# UNITED	STATES

# SECURITIES	AND	EXCHANGE	COMMISSION

# (Mark	One)

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

For	the	fiscal	year	ended	November	2,	2019

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,

(Address	of	principal	executive	offices)

(I.R.S.	Employer	Identification	No.)

(Zip	Code)

(Registrant's	telephone	number,	including	area	code)

Securities	registered	pursuant	to	Section	12(b)	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	☑			No	☐

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	☐	No	☑

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	☑			No	☐

Indicate	by	check	mark	whether	the	registrant	has	submitted	electronically	every	Interactive	Data	File	required	to	be	submitted	pursuant	to	Rule	405	of	Regulation	S-T	(Sec.

232.405	of	this	chapter)	during	the	preceding	12	months	(or	for	such	shorter	period	that	the	registrant	was	required	to	submit	such	files).		Yes	☑			No	☐

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

Large	accelerated	filer ☑

Non-accelerated	filer ☐

Accelerated	filer

Smaller	reporting	company ☐

Emerging	growth	company

If	an	emerging	growth	company,	indicate	by	check	mark	if	the	registrant	has	elected	not	to	use	the	extended	transition	period	for	complying	with	any	new	or	revised	financial accounting	standards	provided	pursuant	to	Section	13(a)	if	the	Exchange	Act	☐

Indicate	by	check	mark	whether	the	registrant	is	a	shell	company	(as	defined	in	Rule	12b-2	of	the	Act).		Yes	☐	No	☑

The	aggregate	market	value	of	the	voting	and	non-voting	common	equity	held	by	non-affiliates	of	the	registrant	was	approximately	$31,890,000,000	based	on	the	last	reported sale	of	the	Common	Stock	on	The	Nasdaq	Global	Select	Market	on	May	3,	2019.	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	11,	2020

| Note	about	Forward-Looking	Statements | 1 |
| :--- | :--- |
| PART\tI | 2 |
| Item\t1.\tBusiness | 2 |
| Item\t1A.\tRisk\tFactors | 9 |
| Item\t1B.\tUnresolved\tStaff\tComments | 19 |
| Item\t2.\tProperties | 20 |
| Item\t3.\tLegal\tProceedings | 21 |
| Item\t4.\tMine\tSafety\tDisclosures | 21 |
| Executive\tOfficers\tof\tthe\tCompany | 22 |
| PART\tII | 23 |
| Item\t5.\tMarket\tfor\tRegistrant's\tCommon\tEquity,\tRelated\tStockholder\tMatters\tand\tIssuer\tPurchases\tof\tEquity\tSecurities | 23 |
| Item\t6.\tSelected\tFinancial\tData | 24 |
| Item\t7.\tManagement's\tDiscussion\tand\tAnalysis\tof\tFinancial\tCondition\tand\tResults\tof\tOperations | 26 |
| Item\t7A.\tQuantitative\tand\tQualitative\tDisclosures\tabout\tMarket\tRisk | 43 |
| Report\tof\tIndependent\tRegistered\tPublic\tAccounting\tFirm | 45 |
| Item\t8.\tFinancial\tStatements\tand\tSupplementary\tData | 48 |
| Consolidated\tStatements\tof\tIncome | 48 |
| Consolidated\tStatements\tof\tComprehensive\tIncome | 49 |
| Consolidated\tBalance\tSheets | 50 |
| Consolidated\tStatements\tof\tShareholders'\tEquity | 51 |
| Consolidated\tStatements\tof\tCash\tFlows | 52 |
| Notes\tto\tConsolidated\tFinancial\tStatements | 53 |
| Supplementary\tFinancial\tInformation | 91 |
| Item\t9.\tChanges\tin\tand\tDisagreements\twith\tAccountants\ton\tAccounting\tand\tFinancial\tDisclosure | 92 |
| Item\t9A.\tControls\tand\tProcedures | 92 |
| Item\t9B.\tOther\tInformation | 94 |
| PART\tIII | 95 |
| Item\t10.\tDirectors,\tExecutive\tOfficers\tand\tCorporate\tGovernance | 95 |
| Item\t11.\tExecutive\tCompensation | 95 |
| Item\t12.\tSecurity\tOwnership\tof\tCertain\tBeneficial\tOwners\tand\tManagement\tand\tRelated\tStockholder\tMatters | 95 |
| Item\t13.\tCertain\tRelationships\tand\tRelated\tTransactions,\tand\tDirector\tIndependence | 95 |
| Item\t14.\tPrincipal\tAccounting\tFees\tand\tServices | 95 |
| PART\tIV | 96 |
| Item\t15.\tExhibits\tand\tFinancial\tStatement\tSchedules | 96 |
| SCHEDULE\tII\t-\tVALUATION\tAND\tQUALIFYING\tACCOUNTS | 101 |
| Item\t16.\tForm\t10-K\tSummary | 102 |
| Signatures | 103 |

# Note	About	Forward-Looking	Statements

This	Annual	Report	on	Form	10-K,	including	"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 and	other	safe	harbors	under	the	Securities	Act	of	1933	and	the	Securities	Exchange	Act	of	1934.	All	statements	other	than	statements	of	historical	fact	are	statements that	could	be	deemed	forward-looking	statements.	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,"	"could"	and	"will,"	and	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;	our	anticipated	growth	and	trends	in	our	businesses;	our future	liquidity,	capital	needs	and	capital	expenditures;	our	future	market	position	and	expected	competitive	changes	in	the	marketplace	for	our	products;	our	ability	to pay	dividends	or	repurchase	stock;	our	ability	to	service	our	outstanding	debt;	our	expected	tax	rate;	expected	cost	savings;	the	effect	of	new	accounting pronouncements;	our	ability	to	successfully	integrate	acquired	businesses	and	technologies;	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, including	to	reflect	events	or	circumstances	occurring	after	the	date	of	the	filing	of	this	report,	except	to	the	extent	required	by	law.

# PART	I

# ITEM	1.	BUSINESS

# Company	Overview

Analog	Devices,	Inc.	(we,	Analog	Devices	or	the	Company)	is	a	leading	global	high-performance	analog	technology	company.	Since	our	inception	in	1965,	we have	focused	on	solving	our	customers'	toughest	signal	processing	engineering	challenges	and	playing	a	fundamental	role	in	efficiently	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 applications.	We	produce	innovative	products	and	technologies	that	accurately	and	securely	sense,	measure,	connect,	interpret	and	power,	allowing	our	customers	to intelligently	bridge	the	physical	and	digital	domains.

We	design,	manufacture,	and	market	a	broad	portfolio	of	solutions,	including	integrated	circuits	(ICs),	algorithms,	software,	and	subsystems	that	leverage	high- performance	analog,	mixed-signal,	and	digital	signal	processing	technologies.	Our	fusion	of	cutting-edge	sensors,	data	converters,	amplifiers	and	linear	products,	radio frequency	(RF)	ICs,	power	management	products,	and	other	signal	processing	products	with	deep	industry	expertise	allows	us	to	create	robust	technology	platforms	that meet	a	broad	spectrum	of	customer	and	market	needs.	As	new	generations	of	applications	evolve	-	such	as	autonomous	vehicles,	5G	networks,	intelligent	factories,	and smart	healthcare	devices	-	the	demand	for	Analog	Devices'	high-performance	analog	signal	processing	and	digital	signal	processing	(DSP)	products	and	technologies	is increasing.

We	focus	on	key	strategic	markets	such	as	industrial,	automotive,	consumer,	and	communications	where	our	signal	processing	technology	is	often	a	critical differentiator	in	our	customers'	products.	Used	by	more	than	125,000	end	customers	worldwide,	our	products	are	used	in	many	different	types	of	electronic	applications including:

•	Factory	and	process	automation	systems

•	Instrumentation,	test	and	measurement	systems

•	Aerospace	and	defense	applications

•	Semi-autonomous	and	autonomous	vehicle	safety	systems

•	Automotive	infotainment	systems

•	Powertrains	for	gas	and	electric	vehicles

•	Medical	imaging	equipment

•	Vital	signs	monitoring	devices

•	Wireless	infrastructure	equipment

•	Networking	and	optical	equipment

•	Portable	consumer	devices

•	Professional	audio	and	video	devices

We	were	incorporated	in	Massachusetts	in	1965.	Our	headquarters	are	near	Boston,	in	Norwood,	Massachusetts.	In	addition,	we	have	manufacturing	facilities	in the	United	States,	Ireland	and	Southeast	Asia.		Our	common	stock	is	listed	on	The	Nasdaq	Global	Select	Market	under	the	symbol	ADI	and	is	included	in	the Standard	&	Poor's	500	Index.

