deferred\tcompensation\tplan\tinvestments | 26,410 | 8,690 |
| Other\tinvestments | 2,951 | 1,317 |
| Goodwill | 275,087 | 255,580 |
| Intangible\tassets,\tnet | 12,200 | 1,343 |
| Deferred\ttax\tassets | 37,645 | 52,765 |
| Other\tassets | 58,155 | 57,472 |
| Total\tother\tassets | 412,448 | 377,167 |
|  | $5,277,635 | $4,328,831 |
| LIABILITIES\tAND\tSHAREHOLDERS'\tEQUITY |  |  |
| Current\tLiabilities |  |  |
| Accounts\tpayable | $113,056 | $133,111 |
| Deferred\tincome\ton\tshipments\tto\tdistributors,\tnet | 233,249 | 242,848 |
| Income\ttaxes\tpayable | 6,584 | 60,421 |
| Current\tportion\tof\tlong-term\tdebt | 14,500 | — |
| Accrued\tliabilities | 157,616 | 207,087 |
| Total\tcurrent\tliabilities | 525,005 | 643,467 |
| Non-current\tLiabilities |  |  |
| Long-term\tdebt | 871,876 | 400,635 |
| Deferred\tincome\ttaxes | 1,260 | 1,800 |
| Deferred\tcompensation\tplan\tliability | 26,428 | 8,690 |
| Other\tnon-current\tliabilities | 57,653 | 74,522 |
| Total\tnon-current\tliabilities | 957,217 | 485,647 |
| Commitments\tand\tcontingencies\t(Note\t12) |  |  |
| Shareholders'\tEquity |  |  |
| Preferred\tstock,\t$1.00\tpar\tvalue,\t471,934\tshares\tauthorized,\tnone\toutstanding | — | — |
|  | 49,661 | 49,777 |
| Capital\tin\texcess\tof\tpar\tvalue | 289,587 | 286,969 |
| Retained\tearnings | 3,482,334 | 2,896,566 |
| Accumulated\tother\tcomprehensive\tloss | (26,169) | (33,595) |
| Total\tshareholders'\tequity | 3,795,413 | 3,199,717 |
|  | $5,277,635 | $4,328,831 |

# CONSOLIDATED	STATEMENTS	OF	SHAREHOLDERS'	EQUITY

|  |  |  | Capital	in |  | Other |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | Common\tStock | Common\tStock | Excess\tof | Retained | Comprehensive |
| (thousands) | Shares | Amount | Par\tValue | Earnings | (Loss)\tIncome |
| BALANCE,\tNOVEMBER\t1,\t2008 | 291,193 | $48,533 | $— | $2,419,908 | $(48,178) |
| Activity\tin\tFiscal\t2009 |  |  |  |  |  |
| Change\tin\tdefined\tbenefit\tplan\tmeasurement\tdate |  |  |  | (246) |  |
| Net\tIncome\t—\t2009 |  |  |  | 247,772 |  |
| Dividends\tdeclared\tand\tpaid |  |  |  | (232,988) |  |
| Issuance\tof\tstock\tunder\tstock\tplans\tand\tother,\tnet\tof\trepurchases | 851 | 142 | 12,235 |  |  |
| Tax\tdeficit—\tstock\toptions |  |  | (810) |  |  |
| Stock-based\tcompensation\texpense |  |  | 48,613 |  |  |
| Other\tcomprehensive\tincome |  |  |  |  | 37,930 |
| Common\tstock\trepurchased | (182) | (30) | (3,732) |  |  |
| BALANCE,\tOCTOBER\t31,\t2009 | 291,862 | 48,645 | 56,306 | 2,434,446 | (10,248) |
| Activity\tin\tFiscal\t2010 |  |  |  |  |  |
| Net\tIncome\t—\t2010 |  |  |  | 712,084 |  |
| Dividends\tdeclared\tand\tpaid |  |  |  | (249,964) |  |
| Issuance\tof\tstock\tunder\tstock\tplans\tand\tother,\tnet\tof\trepurchases | 8,066 | 1,344 | 214,803 |  |  |
| Tax\tbenefit\t—\tstock\toptions |  |  | 3,744 |  |  |
| Stock-based\tcompensation\texpense |  |  | 51,752 |  |  |
| Other\tcomprehensive\tloss |  |  |  |  | (23,347) |
| Common\tstock\trepurchased | (1,275) | (212) | (39,636) |  |  |
| BALANCE,\tOCTOBER\t30,\t2010 | 298,653 | 49,777 | 286,969 | 2,896,566 | (33,595) |
| Activity\tin\tFiscal\t2011 |  |  |  |  |  |
| Net\tIncome\t—\t2011 |  |  |  | 867,394 |  |
| Dividends\tdeclared\tand\tpaid |  |  |  | (281,626) |  |
| Issuance\tof\tstock\tunder\tstock\tplans\tand\tother,\tnet\tof\trepurchases | 8,316 | 1,385 | 215,779 |  |  |
| Tax\tbenefit\t—\tstock\toptions |  |  | 63,236 |  |  |
| Stock-based\tcompensation\texpense |  |  | 52,358 |  |  |
| Other\tcomprehensive\tincome |  |  |  |  | 7,426 |
| Common\tstock\trepurchased | (9,008) | (1,501) | (328,755) |  |  |
| BALANCE,\tOCTOBER\t29,\t2011 | 297,961 | $49,661 | $289,587 | $3,482,334 | $(26,169) |

# CONSOLIDATED	STATEMENTS	OF	COMPREHENSIVE	INCOME

| (thousands) | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Income\tfrom\tcontinuing\toperations,\tnet\tof\ttax | $860,894 | $711,225 | $247,408 |
| Foreign\tcurrency\ttranslation\tadjustment | (647) | 6,085 | 14,840 |
| Net\tunrealized\t(losses)\tgains\ton\tsecurities: |  |  |  |
| Net\tunrealized\tholding\t(losses)\t(net\tof\ttaxes\tof\t$67\tin\t2011,\t$6\tin\t2010\tand\t$347\tin\t2009)\ton\tavailable-for-sale\tsecurities\tclassified\tas |  |  |  |
| short-term\tinvestments | (459) | (50) | (2,456) |
| Net\tunrealized\tholding\t(losses)\tgains\t(net\tof\ttaxes\tof\t$64\tin\t2011,\t$175\tin\t2010\tand\t$197\tin\t2009)\ton\tsecurities\tclassified\tas\tother |  |  |  |
| investments | (118) | 325 | 366 |
| Net\tunrealized\t(losses)\tgains\ton\tsecurities | (577) | 275 | (2,090) |
| Derivative\tinstruments\tdesignated\tas\tcash\tflow\thedges: |  |  |  |
| Changes\tin\tfair\tvalue\tof\tderivatives\t(net\tof\ttaxes\tof\t$539\tin\t2011,\t$449\tin\t2010\tand\t$2,278\tin\t2009) | 3,347 | (1,339) | 16,215 |
| Realized\t(gain)\tloss\treclassification\t(net\tof\ttaxes\tof\t$1,171\tin\t2011,\t$458\tin\t2010\tand\t$1,609\tin\t2009) | (7,793) | 1,863 | 9,657 |
| Net\tchange\tin\tderivative\tinstruments\tdesignated\tas\tcash\tflow\thedges | (4,446) | 524 | 25,872 |
| Accumulated\tother\tcomprehensive\tincome\t(loss)\t—\tpension\tplans: |  |  |  |
| Transition\tasset\t(obligation)\t(net\tof\ttaxes\tof\t$1\tin\t2011,\t$34\tin\t2010\tand\t$1\tin\t2009) | 12 | (80) | (34) |
| Net\tactuarial\tgain\t(loss)\t(net\tof\ttaxes\tof\t$1,770\tin\t2011,\t$4,594\tin\t2010\tand\t$287\tin\t2009) | 13,084 | (30,151) | (663) |
| Net\tprior\tservice\tincome\t(net\tof\ttaxes\tof\t$0\tin\t2011,\t$0\tin\t2010\tand\t$1\tin\t2009) | — | — | 5 |
| Net\tchange\tin\taccumulated\tother\tcomprehensive\tincome\t(loss)\t—\tpension\tplans\t(net\tof\ttaxes\tof\t$1,771\tin\t2011,\t$4,560\tin\t2010\tand\t$286 |  |  |  |
| in\t2009) | 13,096 | (30,231) | (692) |
| Other\tcomprehensive\tincome\t(loss) | 7,426 | (23,347) | 37,930 |
| Comprehensive\tincome\tfrom\tcontinuing\toperations | 868,320 | 687,878 | 285,338 |
| Total\tincome\tfrom\tdiscontinued\toperations,\tnet\tof\ttax | 6,500 | 859 | 364 |
| Comprehensive\tincome | $874,820 | $688,737 | $285,702 |

# CONSOLIDATED	STATEMENTS	OF	CASH	FLOWS

| (thousands) | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Operations |  |  |  |
| Cash\tflows\tfrom\toperating\tactivities: |  |  |  |
| Net\tincome | $867,394 | $712,084 | $247,772 |
| Adjustments\tto\treconcile\tnet\tincome\tto\tnet\tcash\tprovided\tby\toperations: |  |  |  |
| Depreciation | 116,873 | 116,083 | 132,493 |
| Amortization\tof\tintangibles | 1,346 | 4,828 | 7,377 |
| Stock-based\tcompensation\texpense | 52,358 | 51,752 | 48,613 |
| Gain\ton\tsale\tof\tbusiness | (6,500) | (859) | — |
| Non-cash\tportion\tof\tspecial\tcharges | — | 487 | 15,468 |
| Other\tnon-cash\tactivity | 833 | 1,662 | 1,663 |
| Excess\ttax\tbenefit\t—\tstock\toptions | (44,936) | (317) | (20) |
| Deferred\tincome\ttaxes | 1,704 | (9,866) | 11,595 |
| Change\tin\toperating\tassets\tand\tliabilities: |  |  |  |
| Decrease\t(increase)\tin\taccounts\treceivable | 40,025 | (82,380) | 16,561 |
| (Increase)\tdecrease\tin\tinventories | (17,603) | (24,274) | 67,347 |
| Decrease\t(increase)\tin\tprepaid\texpenses\tand\tother\tcurrent\tassets | 822 | (4,002) | 731 |
| (Increase)\tdecrease\tin\tdeferred\tcompensation\tplan\tinvestments | (17,720) | (747) | 24,097 |
| Increase\tin\tprepaid\tincome\ttax | (16,681) | — | — |
| (Decrease)\tincrease\tin\taccounts\tpayable,\tdeferred\tincome\tand\taccrued\tliabilities | (90,323) | 190,043 | (100,064) |
| Increase\t(decrease)\tin\tdeferred\tcompensation\tplan\tliability | 17,738 | 750 | (24,801) |
| Income\ttax\tpayments\trelated\tto\tgain\ton\tsale\tof\tbusinesses | — | — | (4,105) |
| (Decrease)\tincrease\tin\tincome\ttaxes\tpayable | 893 | 61,984 | (24,909) |
| (Decrease)\tincrease\tin\tother\tliabilities | (5,694) | (26,053) | 12,330 |
| Total\tadjustments | 33,135 | 279,091 | 184,376 |
| Net\tcash\tprovided\tby\toperating\tactivities | 900,529 | 991,175 | 432,148 |
| Investing\tActivities |  |  |  |
| Cash\tflows\tfrom\tinvesting: |  |  |  |
| Purchases\tof\tshort-term\tavailable-for-sale\tinvestments | (4,289,304) | (3,478,025) | (2,812,094) |
| Maturities\tof\tshort-term\tavailable-for-sale\tinvestments | 3,436,284 | 2,801,727 | 2,274,254 |
| Sales\tof\tshort-term\tavailable-for-sale\tinvestments | 282,861 | 234,718 | 74,880 |
| Additions\tto\tproperty,\tplant\tand\tequipment,\tnet | (122,996) | (111,557) | (56,095) |
| Net\tproceeds\t(expenditures)\trelated\tto\tsale\tof\tbusinesses | 10,000 | 63,036 | (1,653) |
| Payments\tfor\tacquisitions | (13,988) | — | (8,360) |
| (Increase)\tdecrease\tin\tother\tassets | (6,595) | 4,276 | (5,661) |
| Net\tcash\tused\tfor\tinvesting\tactivities | (703,738) | (485,825) | (534,729) |
| Financing\tActivities |  |  |  |
| Cash\tflows\tfrom\tfinancing\tactivities: |  |  |  |
| Proceeds\tfrom\tlong-term\tdebt | 515,507 | — | 370,350 |
| Term\tloan\trepayments | (28,392) | — | — |
| Dividend\tpayments\tto\tshareholders | (281,626) | (249,964) | (232,988) |
| Repurchase\tof\tcommon\tstock | (330,256) | (39,848) | (3,762) |
| Net\tproceeds\tfrom\temployee\tstock\tplans | 217,164 | 216,147 | 12,377 |
| Increase\tin\tother\tfinancing\tactivities | 1,279 | 710 | — |
| Excess\ttax\tbenefit\t—\tstock\toptions | 44,936 | 317 | 20 |
| Net\tcash\tprovided\tby\t(used\tfor)\tfinancing\tactivities | 138,612 | (72,638) | 145,997 |
| Effect\tof\texchange\trate\tchanges\ton\tcash | (303) | (2,441) | 2,714 |
| Net\tincrease\tin\tcash\tand\tcash\tequivalents | 335,100 | 430,271 | 46,130 |
| Cash\tand\tcash\tequivalents\tat\tbeginning\tof\tyear | 1,070,000 | 639,729 | 593,599 |
| Cash\tand\tcash\tequivalents\tat\tend\tof\tyear | $1,405,100 | $1,070,000 | $639,729 |

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS

# (all	tabular	amounts	in	thousands	except	per	share	amounts)

# 1. Description	of	Business

Analog	Devices,	Inc.	("Analog	Devices"	or	the	"Company")	is	a	world	leader	in	the	design,	manufacture	and	marketing	of	a	broad	portfolio	of	high-performance	analog,	mixed-signal	and	digital signal	processing	integrated	circuits	(ICs)	used	in	virtually	all	types	of	electronic	equipment.	Since	the	Company's	inception	in	1965,	it	has	focused	on	solving	the	engineering	challenges	associated	with signal	processing	in	electronic	equipment.	The	Company's	signal	processing	products	play	a	fundamental	role	in	converting,	conditioning,	and	processing	real-world	phenomena	such	as	temperature, pressure,	sound,	light,	speed	and	motion	into	electrical	signals	to	be	used	in	a	wide	array	of	electronic	devices.	As	new	generations	of	digital	applications	evolve,	new	needs	for	high-performance	analog signal	processing	and	digital	signal	processing	(DSP)	technology	are	generated.	As	a	result,	the	Company	produces	a	wide	range	of	innovative	products	—	including	data	converters,	amplifiers	and	linear products,	radio	frequency	(RF)	ICs,	power	management	products,	sensors	based	on	micro-electro	mechanical	systems	(MEMS)	technology	and	other	sensors,	and	processing	products,	including	DSP	and other	processors	—	that	are	designed	to	meet	the	needs	of	a	broad	base	of	customers.

The	Company's	products	are	embedded	inside	many	types	of	electronic	equipment	including:

•			Energy	management	systems •			Networking	equipment •			Aerospace	and	defense	electronics •			Optical	systems

# 2. Summary	of	Significant	Accounting	Policies

# a. Principles	of	Consolidation

The	consolidated	financial	statements	include	the	accounts	of	the	Company	and	all	of	its	subsidiaries.	Upon	consolidation,	all	intercompany	accounts	and	transactions	are	eliminated.	Certain amounts	reported	in	previous	years	have	been	reclassified	to	conform	to	the	fiscal	2011	presentation.	Such	reclassified	amounts	were	immaterial.	The	Company's	fiscal	year	is	the	52-week	or	53-week period	ending	on	the	Saturday	closest	to	the	last	day	in	October.	Fiscal	years	2011,	2010	and	2009	were	52-week	periods.

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	historical	results	of	operations	of	these	businesses	have	been	segregated	from	the	Company's	consolidated	financial	statements	and are	included	in	income	from	discontinued	operations,	net	of	tax,	in	the	consolidated	statements	of	income.

# b. Cash,	Cash	Equivalents	and	Short-term	Investments

Cash	and	cash	equivalents	are	highly	liquid	investments	with	insignificant	interest	rate	risk	and	maturities	of	three	months	or	less	at	the	time	of	acquisition.	Cash,	cash	equivalents	and	short-term investments	consist	primarily	of	institutional	money	market	funds	and	corporate	obligations	such	as	commercial	paper	and	bonds.	They	also	include	bank	time	deposits.

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS	—	(Continued)

The	Company	classifies	its	investments	in	readily	marketable	debt	and	equity	securities	as	"held-to-maturity,"	"available-for-sale"	or	"trading"	at	the	time	of	purchase.	There	were	no	transfers between	investment	classifications	in	any	of	the	fiscal	years	presented.	Held-to-maturity	securities,	which	are	carried	at	amortized	cost,	include	only	those	securities	the	Company	has	the	positive	intent and	ability	to	hold	to	maturity.	Securities	such	as	bank	time	deposits,	which	by	their	nature	are	typically	held	to	maturity,	are	classified	as	such.	The	Company's	other	readily	marketable	cash	equivalents and	short-term	investments	are	classified	as	available-for-sale.	Available-for-sale	securities	are	carried	at	fair	value	with	unrealized	gains	and	losses,	net	of	related	tax,	reported	in	accumulated	other comprehensive	(loss)	income.

The	Company's	deferred	compensation	plan	investments	are	classified	as	trading.	See	Note	7	for	additional	information	on	the	Company's	deferred	compensation	plan	investments.	There	were	no cash	equivalents	or	short-term	investments	classified	as	trading	at	October	29,	2011	or	October	30,	2010.

The	Company	periodically	evaluates	its	investments	for	impairment.	There	were	no	other-than-temporary	impairments	of	short-term	investments	in	any	of	the	fiscal	years	presented.

Realized	gains	or	losses	recognized	in	nonoperating	income	from	the	sales	of	available-for-sale	securities	were	not	material	during	any	of	the	fiscal	years	presented.

Unrealized	gains	and	losses	on	available-for-sale	securities	classified	as	short-term	investments	at	October	29,	2011	and	October	30,	2010	were	as	follows:

|  | 2011 | 2010 |
| :--- | :--- | :--- |
| Unrealized\tgains\ton\tsecurities\tclassified\tas\tshort-term\tinvestments | $22 | $165 |
| Unrealized\tlosses\ton\tsecurities\tclassified\tas\tshort-term\tinvestments | (600) | (217) |
| Net\tunrealized\tlosses\ton\tsecurities\tclassified\tas\tshort-term\tinvestments | $(578) | $(52) |

Unrealized	gains	and	losses	in	fiscal	years	2011	and	2010	relate	to	corporate	obligations.

The	components	of	the	Company's	cash	and	cash	equivalents	and	short-term	investments	as	of	October	29,	2011	and	October	30,	2010	were	as	follows:

|  | 2011 | 2010 |
| :--- | :--- | :--- |
| Cash\tand\tcash\tequivalents: |  |  |
| Cash | $17,857 | $37,460 |
| Available-for-sale | 1,374,069 | 1,020,993 |
| Held-to-maturity | 13,174 | 11,547 |
| Total\tcash\tand\tcash\tequivalents | $1,405,100 | $1,070,000 |
| Short-term\tinvestments: |  |  |
| Available-for-sale | $2,186,782 | $1,587,768 |
| Held-to-maturity\t(less\tthan\tone\tyear\tto\tmaturity) | 580 | 30,000 |
| Total\tshort-term\tinvestments | $2,187,362 | $1,617,768 |

See	Note	2j	for	additional	information	on	the	Company's	cash	equivalents	and	short-term	investments.

| c.<br>Supplemental	Cash	Flow	Statement	Information |  |  |  |
| :--- | :--- | :--- | :--- |
|  | 2011 | 2010 | 2009 |
| Cash\tpaid\tduring\tthe\tfiscal\tyear\tfor: |  |  |  |
| Income\ttaxes | $223,716 | $137,149 | $60,609 |
| Interest | $16,492 | $9,199 | $2,502 |

# d. 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.

|  | 2011 | 2010 |
| :--- | :--- | :--- |
| Raw\tmaterials | $28,085 | $22,008 |
| Work\tin\tprocess | 170,398 | 171,390 |
| Finished\tgoods | 96,598 | 84,080 |
| Total\tinventories | $295,081 | $277,478 |

# e. Property,	Plant	and	Equipment

Property,	plant	and	equipment	is	recorded	at	cost	less	allowances	for	depreciation.	The	straight-line	method	of	depreciation	is	used	for	all	classes	of	assets	for	financial	statement	purposes	while both	straight-line	and	accelerated	methods	are	used	for	income	tax	purposes.	Leasehold	improvements	are	amortized	based	upon	the	lesser	of	the	term	of	the	lease	or	the	useful	life	of	the	asset.	Repairs and	maintenance	charges	are	expensed	as	incurred.	Depreciation	and	amortization	are	based	on	the	following	useful	lives:

Depreciation	expense	from	continuing	operations	of	property,	plant	and	equipment	was	$116.9	million,	$116.1	million	and	$132.5	million	in	fiscal	2011,	2010	and	2009,	respectively.