# Acquisition	of	Linear	Technology	Corporation

On	March	10,	2017	(Acquisition	Date),	we	completed	the	acquisition	of	Linear	Technology	Corporation	(Linear),	an	independent	manufacturer	of	high performance	analog	integrated	circuits.	The	total	consideration	paid	to	acquire	Linear	was	approximately	$15.8	billion,	consisting	of	$11.1	billion	in	cash	financed through	existing	cash	on	hand,	net	proceeds	from	bridge	and	term	loan	facilities	and	proceeds	received	from	the	issuance	of	senior	unsecured	notes,	$4.6	billion	from	the issuance	of	our	common	stock	and	$0.1	billion	of	consideration	related	to	the	replacement	of	outstanding	equity	awards	held	by	Linear	employees.	The	acquisition	of Linear	is	referred	to	as	the	Acquisition.

# 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	(SEC).	We	also	make	available	on	our	website	our	by-laws,	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	Nasdaq.

# 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	ICs,	in	which	a	number	of	transistors	and	other	elements	are	combined	to	form	a	more	complicated	electronic	circuit.	ICs	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	ICs	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.

# 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.	We	sell	our	ICs	to	tens	of	thousands	of	end	customers	worldwide,	many	of	whom use	products	spanning	our	core	technologies	in	a	wide	range	of	applications.	Our	IC	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.	We	also	focus	on	working	with leading	customers	to	design	application-specific	solutions.	We	begin	with	our	existing	core	technologies,	which	leverage	our	data	conversion,	amplification,	RF	and microwave,	microelectromechanical	systems	(MEMS),	power	management	and	DSP	capabilities,	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	platform	for	our	general-purpose	products,	we	can	create	application-specific solutions	quickly.

We	produce	and	market	a	broad	range	of	ICs	and	operate	in	one	reportable	segment	based	on	the	aggregation	of	eight	operating	segments.	The	ICs	sold	by	each	of our	operating	segments	are	manufactured	using	similar	semiconductor	manufacturing	processes	and	raw	materials	in	either	our	own	production	facilities	or	by	third- party	wafer	fabricators	using	proprietary	processes.		Our	ICs	are	sold	to	customers	globally	through	a	direct	sales	force,	third-party	distributors,	independent	sales representatives	and	via	our	website.	Our	technology	offerings	are	aligned	with	the	predominant	markets	served	in	order	to	facilitate	decision	making	throughout	our organization.

# Analog	Products

Our	analog	and	mixed	signal	IC	technology	has	been	the	foundation	of	our	business	for	over	five	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.	We	believe	that	the	principal	advantages	these	products	have	as	compared	to	competitors'	products	include	higher	accuracy,	higher	speed,	lower	cost per	function,	smaller	size,	lower	power	consumption	and	fewer	components,	resulting	in	improved	performance	and	reliability.	Our	product	portfolio	includes	several thousand	analog	ICs,	many	of	which	can	have	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	(RF)	and	Microwave—	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/microwave,	broadband,	and	other	amplifiers.	Our	analog	product	line	also	includes	a	broad	portfolio	of	high	performance	RF	and microwave	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	and microwave	ICs	support	the	high	performance	requirements	of	cellular	infrastructure	and	a	broad	range	of	applications	in	our	target	markets,	including	instrumentation, aerospace	and	automotive.

Power	Management	&	Reference	—	Power	management	and	reference	products,	which	include	functions	such	as	power	conversion,	driver	monitoring, sequencing	and	energy	management,	provide	efficient	solutions	for	power	management	and	conversion	applications	in	the	automotive,	communications,	industrial	and high-end	consumer	markets.	From	portable	consumer	devices	to	automobiles	to	high	end	data	centers,	the	performance	and	efficiency	of	modern	electronic	products	is increasingly	limited	by	their	power	supply	systems.	Our	high	performance	power	ICs	include	powerful	performance,	integration	and	software	design	simulation	tools	to provide	fast	and	accurate	power	supply	designs.

Other	Analog	—	Our	analog	technology	portfolio	is	comprised	of	sensor	and	actuator	products,	including	products	based	on	MEMS	technology.	MEMS 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	axes,	and	broadband	switches	suitable	for	radio	and instrument	systems.	We	offer	other	high	performance	sensors,	from	temperature	to	magnetic	fields	that	are	deployed	in	a	variety	of	systems.	In	addition	to	sensor products,	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.

# Digital	Signal	Processing	and	System	Products

Digital	Signal	Processing	products	(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.	In	many	cases,	DSPs	are	embedded	with	mixed	signal	functionality	to	provide	System	on	Chip (SOC)	integrated	solutions,	combining	that	analog	and	digital	signal	processing	circuitry	to	provide	a	complete	signal	chain	for	demanding	applications.

# Markets	and	Applications

      The	breakdown	of	our	November	2,	2019	(fiscal	2019)	revenue	by	end	market	is	set	out	in	the	table	below.

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	Automation	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

•	Connected	motion	and	robotics

•	Environmental	control	systems

•	Oscilloscopes

•	Lab,	chemical,	and	environmental	analyzers

•	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.	As	end	systems	are	becoming	more	complex,	many	of	our	customers	in	this	market	also	look	for	us	to	provide	higher	levels	of	integration	in order	to	minimize	size,	weight	and	power	and	to	improve	ease-of-use.		As	such,	we	also	sell	products	in	the	form	of	SiPs	(system	in	package),	printed	circuit	board assemblies,	modules,	and	subsystems.

# Customer	products	include:

•	Navigation	systems •	Radar	systems

•	Space	and	satellite	communications

•	Security	devices

•	Communication	systems •	Electronic	surveillance	and	countermeasures

Energy	Management	—	The	desire	to	improve	energy	efficiency,	conservation,	reliability,	and	cleanliness	is	driving	investments	in	electric	vehicle	charging infrastructure,	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

•	Electric	vehicle	charging	infrastructure

•	Substation	relays	and	automation	equipment

•	Wind	turbines

•	Solar	inverters

•	Building	energy	automation/control

Healthcare	—	The	healthcare	market	is	calling	for	increased	access	to	better	and	more	affordable	care.	To	help	achieve	this,	we	are	collaborating	with	customers

and	partners	on	innovative	solutions	that	are	designed	to	achieve	better	outcomes	for	patients	and	physicians	at	reduced	costs	for	all.

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

•	Ultrasound	systems •	Anesthesia	equipment

•	X-Ray	equipment	(CT	and	DR)

•	Image	guided	therapy

•	Multi-parameter	vital	signs	monitors

•	Lab	diagnostic	equipment

•	Surgical	tools	and	instruments

•	Blood	analyzers

•	Disease	management,	e.g.	hypertension	and	diabetes •	Point-of-care	diagnostics

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	processing	of	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, creates	demand	for	our	products,	which	are	used	in	the	full	spectrum	of	signal	processing	for	data,	video,	voice	and	machine-to-machine	communications.	In	wireless	and broadband	communication	applications,	our	products	are	incorporated	into:

•	Cellular	basestation	equipment •	Optical	and	cable	networking	equipment	for	data	center	and	service	providers •	Microwave	backhaul	systems •	Satellite	and	terrestrial	broadband	access	equipment

Automotive	-	We	develop	differentiated	high	performance	signal	processing	solutions,	which	enable	sophisticated	transportation	systems	that	span	Infotainment, Electrification	and	Autonomous	applications.	Through	collaboration	with	manufacturers	worldwide,	we	have	developed	a	broad	portfolio	of	analog,	digital,	power	and sensor	ICs	that	address	the	emerging	needs	of	this	evolving	industry.	Our	focus	is	on	audio/video	applications	that	lead	to	a	more	enriching	in-cabin	experience, electrification	applications	that	improve	vehicle	range	and	reduce	emissions,	and	mission-critical	perception	and	navigation	applications	that	enable	vehicles	to	more clearly	sense	the	external	environment.

Specifically,	we	have	developed	products	used	in	applications	such	as:

Infotainment Electrification Autonomous,	ADAS	&	Safety •Car	audio,	voice	processing	and	connectivity •Hybrid	electric	/	electric	vehicles •High	performance	24GHz	&	77/79GHz RADAR	systems

•Video	processing	and	connectivity •Battery	monitoring	and	management	systems •High	resolution	LIDAR	systems

•Inertial	MEMS	solutions	for	mission	critical

navigation,	stability	and	safety	systems

Consumer	—	To	address	the	market	demand	for	state	of	the	art	personal	and	professional	entertainment	systems	and	the	consumer	demand	for	high	quality	user interfaces,	music,	movies	and	photographs,	we	have	developed	analog,	digital	and	mixed-signal	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	that	enables	best	in	class	user	experience.	These	products	include:

•	Portable	devices	(smart	phones,	tablets	and	wearable	devices)	for	media	and vital	signs	motoring	applications •	Prosumer	audio/video	equipment

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

# 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 November	2,	2019,	we	held	approximately	3,490	U.S.	patents	and	approximately	693	non-provisional	pending	U.S.	patent	applications	with	expiration	dates	ranging from	2019	through	2039.	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	50	countries	outside	North	America.

We	support	our	worldwide	sales	efforts	through	our	website	and	with	extensive	promotional	programs	that	include	editorial	coverage	and	paid	advertising	in online	and	printed	trade	publications,	webinars,	social	media	and	communities,	promotional	and	training	videos,	direct	mail	programs,	technical	seminars	and participation	in	trade	shows.	We	publish,	share	and	distribute	technical	content	such	as	data	sheets,	application	guides	and	catalogs.		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	57%	of	our	fiscal	2019	revenue	from	sales	made	to	distributors.	We	believe	distributors	provide	a	cost-effective	means	of	reaching	a broad	range	of	customers	while	providing	efficient	logistics	services.	From	time	to	time,	we	may	add	or	terminate	distributors	in	specific	geographies,	or	move customers	to	a	direct	support	or	fulfillment	model	as	we	deem	appropriate	given	our	strategies,	the	level	of	distributor	business	activity	and	distributor	performance	and financial	condition.

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.	We	make	sales	to	distributors	under	agreements	that	allow	certain	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,	certain	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,	Revenue	Recognition,	of	the	Notes to	Consolidated	Financial	Statements	contained	in	Item	8	of	this	Annual	Report	on	Form	10-K.

# Customers

Our	primary	distributors	are	Arrow	Electronics	(Arrow)	and	Macnica,	Inc.	(Macnica).	They,	like	our	other	distributors,	are	not	end	customers,	but	rather	serve	as	a channel	of	sale	to	many	end	users	of	our	products.	Revenue	from	products	sold	to	Arrow	accounted	for	30%,	28%	and	14%	of	net	revenues	in	fiscal	2019,	2018	and 2017,	respectively.	Revenue	from	products	sold	to	Macnica	accounted	for	10%	of	net	revenues	in	fiscal	2019	and	less	than	10%	in	other	periods	presented.	In	fiscal 2017,	sales	to	Apple,	Inc.,	one	of	our	end	customers,	accounted	for	approximately	12%	of	net	revenues.	No	other	single	end	customer	accounted	for	10%	or	more	of	net revenues	in	fiscal	years	2019,	2018	and	2017.	International	sales	accounted	for	approximately	66%,	63%	and	60%	of	our	net	revenues	in	fiscal	years	2019,	2018	and 2017,	respectively,	and	are	based	on	the	geographic	location	of	the	distributors	or	OEMs	who	purchased	our	products.	See	Note	4,	Industry,	Segment	and	Geographic Information,	of	the	Notes	to	Consolidated	Financial	Statements	contained	in	Item	8	of	this	Annual	Report	on	Form	10-K	for	further	information	about	our	revenue	by channel	and	end	market.

# 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	IC	components	are	manufactured	in	a	sequence	of	semiconductor	production	steps	that	include	wafer	fabrication,	wafer	testing,	dicing	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	laminates,	ceramic	and	plastic	used	for	packaging.

We	utilize,	develop	and	employ	a	wide	variety	of	manufacturing	processes,	primarily	based	on	bipolar	and	complementary	metal-oxide	semiconductor	(CMOS) transistors,	which	are	specifically	tailored	for	use	in	fabricating	high-performance	analog,	DSP	and	mixed-signal	ICs.	Devices	such	as	MEMS,	iCoupler®isolators	and various	sensors,	are	fabricated	using	specialized	processes,	which	typically	use	substantially	similar	equipment	as	bipolar	and	CMOS	processes.

Our	IC	products	are	fabricated	on	proprietary	processes	at	our	internal	production	facilities	in	Wilmington,	Massachusetts;	Milpitas,	California;	Camas, Washington;	and	Limerick,	Ireland	and	also	on	a	mix	of	proprietary	and	non-proprietary	processes	at	third-party	wafer	fabricators.	We	currently	source	approximately half	of	our	wafer	requirements	annually	from	third-party	wafer	fabrication	foundries,	such	as	Taiwan	Semiconductor	Manufacturing	Company	(TSMC)	and	others, typically	where	deep-submicron	lithography	capabilities	and/or	large	manufacturing	capacity	is	required.

We	operate	an	assembly	and	wafer	sort	facility	in	Penang,	Malaysia,	and	test	facilities	in	the	Philippines	and	Singapore.	We	also	make	extensive	use	of	third-party subcontractors	for	the	assembly	and	testing	of	our	products.

Capital	spending	was	approximately	$275	million	in	fiscal	2019,	compared	with	approximately	$255	million	in	fiscal	2018	and	$204	million	in	fiscal	2017.	We expect	capital	expenditures	for	the	fiscal	year	ending	October	31,	2020	(fiscal	2020)	to	be	slightly	below	4%	of	fiscal	2020	revenue.

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.	If	any	of	our	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	2019	and	fiscal	2018	was	approximately	$1.0	billion	and	$1.4	billion,	respectively;	however,	as	explained	below,	we	believe	that	our backlog	at	any	time	should	not	be	used	as	an	indication	of	future	revenue.	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	canceled	or deliveries	to	be	delayed	by	customers	without	significant	penalty.	In	addition,	we	allow	certain	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.

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	canceled	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

Less	than	5%	of	our	fiscal	2019,	fiscal	2018,	and	fiscal	2017	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

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	that	may	strengthen	our	business.

On	March	10,	2017,	we	completed	the	acquisition	of	Linear.	The	total	consideration	paid	to	acquire	Linear	was	approximately	$15.8	billion,	consisting	of	$11.1 billion	in	cash	financed	through	existing	cash	on	hand,	net	proceeds	from	bridge	and	term	loan	facilities	and	proceeds	received	from	the	issuance	of	senior	unsecured notes,	$4.6	billion	from	the	issuance	of	our	common	stock	and	$0.1	billion	of	consideration	related	to	the	replacement	of	outstanding	equity	awards	held	by	Linear employees.

Additional	information	relating	to	our	acquisition	activities	during	fiscal	2019,	fiscal	2018	and	fiscal	2017	is	set	forth	in	Note	6,	Acquisitions,	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	Inc.

•	Infineon	Technologies	AG

•	Maxim	Integrated	Products,	Inc.

•	Monolithic	Power	Systems,	Inc.

•	NXP	Semiconductors	N.V.

•	Texas	Instruments	Inc.

•	Microchip	Technology	Inc.

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'	competitiveness	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	EHS	management	systems	in	all	of	our	facilities	are	certified	to	ISO	14001:2015	for	environmental	management,	and	all	of	our	facilities	conform	to	ISO 45001	for	occupational	health	and	safety.	We	are	a	member	of	the	Responsible	Business	Alliance	(RBA),	which	was	formerly	known	as	the	Electronic	Industry Citizenship	Coalition	(EICC).	Our	Sustainability	Report,	first	published	in	2009,	states	our	commitment	to	reducing	Greenhouse	gas	(GHG)	emissions,	conserving resources	by	consuming	less	energy	and	water,	complying	with	our	code	of	business	conduct	and	ethics,	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	substance	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	November	2,	2019,	we	employed	approximately	16,400	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	engineers involved	in	the	design,	development,	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	Securities	and	Exchange	Commission	(SEC)	are	descriptions	of	certain	risks and	uncertainties	that	could	cause	our	actual	results	to	differ	materially	from	the	results	contemplated	by	the	forward-looking	statements	in	this	report.

Political	and	economic	uncertainty	as	well	as	disruptions	in	global	credit	and	financial	markets	could	materially	and	adversely	affect	our	business	and	results	of operations.

Continuing	political	and	global	macroeconomic	uncertainty,	including	escalating	trade	disputes	between	the	United	States	and	China,	the	United	Kingdom's pending	withdrawal	from	the	European	Union,	and	uncertainty	regarding	the	stability	of	global	credit	and	financial	markets	may	lead	consumers	and	businesses	to postpone	or	reduce	spending,	which	may	cause	our	customers	to	cancel,	decrease	or	delay	their	existing	and	future	orders	for	our	products	and	make	it	difficult	for	us	to accurately	forecast	and	plan	our	future	business	activities.	Financial	difficulties	experienced	by	our	customers	could	result	in	nonpayment	or	payment	delays	for previously	purchased	products,	thereby	increasing	our	credit	risk	exposure.	Uncertainty	regarding	the	macroeconomic	conditions	as	well	as	the	future	stability	of	the global	credit	and	financial	markets	could	cause	the	value	of	the	currency	in	the	affected	markets	to	deteriorate,	thus	reducing	the	purchasing	power	of	those	customers. Significant	disruption	to	global	credit	and	financial	markets	may	also	adversely	affect	our	ability	to	access	external	financing	sources	on	acceptable	terms.	In	addition, financial	difficulties	experienced	by	our	suppliers,	distributors	or	customers	could	result	in	product	delays,	increased	accounts	receivable	defaults	and	inventory challenges.	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.

We	are	exposed	to	business,	economic,	political,	legal,	regulatory	and	other	risks	through	our	significant	worldwide	operations,	which	could	adversely	affect	our business,	financial	condition	and	results	of	operations.