The	Company	reviews	property,	plant,	and	equipment	for	impairment	whenever	events	or	changes	in	circumstances	indicate	that	the	carrying	amount	of	assets	may	not	be	recoverable. Recoverability	of	these	assets	is	measured	by	comparison	of	their	carrying	amount	to	the	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.	If	such	assets	are	not	impaired,	but	their	useful	lives	have	decreased,	the	remaining	net	book	value	is	amortized	over	the revised	useful	life.

# f. Goodwill	and	Intangible	Assets

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	on	the	first	day	of	the	fourth	quarter	(on	or	about August	1)	or	more	frequently	if	indicators	of	impairment	exist.	For	our	latest	annual	impairment	assessment	that	occurred	on	July	31,	2011,	the	Company	identified	its	reporting	units	to	be	its	five operating	segments,	which	meet	the	aggregation	criteria	for	one	reportable	segment.	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	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	unit's	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	unit's	goodwill	with	the	carrying	value	of	that	goodwill.	No	impairment	of	goodwill	resulted	in	any	of	the	fiscal	years	presented.	The	Company's	next	annual	impairment assessment	will	be	performed	as	of	the	first	day	of	the	fourth	quarter	of	fiscal	2012	unless	indicators	arise	that	would	require	the	Company	to	reevaluate	at	an	earlier	date.	The	following	table	presents	the changes	in	goodwill	during	fiscal	2011	and	2010:

|  | 2011 | 2010 |
| :--- | :--- | :--- |
| Balance\tat\tbeginning\tof\tyear | $255,580 | $250,881 |
| Acquisition\tof\tLyric\tSemiconductor\t(Note\t6) | 18,865 | — |
| Foreign\tcurrency\ttranslation\tadjustment | 642 | 4,699 |
| Balance\tat\tend\tof\tyear | $275,087 | $255,580 |

# 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	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.	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	the	comparison	of	the	fair	value	of	the	intangible	asset	with	its	carrying	amount.	No	impairment	of	intangible	assets resulted	in	any	of	the	fiscal	years	presented.

Intangible	assets	consisted	of	the	following:

|  | October	29,	2011 | October	29,	2011 | October	30,	2010 | October	30,	2010 |
| :--- | :--- | :--- | :--- | :--- |
|  | Gross\nCarrying\nAmount | Accumulated\nAmortization | Gross\nCarrying\nAmount | Accumulated\nAmortization |
| Technology-based | $—\t $— | $—\t $— | $7,166 | $6,323 |
| Customer\trelationships | — | — | 2,858 | 2,358 |
| In-process\tresearch\tand\tdevelopment | 12,200 | — | — | — |
| Total | $12,200 | $— | $10,024 | $8,681 |

Intangible	assets,	excluding	in-process	research	and	development	(IPR&D),	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.	IPR&D	assets	are	considered	indefinite-lived	intangible	assets	until	completion	or	abandonment	of	the	associated	R&D	efforts.	Upon completion	of	the	projects,	the	IPR&D	assets	will	be	amortized	over	their	estimated	useful	life.	As	of	October	29,	2011,	finite-lived	intangible	assets	were	fully	amortized.

Amortization	expense	related	to	intangibles	was	$1.3	million,	$4.8	million	and	$7.4	million	in	fiscal	2011,	2010	and	2009,	respectively.

# g. Grant	Accounting

Certain	of	the	Company's	foreign	subsidiaries	have	received	grants	from	governmental	agencies.	These	grants	include	capital,	employment	and	research	and	development	grants.	Capital	grants for	the	acquisition	of	property	and	equipment	are	netted	against	the	related	capital	expenditures	and	amortized	as	a	credit	to	depreciation	expense	over	the	useful	life	of	the	related	asset.	Employment grants,	which	relate	to	employee	hiring	and	training,	and	research	and	development	grants	are	recognized	in	earnings	in	the	period	in	which	the	related	expenditures	are	incurred	by	the	Company.

# h. Translation	of	Foreign	Currencies

The	functional	currency	for	the	Company's	foreign	sales	and	research	and	development	operations	is	the	applicable	local	currency.	Gains	and	losses	resulting	from	translation	of	these	foreign currencies	into	U.S.	dollars	are	recorded	in	accumulated	other	comprehensive	(loss)	income.	Transaction	gains	and	losses	and	re-measurement	of	foreign	currency	denominated	assets	and	liabilities	are included	in	income	currently,	including	those	at	the	Company's	principal	foreign	manufacturing	operations	where	the	functional	currency	is	the	U.S.	dollar.	Foreign	currency	transaction	gains	or	losses included	in	other	expenses,	net,	were	not	material	in	fiscal	2011,	2010	or	2009.

# i. Derivative	Instruments	and	Hedging	Agreements

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	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	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	October	29,	2011	and October	30,	2010,	the	total	notional	amount	of	these

undesignated	hedges	was	$41.2	million	and	$42.1	million,	respectively.	The	fair	value	of	these	hedging	instruments	in	the	Company's	consolidated	balance	sheets	as	of	October	29,	2011	and	October	30, 2010	was	immaterial.

Interest	Rate	Exposure	Management	—	On	June	30,	2009,	the	Company	entered	into	interest	rate	swap	transactions	related	to	its	outstanding	5.0%	senior	unsecured	notes	where	the	Company swapped	the	notional	amount	of	its	$375	million	of	fixed	rate	debt	at	5.0%	into	floating	interest	rate	debt	through	July	1,	2014.	Under	the	terms	of	the	swaps,	the	Company	will	(i)	receive	on	the $375	million	notional	amount	a	5.0%	annual	interest	payment	that	is	paid	in	two	installments	on	the	1st	of	every	January	and	July,	commencing	January	1,	2010	through	and	ending	on	the	maturity	date; and	(ii)	pay	on	the	$375	million	notional	amount	an	annual	three	month	LIBOR	plus	2.05%	(2.42%	as	of	October	29,	2011)	interest	payment,	payable	in	four	installments	on	the	1st	of	every	January, April,	July	and	October,	commencing	on	October	1,	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	fair	value	of	the	swaps	at	inception	was	zero	and	subsequent	changes	in	the	fair	value	of	the	interest	rate	swaps	were	reflected	in	the	carrying	value	of	the interest	rate	swaps	on	the	balance	sheet.	The	carrying	value	of	the	debt	on	the	balance	sheet	was	adjusted	by	an	equal	and	offsetting	amount.	The	gain	or	loss	on	the	hedged	item	(that	is,	the	fixed-rate borrowings)	attributable	to	the	hedged	benchmark	interest	rate	risk	and	the	offsetting	gain	or	loss	on	the	related	interest	rate	swaps	for	fiscal	year	2011	and	fiscal	year	2010	were	as	follows:

| Statement	of	Income | October	29,	2011 | October	29,	2011 | October	29,	2011 | October	30,	2010 | October	30,	2010 | October	30,	2010 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Classification | Loss\ton\tSwaps | Gain\ton\tNote | Net\tIncome\tEffect | Gain\ton\tSwaps | Loss\ton\tNote | Net\tIncome\tEffect |
| Other\tincome | $(4,614) | $4,614 | $— | $20,692 | $(20,692) | $— |

The	amounts	earned	and	owed	under	the	swap	agreements	are	accrued	each	period	and	are	reported	in	interest	expense.	There	was	no	ineffectiveness	recognized	in	any	of	the	periods	presented.

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	our	counterparties	as	of	October	29,	2011,	we	do	not	believe	that	there	is	significant	risk	of	nonperformance	by	them.	Furthermore,	none	of	the Company's	derivative	transactions	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	the	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.	Changes	in	the	fair values	of	derivatives	not	qualifying	for	hedge	accounting	are	reported	in	earnings	as	they	occur.

The	total	notional	amounts	of	derivative	instruments	designated	as	hedging	instruments	as	of	October	29,	2011	and	October	30,	2010	were	$375	million	of	interest	rate	swap	agreements accounted	for	as	fair	value	hedges	and	$153.7	million	and	$139.9	million,	respectively,	of	cash	flow	hedges	denominated	in	Euros,	British	Pounds	and

Philippine	Pesos.	The	fair	values	of	these	hedging	instruments	in	the	Company's	consolidated	balance	sheets	as	of	October	29,	2011	and	October	30,	2010	were	as	follows:

|  | Balance	Sheet	Location | Fair	Value	at<br>October	29,	2011 | Fair	Value	at<br>October	30,	2010 |
| :--- | :--- | :--- | :--- |
| Interest\trate\tswap\tagreements | Other\tassets | $22,187 | $26,801 |
| Forward\tforeign\tcurrency\texchange\tcontracts | Prepaid\texpenses\tand\tother\tcurrent\tassets | $2,038 | $7,542 |

The	effects	of	derivative	instruments	designated	as	cash	flow	hedges	on	the	consolidated	statements	of	income	for	fiscal	2011	and	fiscal	2010	were	as	follows:

|  | October	29,	2011 | October	30,	2010 |
| :--- | :--- | :--- |
| Gain\t(loss)\trecognized\tin\tOCI\ton\tderivative\t(net\tof\ttax\tof\t$539\tin\t2011\tand\t$449\tin\t2010) | $3,347 | $(1,339) |
| (Gain)\tloss\treclassified\tfrom\tOCI\tinto\tincome\t(net\tof\ttax\tof\t$1,171\tin\t2011\tand\t$458\tin\t2010) | $(7,793) | $1,863 |

The	amounts	reclassified	into	earnings	before	tax	are	recognized	in	cost	of	sales	and	operating	expenses	for	fiscal	2011	and	fiscal	2010	were	as	follows:

|  | October	29,	2011 | October	30,	2010 |
| :--- | :--- | :--- |
| Cost\tof\tsales | $(4,363) | $(112) |
| Research\tand\tdevelopment | $(2,264) | $1,259 |
| Selling,\tmarketing,\tgeneral\tand\tadministrative | $(2,337) | $1,174 |

All	derivative	gains	and	losses	included	in	OCI	will	be	reclassified	into	earnings	within	the	next	twelve	months.	There	was	no	ineffectiveness	during	fiscal	year	ended	October	29,	2011	or October	30,	2010.

# Accumulated	Derivative	Gains	or	Losses

The	following	table	summarizes	activity	in	accumulated	other	comprehensive	(loss)	income	related	to	derivatives	classified	as	cash	flow	hedges	held	by	the	Company	during	the	period	from November	1,	2009	through	October	29,	2011:

|  | 2011 | 2010 |
| :--- | :--- | :--- |
| Balance\tat\tbeginning\tof\tyear | $6,133 | $5,609 |
| Changes\tin\tfair\tvalue\tof\tderivatives\t—\tgain\t(loss),\tnet\tof\ttax | 3,347 | (1,339) |
| (Gain)\tloss\treclassified\tinto\tearnings\tfrom\tother\tcomprehensive\tincome\t(loss),\tnet\tof\ttax | (7,793) | 1,863 |
| Balance\tat\tend\tof\tyear | $1,687 | $6,133 |

# j. 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.	As	of	October	30,	2010, the	Company	held	no	assets	or	liabilities	measured	on	a	recurring	basis	using	Level	3	inputs.

The	table	below	sets	forth	by	level	the	Company's	financial	assets	and	liabilities,	excluding	accrued	interest	components,	that	were	accounted	for	at	fair	value	on	a	recurring	basis	as	of October	29,	2011	and	October	30,	2010.	The	table	excludes	cash	on	hand	and	assets	and	liabilities	that	are	measured	at	historical	cost	or	any	basis	other	than	fair	value.

|  | Quoted<br>Prices	in<br>Active<br>Markets<br>for<br>Identical<br>Assets<br>(Level	1) | Significant<br>Other<br>Observable<br>Inputs<br>(Level	2) | Significant<br>Other<br>Unobservable<br>Inputs<br>(Level	3) | Total | Quoted<br>Prices	in<br>Active<br>Markets<br>for<br>Identical<br>Assets<br>(Level	1) | Significant<br>Other<br>Observable<br>Inputs<br>(Level	2) | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Assets |  |  |  |  |  |  |  |
| Cash\tequivalents: |  |  |  |  |  |  |  |
| Available-for-sale: |  |  |  |  |  |  |  |
| Institutional\tmoney\tmarket\tfunds | $1,278,121 | $— | $— | $1,278,121 | $921,034 | $— | $921,034 |
| Corporate\tobligations(1) | — | 95,948 | — | 95,948 | — | 99,959 | 99,959 |
| Short\t—\tterm\tinvestments: |  |  |  |  |  |  |  |
| Available-for-sale: |  |  |  |  |  |  |  |
| Securities\twith\tone\tyear\tor\tless\tto\tmaturity: |  |  |  |  |  |  |  |
| Corporate\tobligations(1) | — | 2,169,078 | — | 2,169,078 | — | 1,520,220 | 1,520,220 |
| Floating\trate\tnotes,\tissued\tat\tpar | — | — | — | — | — | 50,000 | 50,000 |
| Floating\trate\tnotes(1) | — | 17,704 | — | 17,704 | — | — | — |
| Securities\twith\tgreater\tthan\tone\tyear\tto\tmaturity: |  |  |  |  |  |  |  |
| Floating\trate\tnotes(1) | — | — | — | — | — | 17,548 | 17,548 |
| Other\tassets: |  |  |  |  |  |  |  |
| Forward\tforeign\tcurrency\texchange\tcontracts(2) | — | 2,472 | — | 2,472 | — | 7,256 | 7,256 |
| Deferred\tcompensation\tinvestments | 26,410 | — | — | 26,410 | 8,690 | — | 8,690 |
| Other\tinvestments | 1,135 | — | — | 1,135 | 1,317 | — | 1,317 |
| Interest\trate\tswap\tagreements | — | 22,187 | — | 22,187 | — | 26,801 | 26,801 |
| Total\tassets\tmeasured\tat\tfair\tvalue | $1,305,666 | $2,307,389 | $— | $3,613,055 | $931,041 | $1,721,784 | $2,652,825 |
| Liabilities |  |  |  |  |  |  |  |
| Long-term\tdebt |  |  |  |  |  |  |  |
| $375\tmillion\taggregate\tprinciple\t5.0%\tdebt(3) | $— | $396,337 | $— | 396,337 | $— | $400,635 | $400,635 |
| Contingent\tconsideration | — | — | 13,973 | 13,973 | — | — | — |
| Total\tliabilities\tmeasured\tat\tfair\tvalue | $— | $396,337 | $13,973 | $410,310 | $— | $400,635 | $400,635 |

(1) The	amortized	cost	of	the	Company's	investments	classified	as	available-for-sale	as	of	October	29,	2011	and	October	30,	2010	was	$2,284.9	million	and	$1,639.1	million,	respectively.

(2) The	Company	has	a	master	netting	arrangement	by	counterparty	with	respect	to	derivative	contracts.	As	of	October	29,	2011	and	October	30,	2010,	contracts	in	a	liability	position	of	$0.8	million	in each	year,	were	netted	against	contracts	in	an	asset	position	in	the	consolidated	balance	sheets.

(3) Equal	to	the	accreted	notional	value	of	the	debt	plus	the	fair	value	of	the	interest	rate	component	of	the	long-term	debt.	The	fair	value	of	the	long-term	debt	as	of	October	29,	2011	and	October	30, 2010	was	$413.4	million	and	$416.3	million,	respectively.

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

Long-term	debt	—	The	fair	value	of	long-term	debt	is	based	on	quotes	received	from	third-party	banks.

Interest	rate	swap	agreements	—	The	fair	value	of	interest	rate	swap	agreements	is	based	on	quotes	received	from	third-party	banks.	These	values	represent	the	estimated	amount	the	Company would	receive	or	pay	to	terminate	the	agreements	taking	into	consideration	current	interest	rates	as	well	as	the	creditworthiness	of	the	counterparty.

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.

Contingent	consideration	—	The	fair	value	of	contingent	consideration	was	estimated	utilizing	the	income	approach	and	is	based	upon	significant	inputs	not	observable	in	the	market.	Changes	in the	fair	value	of	the	contingent	consideration	subsequent	to	the	acquisition	date	that	are	primarily	driven	by	assumptions	pertaining	to	the	achievement	of	the	defined	milestones	will	be	recognized	in operating	income	in	the	period	of	the	estimated	fair	value	change.

        The	following	table	summarizes	the	change	in	the	fair	value	of	the	contingent	consideration	measured	using	significant	unobservable	inputs	(Level	3)	for	fiscal	2011:

# Financial	Instruments	Not	Recorded	at	Fair	Value	on	a	Recurring	Basis

On	April	4,	2011,	the	Company	issued	$375	million	aggregate	principal	amount	of	3.0%	senior	unsecured	notes	due	April	15,	2016	(the	3.0%	Notes)	with	semi-annual	fixed	interest	payments	due on	April	15	and	October	15	of	each	year,	commencing	October	15,	2011.	The	fair	value	of	the	3.0%	Notes	as	of	October	29,	2011	was	$392.8	million,	based	on	quotes	received	from	third-party	banks.

# k. Use	of	Estimates

The	preparation	of	financial	statements	in	conformity	with	accounting	principles	generally	accepted	in	the	United	States	requires	management	to	make	estimates	and	assumptions	that	affect	the reported	amounts	of	assets	and	liabilities	and	disclosure	of	contingencies	at	the	date	of	the	financial	statements	and	the	reported	amounts	of	revenue	and	expenses	during	the	reporting	period.	Such estimates	relate	to	the	useful	lives	of	fixed	assets	and	identified	intangible	assets,	allowances	for	doubtful	accounts	and	customer	returns,	the	net	realizable	value	of	inventory,	potential	reserves	relating	to litigation	matters,	accrued	liabilities,	accrued	taxes,	deferred	tax	valuation	allowances,	assumptions	pertaining	to	share-based	payments	and	other	reserves.	Actual	results	could	differ	from	those	estimates and	such	differences	may	be	material	to	the	financial	statements.

# l. Concentrations	of	Risk

Financial	instruments	that	potentially	subject	the	Company	to	concentrations	of	credit	risk	consist	principally	of	investments	and	trade	accounts	receivable.

The	Company	maintains	cash,	cash	equivalents	and	short-term	investments	and	long-term	investments	with	high	credit	quality	counterparties,	continually	monitors	the	amount	of	credit	exposure to	any	one	issuer	and	diversifies	its	investments	in	order	to	minimize	its	credit	risk.

The	Company	sells	its	products	to	distributors	and	original	equipment	manufacturers	involved	in	a	variety	of	industries	including	industrial	process	automation,	instrumentation, defense/aerospace,	automotive,	communications,	computers	and	computer	peripherals	and	consumer	electronics.	The	Company	has	adopted	credit	policies	and	standards	to	accommodate	growth	in	these markets.	The	Company	performs	continuing	credit	evaluations	of	its	customers'	financial	condition	and	although	the	Company	generally	does	not	require	collateral,	the	Company	may	require	letters	of credit	from	customers	in	certain	circumstances.	The	Company	provides	reserves	for	estimated	amounts	of	accounts	receivable	that	may	not	be	collected.