We	have	significant	operations	and	manufacturing	facilities	outside	the	United	States,	including	in	Ireland,	the	Philippines,	Singapore	and	Malaysia.	A	significant portion	of	our	revenue	is	derived	from	customers	in	international	markets,	and	we	expect	that	international	sales	will	continue	to	account	for	a	significant	portion	of	our revenue	in	the	future.	Risks	associated	with	our	international	business	operations	include	the	following:

•political,	legal	and	economic	changes,	crises	or	instability	and	civil	unrest	in	markets	in	which	we	do	business,	including	potential	macroeconomic	weakness related	to	escalating	trade	disputes	between	the	United	States	and	China	and	the	United	Kingdom's	pending	withdrawal	from	the	European	Union;

•compliance	requirements	of	U.S.	customs	and	export	regulations,	including	the	Export	Administration	Regulations	(EAR)	and	the	International	Traffic	and Arms	Regulations	(ITAR);

•currency	conversion	risks	and	exchange	rate	and	interest	rate	fluctuations,	including	the	potential	impact	of	the	transition	from	LIBOR;

•trade	policy,	commercial,	travel,	export	or	taxation	disputes	or	restrictions,	government	sanctions,	import	or	export	tariffs,	changes	to	export	classifications	or other	restrictions	imposed	by	the	U.S.	government	or	by	the	governments	of	the	countries	in	which	we	do	business,	particularly	in	China;

•complex,	varying	and	changing	government	regulations	and	legal	standards	and	requirements,	particularly	with	respect	to	tax	regulations,	price	protection,

competition	practices,	export	control	regulations	and	restrictions,	customs	and	tax	requirements,	immigration,	anti-boycott	regulations,	data	privacy,	intellectual property,	anti-corruption	and	environmental	compliance,	including	the	Foreign	Corrupt	Practices	Act;

•economic	disruption	from	terrorism	and	threats	of	terrorism	and	the	response	to	them	by	the	U.S.	and	its	allies;

•increased	managerial	complexities,	including	different	employment	practices	and	labor	issues;

•changes	in	immigration	laws,	regulations	and	procedures	and	enforcement	practices	of	various	government	agencies;

•greater	difficulty	enforcing	intellectual	property	rights	and	weaker	laws	protecting	such	rights;

•natural	disasters	or	pandemics;

•transportation	disruptions	and	delays	and	increases	in	labor	and	transportation	costs;

•changes	to	foreign	taxes,	tariffs	and	freight	rates;

•fluctuations	in	raw	material	costs	and	energy	costs;

•greater	difficulty	in	accounts	receivable	collections	and	longer	collection	periods;	and

•costs	associated	with	our	foreign	defined	benefit	pension	plans.

Any	of	these	risks,	or	any	other	risks	related	to	international	business	operations,	could	materially	adversely	affect	our	business,	financial	condition	and	results	of operations.

Many	of	these	risks	are	present	within	our	business	operations	in	China.	For	example,	changes	in	U.S.-China	relations,	the	political	environment	or	international trade	policies	and	relations	could	result	in	revisions	to	laws	or	regulations	or	their	interpretation	and	enforcement,	increased	taxation,	trade	sanctions,	the	imposition	of import	or	export	duties	and	tariffs,	restrictions	on	imports	or	exports,	currency	revaluations,	or	retaliatory	actions,	which	has	had	and	may	continue	to	have	an	adverse effect	on	our	business	plans	and	operating	results.	In	addition,	our	success	in	the	Chinese	markets	may	be	adversely	affected	by	China's	continuously	evolving	policies, laws	and	regulations,	including	those	relating	to	antitrust,	cybersecurity	and	data	protection,	the	environment,	indigenous	innovation	and	the	promotion	of	a	domestic semiconductor	industry,	and	intellectual	property	rights	and	enforcement	and	protection	of	those	rights.

At	November	2,	2019,	our	principal	source	of	liquidity	was	$648.3	million	of	cash	and	cash	equivalents,	of	which	approximately	$295.7	million	was	held	in	the United	States	and	the	remaining	balance	was	held	outside	the	United	States.	As	we	intend	to	reinvest	substantially	all	of	our	foreign	earnings	indefinitely,	certain	cash held	outside	the	United	States	may	not	be	available	for	repatriation	as	dividends	to	the	United	States	in	the	future.	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, borrowings	under	our	current	revolving	credit	facility,	future	debt	or	equity	offerings	or	other	sources	of	cash	obtained	at	an	acceptable	cost,	it	may	be	necessary	for	us to	consider	repatriation	of	earnings	that	are	indefinitely	reinvested,	and	we	may	be	required	to	pay	additional	taxes	under	current	tax	laws,	which	could	have	a	material adverse	effect	on	our	results	of	operations	and	financial	condition.

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

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

•the	effects	of	adverse	economic	conditions	in	the	markets	in	which	we	sell	our	products;

•changes	in	customer	demand	or	order	patterns	for	our	products	and/or	for	end	products	that	incorporate	our	products;

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

•our	ability	to	accurately	forecast	distributor	demand	for	our	products;

•our	ability	to	accurately	estimate	future	distributor	pricing	credits	and/or	stock	rotation	rights;

•our	ability	to	effectively	manage	our	cost	structure	in	both	the	short	term	and	over	a	longer	duration;

•changes	in	geographic,	product	or	customer	mix;

•changes	in	our	effective	tax	rates	or	new	or	revised	tax	legislation	in	the	United	States,	Ireland	or	worldwide;

•the	effects	of	issued,	threatened	or	retaliatory	government	sanctions,	trade	barriers	or	economic	restrictions,	changes	in	law,	regulations	or	other	restrictions,

including	executive	orders,	changes	in	import	and	export	regulations,	export	classifications	or	changes	in	duties	and	tariffs,	particularly	with	respect	to	China;

•the	timing	of	new	product	announcements	or	introductions	by	us,	our	customers	or	our	competitors	and	the	market	acceptance	of	such	products;

•pricing	decisions	and	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	raw	materials,	products	and/or	components;

•a	decline	in	infrastructure	spending	by	foreign	governments,	including	China;

•a	decline	in	the	U.S.	government	defense	budget,	changes	in	spending	or	budgetary	priorities,	a	prolonged	U.S.	government	shutdown	or	delays	in	contract awards;

•any	significant	decline	in	our	backlog;

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

•our	ability	to	generate	new	design	opportunities	and	win	competitive	bid	selection	processes;

•the	increasing	costs	of	providing	employee	benefits	worldwide,	including	health	insurance,	retirement	plan	and	pension	plan	contributions	and	retirement benefits;

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

•potential	significant	litigation-related	costs	or	product	liability,	warranty	and/or	indemnity	claims,	including	those	not	covered	by	our	suppliers	or	insurers;

•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	government,	environmental	and	social	responsibility	standards;

•new	accounting	pronouncements	or	changes	in	existing	accounting	standards	and	practices;	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	and	certain	of	the end	markets	we	serve	are	also	subject	to	rapid	technological	changes	and	material	fluctuations	in	demand	based	on	end-user	preferences.	There	can	be	no	assurance	(i) that	products	stocked	in	our	inventory	will	not	be	rendered	obsolete	before	we	ship	them,	or	(ii)	that	we	will	be	able	to	design,	develop	and	produce	products	in	a	timely fashion	to	accommodate	changing	customer	demand.	As	a	result	of	these	and	other	factors,	we	may	experience	material	fluctuations	in	future	revenue,	gross	margins, operating	results,	net	income	and	earnings	per	share	on	a	quarterly	or	annual	basis.	Our	historical	financial	performance	and	results	of	operations	should	not	be	relied upon	as	indicators	of	future	performance	or	results.	In	addition,	if	our	revenue,	gross	margins,	operating	results,	net	income	and	earnings	per	share	results	or	expectations do	not	meet	the	expectations	of	securities	analysts	or	investors,	the	market	price	of	our	common	stock	may	decline.

Increases	in	our	effective	tax	rate	and	exposure	to	additional	tax	liabilities	may	adversely	impact	our	results	of	operations.