# m. Concentration	of	Other	Risks

The	semiconductor	industry	is	characterized	by	rapid	technological	change,	competitive	pricing	pressures	and	cyclical	market	patterns.	The	Company's	financial	results	are	affected	by	a	wide variety	of	factors,	including	general	economic	conditions	worldwide,	economic	conditions	specific	to	the	semiconductor	industry,	the	timely	implementation	of	new	manufacturing	technologies,	the ability	to	safeguard	patents	and	intellectual	property	in	a	rapidly	evolving	market	and	reliance	on	assembly	and	test	subcontractors,	third-party	wafer	fabricators	and	independent	distributors.	In	addition, the	semiconductor	market	has	historically	been	cyclical	and	subject	to	significant	economic	downturns	at	various	times.	The	Company	is	exposed	to	the	risk	of	obsolescence	of	its	inventory	depending on	the	mix	of	future	business.	Additionally,	a	large	portion	of	the	Company's	purchases	of	external	wafer	and	foundry	services	are	from	a	limited	number	of	suppliers,	primarily	Taiwan	Semiconductor Manufacturing	Company	(TSMC).	If	TSMC	or	any	of	the	Company's	other	key	suppliers	are	unable	or	unwilling	to	manufacture	and	deliver	sufficient	quantities	of	components,	on	the	time	schedule	and of	the	quality	that	the	Company	requires,	the	Company	may	be	forced	to	engage	additional	or	replacement	suppliers,	which	could	result	in	significant	expenses	and	disruptions	or	delays	in	manufacturing, product	development	and	shipment	of	product	to	the	Company's	customers.	Although	the	Company	has	experienced	shortages	of	components,	materials	and	external	foundry	services	from	time	to	time, these	items	have	generally	been	available	to	the	Company	as	needed.

# n. 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 Company's	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	Company's	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	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	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 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	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	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.

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	continuous	contact	with	the distributors	to	ensure	reserves	are	established	for	all	known	material	issues.

As	of	October	29,	2011	and	October	30,	2010,	the	Company	had	gross	deferred	revenue	of	$311.3	million	and	$327.2	million,	respectively,	and	gross	deferred	cost	of	sales	of	$78.1	million	and $84.4	million,	respectively.	Deferred	income	on	shipments	to	distributors	decreased	by	approximately	$9.6	million	in	fiscal	2011	primarily	as	a	result	of	the	distributors'	sales	to	their	customers	in	fiscal 2011	exceeding	the	Company's	shipments	to	its	distributors	during	this	same	time	period.

Shipping	costs	are	charged	to	cost	of	sales	as	incurred.

The	Company	generally	offers	a	12-month	warranty	for	its	products.	The	Company's	warranty	policy	provides	for	replacement	of	the	defective	product.	Specific	accruals	are	recorded	for	known product	warranty	issues.	Product	warranty	expenses	during	fiscal	2011,	2010	or	2009	were	not	material.

# o. Accumulated	Other	Comprehensive	(Loss)	Income

Other	comprehensive	(loss)	income	includes	certain	transactions	that	have	generally	been	reported	in	the	consolidated	statement	of	shareholders'	equity.	The	components	of	accumulated	other comprehensive	(loss)	at	October	29,	2011	and	October	30,	2010	consisted	of	the	following:

|  | 2011 | 2010 |
| :--- | :--- | :--- |
| Foreign\tcurrency\ttranslation | $(2,038) | $(1,391) |
| Unrealized\tgains\ton\tderivative\tinstruments | 1,687 | 6,133 |
| Unrealized\tgains\ton\tavailable-for-sale\tsecurities | 695 | 822 |
| Unrealized\tlosses\ton\tavailable-for-sale\tsecurities | (641) | (191) |
| Accumulated\tother\tcomprehensive\tloss\t—\tpension\tplans: |  |  |
| Transition\tobligation | (117) | (129) |
| Net\tactuarial\tloss | (25,755) | (38,839) |
| Total\taccumulated\tother\tcomprehensive\tloss | $(26,169) | $(33,595) |

The	aggregate	fair	value	of	investments	with	unrealized	losses	as	of	October	29,	2011	and	October	30,	2010	was	$1,899.4	million	and	$731.0	million,	respectively.	These	unrealized	losses	were primarily	related	to	commercial	paper	that	earns	lower	interest	rates	than	current	market	rates.	None	of	these	investments	have	been	in	a	loss	position	for	more	than	twelve	months.

# p. Advertising	Expense

Advertising	costs	are	expensed	as	incurred.	Advertising	expense	was	$4.1	million	in	fiscal	2011,	$3.7	million	in	fiscal	2010	and	$5.2	million	in	fiscal	2009.

# q. Income	Taxes

Deferred	tax	assets	and	liabilities	are	determined	based	on	the	differences	between	financial	reporting	and	tax	bases	of	assets	and	liabilities	and	are	measured	using	the	enacted	income	tax	rates and	laws	that	are	expected	to	be	in	effect	when	the	temporary	differences	are	expected	to	reverse.	Additionally,	deferred	tax	assets	and	liabilities	are	separated	into	current	and	non-current	amounts	based on	the	classification	of	the	related	assets	and	liabilities	for	financial	reporting	purposes.

# r. Earnings	Per	Share	of	Common	Stock

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	that	are	in-the-money	and	restricted	stock	units.	This	results	in	the "assumed"	buyback	of	additional	shares,	thereby	reducing	the	dilutive	impact	of	stock	options.	Potential	shares	related	to	certain	of	the	Company's	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	Company's	outstanding	stock	options	could	be	dilutive	in the	future.

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

|  | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Income\tfrom\tcontinuing\toperations,\tnet\tof\ttax | $860,894 | $711,225 | $247,408 |
| Total\tincome\tfrom\tdiscontinued\toperations,\tnet\tof\ttax | 6,500 | 859 | 364 |
| Net\tincome | $867,394 | $712,084 | $247,772 |
| Basic\tshares: |  |  |  |
| Weighted\taverage\tshares\toutstanding | 299,417 | 297,387 | 291,385 |
| Earnings\tper\tshare-basic: |  |  |  |
| Income\tfrom\tcontinuing\toperations,\tnet\tof\ttax | $2.88 | $2.39 | $0.85 |
| Total\tincome\tfrom\tdiscontinued\toperations,\tnet\tof\ttax | 0.02 | 0.00 | 0.00 |
| Net\tincome | $2.90 | $2.39 | $0.85 |
| Diluted\tshares: |  |  |  |
| Weighted\taverage\tshares\toutstanding | 299,417 | 297,387 | 291,385 |
| Assumed\texercise\tof\tcommon\tstock\tequivalents | 8,819 | 8,474 | 1,313 |
| Weighted\taverage\tcommon\tand\tcommon\tequivalent\tshares | 308,236 | 305,861 | 292,698 |
| Earnings\tper\tshare-diluted: |  |  |  |
| Income\tfrom\tcontinuing\toperations,\tnet\tof\ttax | $2.79 | $2.33 | $0.85 |
| Total\tincome\tfrom\tdiscontinued\toperations,\tnet\tof\ttax | 0.02 | 0.00 | 0.00 |
| Net\tincome | $2.81 | $2.33 | $0.85 |
| Weighted\taverage\tanti-dilutive\tshares\trelated\tto: |  |  |  |
| Outstanding\tstock\toptions | 7,298 | 18,206 | 55,827 |

# s. Stock-Based	Compensation

Stock-based	compensation	is	measured	at	the	grant	date	based	on	the	grant-date	fair	value	of	the	awards	ultimately	expected	to	vest,	and	is	recognized	as	an	expense	on	a	straight-line	basis	over the	vesting	period,	which	is	generally	five	years	for	stock	options	and	generally	three	years	for	restricted	stock	units.	Determining	the	amount	of	stock-based	compensation	to	be	recorded	requires	the Company	to	develop	estimates	used	in	calculating	the	grant-date	fair	value	of	stock	options.	The	Company	calculates	the	grant-date	fair	value	using	the	Black-Scholes	valuation	model.	The	use	of valuation	models	requires	the	Company	to	make	estimates	and	assumptions	such	as	expected	volatility,	expected	term,	risk-free	interest	rate,	expected	dividend	yield	and	forfeiture	rates.

See	Note	3	for	additional	information	relating	to	stock-based	compensation.

# t. New	Accounting	Pronouncements

times	as	part	of	a	single	revenue	generating	transaction.	This	standard	provides	principles	and	application	guidance	to	determine	whether	multiple	deliverables	exist,	how	the	individual	deliverables should	be	separated	and	how	to	allocate	the	revenue	in	the	arrangement	among	those	separate	deliverables.	The	standard	also	expands	the	disclosure	requirements	for	multiple-deliverable	revenue arrangements.	ASU	No.	2009-13	is	effective	for	fiscal	years	that	begin	on	or	after	June	15,	2010,	which	is	the	Company's	fiscal	year	2011.	The	adoption	of	ASU	2009-13	in	the	first	quarter	of	fiscal	2011 did	not	have	a	material	impact	on	the	Company's	financial	condition	and	results	of	operations.

In	December	2010,	the	FASB	issued	ASU	No.	2010-29,	Business	Combinations	(ASC	Topic	805)	—	Disclosure	of	Supplementary	Pro	Forma	Information	for	Business	Combinations	(ASU No.	2010-29).	ASU	No.	2010-29	requires	a	public	entity	to	disclose	revenue	and	earnings	of	the	combined	entity	as	though	the	business	combination	that	occurred	during	the	current	year	had	occurred	as of	the	beginning	of	the	prior	year.	It	also	requires	a	description	of	the	nature	and	amount	of	material,	nonrecurring	adjustments	directly	attributable	to	the	business	combination	included	in	the	reported revenue	and	earnings.	The	new	disclosure	will	be	effective	for	the	Company's	first	quarter	of	fiscal	year	2012.	The	adoption	of	ASU	No.	2010-29	will	require	additional	disclosure	in	the	event	of	a business	combination	but	will	not	have	a	material	impact	on	the	Company's	financial	condition	and	results	of	operations.

In	December	2010,	the	FASB	issued	ASU	No.	2010-28,	Intangibles	—	Goodwill	and	Other	(ASC	Topic	350)	(ASU	No.	2010-28).	ASU	210-28	modifies	Step	1	of	the	goodwill	impairment	test for	reporting	units	with	zero	or	negative	carrying	amounts.	For	those	reporting	units,	an	entity	is	required	to	perform	Step	2	of	the	goodwill	impairment	test	if	it	is	more	likely	than	not	that	a	goodwill impairment	exists.	In	determining	whether	it	is	more	likely	than	not	that	a	goodwill	impairment	exists,	an	entity	should	consider	whether	there	are	any	adverse	qualitative	factors	indicating	that	an impairment	may	exist.	ASU	2010-28	is	effective	for	fiscal	years	that	begin	after	December	15,	2010,	which	is	the	Company's	fiscal	year	2012.	The	Company	does	not	expect	the	adoption	of ASU	No.	2010-28	to	impact	the	Company's	financial	condition	and	results	of	operations.

In	May	2011,	the	FASB	issued	ASU	No.	2011-04,	Amendments	to	Achieve	Common	Fair	Value	Measurements	and	Disclosure	Requirements	in	U.S.	GAAP	and	IFRSs	(ASU	No.	2011-04).	ASU No.	2011-04	amended	ASC	820,	Fair	Value	Measurements	and	Disclosures,	to	converge	the	fair	value	measurement	guidance	in	U.S.	GAAP	and	International	Financial	Reporting	Standards	(IFRSs). Some	of	the	amendments	clarify	the	application	of	existing	fair	value	measurement	requirements,	while	other	amendments	change	a	particular	principle	in	ASC	820.	In	addition,	ASU	No.	2011-04 requires	additional	fair	value	disclosures.	The	amendments	are	to	be	applied	prospectively	and	are	effective	for	interim	and	annual	periods	beginning	after	December	15,	2011,	which	is	the	Company's second	quarter	of	fiscal	year	2012.	The	Company	is	currently	evaluating	the	impact,	if	any,	that	ASU	No.	2011-04	may	have	on	the	Company's	financial	condition	and	results	of	operations.

In	June	2011,	the	FASB	issued	ASU	No.	2011-05,	Presentation	of	Comprehensive	Income	(ASU	No.	2011-05).	ASU	No.	2011-05	amended	ASC	320,	Comprehensive	Income,	to	converge	the presentation	of	comprehensive	income	between	U.S	GAAP	and	IFRS.	ASU	No.	2011-05	requires	that	all	non-owner	changes	in	stockholders'	equity	be	presented	in	either	a	single	continuous	statement of	comprehensive	income	or	in	two	separate	but	consecutive	statements	and	also	requires	reclassification	adjustments	for	items	that	are	reclassified	from	other	comprehensive	income	to	net	income	in	the statement(s)	where	the	components	of	net	income	and	the	components

of	other	comprehensive	income	are	presented.	ASU	No.	2011-05	eliminates	the	option	to	present	the	components	of	other	comprehensive	income	as	part	of	the	statement	of	changes	in	stockholders' equity.	ASU	2011-05	is	effective	for	fiscal	years,	and	interim	periods	within	those	years,	beginning	after	December	15,	2011,	which	is	the	Company's	fiscal	year	2013.	The	adoption	of	ASU	No.	2011-05 will	affect	the	presentation	of	comprehensive	income	but	will	not	impact	the	Company's	financial	condition	or	results	of	operations.

In	September	2011,	the	FASB	issued	ASU	No.	2011-08,	Intangibles	—	Goodwill	and	Other	(ASC	Topic	350):	Testing	for	Goodwill	Impairment	(ASU	No.	2011-08).	ASU	No.	2011-08	provides a	company	the	option	to	first	assess	qualitative	factors	to	determine	whether	the	existence	of	certain	conditions	leads	to	a	determination	that	it	is	more	likely	than	not	that	the	fair	value	of	a	reporting	unit is	less	than	its	carrying	amount.	If,	after	assessing	the	totality	of	events	or	circumstances,	a	company	determines	it	is	not	more	likely	than	not	that	the	fair	value	of	a	reporting	unit	is	less	than	its	carrying amount,	then	performing	the	two-step	goodwill	impairment	test	is	unnecessary.	However,	if	a	company	concludes	otherwise,	then	it	is	required	to	perform	the	two-step	goodwill	impairment	test.	ASU No.	2011-08	is	effective	for	fiscal	years	that	begin	after	December	15,	2011,	which	is	the	Company's	fiscal	year	2013.	The	Company	is	currently	evaluating	the	impact,	if	any,	that	ASU	No.	2011-08	may have	on	the	Company's	financial	condition	and	results	of	operations.

# u. Discontinued	Operations

In	November	2007,	the	Company	entered	into	a	purchase	and	sale	agreement	with	certain	subsidiaries	of	ON	Semiconductor	Corporation	to	sell	the	Company's	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.	During	fiscal	2008,	the	Company	completed	the	sale	of	this	business.	In	the	first	quarter	of	fiscal	2010,	proceeds	of	$1	million	were	released	from escrow	and	$0.6	million	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	September	2007,	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 Company's	decision	to	focus	its	resources	in	areas	where	its	signal	processing	expertise	can	provide	unique	capabilities	and	earn	superior	returns.	During	fiscal	2008	the	Company	completed	the	sale	of its	Baseband	Chipset	Business	for	net	cash	proceeds	of	$269	million.	The	Company	made	cash	payments	of	$1.7	million	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.	During	fiscal	2010,	the	Company	received	cash	proceeds	of	$62	million	as	a	result	of	the	receipt	of	a refundable	withholding	tax	and	also	recorded	an	additional	gain	on	sale	of	$0.3	million,	or	$0.2	million	net	of	tax,	due	to	the	settlement	of	certain	items	at	less	than	the	amounts	accrued.	In	fiscal	2011, additional	proceeds	of	$10	million	were	released	from	escrow	and	$6.5	million	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.

The	following	amounts	related	to	the	CPU	voltage	regulation	and	PC	thermal	monitoring	and	baseband	chipset	businesses	have	been	segregated	from	continuing	operations	and	reported	as discontinued	operations.	These	amounts	also	include	the	revenue	and	costs	of	sales	provided	under	a	manufacturing	supply	agreement	between	the	Company	and	a	subsidiary	of	ON	Semiconductor Corporation,	which	terminated	during	the	first	quarter	of	fiscal	year	2009.

|  | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Total\trevenue | $— | $— | $10,332 |
| Cost\tof\tsales | — | — | 10,847 |
| Operating\texpenses | — | — | 16 |
| Gain\ton\tsale\tof\tdiscontinued\toperations | 10,000 | 1,316 | — |
| Income\t(loss)\tbefore\tincome\ttaxes | 10,000 | 1,316 | (531) |
| Provision\tfor\t(benefit\tfrom)\tincome\ttaxes | 3,500 | 457 | (895) |
| Total\tincome\tfrom\tdiscontinued\toperations,\tnet\tof\ttax | $6,500 | $859 | $364 |

# 3. Stock-Based	Compensation	and	Shareholders'	Equity

# Equity	Compensation	Plans

The	Company	grants,	or	has	granted,	stock	options	and	other	stock	and	stock-based	awards	under	The	2006	Stock	Incentive	Plan	(2006	Plan).	The	2006	Plan	was	approved	by	the	Company's Board	of	Directors	on	January	23,	2006	and	was	approved	by	shareholders	on	March	14,	2006	and	subsequently	amended	in	March	2006,	June	2009,	September	2009,	December	2009,	December	2010 and	June	2011.	The	2006	Plan	provides	for	the	grant	of	up	to	15	million	shares	of	the	Company's	common	stock,	plus	such	number	of	additional	shares	that	were	subject	to	outstanding	options	under	the Company's	previous	plans	that	are	not	issued	because	the	applicable	option	award	subsequently	terminates	or	expires	without	being	exercised.	The	2006	Plan	provides	for	the	grant	of	incentive	stock options	intended	to	qualify	under	Section	422	of	the	Internal	Revenue	Code	of	1986,	as	amended,	non-statutory	stock	options,	stock	appreciation	rights,	restricted	stock,	restricted	stock	units	and	other stock-based	awards.	Employees,	officers,	directors,	consultants	and	advisors	of	the	Company	and	its	subsidiaries	are	eligible	to	be	granted	awards	under	the	2006	Plan.	No	award	may	be	made	under	the 2006	Plan	after	March	13,	2016,	but	awards	previously	granted	may	extend	beyond	that	date.	The	Company	will	not	grant	further	options	under	any	previous	plans.

While	the	Company	may	grant	to	employees	options	that	become	exercisable	at	different	times	or	within	different	periods,	the	Company	has	generally	granted	to	employees	options	that	vest	over five	years	and	become	exercisable	in	annual	installments	of	20%	on	each	of	the	first,	second,	third,	fourth	and	fifth	anniversaries	of	the	date	of	grant;	331/3%	on	each	of	the	third,	fourth,	and	fifth anniversaries	of	the	date	of	grant;	or	in	annual	installments	of	25%	on	each	of	the	second,	third,	fourth	and	fifth	anniversaries	of	the	date	of	grant.	The	maximum	contractual	term	of	all	options	is	ten years.	In	addition,	the	Company	has	granted	to	employees	restricted	stock	units	that	generally	vest	in	one	installment	on	the	third	anniversary	of	the	grant	date.

# Grant-Date	Fair	Value

The	Company	uses	the	Black-Scholes	option	pricing	model	to	calculate	the	grant-date	fair	value	of	stock	option	awards.	The	grant	date	fair	value	of	restricted	stock	units	represents	the	value	of the	Company's	common	stock	on	the	date	of	grant,	reduced	by	the	present	value	of	dividends	expected	to	be	paid	on	the	Company's	common	stock	prior	to	vesting.

Information	pertaining	to	the	Company's	stock	option	awards	and	the	related	estimated	weighted-average	assumptions	to	calculate	the	fair	value	of	stock	options	granted	is	as	follows:

|  | 2011 | 2010 | Program | 2009* |
| :--- | :--- | :--- | :--- | :--- |
| Options\tgranted\t(in\tthousands) | \t1,990 | \t1,866 | 5,675 | \t20,873 |
| Weighted-average\texercise\tprice-stock\toptions | $37.59 | $31.49 | $19.63 | $25.74 |
| Weighted-average\tgrant\tdate\tfair\tvalue-stock\toptions | $8.62 | $7.77 | $7.42 | $5.97 |
| Assumptions: |  |  |  |  |
| Weighted-average\texpected\tvolatility | 29.3% | 31.4% | 58.8% | 41.3% |
| Weighted-average\texpected\tterm\t(in\tyears) | 5.3 | 5.3 | 5.3 | 4.7 |
| Risk-free\tinterest\trate | 2.1% | 2.5% | 1.7% | 1.4% |
| Expected\tdividend\tyield | 2.4% | 2.6% | 4.1% | 3.2% |

* Includes	options	granted	under	the	stock	option	exchange	program	which	is	described	below.

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	market's	current	expectations	of	future volatility.	In	evaluating	the	appropriateness	of	exclusively	relying	on	implied	volatility,	the	Company	concluded	that:	(1)	options	in	the	Company's	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	remaining	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.