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	the	fiscal	year	ended	November	2,	2019	was	below	our	U.S.	federal	statutory	rate	of	21%.	It	was	also	below	our	blended	U.S.	federal	statutory	tax	rate	of	23.4%	for the	fiscal	year	ended	November	3,	2018.	This	is	primarily	due	to	lower	statutory	tax	rates	applicable	to	our	operations	in	the	foreign	jurisdictions	in	which	we	earn income.	A	number	of	factors	may	increase	our	future	effective	tax	rate,	including:	new	or	revised	tax	laws	or	legislation	or	the	interpretation	of	such	laws	or	legislation by	governmental	authorities;	increases	in	tax	rates	in	various	jurisdictions;	variation	in	the	mix	of	jurisdictions	in	which	our	profits	are	earned	and	taxed;	deferred	taxes arising	from	basis	differences	in	investments	in	foreign	subsidiaries;	any	adverse	resolution	of	ongoing	tax	audits	or	adverse	rulings	from	taxing	authorities	worldwide, including	our	current	transfer	pricing	appeal	in	Ireland;	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	executive	compensation	subject	to	the	limitations	of	Section	162(m)	of	the Internal	Revenue	Code	and	amortization	of	assets	acquired	in	connection	with	strategic	transactions;	decreased	availability	of	tax	deductions	for	stock-based compensation	awards	worldwide;	and	changes	in	available	tax	credits.	In	addition,	we	have	a	partial	tax	holiday	through	July	2025	in	Malaysia.	The	ability	to	extend such	tax	holiday	beyond	its	expiration	date	cannot	be	assured.	In	addition,	if	we	fail	to	meet	certain	conditions	of	the	tax	holiday,	we	may	lose	the	benefit	of	the	tax holiday	and/or	be	subject	to	additional	taxes	and/or	penalties.	Any	significant	increase	in	our	future	effective	tax	rate	could	adversely	impact	our	net	income	during future	periods.

Compliance	with	the	Tax	Legislation	may	require	the	collection	of	information	not	regularly	produced	within	the	Company,	and	therefore	necessitate	the	use	of estimates	in	our	Consolidated	Financial	Statements	and	the	exercise	of	significant	judgment	in	accounting	for	its	provisions.	As	regulations	and	guidance	evolve	with respect	to	the	Tax	Legislation,	and	as	more	information	is	gathered	and	analyzed,	our	results	may	differ	from	previous	estimates	and	may	materially	affect	our Consolidated	Financial	Statements.

We	are	also	subject	to	laws	and	regulations	in	various	jurisdictions	that	determine	how	much	profit	has	been	earned	and	when	it	is	subject	to	taxation	in	that jurisdiction.	Changes	in	these	laws	and	regulations,	including	those	that	align	to	or	are	associated	with	the	Organization	for	Economic	Cooperation	and	Development's Base	Erosion	and	Profit	Shifting	(BEPS)	Actions	Plans,	could	impact	the	jurisdictions	where	we	are	deemed	to	earn	income,	which	could	in	turn	adversely	affect	our	tax liability	and	results	of	operations.

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

Our	future	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,	information	security	practices,	and	other	methods,	to	protect	our	proprietary	information,	technologies	and	processes. Despite	our	efforts	to	protect	our	intellectual	property,	it	is	possible	that	competitors	or	other	unauthorized	third	parties	may	obtain	or	disclose	our	confidential information,	reverse	engineer	or	copy	our	technologies,	products	or	processes,	or	otherwise	misappropriate	our	intellectual	property.	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	intellectual	property.

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	prevent	others	from	exploiting	our	proprietary technology.	We	may	not	be	able	to	obtain	foreign	patents	or	pending	applications	corresponding	to	our	U.S.	patents	and	applications.	Even	if	patents	are	granted,	we may	not	be	able	to	effectively	enforce	our	rights.	If	our	patents	and	mask	works	do	not	adequately	protect	our	technology,	or	if	our	registrations	expire	prior	to	end	of life	of	our	products,	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.

A	significant	disruption	in,	or	breach	in	security	of,	our	information	technology	systems	or	certain	of	our	products	could	materially	and	adversely	affect	our	business	or reputation.

We	rely	on	information	technology	systems	throughout	our	company	to	keep	financial	records	and	customer	data,	process	orders,	manage	inventory,	coordinate shipments	to	customers,	maintain	confidential	and	proprietary	information,	assist	in	semiconductor	engineering	and	other	technical	activities	and	operate	other	critical functions	such	as	Internet	connectivity,	network	communications	and	email.	Our	information	technology	systems	may	be	susceptible	to	damage,	disruptions	or shutdowns	due	to	power	outages,	hardware	failures,	telecommunication	failures,	employee	malfeasance,	user	errors,	catastrophes	or	other	unforeseen	events.	We	also rely	upon	external	cloud	providers	for	certain	infrastructure	activities.	If	we	were	to	experience	a	prolonged	disruption	in	the	information	technology	systems	that	involve our	internal	communications	or	our	interactions	with	customers	or	suppliers,	it	could	result	in	the	loss	of	sales	and	customers	and	significant	incremental	costs,	which could	adversely	affect	our	business.	We	may	also	be	subject	to	security	breaches	of	our	information	technology	systems	and	certain	of	our	products	caused	by	viruses, illegal	break-ins	or	hacking,	sabotage,	or	acts	of	vandalism	by	third	parties	or	our	employees	or	contractors.	Our	security	measures	or	those	of	our	third	party	service providers	may	not	detect	or	prevent	security	breaches,	defects,	bugs	or	errors.	In	addition,	we	provide	our	confidential	and	proprietary	information	to	our	strategic partners	in	certain	cases	where	doing	so	is	necessary	to	conduct	our	business.	While	we	employ	confidentiality	agreements	to	protect	such	information,	those	third parties	may	nonetheless	also	be	subject	to	security	breaches	or	otherwise	compromise	the	protection	of	such	information.	Security	breaches	of	our	information technology	systems	or	those	of	our	partners	could	result	in	the	misappropriation	or	unauthorized	disclosure	of	confidential	and	proprietary	information	belonging	to	us	or to	our	employees,	partners,	customers,	suppliers,	or	other	third	parties	which	could	result	in	our	suffering	significant	financial	or	reputational	damage.

Our	customers	typically	do	not	make	long-term	product	purchase	commitments	and	incorrect	forecasts	or	reductions,	cancellations	or	delays	in	orders	for	our	products could	adversely	affect	our	operating	results.

We	typically	do	not	have	sales	contracts	with	our	customers	that	include	long-term	product	purchase	commitments.	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	non-binding forecasts	of	customer	demands,	which	may	fluctuate	significantly	on	a	quarterly	or	annual	basis	and	at	times	may	prove	to	be	inaccurate.	Additionally,	our	U.S. government	contracts	and	subcontracts	may	be	funded	in	increments	over	a	number	of	government	budget	periods	and	typically	can	be	terminated	by	the	government	for its	convenience.	As	a	result,	we	may	incur	inventory	and	manufacturing	costs	in	advance	of	anticipated	sales,	and	we	are	subject	to	the	risk	of	lower	than	expected	orders or	cancellations	of	orders,	leading	to	a	sharp	reduction	of	sales	and	backlog.	Further,	if	orders	or	forecasts	for	products	that	meet	a	customer's	unique	requirements	are canceled	or	unrealized	we	may	be	left	with	an	inventory	of	unsaleable	products,	causing	potential	inventory	write-offs,	and	hindering	our	ability	to	recover	our	costs.	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	execute	our	business	strategy,	continue	to	innovate,	improve	our	existing	products,	design,	develop,	produce	and	market new	products,	and	identify	and	enter	new	markets.

Our	future	success	significantly	depends	on	our	ability	to	execute	our	business	strategy,	continue	to	innovate,	improve	our	existing	products	and	design,	develop, produce	and	market	innovative	new	products	and	system-level	solutions.	Product	design,	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	and	reliability	standards	or	comply	with	industry	standards	and	technical requirements	may	adversely	affect	demand	for	our	products	and	our	results	of	operations.

Our	growth	is	also	dependent	on	our	ability	to	identify	and	penetrate	new	markets	where	we	have	limited	experience	yet	require	significant	investments,	resources and	technological	advancements	in	order	to	compete	effectively	and	there	can	be	no	assurance	that	we	will	achieve	success	in	these	markets.	There	can	be	no	assurance that	the	markets	we	serve	and/or	target	based	on	our	business	strategy	will	grow	in	the	future,	that	our	existing	and	new	products	will	meet	the	requirements	of	these markets,	that	our	products,	or	the	end-products	in	which	our	products	are	used,	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.

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

We	face	intense	competition	in	the	semiconductor	industry,	and	we	expect	this	competition	to	increase	in	the	future,	including	from	companies	located	outside	of the	United	States.	Competition	is	generally	based	on	innovation,	design,	quality	and	reliability	of	products,	product	performance,	features	and	functionality,	product pricing,	availability	and	capacity,	technological	service	and	support,	and	the	availability	of	integrated	system	solutions,	with	the	relative	importance	of	these	factors varying	among	products,	markets	and	customers.	Many	companies	have	sufficient	financial,	manufacturing,	technical,	sales	and	marketing	resources	to	develop	and market	products	that	compete	with	our	products.	Some	of	our	competitors	may	have	more	advantageous	supply	or	development	relationships	with	our	current	and potential	customers	or	suppliers.	Our	competitors	also	include	both	emerging	companies	selling	specialized	products	in	markets	we	serve	and	companies	outside	of	the U.S.,	including	entities	associated	with	well-funded	efforts	by	foreign	governments	to	create	indigenous	semiconductor	industries.	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.	In	addition,	as	we	seek	to	expand	our	business,	including	the	design	and	production	of	products	and services	for	developing	and	emerging	markets,	we	may	encounter	increased	competition	from	our	current	competitors	and/or	new	competitors.	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.	In	addition,	the	semiconductor	industry	has	experienced	significant	consolidation	over	the	past	several	years.	Consolidation	among	our competitors	could	lead	to	a	changing	competitive	landscape,	which	could	negatively	impact	our	competitive	position	and	market	share	and	harm	our	results	of operations.