Expected	dividend	yield	—	Expected	dividend	yield	is	calculated	by	annualizing	the	cash	dividend	declared	by	the	Company's	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	Company's	Board	of	Directors	declares	a	cash	dividend	for	an	amount	that	is	different	from	the	current	quarter's	cash	dividend,	the current	dividend	will	be	used	in	deriving	this	assumption.	Cash	dividends	are	not	paid	on	options,	restricted	stock	or	restricted	stock	units.

# Stock-Based	Compensation	Expense

The	amount	of	stock-based	compensation	expense	recognized	during	a	period	is	based	on	the	value	of	the	awards	that	are	ultimately	expected	to	vest.	Forfeitures	are	estimated	at	the	time	of	grant and	revised,	if	necessary,	in	subsequent	periods	if	actual	forfeitures	differ	from	those	estimates.	The	term	"forfeitures"	is	distinct	from	"cancellations"	or	"expirations"	and	represents	only	the	unvested portion	of	the	surrendered	stock-based	award.	Based	on	an	analysis	of	its	historical	forfeitures,	the	Company	has	applied	an	annual	forfeiture	rate	of	4.3%	to	all	unvested	stock-based	awards	as	of October	29,	2011.	The	rate	of	4.3%	represents	the	portion	that	is	expected	to	be	forfeited	each	year	over	the	vesting	period.	This	analysis	will	be	re-evaluated	quarterly	and	the	forfeiture	rate	will	be adjusted	as	necessary.	Ultimately,	the	actual	expense	recognized	over	the	vesting	period	will	only	be	for	those	options	that	vest.

# Additional	paid-in-capital	(APIC)	Pool

The	APIC	pool	represents	the	excess	tax	benefits	related	to	share-based	compensation	that	are	available	to	absorb	future	tax	deficiencies.	If	the	amount	of	future	tax	deficiencies	is	greater	than	the available	APIC	pool,	the	Company	records	the	excess	as	income	tax	expense	in	its	consolidated	statements	of	income.	For	fiscal	years	2009	and	2010,	the	Company	had	a	sufficient	APIC	pool	to	cover any	tax	deficiencies	recorded	and	as	a	result,	these	deficiencies	did	not	affect	its	results	of	operations.	During	fiscal	2011,	the	Company	recognized	an	immaterial	amount	of	income	tax	expense	resulting from	tax	shortfalls	related	to	share-based	compensation	in	its	consolidated	statement	of	income.

# Stock-option	Exchange

During	fiscal	2009,	shareholders	approved	and	the	Company	completed	an	employee	stock	option	exchange	program	(Option	Exchange).	The	Option	Exchange	provided	eligible	employees	of the	Company,	except	named	executive	officers	and	directors,	the	opportunity	to	exchange	eligible	stock	option	grants	for	a	smaller	number	of	new	stock	options	with	a	lower	exercise	price,	or	in	some instances	cash,	that	had	approximately	the	same	fair	value	as	the	options	surrendered.

On	September	28,	2009	the	Company	granted	stock	options	for	approximately	15.2	million	shares	in	the	aggregate	to	approximately	3,100	employees	who	elected	to	participate	in	the	Option Exchange.	The	new	stock	options	issued	were	subject	to	a	new	vesting	period	and	a	new	contractual	term	based	on	the	grant	date	of	the	original	options.	In	addition,	the	Company	made	cash	payments	of approximately	$2.6	million	to	approximately	5,100	employees	whose	exchanged	options	would	each	have	resulted	in	a	new	stock	option	for	fewer	than	100	shares.	As	a	result	of	the	exchange,	employees elected	to	surrender	options	for	approximately	33.6	million	options,	which	were	cancelled	upon	the	grant	of	the	new	options	on	September	28,	2009.

The	exchange	of	options	in	this	Option	Exchange	is	treated	as	a	modification	of	the	existing	stock	options	for	accounting	purposes.	Accordingly,	any	unrecognized	compensation	expense	from	the surrendered	stock	options	will	be	recognized	over	the	original	service	period	of	the	surrendered	option.	Because	the	exchange	ratios	were	calculated	to	result	in	the	fair	value	of	surrendered	eligible	stock options	that	was	approximately	equal	to	the	fair	value	of	the	new	stock	options	replacing	them,	the	amount	of	incremental	expense	was	immaterial.

# Stock-Based	Compensation	Activity

A	summary	of	the	activity	under	the	Company's	stock	option	plans	as	of	October	29,	2011	and	changes	during	the	fiscal	year	then	ended	is	presented	below:

|  | Options<br>Outstanding | Weighted-<br>Average<br>Exercise	Price<br>Per	Share | Average<br>Remaining<br>Contractual<br>Term	in	Years | Aggregate<br>Intrinsic	Value |
| :--- | :--- | :--- | :--- | :--- |
| Options\toutstanding\tat\tOctober\t30,\t2010 | 43,079 | $29.87 |  |  |
| Options\tgranted | 1,990 | $37.59 |  |  |
| Options\texercised | (8,260) | $26.32 |  |  |
| Options\tforfeited | (450) | $27.71 |  |  |
| Options\texpired | (2,243) | $44.08 |  |  |
| Options\toutstanding\tOctober\t29,\t2011 | 34,116 | $30.27 | 4.5 | $274,486 |
| Options\texercisable\tat\tOctober\t29,\t2011 | 21,510 | $31.44 | 3.5 | $155,665 |
| Options\tvested\tor\texpected\tto\tvest\tOctober\t29,\t2011(1) | 33,507 | $30.29 | 4.4 | $269,320 |

(1) In	addition	to	the	vested	options,	the	Company	expects	a	portion	of	the	unvested	options	to	vest	at	some	point	in	the	future.	Options	expected	to	vest	is	calculated	by	applying	an	estimated	forfeiture rate	to	the	unvested	options.

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)	during	fiscal	2011,	2010	and	2009 was	$96.5	million,	$29.6	million	and	$4.7	million,	respectively.	The	total	amount	of	proceeds	received	by	the	Company	from	exercise	of	these	options	during	fiscal	2011,	2010	and	2009	was $217.4	million,	$240.4	million	and	$15.1	million,	respectively.

Proceeds	from	stock	option	exercises	pursuant	to	employee	stock	plans	in	the	Company's	statement	of	cash	flows	of	$217.2	million,	$216.1	million	and	$12.4	million	for	fiscal	2011,	2010	and 2009,	respectively,	are	net	of	the	value	of	shares	surrendered	by	employees	in	certain	limited	circumstances	to	satisfy	the	exercise	price	of	options,	and	to	satisfy	employee	tax	obligations	upon	vesting	of restricted	stock	or	restricted	stock	units	and	in	connection	with	the	exercise	of	stock	options	granted	to	the	Company's	employees	under	the	Company's	equity	compensation	plans.	The	withholding amount	is	based	on	the	Company's	minimum	statutory	withholding	requirement.

        A	summary	of	the	Company's	restricted	stock	unit	award	activity	as	of	October	29,	2011	and	changes	during	the	year	then	ended	is	presented	below:

| amount	is	based	on	the	Company's	minimum	statutory	withholding	requirement. |  |  |
| :--- | :--- | :--- |
| A\tsummary\tof\tthe\tCompany's\trestricted\tstock\tunit\taward\tactivity\tas\tof\tOctober\t29,\t2011\tand\tchanges\tduring\tthe\tyear\tthen\tended\tis\tpresented\tbelow: |  |  |
|  | Restricted\nStock\nUnits\nOutstanding | Weighted-\nAverage\tGrant-\nDate\tFair\tValue\nPer\tShare |
| Restricted\tstock\tunits\toutstanding\tat\tOctober\t30,\t2010 | 1,265 | $28.21 |
| Units\tgranted | 898 | $34.93 |
| Restrictions\tlapsed | (33) | $24.28 |
| Units\tforfeited | (42) | $31.39 |
| Restricted\tstock\tunits\toutstanding\tat\tOctober\t29,\t2011 | 2,088 | $31.10 |

As	of	October	29,	2011,	there	was	$88.6	million	of	total	unrecognized	compensation	cost	related	to	unvested	share-based	awards	comprised	of	stock	options	and	restricted	stock	units.	That	cost	is expected	to	be	recognized	over	a	weighted-average	period	of	1.3	years.	The	total	grant-date	fair	value	of	shares	that	vested	during	fiscal	2011,	2010	and	2009	was	approximately	$49.6	million, $67.7	million	and	$74.4	million,	respectively.

# Common	Stock	Repurchase	Program

The	Company's	common	stock	repurchase	program	has	been	in	place	since	August	2004.	In	the	aggregate,	the	Board	of	Directors	has	authorized	the	Company	to	repurchase	$5	billion	of	the Company's	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	Company's	Board	of	Directors,	the	repurchase	program	will	expire	when	the	Company	has	repurchased	all	shares	authorized	under the	program.	As	of	October	29,	2011,	the	Company	had	repurchased	a	total	of	approximately	125.0	million	shares	of	its	common	stock	for	approximately	$4,278.5	million	under	this	program.	An additional	$721.5	million	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	Company's	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	units,	or	in	certain	limited circumstances	to	satisfy	the	exercise	price	of	options	granted	to	the	Company's	employees	under	the	Company's	equity	compensation	plans.

# Preferred	Stock

The	Company	has	471,934	authorized	shares	of	$1.00	par	value	preferred	stock,	none	of	which	is	issued	or	outstanding.	The	Board	of	Directors	is	authorized	to	fix	designations,	relative	rights, preferences	and	limitations	on	the	preferred	stock	at	the	time	of	issuance.

# 4. Industry,	Segment	and	Geographic	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.

The	following	table	summarizes	revenue	by	end	market.	The	categorization	of	revenue	by	end	market	is	determined	using	a	variety	of	data	points	including	the	technical	characteristics	of	the product,	the	"sold	to"	customer	information,	the	"ship	to"	customer	information	and	the	end	customer	product	or	application	into	which	the	Company's	product	will	be	incorporated.	As	data	systems	for capturing	and	tracking	this	data	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.	During	fiscal	year	2011,	the	Company	consolidated	the	computer	end market,	which	represented	approximately	1%	of	fiscal	2011	revenue,	into	the	consumer	end	market,	and	reclassified	handset	revenue,	which	represented	approximately	3%	of	fiscal	2011	revenue,	from the	communications	end	market	to	the	consumer	end	market,	for	all	periods	presented.

|  | 2011 | 2011 |  | 2010 | 2010 | 2009 | 2009 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Revenue | %\tof\nTotal\nProduct\nRevenue* | Y/Y% | Revenue | %\tof\nTotal\nProduct\nRevenue | Revenue | %\tof\nTotal\nProduct\nRevenue |
| Industrial | $1,397,634 | 47% | 10% | $1,267,736 | 46% | $860,696 | 43% |
| Automotive | 415,444 | 14% | 25% | 333,644 | 12% | 200,329 | 10% |
| Consumer | 586,945 | 20% | (6)% | 626,565 | 23% | 508,848 | 25% |
| Communications | 593,297 | 20% | 11% | 533,558 | 19% | 445,035 | 22% |
| Total\tRevenue | $2,993,320 | 100% | 8% | $2,761,503 | 100% | $2,014,908 | 100% |

The	following	table	summarizes	revenue	by	product	categories.	The	categorization	of	the	Company's	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	sizing	of,	or	the	underlying	trends	of	results	within,	each	product	category.

|  | 2011 | 2011 |  | 2010 | 2010 | 2009 | 2009 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Revenue | %\tof\nTotal\nProduct\nRevenue | Y/Y% | Revenue | %\tof\nTotal\nProduct\nRevenue | Revenue | %\tof\nTotal\nProduct\nRevenue* |
| Converters | $1,343,492 | 45% | 4% | $1,295,678 | 47% | $1,005,004 | 50% |
| Amplifiers/Radio\tfrequency | 788,498 | 26% | 12% | 701,634 | 25% | 501,942 | 25% |
| Other\tanalog | 410,233 | 14% | 23% | 334,649 | 12% | 216,473 | 11% |
| Subtotal\tanalog\tsignal\tprocessing | 2,542,223 | 85% | 9% | 2,331,961 | 84% | 1,723,419 | 86% |
| Power\tmanagement\t&amp;\treference | 217,501 | 7% | 12% | 194,699 | 7% | 118,148 | 6% |
| Total\tanalog\tproducts | $2,759,724 | 92% | 9% | $2,526,660 | 91% | $1,841,567 | 91% |
| Digital\tsignal\tprocessing | 233,596 | 8% | (1)% | 234,843 | 9% | 173,341 | 9% |
| Total\tRevenue | $2,993,320 | 100% | 8% | $2,761,503 | 100% | $2,014,908 | 100% |

# Geographic	Information

The	Company	operates	in	the	following	major	geographic	areas.	Revenue	data	is	based	upon	customer	location	and	property,	plant	and	equipment	data	is	based	upon	physical	location.	In	fiscal years	2011,	2010	and	2009,	the	predominant	countries	comprising	"Rest	of	North	and	South	America"	are	Canada	and	Mexico;	the	predominant	countries	comprising	"Europe"	are	Germany,	Sweden,

France	and	the	United	Kingdom;	and	the	predominant	countries	comprising	"Rest	of	Asia"	are	Taiwan	and	South	Korea.

|  | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Revenue\tfrom\tcontinuing\toperations |  |  |  |
| United\tStates | $532,011 | $508,187 | $401,608 |
| Rest\tof\tNorth\tand\tSouth\tAmerica | 164,079 | 153,962 | 92,954 |
| Europe | 838,719 | 703,717 | 502,602 |
| Japan | 400,456 | 441,826 | 349,907 |
| China | 596,433 | 508,489 | 376,080 |
| Rest\tof\tAsia | 461,622 | 445,322 | 291,757 |
| Subtotal\tall\tforeign\tcountries | 2,461,309 | 2,253,316 | 1,613,300 |
| Total\trevenue | $2,993,320 | $2,761,503 | $2,014,908 |
| Property,\tplant\tand\tequipment |  |  |  |
| United\tStates | $187,013 | $188,776 | $204,758 |
| Ireland | 128,660 | 139,165 | 155,428 |
| Philippines | 149,098 | 131,963 | 103,209 |
| All\tother\tcountries | 14,068 | 12,761 | 13,121 |
| Subtotal\tall\tforeign\tcountries | 291,826 | 283,889 | 271,758 |
| Total\tproperty,\tplant\tand\tequipment | $478,839 | $472,665 | $476,516 |

On	an	on-going	basis,	the	Company	monitors	global	macro-economic	conditions,	and	continues	to	assess	opportunities	for	improved	operational	effectiveness	and	efficiency	and	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	table	displays	the	special	charges	taken	related	to	these	actions	and	a	roll-forward	from	November	1,	2008	to	October	29,	2011	of	the	employee	separation	and	exit	cost	accruals established	related	to	these	actions.

| Statement	of	Income | Closure	of	Wafer<br>Fabrication<br>Facility<br>in	Sunnyvale | of	a	Wafer<br>Fabrication<br>Facility	in<br>Limerick | Reduction	of<br>Operating<br>Costs | Closure	of	Wafer<br>Fabrication<br>Facility<br>in	Cambridge | Total<br>Special<br>Charges |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Workforce\treductions | $— | $— | $1,627 | $— | $1,627 |
| Change\tin\testimate | — | 1,461 | — | — | 1,461 |
| Total\tFiscal\t2008\tCharges | $— | $1,461 | $1,627 | $— | $3,088 |
| Workforce\treductions | — | — | 26,583 | 7,446 | 34,029 |
| Facility\tclosure\tcosts | — | 1,191 | 2,411 | 57 | 3,659 |
| Non-cash\timpairment\tcharge | — | — | 839 | 14,629 | 15,468 |
| Other\titems | — | — | 500 | — | 500 |
| Total\tFiscal\t2009\tCharges | $— | $1,191 | $30,333 | $22,132 | $53,656 |
| Workforce\treductions | — | — | 10,908 | — | 10,908 |
| Facility\tclosure\tcosts | 375 | — | — | 4,689 | 5,064 |
| Non-cash\timpairment\tcharge | — | — | 487 | — | 487 |
| Other\titems | — | — | 24 | — | 24 |
| Total\tFiscal\t2010\tCharges | $375 | $$11,419 | $$11,419 | $4,689 | $16,483 |
| Workforce\treductions | — | — | 2,239 | — | 2,239 |
| Total\tFiscal\t2011\tCharges | $— | $— | $2,239 | $— | $2,239 |

| Accrued	Restructuring | Closure	of	Wafer<br>Fabrication<br>Facility<br>in	Sunnyvale | of	a	Wafer<br>Fabrication<br>Facility	in<br>Limerick | Reduction	of<br>Operating<br>Costs | Closure	of	Wafer<br>Fabrication<br>Facility<br>in	Cambridge | Total<br>Special<br>Charge |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Balance\tat\tNovember\t1,\t2008 | $1,747 | $11,754 | $1,501 | $— | $15,002 |
| Fiscal\t2009\tspecial\tcharges | — | 1,191 | 30,333 | 22,132 | 53,656 |
| Severance\tpayments | — | (11,802) | (21,156) | (756) | (33,714) |
| Facility\tclosure\tcosts | (1,578) | (1,164) | (1,195) | (57) | (3,994) |
| Non-cash\timpairment\tcharge | — | — | (839) | (14,629) | (15,468) |
| Other\tpayments | — | — | (503) | — | (503) |
| Effect\tof\tforeign\tcurrency\ton\taccrual | — | 333 | 20 | — | 353 |
| Balance\tat\tOctober\t31,\t2009 | $169 | $312 | $8,161 | $6,690 | $15,332 |
| Fiscal\t2010\tspecial\tcharges | 375 | — | 11,419 | 4,689 | 16,483 |
| Severance\tpayments | — | (302) | (12,223) | (5,337) | (17,862) |
| Facility\tclosure\tcosts | (544) | — | (1,216) | (4,079) | (5,839) |
| Non-cash\timpairment\tcharge | — | — | (487) | — | (487) |
| Other\tpayments | — | — | (24) | — | (24) |
| Effect\tof\tforeign\tcurrency\ton\taccrual | — | (10) | (84) | — | (94) |
| Balance\tat\tOctober\t30,\t2010 | $— | $— | $5,546 | $1,963 | $7,509 |
| Fiscal\t2011\tspecial\tcharges | — | — | 2,239 | — | 2,239 |
| Severance\tpayments | — | — | (3,913) | (1,352) | (5,265) |
| Facility\tclosure\tcosts | — | — | — | (611) | (611) |
| Effect\tof\tforeign\tcurrency\ton\taccrual | — | — | 4 | — | 4 |
| Balance\tat\tOctober\t29,\t2011 | $— | $— | $3,876 | $— | $3,876 |

The	Company	ceased	production	at	its	California	wafer	fabrication	facility	in	November	2006.	The	Company	paid	the	related	lease	obligation	costs	on	a	monthly	basis	over	the	remaining	lease term,	which	expired	in	March	2010.	The	Company	recorded	a	one-time	settlement	charge	of	$0.4	million	in	fiscal	2010	related	to	the	termination	of	the	lease.	This	action	was	completed	during	fiscal 2010.

During	fiscal	2007	through	fiscal	2010,	the	Company	recorded	special	charges	of	$16.4	million	as	a	result	of	its	decision	to	only	use	eight-inch	technology	at	its	wafer	fabrication	facility	in Limerick.	These	special	charges	included	$14.9	million	for	severance	and	fringe	benefit	costs	in	accordance	with	the	Company's	ongoing	benefit	plan	for	150	manufacturing	employees	and	$1.5	million for	clean-up	and	closure	costs	that	were	expensed	as	incurred.	The	production	in	the	six-inch	wafer	fabrication	facility	ceased	during	the	fourth	quarter	of	fiscal	2009.	This	action	was	completed	during fiscal	2010.

During	fiscal	2008	through	fiscal	2010,	in	order	to	further	reduce	its	operating	cost	structure,	the	Company	recorded	special	charges	of	approximately	$43.3	million.	These	special	charges included:	$39.1	million	for	severance	and	fringe	benefit	costs	in	accordance	with	its	ongoing	benefit	plan	or	statutory	requirements	at	foreign	locations	for	245	manufacturing	employees	and	470 engineering	and	SMG&A	employees;	$2.1	million	for	lease	obligation	costs	for	facilities	that	the	Company	ceased	using	during	the	first	quarter	of	fiscal	2009;	$0.8	million	for	the	write-off	of	property, plant	and	equipment;	$0.5	million	for	contract	termination	costs	and	$0.3	million	for	clean-up	and	closure	costs	that	were	expensed	as	incurred;	and	$0.5	million	related	to	the	impairment	of	intellectual property.	The	Company	terminated	the	employment	of	all	employees	associated	with	this	action	and	is	paying	amounts	owed	to	them	as	income	continuance.

During	fiscal	2011,	in	order	to	further	reduce	its	operating	cost	structure,	the	Company	recorded	a	special	charge	of	approximately	$2.2	million	for	severance	and	fringe	benefit	costs	in accordance	with	its	ongoing	benefit	plan	or	statutory	requirements	at	foreign	locations	for	25	engineering	and	SMG&A	employees.	As	of	October	29,	2011,	the	Company	still	employed	13	of	the 25	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 benefit.

During	fiscal	2009	and	fiscal	2010,	the	Company	recorded	special	charges	of	$26.8	million	as	a	result	of	its	decision	to	consolidate	its	Cambridge,	Massachusetts	wafer	fabrication	facility	into	its existing	Wilmington,	Massachusetts	facility.	These	special	charges	included:	$7.4	million	for	severance	and	fringe	benefit	costs	recorded	in	accordance	with	the	Company's	ongoing	benefit	plan	for	124 manufacturing	employees	and	9	SMG&A	employees;	$14.6	million	for	the	impairment	of	manufacturing	assets;	$3.4	million	for	lease	obligation	costs	for	the	Cambridge	wafer	fabrication	facility,	which the	Company	ceased	using	in	the	first	quarter	of	fiscal	2010;	and	$1.4	million	for	clean-up	and	closure	costs	that	were	expensed	as	incurred.	This	action	was	completed	during	the	third	quarter	of	fiscal 2011.

In	fiscal	2006,	the	Company	acquired	substantially	all	the	outstanding	stock	of	privately-held	Integrant	Technologies,	Inc.	(Integrant)	of	Seoul,	Korea.	The	acquisition	enabled	the	Company	to enter	the	mobile	TV	market	and	strengthened	its	presence	in	the	Asian	region.	The	Company	paid	$8.4	million	related	to	the	purchase	of	shares	from	the	founder	of	Integrant	during	the	period	from	July 2007	through	July	2009.	The	Company	recorded	these	payments	as	additional	goodwill.

In	fiscal	2006,	the	Company	acquired	all	the	outstanding	stock	of	privately-held	AudioAsics	A/S	(AudioAsics)	of	Roskilde,	Denmark.	The	acquisition	of	AudioAsics	allowed	the	Company	to continue	developing	low-power	audio	solutions,	while	expanding	its	presence	in	the	Nordic	and	Eastern	European	regions.	The	Company	paid	additional	cash	payments	of	$3.1	million	during	fiscal	2009 for	the	achievement	of	revenue-based	milestones	during	the	period	from	October	2006	through	January	2009,	which	were	recorded	as	additional	goodwill.	In	addition,	the	Company	paid	$3.2	million during	fiscal	2009	based	on	the	achievement	of	technological	milestones	during	the	period	from	October	2006	through	January	2009,	which	were	recorded	as	compensation	expense	in	fiscal	2008.	All revenue	and	technological	milestones	related	to	this	acquisition	have	been	met	and	no	additional	payments	will	be	made.

On	June	9,	2011,	the	Company	acquired	privately-held	Lyric	Semiconductor,	Inc.	(Lyric)	of	Cambridge,	Massachusetts.	The	acquisition	of	Lyric	gives	the	Company	the	potential	to	achieve	an order	of	magnitude	improvement	in	power	efficiency	in	mixed	signal	processing.	The	acquisition-date	fair	value	of	the	consideration	transferred	totaled	$27.8	million,	which	consisted	of	$14.0	million	in initial	cash	payments	at	closing	and

contingent	consideration	of	up	to	$13.8	million.	The	contingent	consideration	arrangement	requires	additional	cash	payments	to	the	former	equity	holders	of	Lyric	upon	the	achievement	of	certain technological	and	product	development	milestones	payable	during	the	period	from	June	2011	through	June	2016.	The	Company	estimated	the	fair	value	of	the	contingent	consideration	arrangement utilizing	the	income	approach.	Changes	in	the	fair	value	of	the	contingent	consideration	subsequent	to	the	acquisition	date	primarily	driven	by	assumptions	pertaining	to	the	achievement	of	the	defined milestones	will	be	recognized	in	operating	income	in	the	period	of	the	estimated	fair	value	change.	As	of	October	29,	2011,	no	contingent	payments	have	been	made	and	the	fair	value	of	the	contingent consideration	was	approximately	$14.0	million.	The	Company	allocated	the	purchase	price	to	the	tangible	and	intangible	assets	acquired	and	liabilities	assumed	based	on	their	estimated	fair	values	at	the date	of	acquisition,	resulting	in	the	recognition	of	$12.2	million	of	IPR&D,	$18.9	million	of	goodwill	and	$3.3	million	of	net	deferred	tax	liabilities.	The	goodwill	recognized	is	attributable	to	future technologies	that	have	yet	to	be	determined	as	well	as	the	assembled	workforce	of	Lyric.	Future	technologies	do	not	meet	the	criteria	for	recognition	separately	from	goodwill	because	they	are	a	part	of future	development	and	growth	of	the	business.	None	of	the	goodwill	is	expected	to	be	deductible	for	tax	purposes.	In	addition,	the	Company	will	be	obligated	to	pay	royalties	to	the	former	equity	holders of	Lyric	on	revenue	recognized	from	the	sale	of	Lyric	products	and	licenses	through	the	earlier	of	20	years	or	the	accrual	of	a	maximum	of	$25	million.	Royalty	payments	to	Lyric	employees	require	post- acquisition	services	to	be	rendered	and,	as	such,	the	Company	will	record	these	amounts	as	compensation	expense	in	the	related	periods.	As	of	October	29,	2011,	no	royalty	payments	have	been	made. The	Company	recognized	$0.2	million	of	acquisition-related	costs	that	were	expensed	in	the	third	quarter	of	fiscal	2011.	These	costs	are	included	in	operating	expenses	in	the	consolidated	statement	of income.

The	Company	has	not	provided	pro	forma	results	of	operations	for	Integrant,	AudioAsics	and	Lyric	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	such	acquisition.

# 7. Deferred	Compensation	Plan	Investments

Investments	in	The	Analog	Devices,	Inc.	Deferred	Compensation	Plan	(the	Deferred	Compensation	Plan)	are	classified	as	trading.	The	components	of	the	investments	as	of	October	29,	2011	and October	30,	2010	were	as	follows:

The	fair	values	of	these	investments	are	based	on	published	market	quotes	on	October	29,	2011	and	October	30,	2010,	respectively.	Adjustments	to	the	fair	value	of,	and	income	pertaining	to, Deferred	Compensation	Plan	investments	are	recorded	in	operating	expenses.	Gross	realized	and	unrealized	gains	and	losses	from	trading	securities	were	not	material	in	fiscal	2011,	2010	or	2009.

The	Company	has	recorded	a	corresponding	liability	for	amounts	owed	to	the	Deferred	Compensation	Plan	participants	(see	Note	10).	These	investments	are	specifically	designated	as	available	to the	Company	solely	for	the	purpose	of	paying	benefits	under	the	Deferred	Compensation	Plan.	However,	in	the	event	the	Company	became	insolvent,	the	investments	would	be	available	to	all	unsecured general	creditors.

# 8. Other	Investments

Other	investments	consist	of	equity	securities	and	other	long-term	investments.	Investments	are	stated	at	fair	value,	which	is	based	on	market	quotes	or	on	a	cost-basis,	dependent	on	the	nature	of the	investment,	as	appropriate.	Adjustments	to	the	fair	value	of	investments	classified	as	available-for-sale	are	recorded	as	an	increase	or	decrease

in	accumulated	other	comprehensive	(loss)	income,	unless	the	adjustment	is	considered	an	other-than-temporary	impairment,	in	which	case	the	adjustment	is	recorded	as	a	charge	in	the	statement	of income.

During	fiscal	2010,	the	Company	recognized	an	other-than-temporary	impairment	of	$0.7	million.	The	investment	impairment	was	related	to	the	decline	in	fair	value	of	a	publicly-traded	equity investment	below	cost	basis	that	was	determined	to	be	other-than-temporary.

        Unrealized	gains	and	losses	on	securities	classified	as	other	investments	as	of	October	29,	2011	and	October	30,	2010	were	as	follows:

# 9. Accrued	Liabilities

Accrued	liabilities	at	October	29,	2011	and	October	30,	2010	consisted	of	the	following:

|  | 2011 | 2010 |
| :--- | :--- | :--- |
| Accrued\tcompensation\tand\tbenefits | $91,918 | $128,113 |
| Special\tcharges | 3,876 | 7,509 |
| Other | 61,822 | 71,465 |
| Total\taccrued\tliabilities | $157,616 | $207,087 |

# 10. Deferred	Compensation	Plan	Liability

The	deferred	compensation	plan	liability	relates	to	obligations	due	under	the	Deferred	Compensation	Plan.	The	Deferred	Compensation	Plan	allows	certain	members	of	management	and	other highly-compensated	employees	and	non-employee	directors	to	defer	receipt	of	all	or	any	portion	of	their	compensation.	The	balance	represents	Deferred	Compensation	Plan	participant	accumulated deferrals	and	earnings	thereon	since	the	inception	of	the	Deferred	Compensation	Plan	net	of	withdrawals.	The	Company's	liability	under	the	Deferred	Compensation	Plan	is	an	unsecured	general obligation	of	the	Company.

# 11. Lease	Commitments

The	Company	leases	certain	of	its	facilities,	equipment	and	software	under	various	operating	leases	that	expire	at	various	dates	through	2022.	The	lease	agreements	frequently	include	renewal and	escalation	clauses	and	require	the	Company	to	pay	taxes,	insurance	and	maintenance	costs.	Total	rental	expense	under	operating	leases	was	approximately	$45	million	in	fiscal	2011,	$40	million	in fiscal	2010	and	$40	million	in	fiscal	2009.

The	following	is	a	schedule	of	future	minimum	rental	payments	required	under	long-term	operating	leases	at	October	29,	2011:

| Fiscal	Years | Operating<br>Leases |
| :--- | :--- |
| 2012 | $17,590 |
| 2013 | 12,724 |
| 2014 | 6,951 |
| 2015 | 5,649 |
| 2016 | 3,669 |
| Later\tYears | 19,472 |
| Total | $66,055 |

# 12. Commitments	and	Contingencies

From	time	to	time	in	the	ordinary	course	of	the	Company's	business,	various	claims,	charges	and	litigation	are	asserted	or	commenced	against	the	Company	arising	from,	or	related	to,	contractual matters,	patents,	trademarks,	personal	injury,	environmental	matters,	product	liability,	insurance	coverage	and	personnel	and	employment	disputes.	As	to	such	claims	and	litigation,	the	Company	can	give no	assurance	that	it	will	prevail.	The	Company	does	not	believe	that	any	current	legal	matters	will	have	a	material	adverse	effect	on	the	Company's	financial	position,	results	of	operations	or	cash	flows.

# 13. Retirement	Plans

The	Company	and	its	subsidiaries	have	various	savings	and	retirement	plans	covering	substantially	all	employees.	The	Company	maintains	a	defined	contribution	plan	for	the	benefit	of	its eligible	U.S.	employees.	This	plan	provides	for	Company	contributions	of	up	to	5%	of	each	participant's	total	eligible	compensation.	In	addition,	the	Company	contributes	an	amount	equal	to	each participant's	pre-tax	contribution,	if	any,	up	to	a	maximum	of	3%	of	each	participant's	total	eligible	compensation.	The	total	expense	related	to	the	defined	contribution	plan	for	U.S.	employees	was $21.9	million	in	fiscal	2011,	$20.5	million	in	fiscal	2010	and	$21.5	million	in	fiscal	2009.	The	Company	also	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	total	expense	related	to	the	various	defined	benefit	pension	and	other	retirement	plans	for	certain non-U.S.	employees	was	$21.4	million	in	fiscal	2011,	$11.7	million	in	fiscal	2010	and	$10.9	million	in	fiscal	2009.

# Non-U.S.	Plan	Disclosures

The	Company's	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.	The	benefit	obligations	and	related	assets	under	these	plans	have	been	measured	at	October	29,	2011	and	October	30,	2010.

# Components	of	Net	Periodic	Benefit	Cost

Net	annual	periodic	pension	cost	of	non-U.S.	plans	is	presented	in	the	following	table:

|  | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Service\tcost | $9,175 | $5,933 | $6,368 |
| Interest\tcost | 11,395 | 9,594 | 9,525 |
| Expected\treturn\ton\tplan\tassets | (10,938) | (11,079) | (10,703) |
| Amortization\tof\tprior\tservice\tcost | — | 1 | 5 |
| Amortization\tof\ttransition\tobligation\t(asset) | 15 | (27) | (40) |
| Recognized\tactuarial\tloss\t(gain) | 1,630 | (133) | (519) |
| Subtotal | $11,277 | $4,289 | $4,636 |
| Settlement\timpact | — | (39) | 207 |
| Special\ttermination\tbenefits | — | — | 281 |
| Net\tperiodic\tpension\tcost | $11,277 | $4,250 | $5,124 |

The	special	termination	benefits	presented	relate	to	certain	early	retirement	benefits	provided	in	certain	jurisdictions.

# Benefit	Obligations	and	Plan	Assets

Obligation	and	asset	data	of	the	Company's	non-U.S.	plans	at	each	fiscal	year	end	is	presented	in	the	following	table:

|  | 2011 | 2010 |
| :--- | :--- | :--- |
| Change\tin\tBenefit\tObligation |  |  |
| Benefit\tobligation\tat\tbeginning\tof\tyear | $215,012 | $165,047 |
| Service\tcost | 9,175 | 5,933 |
| Interest\tcost | 11,395 | 9,594 |
| Participant\tcontributions | 2,301 | 2,378 |
| Premiums\tpaid | (192) | (81) |
| Actuarial\t(gain)\tloss | (27,544) | 40,227 |
| Benefits\tpaid | (2,625) | (3,170) |
| Exchange\trate\tadjustment | 3,391 | (4,916) |
| Benefit\tobligation\tat\tend\tof\tyear | $210,913 | $215,012 |
| Change\tin\tPlan\tAssets |  |  |
| Fair\tvalue\tof\tplan\tassets\tat\tbeginning\tof\tyear | $176,220 | $135,643 |
| Actual\treturn\ton\tplan\tassets | (2,938) | 17,480 |
| Employer\tcontributions | 9,233 | 28,433 |
| Participant\tcontributions | 2,301 | 2,378 |
| Premiums\tpaid | (192) | (81) |
| Benefits\tpaid | (2,625) | (3,170) |
| Exchange\trate\tadjustment | 2,755 | (4,463) |
| Fair\tvalue\tof\tplan\tassets\tat\tend\tof\tyear | $184,754 | $176,220 |
| Reconciliation\tof\tFunded\tStatus |  |  |
| Funded\tstatus | $(26,159) | $(38,792) |
| Amounts\tRecognized\tin\tthe\tBalance\tSheet |  |  |
| Non-current\tassets | $2,741 | $4,160 |
| Current\tliabilities | (573) | (520) |
| Non-current\tliabilities | (28,327) | (42,432) |
| Net\tamount\trecognized | $(26,159) | $(38,792) |

The	accumulated	benefit	obligation	for	non-U.S.	pension	plans	was	$169.0	million	and	$168.9	million	at	October	29,	2011	and	October	30,	2010,	respectively.

Information	relating	to	the	Company's	non-U.S.	plans	with	projected	benefit	obligations	in	excess	of	plan	assets	and	accumulated	benefit	obligations	in	excess	of	plan	assets	at	each	fiscal	year end	is	presented	in	the	following	table:

|  | 2011 | 2010 |
| :--- | :--- | :--- |
| Plans\twith\tprojected\tbenefit\tobligations\tin\texcess\tof\tplan\tassets: |  |  |
| Projected\tbenefit\tobligation | $180,182 | $188,741 |
| Fair\tvalue\tof\tplan\tassets | $151,281 | $145,789 |
| Plans\twith\taccumulated\tbenefit\tobligations\tin\texcess\tof\tplan\tassets: |  |  |
| Projected\tbenefit\tobligation | $25,236 | $23,278 |
| Accumulated\tbenefit\tobligation | $21,022 | $19,360 |
| Fair\tvalue\tof\tplan\tassets | $635 | $602 |

# Assumptions

The	range	of	assumptions	used	for	the	non-U.S.	defined	benefit	plans	reflects	the	different	economic	environments	within	the	various	countries.	The	projected	benefit	obligation	was	determined using	the	following	weighted-average	assumptions:

Net	annual	periodic	pension	cost	was	determined	using	the	following	weighted	average	assumptions:

|  | 2011 | 2010 |
| :--- | :--- | :--- |
| Discount\trate | 5.33% | 6.32% |
| Expected\tlong-term\treturn\ton\tplan\tassets | 6.15% | 6.73% |
| Rate\tof\tincrease\tin\tcompensation\tlevels | 3.40% | 3.72% |

The	expected	long-term	rate	of	return	on	assets	is	a	weighted-average	of	the	long-term	rates	of	return	selected	for	the	various	countries	where	the	Company	has	funded	pension	plans.	The expected	long-term	rate	of	return	on	assets	assumption	is	selected	based	on	the	facts	and	circumstances	that	exist	as	of	the	measurement	date	and	the	specific	portfolio	mix	of	plan	assets.	Management,	in conjunction	with	its	actuaries,	reviewed	anticipated	future	long-term	performance	of	individual	asset	categories	and	considered	the	asset	allocation	strategy	adopted	by	the	Company	and/or	the	trustees	of the	plans.	While	the	review	considered	recent	fund	performance	and	historical	returns,	the	assumption	is	primarily	a	long-term	prospective	rate.

The	Company's	investment	strategy	is	based	on	an	expectation	that	equity	securities	will	outperform	debt	securities	over	the	long	term.	Accordingly,	in	order	to	maximize	the	return	on	assets,	a majority	of	assets	are	invested	in	equities.	Investments	within	each	asset	class	are	diversified	to	reduce	the	impact	of	losses	in	single	investments.	The	use	of	derivative	instruments	is	permitted	where appropriate	and	necessary	to	achieve	overall	investment	policy	objectives	and	asset	class	targets.

The	Company	establishes	strategic	asset	allocation	percentage	targets	and	appropriate	benchmarks	for	each	significant	asset	class	to	obtain	a	prudent	balance	between	return	and	risk.	The interaction	between	plan	assets	and	benefit	obligations	is	periodically	studied	by	the	Company	and	its	actuaries	to	assist	in	the	establishment	of	strategic	asset	allocation	targets.

# Fair	value	of	plan	assets

The	following	table	presents	plan	assets	measured	at	fair	value	on	a	recurring	basis	by	investment	categories	as	of	October	29,	2011	and	October	30,	2010	using	the	same	three-level	hierarchy described	in	Note	2j:

# October	29,	2011 October	30,	2010 Fair	Value	Measurement	at	Reporting	Date	Using: Fair	Value	Measurement	at	Reporting	Date	Using:

|  | Quoted<br>Prices	in<br>Active<br>Markets	for<br>Identical<br>Assets<br>(Level	1) | Significant<br>Other<br>Observable<br>Inputs<br>(Level	2) | Unobservable<br>Inputs<br>(Level	3) | Total | Quoted<br>Prices	in<br>Active<br>Markets	for<br>Identical<br>Assets<br>(Level	1) | Significant<br>Other<br>Observable<br>Inputs<br>(Level	2) | Unobservable<br>Inputs<br>(Level	3) | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Unit\ttrust\tfunds(1) | $— | $100,161 | $— | $100,161 | $— | $131,650 | $— | $131,650 |
| Equities(1) | 2,003 | 56,163 | 614 | 58,780 | 1,589 | 19,356 | 607 | 21,552 |
| Fixed\tincome\tsecurities(2) | — | 21,984 | — | 21,984 | — | 19,214 | — | 19,214 |
| Property(3) | — | — | 3,166 | 3,166 | — | — | 3,186 | 3,186 |
| Cash\tand\tcash\tequivalents | 663 | — | — | 663 | 618 | — | — | 618 |
| Total\tassets\tmeasured\tat\tfair\tvalue | $2,666 | $178,308 | $3,780 | $184,754 | $2,207 | $170,220 | $3,793 | $176,220 |

(1) The	majority	of	the	assets	in	these	categories	are	invested	in	a	mix	of	equities,	including	those	from	North	America,	Europe	and	Asia.	The	funds	are	valued	using	the	net	asset	value	method	in which	an	average	of	the	market	prices	for	underlying	investments	is	used	to	value	the	fund.	Due	to	the	nature	of	the	underlying	assets	of	these	funds,	changes	in	market	conditions	and	the	economic environment	may	significantly	impact	the	net	asset	value	of	these	investments	and,	consequently,	the	fair	value	of	the	investments.	These	investments	are	redeemable	at	net	asset	value	to	the	extent provided	in	the	documentation	governing	the	investments.	However,	these	redemption	rights	may	be	restricted	in	accordance	with	governing	documents.	Publicly	traded	securities	are	valued	at	the last	trade	or	closing	price	reported	in	the	active	market	in	which	the	individual	securities	are	traded.	Level	3	securities	are	valued	at	book	value	per	share	based	upon	the	financial	statements	of	the investment.