We	rely	on	third-parties	for	supply	of	raw	materials	and	parts,	semiconductor	wafer	foundry	services,	assembly	and	test	services,	and	transportation,	among	other things,	and	we	generally	cannot	control	their	availability	or	conditions	of	supply	or	services.

We	rely,	and	plan	to	continue	to	rely,	on	third-party	suppliers	and	service	providers,	including	raw	material	and	components	suppliers,	semiconductor	wafer foundries,	assembly	and	test	contractors,	and	freight	carriers	(collectively,	vendors)	in	manufacturing	our	products.	This	reliance	involves	several	risks,	including reduced	control	over	availability,	capacity	utilization,	delivery	schedules,	manufacturing	yields,	and	costs.	We	currently	source	approximately	half	of	our	wafer requirements	annually	from	third-party	wafer	foundries,	including	Taiwan	Semiconductor	Manufacturing	Company	(TSMC)	and	others.	These	foundries	often	provide wafer	foundry	services	to	our	competitors	and	therefore	periods	of	increased	industry	demand	may	result	in	capacity	constraints.	In	addition,	in	certain	instances,	one	of our	vendors	may	be	the	sole	source	of	highly	specialized	processing	services	or	materials.	If	such	vendor	is	unable	or	unwilling	to	manufacture	and	deliver	components to	us	on	the	time	schedule	and	of	the	quality	or	quantity	that	we	require,	we	may	be	forced	to	seek	to	engage	an	additional	or	replacement	vendor,	which	could	result	in additional	expenses	and	delays	in	product	development	or	shipment	of	product	to	our

customers.	If	additional	or	replacement	vendors	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	prolonged	disruption	of	our	internal	manufacturing	operations	could	have	a	material	adverse	effect	on	our	business,	financial	condition	and	results	of	operations.

In	addition	to	leveraging	an	outsourcing	model	for	manufacturing	operations,	we	also	rely	on	our	internal	manufacturing	operations	located	in	the	United	States, Ireland,	the	Philippines,	Singapore	and	Malaysia.	A	prolonged	disruption	at,	or	inability	to	utilize,	one	or	more	of	our	manufacturing	facilities,	loss	of	raw	materials	or damage	to	our	manufacturing	equipment	for	any	reason,	including	due	to	natural	or	man-made	disasters,	civil	unrest	or	other	events	outside	of	our	control,	such	as widespread	outbreaks	of	illness	or	the	failure	to	maintain	our	labor	force	at	one	or	more	of	these	facilities,	may	disrupt	our	operations,	delay	production,	shipments	and revenue	and	result	in	us	being	unable	to	timely	satisfy	customer	demand.	As	a	result,	we	could	forgo	revenue	opportunities,	potentially	lose	market	share	and	damage	our customer	relationships,	all	of	which	could	materially	and	adversely	affect	our	business,	financial	condition	and	results	of	operations.

If	we	are	unable	to	generate	sufficient	cash	flow,	we	may	not	be	able	to	service	our	debt	obligations,	including	making	payments	on	our	outstanding	indebtedness.

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	outstanding	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;

•borrow	under	our	revolving	credit	facility;

•divert	funds	that	would	otherwise	be	invested	in	growing	our	business	operations;

•repatriate	earnings	as	dividends	from	foreign	locations	with	potential	for	negative	tax	consequences;	or

•sell	selected	assets.

Such	measures	might	not	be	sufficient	to	enable	us	to	service	our	debt,	which	could	negatively	impact	our	financial	results.	In	addition,	we	may	not	be	able	to obtain	any	such	financing,	refinancing	or	complete	a	sale	of	assets	on	economically	favorable	terms.	In	the	case	of	financing	or	refinancing,	favorable	interest	rates	will depend	on	the	health	of	the	debt	capital	markets.

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.	The	demand	for	our products	is	subject	to	the	strength	of	our	four	major	end	markets	of	Industrial,	Communications,	Automotive	and	Consumer.	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	and	raw	materials,	locate	suitable	third-party	suppliers,	or	respond	effectively	to	changes	in	demand	for	our	existing	products or	to	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	warranty,	indemnity	and/or	product	liability	claims,	which	could	result	in	significant	costs	and damage	to	our	reputation	and	adversely	affect	customer	relationships,	the	market	acceptance	of	our	products	and	our	operating	results.

Semiconductor	products	are	highly	complex	and	may	contain	defects	that	affect	their	quality	or	performance.	Failures	in	our	products	and	services	or	in	the products	of	our	customers	could	result	in	damage	to	our	reputation	for	reliability	and	increase	our	legal	or	financial	exposure	to	third	parties.	Certain	of	our	products	and services	could	also	contain	security	vulnerabilities,	defects,	bugs	and	errors,	which	could	also	result	in	significant	data	losses,	security	breaches	and	theft	of	intellectual property.	We	generally	warrant	that	our	products	will	meet	their	published	specifications,	and	that	we	will	repair	or	replace	defective	products,	for	one	year	from	the date	title	passes	from	us	to	the	customer.	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	and	expenses	associated	with	product	defects,	including recalls,	which	may	adversely	impact	our	operating	results.	We	may	also	be	subject	to	customer	intellectual	property	indemnity	claims.	Our	customers	have	on	occasion been	sued,	and	may	be	sued	in	the	future,	by	third	parties	alleging	infringement	of	intellectual	property	rights,	or	damages	resulting	from	use	of	our	products.	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.	Further,	we	sell	to	customers	in	industries	such	as	automotive	(including	autonomous	vehicles),	aerospace,	defense,	and	healthcare,	where	failure	of the	systems	in	which	our	products	are	integrated	could	cause	damage	to	property	or	persons.	We	may	be	subject	to	product	liability	claims	if	our	products,	or	the integration	of	our	products,	cause	system	failures.	Any	product	liability	claim,	whether	or	not	determined	in	our	favor,	could	result	in	significant	expense,	divert	the efforts	of	our	technical	and	management	personnel,	and	harm	our	business.	In	addition,	if	any	of	our	products	contain	defects,	or	have	reliability,	quality	or compatibility	problems	not	capable	of	being	resolved,	our	reputation	may	be	damaged,	which	could	make	it	more	difficult	for	us	to	sell	our	products	to	customers	and which	could	also	adversely	affect	our	operating	results.

The	fabrication	of	integrated	circuits	is	highly	complex	and	precise,	and	our	manufacturing	processes	utilize	a	substantial	amount	of	technology.	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	occasionally	involved	in	litigation,	including	claims	regarding	intellectual	property	rights,	which	could	be	costly	to	litigate	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.	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	and	infringed	by	us.	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	also	be	subject	to	litigation	or	arbitration	disputes	arising	under	our	contractual	obligations,	as	well	as	customer	indemnity,	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,	and	we	may	elect	to	self-insure	with	respect	to	certain	matters.	An	adverse	outcome	in	litigation	or	arbitration	could	have	a material	adverse	effect	on	our	financial	position	or	on	our	operating	results	or	cash	flows	in	the	period	in	which	the	dispute	is	resolved.

If	we	are	unable	to	recruit	or	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	key	personnel,	including	our	leadership team,	management	and	technical	personnel,	particularly	our	experienced	engineers.	The	competition	for	these	employees	is	intense.	The	loss	of	key	personnel	or	the inability	to	attract,	hire	and	retain	key	employees	with	critical	technical	skills	to	achieve	our	strategy,	including	as	a	result	of	changes	to	immigration	policies,	could	also have	a	material	adverse	effect	on	our	business.	We	do	not	maintain	any	key	person	life	insurance	policy	on	any	of	our	officers	or	other	employees.