(2) The	majority	of	the	assets	in	this	category	are	invested	in	funds	primarily	concentrated	in	non-U.S.	debt	instruments.	The	funds	are	valued	using	the	net	asset	value	method	in	which	an	average	of the	market	prices	for	underlying	investments	is	used	to	value	the	fund.

(3) The	majority	of	the	assets	in	this	category	are	invested	in	properties	in	Ireland,	the	UK,	Europe	and	established	international	markets.	Investments	in	properties	are	stated	at	estimated	fair	values based	upon	valuations	by	external	independent	property	values.

The	table	below	presents	a	reconciliation	of	the	plan	assets	measured	at	fair	value	on	a	recurring	basis	using	significant	unobservable	inputs	(Level	3)	for	fiscal	years	2010	and	2011.

#     Estimated	future	cash	flows

|  | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| U.S.\tfederal\tstatutory\ttax\trate | 35.0% | 35.0% | 35.0% |
| Income\ttax\tprovision\treconciliation: |  |  |  |
| Tax\tat\tstatutory\trate: | $371,506 | $315,583 | $104,105 |
| Irish\tincome\tsubject\tto\tlower\ttax\trate | (143,938) | (129,741) | (50,972) |
| State\tincome\ttaxes,\tnet\tof\tfederal\tbenefit | 1,162 | 2,622 | 406 |
| Valuation\treserve | (6,700) | — | — |
| Research\tand\tdevelopment\ttax\tcredits | (14,681) | (1,045) | (5,153) |
| Settlement\tof\ttax\texamination | (10,804) | — | — |
|  | 338 | 1,315 | 1,123 |
| Other,\tnet | 3,670 | 1,706 | 527 |
| Total\tincome\ttax\tprovision | $200,553 | $190,440 | $50,036 |

For	financial	reporting	purposes,	income	before	income	taxes	includes	the	following	components:

|  | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Pretax\tincome: |  |  |  |
| Domestic | $355,819 | $289,748 | $1,133 |
| Foreign | 705,628 | 611,917 | 296,311 |
| Income\tfrom\tcontinuing\toperations\tbefore\tincome\ttaxes | $1,061,447 | $901,665 | $297,444 |

|  | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Current: |  |  |  |
| Federal\ttax\t(benefit) | $92,103 | $117,097 | $(5,191) |
| Foreign | 104,959 | 79,055 | 43,007 |
| State | 1,787 | 4,154 | 625 |
| Total\tcurrent | $198,849 | $200,306 | $38,441 |
| Deferred\t(prepaid): |  |  |  |
| Federal | $9,399 | $(6,159) | $16,718 |
| State | (5,762) | (173) | 315 |
| Foreign | (1,933) | (3,534) | (5,438) |
| Total\tdeferred\t(prepaid) | $1,704 | $(9,866) | $11,595 |

The	Company	continues	to	intend	to	reinvest	certain	of	its	foreign	earnings	indefinitely.	Accordingly,	no	U.S.	income	taxes	have	been	provided	for	approximately	$2,805	million	of	unremitted earnings	of	international	subsidiaries.	As	of	October	29,	2011,	the	amount	of	unrecognized	deferred	tax	liability	on	these	earnings	was	$736	million.

The	significant	components	of	the	Company's	deferred	tax	assets	and	liabilities	for	the	fiscal	years	ended	October	29,	2011	and	October	30,	2010	are	as	follows:

|  | 2011 | 2010 |
| :--- | :--- | :--- |
| Deferred\ttax\tassets: |  |  |
| Inventory\treserves | $23,503 | $24,495 |
| Deferred\tincome\ton\tshipments\tto\tdistributors | 34,061 | 32,870 |
| Reserves\tfor\tcompensation\tand\tbenefits | 21,164 | 26,199 |
| Tax\tcredit\tcarryovers | 41,468 | 50,384 |
| Stock-based\tcompensation | 91,417 | 75,827 |
| Depreciation | 4,781 | 4,553 |
| Other | (592) | 1,251 |
| Total\tgross\tdeferred\ttax\tassets | 215,802 | 215,579 |
| Valuation\tallowance | (34,768) | (50,384) |
| Total\tdeferred\ttax\tassets | 181,034 | 165,195 |
| Deferred\ttax\tliabilities: |  |  |
| Depreciation | (36,624) | (12,185) |
| Undistributed\tearnings\tof\tforeign\tsubsidiaries | (24,025) | (24,229) |
| Other | (1,829) | (3,106) |
| Total\tgross\tdeferred\ttax\tliabilities | (62,478) | (39,520) |
| Net\tdeferred\ttax\tassets | $118,556 | $125,675 |

The	valuation	allowances	of	$34.8	million	and	$50.4	million	at	October	29,	2011	and	October	30,	2010,	respectively,	are	a	valuation	allowance	for	the	Company's	state	credit	carryovers	that began	expiring	in	2008.

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	Company's	income	tax	provision	and	operating	results	in the	period	in	which	such	determination	is	made.

As	of	October	29,	2011	and	October	30,	2010,	the	Company	had	a	liability	of	$9.7	million	and	$18.4	million,	respectively,	for	gross	unrealized	tax	benefits,	all	of	which,	if	settled	in	the Company's	favor,	would	lower	the	Company's	effective	tax	rate	in	the	period	recorded.	In	addition,	as	of	October	29,	2011	and	October	30,	2010,	the	Company	had	a	liability	of	approximately $11.1	million	and	$9.9	million,	respectively,	for	interest	and	penalties.	The	Company	includes	interest	and	penalties	related	to	unrecognized	tax	benefits	within	the	provision	for	taxes	in	the	consolidated statements	of	income.	The	total	liability	as	of	October	29,	2011	and	October	30,	2010	of	$20.8	million	and	$28.3	million,	respectively,	for	uncertain	tax	positions	is	classified	as	non-current,	and	is included	in	other	non-current	liabilities,	because	the	Company	believes	that	the	ultimate	payment	or	settlement	of	these	liabilities	may	not	occur	within	the	next	twelve	months.	The	consolidated statements	of	income	for	fiscal	years	2011,	2010	and	2009	include	$0.9	million,	$1.8	million	and	$1.7	million,	respectively,	of	interest	and	penalties	related	to	these	uncertain	tax	positions.	Over	the	next fiscal	year,	the	Company	anticipates	the	liability	to	be	reduced	by	$5.2	million	for	a	tax	settlement	payment	and	the	possible	expiration	of	income	tax	statute	of	limitations.

        The	following	table	summarizes	the	changes	in	the	total	amounts	of	unrealized	tax	benefits	for	fiscal	2009	through	fiscal	2011.

| The	following	table	summarizes	the	changes	in	the	total	amounts	of	unrealized	tax	benefits	for	fiscal	2009	through	fiscal	2011. |  |
| :--- | :--- |
| Balance,\tNovember\t1,\t2008 | $13,750 |
| Additions\tfor\ttax\tpositions\tof\t2009 | 4,411 |
| Balance,\tOctober\t31,\t2009 | 18,161 |
| Additions\tfor\ttax\tpositions\tof\t2010 | 286 |
| Balance,\tOctober\t30,\t2010 | $18,447 |
| Additions\tfor\ttax\tpositions\trelated\tto\tprior\tyears | 9,265 |
| Reductions\tfor\ttax\tpositions\trelated\tto\tprior\tyears | (17,677) |
| Settlements\twith\ttaxing\tauthorities | (370) |
| Balance,\tOctober\t29,\t2011 | $9,665 |

# Fiscal	Years	2004	and	2005	IRS	Examination

During	the	fourth	quarter	of	fiscal	2007,	the	Internal	Revenue	Service	(IRS)	completed	its	field	examination	of	the	Company's	fiscal	years	2004	and	2005.	On	January	2,	2008,	the	IRS	issued	its report	for	fiscal	2004	and	2005,	which	included	four	proposed	adjustments	related	to	these	two	fiscal	years	that	the	Company	protested	to	the	IRS	Appeals	Office.	Two	of	the	unresolved	matters	were one-time	issues	that	pertain	to	Section	965	of	the	Internal	Revenue	Code	related	to	the	beneficial	tax	treatment	of	dividends	paid	from	foreign	owned	companies	under	The	American	Jobs	Creation	Act. The	other	matters	pertained	to	the	computation	of	the	research	and	development	(R&D)	tax	credit	and	certain	profits	earned	from	manufacturing	activities	carried	on	outside	the	United	States.	The Company	recorded	a	tax	liability	for	a	portion	of	the	proposed	R&D	tax	credit	adjustment.	These	four	items	had	an	additional	potential	tax	liability	of	$46	million.	The	Company	concluded,	based	on discussions	with	its	tax	advisors,	that	these	items	were	not	likely	to	result	in	any	additional	tax	liability.	Therefore,	the	Company	did	not	record	a	tax	liability	for	these	items.

During	the	second	quarter	of	fiscal	2011,	the	Company	reached	settlement	with	the	IRS	Appeals	Office	on	three	of	the	four	items	under	protest.	The	remaining	unresolved	matter	is	a	one-time issue	pertaining	to	Section	965	of	the	Internal	Revenue	Code	related	to	the	beneficial	tax	treatment	of	dividends	from	foreign	owned	companies	under	The	American	Jobs	Creation	Act.	The	Company	will file	a	petition	with	the	Tax	Court	with	respect	to	this	open	matter.	The	potential	liability	for	this	adjustment	is	$36.5	million.	The	Company	has	concluded,	based	on	discussions	with	its	tax	advisors,	that this	item	is	not	likely	to	result	in	any	additional	tax	liability.	Therefore,	the	Company	has	not	recorded	any	additional	tax	liability	for	this	issue.

During	the	third	quarter	of	fiscal	2009,	the	IRS	completed	its	field	examination	of	the	Company's	fiscal	years	2006	and	2007.	The	IRS	and	the	Company	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	for	the	fiscal 2006	and	fiscal	2007	years,	including	the	same	R&D	tax	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.	The	Company	recorded	taxes	related	to	a	portion	of	the	proposed	R&D	tax	credit	adjustment.	These	four	items	had	an	additional	potential total	tax	liability	of	$195	million.	The	Company	concluded,	based	on	discussions	with	its	tax	advisors	that	these	items	were	not	likely	to	result	in	any	additional	tax	liability.	Therefore,	the	Company	did not	record	any	additional	tax	liability	for	these	items	and	appealed	these	proposed	adjustments	through	the	normal	processes	for	the	resolution	of	differences	between	the	IRS	and	taxpayers.

During	the	second	quarter	of	fiscal	2011,	the	Company	reached	an	agreement	with	the	IRS	Appeals	Office	on	three	of	the	four	protested	items,	two	of	which	were	the	same	issues	settled	relating to	the	2004	and	2005	fiscal	years.	Transfer	pricing	remained	as	the	only	item	under	protest	with	the	IRS	Appeals	Office	related	to	the	fiscal

2006	and	fiscal	2007	years.	The	potential	U.S.	tax	liability	for	this	matter	would	have	been	$157.5	million.	The	Company	concluded,	based	on	discussions	with	its	tax	advisors,	that	this	item	was	not likely	to	result	in	any	additional	tax	liability.	Therefore,	the	Company	did	not	record	a	tax	liability	for	this	issue.

During	the	third	quarter	of	fiscal	2011,	the	Company	reached	an	agreement	with	the	IRS	Appeals	Office	on	transfer	pricing,	the	remaining	item	under	protest	related	to	the	fiscal	2006	and	fiscal 2007	years.	Under	this	agreement,	there	is	no	tax	owed	on	the	transfer	pricing	issue	for	those	years.

As	a	result	of	settling	all	but	the	one-time	issue	pertaining	to	Section	965	of	the	Internal	Revenue	Code	related	to	the	beneficial	tax	treatment	of	dividends	from	foreign	owned	companies	under The	American	Jobs	Creation	Act	for	the	fiscal	2004	through	fiscal	2007	years	at	the	IRS	Appeals	Office,	the	Company	recorded	a	net	$10.8	million	tax	benefit	in	the	second	quarter	of	fiscal	2011.	The Company	will	file	a	petition	with	the	Tax	Court	for	the	open	matter.

The	Company	files	U.S.	federal,	U.S.	state	and	non-U.S.	tax	returns.	The	following	major	jurisdictions	are	no	longer	subject	to	examination:	U.S.	federal	prior	to	fiscal	year	2008	and	Ireland	prior to	fiscal	year	2007.

Although	the	Company	believes	its	estimates	of	income	tax	payable	are	reasonable,	no	assurance	can	be	given	that	the	Company	will	prevail	in	the	matters	raised	and	that	the	outcome	of	one	or all	of	these	matters	will	not	be	different	than	that	which	is	reflected	in	the	historical	income	tax	provisions	and	accruals.	The	Company	believes	such	differences	would	not	have	a	material	impact	on	the Company's	financial	condition	but	could	have	a	material	impact	on	the	Company's	income	tax	provision,	operating	results	and	operating	cash	flows	in	the	period	in	which	such	matters	are	resolved	as well	as	for	subsequent	years.

# 15. Revolving	Credit	Facility

As	of	October	29,	2011,	the	Company	had	$3,592.5	million	of	cash	and	cash	equivalents	and	short-term	investments,	of	which	$1,170.5	million	was	held	in	the	United	States.	The	balance	of	the Company's	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	Company's	cash	requirements	in	the	United	States,	including	for	cash	dividends	and	common	stock	repurchases.	The	Company	entered	into	a five-year,	$165	million	unsecured	revolving	credit	facility	with	certain	institutional	lenders	in	May	2008.	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	Company's	leverage	ratio.	The	terms	of	the	facility	impose restrictions	on	the	Company's	ability	to	undertake	certain	transactions,	to	create	certain	liens	on	assets	and	to	incur	certain	subsidiary	indebtedness.	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	October	29,	2011,	the	Company	was	compliant	with	these	covenants.

On	June	30,	2009,	the	Company	issued	$375	million	aggregate	principal	amount	of	5.0%	senior	unsecured	notes	due	July	1,	2014	(the	5.0%	Notes)	with	semi-annual	fixed	interest	payments	on January	1	and	July	1	of	each	year,	commencing	January	1,	2010.	The	sale	of	the	5.0%	Notes	was	made	pursuant	to	the	terms	of	an	underwriting	agreement	dated	June	25,	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	$370.4	million,	after	issuing	at	a	discount	and	deducting	expenses, underwriting	discounts	and	commissions,	which	will	be	amortized	over	the	term	of	the	5.0%	Notes.	The	indenture	governing	the	5.0%	Notes	contains	covenants	that	may	limit	the	Company's	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.	As	of	October	29,	2011,	the

Company	was	compliant	with	these	covenants.	The	notes	are	subordinated	to	any	future	secured	debt	and	to	the	other	liabilities	of	our	subsidiaries.

On	June	30,	2009,	the	Company	entered	into	interest	rate	swap	transactions	where	the	Company	swapped	the	notional	amount	of	its	$375	million	of	fixed	rate	debt	at	5.0%	into	floating	interest rate	debt	through	July	1,	2014.	Under	the	terms	of	the	swaps,	the	Company	will	(i)	receive	on	the	$375	million	notional	amount	a	5.0%	annual	interest	payment	that	is	paid	in	two	installments	on	the 1st	business	day	of	every	January	and	July,	commencing	January	1,	2010	through	and	ending	on	the	maturity	date;	and	(ii)	pay	on	the	$375	million	notional	amount	an	annual	three	month	LIBOR	plus 2.05%	(2.42%	as	of	October	29,	2011)	interest	payment,	payable	in	four	installments	on	the	1st	business	day	of	every	January,	April,	July	and	October,	commencing	on	October	1,	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.

On	December	22,	2010,	Analog	Devices	Holdings	B.V.,	a	wholly	owned	subsidiary	of	the	Company,	entered	into	a	credit	agreement	with	Bank	of	America,	N.A.,	London	Branch	as administrative	agent.	The	borrower's	obligations	are	guaranteed	by	the	Company.	The	credit	agreement	provides	for	a	term	loan	facility	of	$145	million,	which	matures	on	December	22,	2013.	The	terms of	the	agreement	provide	for	a	three	year	principle	amortization	schedule	with	$3.6	million	payable	quarterly	every	March,	June,	September	and	December	with	the	balance	payable	upon	the	maturity date.	During	the	third	quarter	of	fiscal	2011	the	Company	made	an	additional	principal	payment	of	$17.5	million.	The	loan	will	bear	interest	at	a	fluctuating	rate	for	each	period	equal	to	the	LIBOR	rate corresponding	with	the	tenor	of	the	interest	period	plus	a	spread	of	1.25%	(1.61%	as	of	October	29,	2011).	The	terms	of	this	facility	include	limitations	on	subsidiary	indebtedness	and	on	liens	against	the assets	of	the	Company	and	its	subsidiaries,	and	also	include	financial	covenants	that	require	the	Company	to	maintain	a	minimum	interest	coverage	ratio	and	not	exceed	a	maximum	leverage	ratio.	As	of October	29,	2011,	the	Company	was	compliant	with	these	covenants.	As	of	October	29,	2011,	$14.5	million	of	this	debt	was	classified	as	short-term.

On	April	4,	2011,	the	Company	issued	$375	million	aggregate	principal	amount	of	3.0%	senior	unsecured	notes	due	April	15,	2016	(the	3.0%	Notes)	with	semi-annual	fixed	interest	payments	due on	April	15	and	October	15	of	each	year,	commencing	October	15,	2011.	The	sale	of	the	3.0%	Notes	was	made	pursuant	to	the	terms	of	an	underwriting	agreement	dated	March	30,	2011	between	the Company	and	Credit	Suisse	Securities	(USA)	LLC	and	Merrill	Lynch,	Pierce,	Fenner	and	Smith	Incorporated,	as	representative	of	the	several	underwriters	named	therein.	The	net	proceeds	of	the	offering were	$370.5	million,	after	issuing	at	a	discount	and	deducting	expenses,	underwriting	discounts	and	commissions,	which	will	be	amortized	over	the	term	of	the	3.0%	Notes.	The	indenture	governing	the 3.0%	Notes	contains	covenants	that	may	limit	the	Company's	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.	As	of	October	29,	2011,	the Company	was	compliant	with	these	covenants.	The	notes	are	subordinated	to	any	future	secured	debt	and	to	the	other	liabilities	of	our	subsidiaries.

The	Company's	principle	payments	related	to	its	long-term	debt	obligations	are	as	follows:	$14.5	million	in	fiscal	years	2012	and	2013;	$462.6	million	in	fiscal	year	2014;	and	$375	million	in fiscal	year	2016.

# 17. Subsequent	Events

On	November	18,	2011,	the	Board	of	Directors	of	the	Company	declared	a	cash	dividend	of	$0.25	per	outstanding	share	of	common	stock.	The	dividend	will	be	paid	on	December	21,	2011	to	all shareholders	of	record	at	the	close	of	business	on	December	2,	2011.

# REPORT	OF	INDEPENDENT	REGISTERED	PUBLIC	ACCOUNTING	FIRM

# The	Board	of	Directors	and	Shareholders

We	have	audited	the	accompanying	consolidated	balance	sheets	of	Analog	Devices,	Inc.	as	of	October	29,	2011	and	October	30,	2010,	and	the	related	consolidated	statements	of	income, shareholders'	equity,	comprehensive	income,	and	cash	flows	for	each	of	the	three	years	in	the	period	ended	October	29,	2011.	Our	audits	also	included	the	financial	statement	schedule	listed	in	the	Index at	Item	15(b).	These	financial	statements	and	schedule	are	the	responsibility	of	the	Company's	management.	Our	responsibility	is	to	express	an	opinion	on	these	financial	statements	and	schedule	based on	our	audits.