To	remain	competitive,	we	may	need	to	invest	in	or	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,	diversify	our	product	portfolio,	expand	our	market	coverage,	increase	our	engineering	workforce,	expand	our	technical	skill	sets	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	invest	in,	purchase	or	license	the	technology	or	resources	on	commercially	favorable	terms	or	at	all.	Acquisitions,	investments	and	technology	licenses	are	challenging to	complete	for	a	number	of	reasons,	including	difficulties	in	identifying	potential	targets,	the	cost	of	potential	transactions,	competition	among	prospective	buyers	and licensees,	the	need	for	regulatory	approvals,	and	difficulties	related	to	integration	efforts.	In	addition,	investments	in	private	companies	are	subject	to	a	risk	of	a	partial	or total	loss	of	our	investment.	Both	in	the	U.S.	and	abroad,	governmental	regulation	of	acquisitions,	including	antitrust	and	other	regulatory	reviews	and	approvals,	has become	more	complex,	increasing	the	costs	and	risks	of	undertaking	and	consummating	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	obtain	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	challenges	and	risks,	including:

•diversion	of	management's	attention	in	connection	with	both	negotiating	the	transaction	and	integrating	the	acquired	assets	and	businesses;

•difficulty	or	delay	integrating	acquired	technologies,	operations,	systems	and	infrastructure,	and	personnel	with	our	existing	businesses;

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

•the	future	funding	requirements	for	acquired	companies,	including	research	and	development	costs,	employee	compensation	and	benefits,	and	operating expenses,	which	may	be	significant;

•servicing	significant	debt	that	may	be	incurred	in	connection	with	acquisitions;

•potential	loss	of	key	employees;

•exposure	to	unforeseen	liabilities	or	regulatory	compliance	issues	of	acquired	companies;

•higher	than	expected	or	unexpected	costs	relating	to	or	associated	with	an	acquisition	and	integration	of	assets	and	businesses;

•difficulty	realizing	expected	cost	savings,	operating	synergies	and	growth	prospects	of	an	acquisition	in	a	timely	manner	or	at	all;	and

•increased	risk	of	costly	and	time-consuming	legal	proceedings.

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

We	rely	on	supplies,	services	and	manufacturing	capacity	located	in	geologically	unstable	areas,	which	could	affect	our	ability	to	produce	products.

We,	like	many	companies	in	the	semiconductor	industry,	rely	on	supplies,	services,	internal	manufacturing	capacity,	wafer	fabrication	foundries	and	other subcontractors	in	geologically	unstable	locations	around	the	world.	Earthquakes,	tsunamis,	flooding	or	other	natural	disasters	may	disrupt	local	semiconductor-related businesses	and	adversely	affect	manufacturing	capacity,	availability	and	cost	of	key	raw	materials,	utilities	and	equipment,	and	availability	of	key	services,	including transport	of	our	products	worldwide.	Our	insurance	may	not	adequately	cover	losses	resulting	from	such	disruptions.	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,	flood,	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.

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

A	significant	portion	of	our	sales	are	through	independent	global	and	regional	distributors	that	are	not	under	our	control.	Arrow	Electronics	is	currently	our largest	distributor.	These	independent	distributors	generally	represent	product	lines	offered	by	several	companies	and	thus	could	reduce	their	sales	efforts	for	our products	or	they	could	terminate	their	representation	of	us.	We	generally	do	not	require	letters	of	credit	from	our	distributors,	including	our	largest	distributor,	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	or	a	group	of	distributors,	whether	at	our	initiative	or	the	distributor's initiative	or	through	consolidation	in	the	distribution	industry,	could	disrupt	our	current	business,	and	if	we	are	unable	to	find	suitable	replacements	with	the	appropriate scale	and	resources,	our	operating	results	could	be	adversely	affected.

Effective	November	4,	2018,	all	distributor	sales	are	recognized	upon	shipment	to	the	distributor	under	Accounting	Standards	Update	2014-09,	Revenue	from Contracts	with	Customers	(ASU	2014-09).	We	are	now	required	to	estimate	the	effects	of	returns	and	allowances	provided	to	distributors	and	record	revenue	at	the	time of	sale	to	the	distributor.	If	our	estimates	of	such	credits	and	rights	are	materially	understated,	it	could	cause	subsequent	adjustments	that	negatively	impact	our	revenues and	gross	profits	in	a	future	period.

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

Our	industry	is	subject	to	EHS	requirements,	particularly	those	that	control	and	restrict	the	sourcing,	use,	transportation,	emission,	discharge,	storage	and	disposal of	certain	substances,	and	materials	used	or	produced	in	the	semiconductor	manufacturing	process.	Public	attention	to	environmental	sustainability	and	social responsibility	concerns	continues	to	increase,	and	our	customers	routinely	include	stringent	environmental	and	other	standards	in	their	contract	with	us.	Changes	in	EHS laws	or	regulations	may	require	us	to	invest	in	costly	equipment	or	make	manufacturing	process	changes	and	may	adversely	affect	the	sourcing,	supply	and	pricing	of materials	used	in	our	products.	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	existing	or	future	EHS	statutory	or	regulatory	standards,

requirements	or	contractual	obligations	could	result	in	any	of	the	following,	each	of	which	could	have	a	material	adverse	effect	on	our	business	and	operating	results:

•liability	for	damages	and	remediation;

•the	imposition	of	regulatory	penalties	and	civil	and	criminal	fines;

•the	suspension	or	termination	of	the	development,	manufacture,	sale	or	use	of	certain	of	our	products;

•changes	to	our	manufacturing	processes	or	a	need	to	substitute	materials	that	may	cost	more	or	be	less	available;

•damage	to	our	reputation;	and/or

•increased	expenses	associated	with	compliance.

Restrictions	in	our	revolving	credit	facility,	term	loan	and	outstanding	debt	instruments	may	limit	our	activities.

Our	current	revolving	credit	facility,	term	loan	and	outstanding	debt	instruments	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	changes	in	technology, government	regulations	and	the	level	of	competition	in	our	markets.	In	addition,	our	revolving	credit	facility	and	term	loan	require	us	to	maintain	compliance	with specified	financial	ratios.	If	we	breach	any	of	the	covenants	under	our	revolving	credit	facility,	the	indentures	governing	our	outstanding	senior	unsecured	notes,	the	term loan	facility	or	any	future	debt	instruments	to	which	we	may	become	subject	and	do	not	obtain	appropriate	waivers,	then,	subject	to	applicable	cure	periods,	our outstanding	indebtedness	thereunder	could	be	declared	immediately	due	and	payable	and/or	we	may	be	restricted	from	further	borrowing	under	our	revolving	credit facility.

If	we	fail	to	comply	with	government	contracting	regulations,	we	could	suffer	a	loss	of	revenue	or	incur	price	adjustments	or	other	penalties.

Some	of	our	revenue	is	derived	from	contracts	with	agencies	of	the	United	States	government	and	subcontracts	with	its	prime	contractors.	As	a	United	States government	contractor	or	subcontractor,	we	are	subject	to	federal	contracting	regulations,	including	the	Federal	Acquisition	Regulations,	which	govern	the	allowability of	costs	incurred	by	us	in	the	performance	of	United	States	government	contracts.	Certain	contract	pricing	is	based	on	estimated	direct	and	indirect	costs,	which	are subject	to	change.	Additionally,	the	United	States	government	is	entitled	after	final	payment	on	certain	negotiated	contracts	to	examine	all	of	our	cost	records	with respect	to	such	contracts	and	to	seek	a	downward	adjustment	to	the	price	of	the	contract	if	it	determines	that	we	failed	to	furnish	complete,	accurate	and	current	cost	or pricing	data	in	connection	with	the	negotiation	of	the	price	of	the	contract.

In	connection	with	our	United	States	government	business,	we	are	also	subject	to	government	audits	and	to	review	and	approval	of	our	policies,	procedures,	and internal	controls	for	compliance	with	procurement	regulations	and	applicable	laws.	In	certain	circumstances,	if	we	do	not	comply	with	the	terms	of	a	contract	or	with regulations	or	statutes,	we	could	be	subject	to

downward	contract	price	adjustments	or	refund	obligations	or	could	in	extreme	circumstances	be	assessed	civil	and	criminal	penalties	or	be	debarred	or	suspended	from obtaining	future	contracts	for	a	specified	period	of	time.	Any	such	suspension	or	debarment	or	other	sanction	could	have	an	adverse	effect	on	our	business.

Under	some	of	our	government	subcontracts,	we	are	required	to	maintain	secure	facilities	and	to	obtain	security	clearances	for	personnel	involved	in	performance of	the	contract,	in	compliance	with	applicable	federal	standards.	If	we	were	unable	to	comply	with	these	requirements,	or	if	personnel	critical	to	our	performance	of	these contracts	were	unable	to	obtain	or	maintain	their	security	clearances,	we	might	be	unable	to	perform	these	contracts	or	compete	for	other	projects	of	this	nature,	which could	adversely	affect	our	revenue.

# 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	factors	including:

•global	economic	conditions	generally;

•crises	in	global	credit,	debt	and	financial	markets;

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

•changes	in	financial	estimates	or	other	statements	made	by	securities	analysts	or	others	in	analyst	reports	or	other	publications	or	our	failure	to	perform	in	line with	those	estimates	or	statements	or	our	published	guidance;

•financial	results	and	prospects	of	our	customers;

•U.S.	and	foreign	government	actions,	including	with	respect	to	trade,	travel,	export	and	taxation;

•changes	in	market	valuations	of	other	semiconductor	companies;

•rumors	and	speculation	in	the	press,	investment	community	or	on	social	media	about	us,	our	customers	or	other	companies	in	our	industry;

•announcements	by	us,	our	customers	or	our	competitors	of	significant	new	products,	technical	innovations,	material	transactions,	acquisitions	or	dispositions, litigation,	capital	commitments	or	revised	earnings	estimates;

•departures	of	key	personnel;

•alleged	noncompliance	with	laws,	regulations	or	ethics	standards	by	us	or	any	of	our	employees,	officers	or	directors;	and

•negative	media	publicity	targeting	us	or	our	suppliers,	customers	or	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.