We	conducted	our	audits	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that	we	plan	and	perform	the	audit	to obtain	reasonable	assurance	about	whether	the	financial	statements	are	free	of	material	misstatement.	An	audit	includes	examining,	on	a	test	basis,	evidence	supporting	the	amounts	and	disclosures	in	the financial	statements.	An	audit	also	includes	assessing	the	accounting	principles	used	and	significant	estimates	made	by	management,	as	well	as	evaluating	the	overall	financial	statement	presentation.	We believe	that	our	audits	provide	a	reasonable	basis	for	our	opinion.

In	our	opinion,	the	financial	statements	referred	to	above	present	fairly,	in	all	material	respects,	the	consolidated	financial	position	of	Analog	Devices,	Inc.	at	October	29,	2011	and	October	30, 2010,	and	the	consolidated	results	of	its	operations	and	its	cash	flows	for	each	of	the	three	years	in	the	period	ended	October	29,	2011,	in	conformity	with	U.S.	generally	accepted	accounting	principles. Also,	in	our	opinion,	the	related	financial	statement	schedule,	when	considered	in	relation	to	the	basic	financial	statements	taken	as	a	whole,	presents	fairly	in	all	material	respects	the	information	set	forth therein.

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	Analog	Devices,	Inc.'s	internal	control	over	financial	reporting	as	of October	29,	2011,	based	on	criteria	established	in	Internal	Control-Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	and	our	report	dated November	22,	2011	expressed	an	unqualified	opinion	thereon.

Boston,	Massachusetts

# SUPPLEMENTARY	FINANCIAL	INFORMATION

# (Unaudited)

Quarterly	financial	information	for	fiscal	2011	and	fiscal	2010	(thousands,	except	per	share	amounts	and	as	noted):

|  | 4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q10 | 1Q10 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Revenue | 716,134 | 757,902 | 790,780 | 728,504 | 769,990 | 720,290 | 668,240 | 602,983 |
| Cost\tof\tsales | 255,620 | 248,262 | 256,566 | 246,331 | 253,761 | 240,088 | 233,725 | 234,507 |
| Gross\tmargin | 460,514 | 509,640 | 534,214 | 482,173 | 516,229 | 480,202 | 434,515 | 368,476 |
| %\tof\tRevenue | 64.3% | 67.2% | 67.6% | 66.2% | 67.0% | 66.7% | 65.0% | 61.1% |
| Research\tand\tdevelopment | 123,889 | 128,476 | 130,460 | 122,745 | 128,140 | 126,987 | 122,780 | 114,398 |
| Selling,\tmarketing,\tgeneral\tand\tadministrative | 99,094 | 102,323 | 105,268 | 100,022 | 102,349 | 102,070 | 97,660 | 88,481 |
| Special\tcharges | 2,239 | — | — | — | — | — | — | 16,483 |
| Total\toperating\texpenses | 225,222 | 230,799 | 235,728 | 222,767 | 230,489 | 229,057 | 220,440 | 219,362 |
| Operating\tincome\tfrom\tcontinuing\toperations | 235,292 | 278,841 | 298,486 | 259,406 | 285,740 | 251,145 | 214,075 | 149,114 |
| %\tof\tRevenue | 33% | 37% | 38% | 36% | 37% | 35% | 32% | 25% |
| Nonoperating\t(income)\texpenses: |  |  |  |  |  |  |  |  |
| Interest\texpense | 6,079 | 6,159 | 4,078 | 2,830 | 2,709 | 2,614 | 2,568 | 2,538 |
| Interest\tincome | (2,183) | (2,395) | (2,197) | (2,285) | (2,426) | (3,206) | (2,025) | (2,180) |
| Other,\tnet | 396 | 206 | (151) | 41 | (2,600) | 416 | (488) | 489 |
| Total\tnonoperating\t(income)\texpense | 4,292 | 3,970 | 1,730 | 586 | (2,317) | (176) | 55 | 847 |
| Income\tfrom\tcontinuing\toperations\tbefore\tincome\ttaxes | 231,000 | 274,871 | 296,756 | 258,820 | 288,057 | 251,321 | 214,020 | 148,267 |
| %\tof\tRevenue | 32% | 36% | 38% | 36% | 37% | 35% | 32% | 25% |
| Provision\tfor\tincome\ttaxes | 47,473 | 54,936 | 54,930 | 43,214 | 63,063 | 51,830 | 46,880 | 28,667 |
| Net\tincome\tfrom\tcontinuing\toperations | 183,527 | 219,935 | 241,826 | 215,606 | 224,994 | 199,491 | 167,140 | 119,600 |
| Gain\ton\tsale\tof\tdiscontinued\toperations | — | — | — | 6,500 | — | — | — | 859 |
| Net\tincome | 183,527 | 219,935 | 241,826 | 222,106 | 224,994 | 199,491 | 167,140 | 120,459 |
| %\tof\tRevenue | 26% | 29% | 31% | 30% | 29% | 28% | 25% | 20% |
| Earnings\tper\tshare\t—\tbasic |  |  |  |  |  |  |  |  |
| Income\tfrom\tcontinuing\toperations | 0.61 | 0.73 | 0.81 | 0.72 | 0.75 | 0.67 | 0.56 | 0.40 |
| Net\tincome | 0.61 | 0.73 | 0.81 | 0.74 | 0.75 | 0.67 | 0.56 | 0.41 |
| Earnings\tper\tshare\t—\tdiluted |  |  |  |  |  |  |  |  |
| Income\tfrom\tcontinuing\toperations | 0.60 | 0.71 | 0.78 | 0.70 | 0.73 | 0.65 | 0.55 | 0.39 |
| Net\tincome | 0.60 | 0.71 | 0.78 | 0.72 | 0.73 | 0.65 | 0.55 | 0.40 |
| Shares\tused\tto\tcompute\tearnings\tper\tshare\t(in\tthousands): |  |  |  |  |  |  |  |  |
| Basic | 298,910 | 299,616 | 299,923 | 299,218 | 298,228 | 298,027 | 297,825 | 295,469 |
| Diluted | 305,734 | 308,744 | 309,619 | 308,848 | 306,711 | 306,168 | 305,836 | 304,730 |
| Dividends\tdeclared\tper\tshare | 0.25 | 0.25 | 0.22 | 0.22 | 0.22 | 0.22 | 0.20 | 0.20 |

# ITEM	9. CHANGES	IN	AND	DISAGREEMENTS	WITH	ACCOUNTANTS	ON	ACCOUNTING	AND	FINANCIAL	DISCLOSURE

Not	applicable.

# ITEM	9A. CONTROLS	AND	PROCEDURES

(a)	Evaluation	of	Disclosure	Controls	and	Procedures.		Our	management,	with	the	participation	of	our	Chief	Executive	Officer	and	Chief	Financial	Officer,	evaluated	the	effectiveness	of Analog's	disclosure	controls	and	procedures	as	of	October	29,	2011.	The	term	"disclosure	controls	and	procedures,"	as	defined	in	Rules	13a-15(e)	and	15d-15(e)	under	the	Securities	Exchange	Act	of 1934,	as	amended	(the	"Exchange	Act"),	means	controls	and	other	procedures	of	a	company	that	are	designed	to	ensure	that	information	required	to	be	disclosed	by	a	company	in	the	reports	that	it	files	or submits	under	the	Exchange	Act	is	recorded,	processed,	summarized	and	reported,	within	the	time	periods	specified	in	the	SEC's	rules	and	forms.	Disclosure	controls	and	procedures	include,	without limitation,	controls	and	procedures	designed	to	ensure	that	information	required	to	be	disclosed	by	a	company	in	the	reports	that	it	files	or	submits	under	the	Exchange	Act	is	accumulated	and communicated	to	the	company's	management,	including	its	principal	executive	and	principal	financial	officers,	as	appropriate	to	allow	timely	decisions	regarding	required	disclosure.	Management recognizes	that	any	controls	and	procedures,	no	matter	how	well	designed	and	operated,	can	provide	only	reasonable	assurance	of	achieving	their	objectives	and	management	necessarily	applies	its judgment	in	evaluating	the	cost-benefit	relationship	of	possible	controls	and	procedures.	Based	on	the	evaluation	of	our	disclosure	controls	and	procedures	as	of	October	29,	2011,	our	Chief	Executive Officer	and	Chief	Financial	Officer	concluded	that,	as	of	such	date,	our	disclosure	controls	and	procedures	were	effective	at	the	reasonable	assurance	level.

(b)	Management's	Report	on	Internal	Control	Over	Financial	Reporting.

# Management's	Report	on	Internal	Control	Over	Financial	Reporting

Our	management	is	responsible	for	establishing	and	maintaining	adequate	internal	control	over	financial	reporting.	Internal	control	over	financial	reporting	is	defined	in	Rule	13a-15(f)	or 15d-15(f)	promulgated	under	the	Securities	Exchange	Act	of	1934	as	a	process	designed	by,	or	under	the	supervision	of,	the	company's	principal	executive	and	principal	financial	officers	and	effected	by the	company's	board	of	directors,	management	and	other	personnel,	to	provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting	and	the	preparation	of	financial	statements	for	external purposes	in	accordance	with	generally	accepted	accounting	principles	and	includes	those	policies	and	procedures	that:

•	Pertain	to	the	maintenance	of	records	that	in	reasonable	detail	accurately	and	fairly	reflect	the	transactions	and	dispositions	of	the	assets	of	the	company;

•	Provide	reasonable	assurance	that	transactions	are	recorded	as	necessary	to	permit	preparation	of	financial	statements	in	accordance	with	generally	accepted	accounting	principles,	and	that receipts	and	expenditures	of	the	company	are	being	made	only	in	accordance	with	authorizations	of	management	and	directors	of	the	company;	and

•	Provide	reasonable	assurance	regarding	prevention	or	timely	detection	of	unauthorized	acquisition,	use	or	disposition	of	the	company's	assets	that	could	have	a	material	effect	on	the	financial statements.

Because	of	its	inherent	limitations,	internal	control	over	financial	reporting	may	not	prevent	or	detect	misstatements.	Projections	of	any	evaluation	of	effectiveness	to	future	periods	are	subject	to the	risk	that	controls	may	become	inadequate	because	of	changes	in	conditions,	or	that	the	degree	of	compliance	with	the	policies	or	procedures	may	deteriorate.

Our	management	assessed	the	effectiveness	of	our	internal	control	over	financial	reporting	as	of	October	29,	2011.	In	making	this	assessment,	the	company's	management	used	the	criteria	set forth	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(COSO)	in	Internal	Control-Integrated	Framework.

Based	on	this	assessment,	our	management	concluded	that,	as	of	October	29,	2011,	our	internal	control	over	financial	reporting	is	effective	based	on	those	criteria.

Our	independent	registered	public	accounting	firm	that	audited	the	financial	statements	included	in	this	annual	report	has	issued	an	attestation	report	on	our	internal	control	over	financial reporting.	This	report	appears	below.

(c)	Attestation	Report	of	the	Registered	Public	Accounting	Firm

We	have	audited	Analog	Devices,	Inc.'s	internal	control	over	financial	reporting	as	of	October	29,	2011,	based	on	criteria	established	in	Internal	Control	—	Integrated	Framework	issued	by	the Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(the	COSO	criteria).	Analog	Devices,	Inc.'s	management	is	responsible	for	maintaining	effective	internal	control	over	financial reporting,	and	for	its	assessment	of	the	effectiveness	of	internal	control	over	financial	reporting	included	in	the	accompanying	Management's	Report	on	Internal	Control	Over	Financial	Reporting.	Our responsibility	is	to	express	an	opinion	on	the	Company's	internal	control	over	financial	reporting	based	on	our	audit.

We	conducted	our	audit	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that	we	plan	and	perform	the	audit	to obtain	reasonable	assurance	about	whether	effective	internal	control	over	financial	reporting	was	maintained	in	all	material	respects.	Our	audit	included	obtaining	an	understanding	of	internal	control	over financial	reporting,	assessing	the	risk	that	a	material	weakness	exists,	testing	and	evaluating	the	design	and	operating	effectiveness	of	internal	control	based	on	the	assessed	risk,	and	performing	such	other procedures	as	we	considered	necessary	in	the	circumstances.	We	believe	that	our	audit	provides	a	reasonable	basis	for	our	opinion.

A	company's	internal	control	over	financial	reporting	is	a	process	designed	to	provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting	and	the	preparation	of	financial statements	for	external	purposes	in	accordance	with	generally	accepted	accounting	principles.	A	company's	internal	control	over	financial	reporting	includes	those	policies	and	procedures	that	(1)	pertain to	the	maintenance	of	records	that,	in	reasonable	detail,	accurately	and	fairly	reflect	the	transactions	and	dispositions	of	the	assets	of	the	company;	(2)	provide	reasonable	assurance	that	transactions	are recorded	as	necessary	to	permit	preparation	of	financial	statements	in	accordance	with	generally	accepted	accounting	principles,	and	that	receipts	and	expenditures	of	the	company	are	being	made	only	in accordance	with	authorizations	of	management	and	directors	of	the	company;	and	(3)	provide	reasonable	assurance	regarding	prevention	or	timely	detection	of	unauthorized	acquisition,	use,	or disposition	of	the	company's	assets	that	could	have	a	material	effect	on	the	financial	statements.

Because	of	its	inherent	limitations,	internal	control	over	financial	reporting	may	not	prevent	or	detect	misstatements.	Also,	projections	of	any	evaluation	of	effectiveness	to	future	periods	are subject	to	the	risk	that	controls	may	become	inadequate	because	of	changes	in	conditions,	or	that	the	degree	of	compliance	with	the	policies	or	procedures	may	deteriorate.

In	our	opinion,	Analog	Devices,	Inc.	maintained,	in	all	material	respects,	effective	internal	control	over	financial	reporting	as	of	October	29,	2011,	based	on	the	COSO	criteria.

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	the	consolidated	balance	sheets	of	Analog	Devices,	Inc.	as	of October	29,	2011	and	October	30,	2010,	and	the	related	consolidated	statements	of	income,	shareholders'	equity,	comprehensive	income,	and	cash	flows	for	each	of	the	three	years	in	the	period	ended October	29,	2011	of	Analog	Devices,	Inc.	and	our	report	dated	November	22,	2011	expressed	an	unqualified	opinion	thereon.

(d)	Changes	in	Internal	Controls	over	Financial	Reporting.		No	change	in	our	internal	control	over	financial	reporting	(as	defined	in	Rules	13a-15(f)	and	15d-15(f)	under	the	Securities	Exchange Act)	occurred	during	the	fiscal	quarter	ended	October	29,	2011	that	has	materially	affected,	or	is	reasonably	likely	to	materially	affect,	our	internal	control	over	financial	reporting.

# ITEM	9B. OTHER	INFORMATION

# PART	III

# ITEM	10. DIRECTORS,	EXECUTIVE	OFFICERS	AND	CORPORATE	GOVERNANCE

Information	required	by	this	item	relating	to	our	directors	and	nominees	is	contained	in	our	2012	proxy	statement	under	the	caption	"Proposal	1	—	Election	of	Directors"	and	is	incorporated herein	by	reference.	Information	required	by	this	item	relating	to	our	executive	officers	is	contained	under	the	caption	"EXECUTIVE	OFFICERS	OF	THE	COMPANY"	in	Part	I	of	this	Annual	Report on	Form	10-K	and	is	incorporated	herein	by	reference.	Information	required	by	this	item	relating	to	compliance	with	Section	16(a)	of	the	Securities	Exchange	Act	of	1934	is	contained	in	our	2012	proxy statement	under	the	caption	"Section	16(a)	Beneficial	Ownership	Reporting	Compliance"	and	is	incorporated	herein	by	reference.

We	have	adopted	a	written	code	of	business	conduct	and	ethics	that	applies	to	our	principal	executive	officer,	principal	financial	officer,	principal	accounting	officer	or	controller,	or	persons performing	similar	functions	and	have	posted	it	in	the	Corporate	Governance	section	of	our	website	which	is	located	at	www.analog.com.	To	the	extent	permitted	by	NYSE	and	SEC	regulations,	we intend	to	satisfy	any	disclosure	requirement	under	Item	5.05	of	Form	8-K	regarding	any	amendments	to,	or	waivers	from,	our	code	of	business	conduct	and	ethics	by	posting	such	information	on	our website	which	is	located	at	www.analog.com.

During	the	fourth	quarter	of	fiscal	2011,	we	made	no	material	change	to	the	procedures	by	which	shareholders	may	recommend	nominees	to	our	Board	of	Directors,	as	described	in	our	2011 proxy	statement.

Information	required	by	this	item	relating	to	the	audit	committee	of	our	Board	of	Directors	is	contained	in	our	2012	proxy	statement	under	the	caption	"Corporate	Governance	—	Board	of Directors	Meetings	and	Committees	—	Audit	Committee"	and	is	incorporated	herein	by	reference.

# ITEM	11. EXECUTIVE	COMPENSATION

Information	required	by	this	item	is	contained	in	our	2012	proxy	statement	under	the	captions	"Corporate	Governance	—	Director	Compensation"	and	"Information	About	Executive Compensation"	and	is	incorporated	herein	by	reference.

# ITEM	12. SECURITY	OWNERSHIP	OF	CERTAIN	BENEFICIAL	OWNERS	AND	MANAGEMENT	AND	RELATED	STOCKHOLDER	MATTERS

Information	required	by	this	item	relating	to	security	ownership	of	certain	beneficial	owners	and	management	is	contained	in	our	2012	proxy	statement	under	the	caption	"Security	Ownership	of Certain	Beneficial	Owners	and	Management"	and	is	incorporated	herein	by	reference.	Information	required	by	this	item	relating	to	securities	authorized	for	issuance	under	equity	compensation	plans	is contained	in	our	2012	proxy	statement	under	the	caption	"Information	About	Executive	Compensation	—	Securities	Authorized	for	Issuance	Under	Equity	Compensation	Plans"	and	is	incorporated herein	by	reference.

# ITEM	13. CERTAIN	RELATIONSHIPS	AND	RELATED	TRANSACTIONS,	AND	DIRECTOR	INDEPENDENCE

Information	required	by	this	item	relating	to	transactions	with	related	persons	is	contained	in	our	2012	proxy	statement	under	the	caption	"Corporate	Governance	—	Certain	Relationships	and Related	Transactions"	and	is	incorporated	herein	by	reference.	Information	required	by	this	item	relating	to	director	independence	is	contained	in	our	2012	proxy	statement	under	the	caption	"Corporate Governance	—	Determination	of	Independence"	and	is	incorporated	herein	by	reference.

# ITEM	14. PRINCIPAL	ACCOUNTING	FEES	AND	SERVICES

Information	required	by	this	item	is	contained	in	our	2012	proxy	statement	under	the	caption	"Corporate	Governance	—	Independent	Registered	Public	Accounting	Firm	Fees	and	Other	Matters" and	is	incorporated	herein	by	reference.

# PART	IV

# ITEM	15. EXHIBITS	AND	FINANCIAL	STATEMENT	SCHEDULES

(a)	The	following	are	filed	as	part	of	this	Annual	Report	on	Form	10-K:

# 1. Financial	Statements

The	following	consolidated	financial	statements	are	included	in	Item	8	of	this	Annual	Report	on	Form	10-K:

— Consolidated	Statements	of	Shareholders'	Equity	for	the	years	ended	October	29,	2011,	October	30,	2010	and	October	31,	2009

— Consolidated	Statements	of	Comprehensive	Income	for	the	years	ended	October	29,	2011,	October	30,	2010	and	October	31,	2009

# (b) Financial	Statement	Schedules

The	following	consolidated	financial	statement	schedule	is	included	in	Item	15(b)	of	this	Annual	Report	on	Form	10-K:

Schedule	II	—	Valuation	and	Qualifying	Accounts

All	other	schedules	have	been	omitted	since	the	required	information	is	not	present,	or	not	present	in	amounts	sufficient	to	require	submission	of	the	schedule	or	because	the	information	required is	included	in	the	consolidated	financial	statements	or	the	Notes	thereto.

# (c) Exhibits

The	exhibits	listed	in	the	Exhibit	Index	immediately	preceding	the	exhibits	are	filed	or	furnished	with	or	incorporated	by	reference	in	this	Annual	Report	on	Form	10-K.

# ANNUAL	REPORT	ON	FORM	10-K

# FINANCIAL	STATEMENT	SCHEDULE

# (Thousands)

| Description | Balance	at<br>Beginning	of<br>Period | Additions<br>Charged	to<br>Income	Statement | Deductions | Balance	at<br>End	of<br>Period |
| :--- | :--- | :--- | :--- | :--- |
| Accounts\tReceivable\tReserves\tand\tAllowances: |  |  |  |  |
| Year\tended\tOctober\t31,\t2009 | $5,501 | $3,628 | $7,448 | $1,681 |
| Year\tended\tOctober\t30,\t2010 | $1,681 | $2,918 | $3,018 | $1,581 |
| Year\tended\tOctober\t29,\t2011 | $1,581 | $846 | $962 | $1,465 |

# SIGNATURES

Pursuant	to	the	requirements	of	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934,	the	registrant	has	duly	caused	this	report	to	be	signed	on	its	behalf	by	the	undersigned,	thereunto	duly authorized.

By: /s/		JERALD	G.	FISHMAN

Jerald	G.	Fishman

President,	Chief	Executive	Officer	and	Director

(Principal	Executive	Officer)

Pursuant	to	the	requirements	of	the	Securities	and	Exchange	Act	of	1934,	this	report	has	been	signed	below	by	the	following	persons	on	behalf	of	the	registrant	and	in	the	capacities	and	on	the dates	indicated.

# Exhibit	Index

1.2 Underwriting	Agreement,	dated	March	30,	2011,	between	Analog	Devices,	Inc.	and	Credit	Suisse	Securities	(USA)	LLC	and	Merrill	Lynch,	Pierce,	Fenner	&	Smith Incorporated,	as	representative	of	the	several	underwriters	named	therein,	filed	as	exhibit	1.1	to	the	Company's	Current	Report	on	Form	8-K	(File	No.	1-7819),	filed	with	the Commission	on	March	31,	2011	and	incorporated	herein	by	reference.

2.1 Purchase	and	Sale	Agreement,	dated	as	of	September	9,	2007,	among	Analog	Devices,	Inc.,	various	subsidiaries,	and	MediaTek	Inc.,	filed	as	an	exhibit	to	the	Company's Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	November	3,	2007	(File	No.	1-7819)	as	filed	with	the	Commission	on	November	30,	2007	and	incorporated	herein	by reference.

2.2 Amendment	No.	1	to	Purchase	and	Sale	Agreement,	dated	January	11,	2008,	among	Analog	Devices,	Inc.,	various	subsidiaries,	and	MediaTek	Inc.	filed	as	an	exhibit	to	the Company's	Current	Report	on	Form	8-K	(File	No.	1-7819),	as	filed	with	the	Commission	on	January	16,	2008	and	incorporated	herein	by	reference.

2.3 License	Agreement,	dated	as	of	January	11,	2008,	among	Analog	Devices,	Inc.,	Analog	Devices	B.V.,	MediaTek	Inc.	and	MediaTek	Singapore	Pte.	Ltd.,	filed	as	an	exhibit to	the	Company's	Current	Report	on	Form	8-K	(File	No.	1-7819),	as	filed	with	the	Commission	on	January	16,	2008	and	incorporated	herein	by	reference.

3.1 Restated	Articles	of	Organization	of	Analog	Devices,	Inc.,	as	amended,	filed	as	an	exhibit	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	fiscal	quarter	ended	May 3,	2008	(File	No.	1-7819)	as	filed	with	the	Commission	on	May	20,	2008	and	incorporated	herein	by	reference.

3.2 Amendment	to	Restated	Articles	of	Organization	of	Analog	Devices,	Inc.,	filed	as	exhibit	3.1	to	the	Company's	Current	Report	on	Form	8-K	filed	with	the	Commission	on December	8,	2008	(File	No.	1-7819)	and	incorporated	herein	by	reference.

3.3 Amended	and	Restated	By-Laws	of	Analog	Devices,	Inc.,	filed	as	exhibit	3.1	to	the	Company's	Current	Report	on	Form	8-K	filed	with	the	Commission	on	January	28,	2010 (File	No.	1-7819)	and	incorporated	herein	by	reference.

4.1 Indenture,	by	and	between	Analog	Devices,	Inc.	and	The	Bank	of	New	York	Mellon	Trust	Company,	N.A.	(as	Trustee)	dated	as	of	June	30,	2009,	filed	as	exhibit	4.1	to	the Company's	Quarterly	Report	on	Form	10-Q	for	the	fiscal	quarter	ended	August	1,	2009	(File	No.	1-7819)	and	incorporated	herein	by	reference.

4.2 Supplemental	Indenture,	dated	June	30,	2009,	between	Analog	Devices,	Inc.	and	The	Bank	of	New	York	Mellon	Trust	Company,	N.A.,	as	trustee,	filed	as	exhibit	4.1	to	the Company's	Current	Report	on	Form	8-K	(File	No.	1-7819),	filed	with	the	Commission	on	June	30,	2009	and	incorporated	herein	by	reference.

4.4 Supplemental	Indenture,	dated	April	4,	2011,	between	Analog	Devices,	Inc.	and	The	Bank	of	New	York	Mellon	Trust	Company,	N.A.,	as	trustee,	filed	as	exhibit	4.1	to	the Company's	Current	Report	on	Form	8-K	(File	No.	1-7819),	filed	with	the	Commission	on	April	4,	2011	and	incorporated	herein	by	reference.

*10.1 Analog	Devices,	Inc.	Amended	and	Restated	Deferred	Compensation	Plan,	incorporated	herein	by	reference	to	exhibit	10.1	of	the	Company's	Current	Report	on	Form	8-K filed	with	the	Commission	on	December	8,	2008	(File	No.	1-7819)	and	incorporated	herein	by	reference.

Exhibit	No. Description *10.2 First	Amendment	to	the	Analog	Devices,	Inc.	Amended	and	Restated	Deferred	Compensation	Plan,	filed	as	an	exhibit	to	the	Company's	Quarterly	Report	on	Form	10-Q	for fiscal	quarter	ended	July	30,	2011	(File	No.	1-7819)	as	filed	with	the	Commission	on	August	16,	2011	and	incorporated	herein	by	reference. *10.3 Trust	Agreement	for	Deferred	Compensation	Plan	dated	as	of	October	1,	2003	between	Analog	Devices,	Inc.	and	Fidelity	Management	Trust	Company,	filed	as	an	exhibit	to the	Company's	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	November	1,	2003	(File	No.	1-7819)	as	filed	with	the	Commission	on	December	23,	2003	and incorporated	herein	by	reference.

*10.4 First	Amendment	to	Trust	Agreement	for	Deferred	Compensation	Plan	between	Analog	Devices,	Inc.	and	Fidelity	Management	Trust	Company	dated	as	of	January	1,	2005, filed	as	an	exhibit	to	the	Company's	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	October	28,	2006	(File	No.	1-7819)	as	filed	with	the	Commission	on	November 20,	2006	and	incorporated	herein	by	reference.

*10.5 Second	Amendment	to	Trust	Agreement	for	Deferred	Compensation	Plan	between	Analog	Devices,	Inc.	and	Fidelity	Management	Trust	Company	dated	as	of	December	10, 2007,	filed	as	exhibit	10.41	to	the	Company's	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	November	1,	2008	(File	No.	1-7819)	as	filed	with	the	Commission	on November	25,	2008	and	incorporated	herein	by	reference.

*10.6 Restated	1988	Stock	Option	Plan	of	Analog	Devices,	Inc.,	filed	as	an	exhibit	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	fiscal	quarter	ended	May	3,	1997	(File No.	1-7819)	as	filed	with	the	Commission	on	June	17,	1997	and	incorporated	herein	by	reference.

*10.7 Restated	1994	Director	Option	Plan	of	Analog	Devices,	Inc.,	as	amended,	filed	as	an	exhibit	to	the	Company's	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended November	2,	2002	(File	No.	1-7819)	as	filed	with	the	Commission	on	January	29,	2003	and	incorporated	herein	by	reference.

*10.8 1998	Stock	Option	Plan	of	Analog	Devices	Inc.,	as	amended,	filed	as	an	exhibit	to	the	Company's	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	November	2,	2002 (File	No.	1-7819)	as	filed	with	the	Commission	on	January	29,	2003	and	incorporated	herein	by	reference.

*10.9 Analog	Devices,	Inc.	2001	Broad-Based	Stock	Option	Plan,	as	amended,	filed	as	an	exhibit	to	the	Company's	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended November	2,	2002	(File	No.	1-7819)	as	filed	with	the	Commission	on	January	29,	2003	and	incorporated	herein	by	reference. †*10.10 Amended	and	Restated	2006	Stock	Incentive	Plan	of	Analog	Devices,	Inc.,	filed	herewith. *10.11 Form	of	Global	Non-Qualified	Stock	Option	Agreement	for	Employees	for	usage	under	the	Company's	2006	Stock	Incentive	Plan,	filed	as	an	exhibit	to	the	Company's Quarterly	Report	on	Form	10-Q	for	fiscal	quarter	ended	July	30,	2011	(File	No.	1-7819)	as	filed	with	the	Commission	on	August	16,	2011	and	incorporated	herein	by reference. †*10.12 Form	of	Agreement	for	Grants	of	Non-Qualified	Stock	Options	to	Directors	for	usage	under	the	Company's	2006	Stock	Incentive	Plan,	filed	herewith. *10.13 Form	of	Global	Restricted	Stock	Unit	Agreement	for	Employees	for	usage	under	the	Company's	2006	Stock	Incentive	Plan,	filed	as	an	exhibit	to	the	Company's	Current Report	on	Form	8-K	(File	No.	1-7819),	as	filed	with	the	Commission	on	December	3,	2010	and	incorporated	herein	by	reference. †*10.14 Form	of	Agreement	for	Grants	of	Restricted	Stock	Units	to	Directors	for	usage	under	the	Company's	2006	Stock	Incentive	Plan,	filed	herewith. *10.15 Analog	Devices	BV	(Ireland)	Employee	Stock	Option	Program,	as	amended,	filed	as	an	exhibit	to	the	Company's	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended November	2,	2002	(File	No.	1-7819)	as	filed	with	the	Commission	on	January	29,	2003	and	incorporated	herein	by	reference.

10.16 BCO	Technologies	Plc	Unapproved	Share	Option	Scheme,	filed	as	an	exhibit	to	the	Company's	Registration	Statement	on	Form	S-8	(File	No.	333-50092)	as	filed	with	the Commission	on	November	16,	2000	and	incorporated	herein	by	reference.

10.17 BCO	Technologies	Plc	Approved	Share	Option	Scheme,	filed	as	an	exhibit	to	the	Company's	Registration	Statement	on	Form	S-8	(File	No.	333-50092)	as	filed	with	the Commission	on	November	16,	2000	and	incorporated	herein	by	reference.

10.18 ChipLogic,	Inc.	Amended	and	Restated	1998	Stock	Plan,	filed	as	an	exhibit	to	the	Company's	Registration	Statement	on	Form	S-8	(File	No.	333-53314)	as	filed	with	the Commission	on	January	5,	2001	and	incorporated	herein	by	reference.

10.19 Staccato	Systems,	Inc.	1998	Stock	Plan,	filed	as	an	exhibit	to	the	Company's	Registration	Statement	on	Form	S-8	(File	No.	333-53828)	as	filed	with	the	Commission	on January	17,	2001	and	incorporated	herein	by	reference.

10.20 Various	individual	stock	restriction	and	similar	agreements	between	the	registrant	and	employees	thereof	relating	to	ChipLogic,	Inc.,	filed	as	an	exhibit	to	the	Company's Registration	Statement	on	Form	S-8	(File	No.	333-57444)	as	filed	with	the	Commission	on	March	22,	2001,	as	amended	by	Amendment	No.	1	filed	as	an	exhibit	to	the Company's	Post-Effective	Amendment	to	Registration	Statement	on	Form	S-8	(File	No.	333-57444)	as	filed	with	the	Commission	on	March	23,	2001	and	incorporated herein	by	reference.

*10.21 Amended	and	Restated	Employment	Agreement	between	Jerald	G.	Fishman	and	Analog	Devices,	Inc.,	dated	January	14,	2010,	filed	as	an	exhibit	to	the	Company's	Current Report	on	Form	8-K	(File	No.	1-7819)	as	filed	with	the	Commission	on	January	19,	2010	and	incorporated	herein	by	reference.

*10.22 Executive	Retention	Agreement	dated	October	22,	2007	between	Jerald	G.	Fishman	and	Analog	Devices,	Inc.,	filed	as	an	exhibit	to	the	Company's	Current	Report	on	Form 8-K	(File	No.	1-7819)	as	filed	with	the	Commission	on	October	26,	2007	and	incorporated	herein	by	reference.

*10.23 Amendment	to	Long-Term	Retention	Agreement	between	Jerald	G.	Fishman	and	Analog	Devices,	Inc.,	filed	as	exhibit	10.1	to	the	Company's	Current	Report	on	Form	8-K (File	No.	1-7819)	as	filed	with	the	Commission	on	January	19,	2010	and	incorporated	herein	by	reference.

*10.24 Letter	Agreement	between	Analog	Devices	Inc.	and	Jerald	G.	Fishman	dated	June	21,	2000	relating	to	acceleration	of	stock	options	upon	the	occurrence	of	certain	events, filed	as	an	exhibit	to	the	Company's	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	October	28,	2000	(File	No.	1-7819)	as	filed	with	the	Commission	on	January	26, 2001	and	incorporated	herein	by	reference.

*10.25 Amendment	dated	as	of	October	22,	2007	to	the	Employee	Retention	Agreement	dated	as	of	January	16,	1989	between	Jerald	G.	Fishman	and	Analog	Devices,	Inc.,	filed	as an	exhibit	to	the	Company's	Current	Report	on	Form	8-K	(File	No.	1-7819)	as	filed	with	the	Commission	on	October	26,	2007	and	incorporated	herein	by	reference. *10.26 2012	Executive	Performance	Incentive	Plan,	filed	as	exhibit	10.1	to	the	Company's	Current	Report	on	Form	8-K	(File	No.	1-7819),	filed	with	the	Commission	on	September 16,	2011	and	incorporated	herein	by	reference.

*10.27 2011	Executive	Performance	Incentive	Plan,	filed	as	exhibit	10.1	to	the	Company's	Current	Report	on	Form	8-K	(File	No.	1-7819),	filed	with	the	Commission	on	November 4,	2010	and	incorporated	herein	by	reference.

*10.28 Form	of	Employee	Retention	Agreement,	as	amended	and	restated,	filed	as	exhibit	10.27	to	the	Company's	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	November 1,	2008	(File	No.	1-7819)	as	filed	with	the	Commission	on	November	25,	2008	and	incorporated	herein	by	reference.

*10.29 Form	of	Amendment	to	Employee	Retention	Agreement,	incorporated	herein	by	reference	to	exhibit	10.3	of	the	Company's	Current	Report	on	Form	8-K	filed	with	the Securities	and	Exchange	Commission	on	December	8,	2008	(File	No.	1-7819).

*10.30 Employee	Change	in	Control	Severance	Policy	of	Analog	Devices,	Inc.,	as	amended,	filed	as	an	exhibit	to	the	Company's	Annual	Report	on	Form	10-K	for	the	fiscal	year ended	October	30,	1999	(File	No.	1-7819)	as	filed	with	the	Commission	on	January	28,	2000	and	incorporated	herein	by	reference.

*10.31 Senior	Management	Change	in	Control	Severance	Policy	of	Analog	Devices,	Inc.,	as	amended,	filed	as	an	exhibit	to	the	Company's	Annual	Report	on	Form	10-K	for	the fiscal	year	ended	October	30,	1999	(File	No.	1-7819)	as	filed	with	the	Commission	on	January	28,	2000	and	incorporated	herein	by	reference.

*10.32 Offer	Letter	for	David	A.	Zinsner,	dated	November	18,	2008,	filed	as	exhibit	10.1	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	January	31,	2009 (File	No.	1-7819)	as	filed	with	the	Commission	on	February	18,	2009	and	incorporated	herein	by	reference.

10.34 Amended	and	Restated	Lease	Agreement	dated	May	1,	1992	between	Analog	Devices,	Inc.	and	the	trustees	of	Everett	Street	Trust	relating	to	the	premises	at	3	Technology Way,	Norwood,	Massachusetts,	filed	as	an	exhibit	to	the	Company's	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	November	1,	1997	(File	No.	1-7819)	as	filed	with the	Commission	on	January	28,	1998	and	incorporated	herein	by	reference.

10.35 Guaranty	dated	as	of	May	1,	1994	between	Analog	Devices,	Inc.	and	Metropolitan	Life	Insurance	Company	relating	to	the	premises	at	3	Technology	Way,	Norwood, Massachusetts,	filed	as	an	exhibit	to	the	Company's	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	October	30,	1999	(File	No.	1-7819)	as	filed	with	the	Commission on	January	28,	2000	and	incorporated	herein	by	reference.

10.36 Letter	Agreement	dated	as	of	May	18,	1994	between	Analog	Devices,	Inc.	and	Metropolitan	Life	Insurance	Company	relating	to	the	premises	at	3	Technology	Way,	Norwood, Massachusetts,	filed	as	an	exhibit	to	the	Company's	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	October	30,	1999	(File	No.	1-7819)	as	filed	with	the	Commission on	January	28,	2000	and	incorporated	herein	by	reference.

10.37 Reimbursement	Agreement	dated	May	18,	1992	between	Analog	Devices,	Inc.	and	the	trustees	of	Everett	Street	Trust,	filed	as	an	exhibit	to	the	Company's	Annual	Report	on Form	10-K	for	the	fiscal	year	ended	November	1,	1997	(File	No.	1-7819)	as	filed	with	the	Commission	on	January	28,	1998	and	incorporated	herein	by	reference.

10.38 Lease	Agreement	dated	November	14,	1997,	as	amended,	between	Analog	Devices,	Inc.	and	Liberty	Property	Limited	Partnership,	relating	to	premises	located	at	7736 McCloud	Road,	Greensboro,	North	Carolina,	filed	as	an	exhibit	to	the	Company's	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	October	28,	2006	(File	No.	1-7819)	as filed	with	the	Commission	on	November	20,	2006	and	incorporated	herein	by	reference.

10.39 Fifth	Amendment	dated	September	14,	2007	to	Lease	Agreement	dated	November	14,	1997,	as	amended,	between	Analog	Devices,	Inc.	and	Crown-Greensboro	I,	LLC	(as successor	to	Liberty	Property	Limited	Partnership),	relating	to	premises	located	at	7736	McCloud	Road,	Greensboro,	North	Carolina,	filed	as	an	exhibit	to	the	Company's Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	November	3,	2007	(File	No.	1-7819)	as	filed	with	the	Commission	on	November	30,	2007	and	incorporated	herein	by reference.

	†12.1 Computation	of	Consolidated	Ratios	of	Earnings	to	Fixed	Charges.

	†21 Subsidiaries	of	the	Company.

	†23 Consent	of	Ernst	&	Young	LLP,	Independent	Registered	Public	Accounting	Firm.

	†31.1 Certification	Pursuant	to	Rule	13a-14(a)	and	15d-14(a)	of	the	Exchange	Act,	as	Adopted	Pursuant	to	Section	302	of	the	Sarbanes-Oxley	Act	of	2002	(Chief	Executive	Officer).

† Filed	herewith.

* Management	contracts	and	compensatory	plan	or	arrangements	required	to	be	filed	as	an	Exhibit	pursuant	to	Item	15(b)	of	Form	10-K.

Attached	as	Exhibit	101	to	this	report	are	the	following	formatted	in	XBRL	(Extensible	Business	Reporting	Language):	(i)	Consolidated	Statements	of	Income	for	the	years	ended	October	29, 2011,	October	30,	2010	and	October	31,	2009,	(ii)	Consolidated	Balance	Sheets	at	October	29,	2011	and	October	30,	2010,	(iii)	Consolidated	Statements	of	Shareholders'	Equity	for	the	years	ended October	29,	2011,	October	30,	2010	and	October	31,	2009,	(iv)	Consolidated	Statements	of	Comprehensive	Income	for	the	years	ended	October	29,	2011,	October	30,	2010	and	October	31,	2009,

(v)	Consolidated	Statements	of	Cash	Flows	for	the	years	ended	October	29,	2011,	October	30,	2010	and	October	31,	2009,	(vi)	Notes	to	Consolidated	Financial	Statements.



Question: what is the yearly interest payment related to the $ 375 million notional amount included in the swap terms?
Calculation:   notional_amount = 375
 interest_rate = 0.05
 answer = notional_amount * interest_rate
Answer: 18.8