Our	directors	and	executive	officers	periodically	sell	shares	of	our	common	stock	in	the	market,	including	pursuant	to	Rule	10b5-1	trading	plans.	Regardless	of the	individual's	reasons	for	such	sales,	securities	analysts	and	investors	could	view	such	sales	as	a	negative	indicator	and	our	stock	price	could	be	adversely	affected	as	a result.

# 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	significant	general	offices	and	manufacturing	facilities:

| Properties |  | Approximate |
| :--- | :--- | :--- |
| Owned: | Use | Total\tSq.\tFt. |
| Cavite,\tPhilippines | Wafer\tprobe\tand\ttesting,\twarehouse,\tengineering\tand\tadministrative\toffices | 873,000\tsq.\tft. |
| Wilmington,\tMA | Wafer\tfabrication,\ttesting,\tengineering,\tmarketing\tand\tadministrative\toffices | 594,000\tsq.\tft. |
| Limerick,\tIreland | Wafer\tfabrication,\twafer\tprobe\tand\ttesting,\tengineering\tand\tadministrative\toffices | 491,000\tsq.\tft. |
| Milpitas,\tCA | Wafer\tfabrication,\ttest\tand\tassembly;\twarehouse\tand\tdistribution;\tengineering,\tsales,\tmarketing\tand\nadministrative\toffices | 430,000\tsq.\tft. |
| Singapore\t(1) | Wafer\ttest\tand\tpackaging,\twarehouse\tand\tdistribution,\tengineering,\tsales\tand\tadministrative\toffices | 384,000\tsq.\tft. |
| Malaysia\t(2) | Assembly\tand\tengineering\toffices,\temployee\tparking | 350,000\tsq.\tft. |
| Chelmsford,\tMA | Final\tassembly\tof\tcertain\tmodule\tand\tsubsystem-level\tproducts,\ttesting,\tengineering\tand\tadministrative\noffices | 174,000\tsq.\tft. |
| Camas,\tWA | Wafer\tfabrication | 105,000\tsq.\tft. |
| Greensboro,\tNC | Product\ttesting,\tengineering\tand\tadministrative\toffices | 99,000\tsq.\tft. |

(1) Leases	on	the	land	used	for	this	facility	expire	in	2021	through	2022	with	an	option	to	extend	each	lease	for	an	additional	30	years.

| Properties<br>Leased: | Use | Approximate<br>Total	Sq.	Ft. | Termination<br>(fiscal	year) | Renewals |
| :--- | :--- | :--- | :--- | :--- |
| Norwood,\tMA | Corporate\theadquarters,\tengineering,\tsales\tand\tmarketing | 130,000\tsq.\tft. | 2022 | 2,\tfive-yr. |
|  | offices |  |  | periods |
| Santa\tClara,\tCA | Engineering,\tsales,\tmarketing\tand\tadministrative\toffices | 445,000\tsq.\tft. | 2030 | 2,\tfive-yr.\nperiods |
| Bangalore,\tIndia | Engineering | 175,000\tsq.\tft. | 2027 | 1,\tfive-yr.\nperiod |
| Greensboro,\tNC | Engineering\tand\tadministrative\toffices | 51,000\tsq.\tft. | 2024 | 1,\tfive-yr.\nperiod |
| Shanghai,\tChina | Engineering\tand\tsales\toffices | 59,000\tsq.\tft. | 2021 | 1,\tthree-yr.\nperiod |
| Beijing,\tChina | Engineering\tand\tsales\toffices | 58,000\tsq.\tft. | 2021 | 3,\tone-\tto\tthree-yr.\nperiods |

In	addition	to	the	properties	listed	in	the	above	table,	we	also	own	or	lease	a	number	of	other	facilities	in	various	locations	in	the	United	States	and	internationally that	are	used	for	manufacturing,	engineering,	sales	and	marketing	and	administration	activities.	Leases	for	these	leased	facilities	expire	at	various	dates	through	the	year 2030.	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	9,	Lease	Commitments,	of	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, among	other	things,	contractual	matters,	patents,	trademarks,	personal	injury,	environmental	matters,	product	liability,	insurance	coverage,	employment	or	employee benefits.	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.		MINE	SAFETY	DISCLOSURES

Not	Applicable.

# INFORMATION	ABOUT	OUR	EXECUTIVE	OFFICERS

The	following	table	sets	forth	(i)	the	name,	age	and	position	of	each	of	our	executive	officers	as	of	November	26,	2019	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.

# 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	Nasdaq	Global	Select	Market	under	the	symbol	ADI.

Information	regarding	our	equity	compensation	plans	and	the	securities	authorized	for	issuance	thereunder	is	set	forth	in	Item	12	of	this	Annual	Report	on	Form

# Issuer	Purchases	of	Equity	Securities

The	table	below	summarizes	the	activity	related	to	stock	repurchases	for	the	three	months	ended	November	2,	2019.

| Period | Total	Number	of<br>Shares	Purchased	(1) | Average	Price<br>Paid<br>Per	Share	(2) | Total	Number	of	Shares<br>Purchased	as	Part	of<br>Publicly	Announced<br>Plans	or	Programs	(3) | Approximate	Dollar<br>Value	of	Shares	that<br>May	Yet	Be	Purchased<br>Under	the	Plans	or	Programs |
| :--- | :--- | :--- | :--- | :--- |
| August\t4,\t2019\tthrough\tAugust\t31,\t2019 | 199,231 | $109.00 | 194,849 | $2,213,017,633 |
| September\t1,\t2019\tthrough\tSeptember\t28,\t2019 | 342,313 | $113.39 | 338,534 | $2,174,639,499 |
| September\t29,\t2019\tthrough\tNovember\t2,\t2019 | 1,023,202 | $109.32 | 949,531 | $2,070,927,831 |
| Total | 1,564,746 | $110.17 | 1,482,914 | $2,070,927,831 |

(1) Includes	81,832	shares	withheld	by	us	from	employees	to	satisfy	employee	tax	obligations	upon	vesting	of	restricted	stock	units/awards	granted	to	our	employees	under	our equity	compensation	plans.

(2) The	average	price	paid	for	shares	in	connection	with	vesting	of	restricted	stock	units/awards	are	averages	of	the	closing	stock	price	at	the	vesting	date	which	is	used	to	calculate the	number	of	shares	to	be	withheld.

(3) Shares	repurchased	pursuant	to	the	stock	repurchase	program	publicly	announced	on	August	12,	2004.	On	August	21,	2018,	the	Board	of	Directors	approved	an	increase	to	the current	authorization	for	the	stock	repurchase	program	by	an	additional	$2.0	billion	to	$8.2	billion	in	the	aggregate.	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	22,	2019	was	2,059.	This	number	does	not	include	shareholders	for	whom	shares	are	held	in	a "nominee"	or	"street"	name.	On	November	1,	2019,	the	last	reported	sales	price	of	our	common	stock	on	The	Nasdaq	Global	Select	Market	was	$109.37	per	share.

# Comparative	Stock	Performance	Graph

The	following	graph	compares	cumulative	total	shareholder	return	on	our	common	stock	since	November	1,	2014	with	the	cumulative	total	return	of	the Standard	&	Poor's	(S&P)	500	Index	and	the	S&P	Semiconductors	Index.	This	graph	assumes	the	investment	of	$100	on	November	1,	2014	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	the	results	of	operations	from	the	acquisition	of	Linear	from March	10,	2017.	See	Note	6,	Acquisitions,	of	the	Notes	to	Consolidated	Financial	Statements	contained	in	Item	8	of	this	Annual	Report	on	Form	10-K	for	information on	the	Linear	acquisition.	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	2019,	2017, 2016,	and	2015	are	52-week	fiscal	years.	Fiscal	2018	was	a	53-week	fiscal	year.	The	additional	week	in	fiscal	2018	was	included	in	the	first	quarter	ended	February	3, 2018.	Therefore,	fiscal	2018	included	an	additional	week	of	operations	as	compared	to	other	periods	presented.

| (thousands,	except	per	share	amounts) | 2019 | 2018	(1) | 2017	(1) | 2016 | 2015 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Statement\tof\tIncome\tdata: |  |  |  |  |  |
| Revenue | $5,991,065 | $6,224,689 | $5,246,354 | $3,421,409 | $3,435,092 |
| Net\tincome | $1,363,011 | $1,506,980 | $805,379 | $861,664 | $696,878 |
| Net\tincome\tper\tcommon\tshare |  |  |  |  |  |
| Basic | $3.68 | $4.05 | $2.32 | $2.79 | $2.23 |
| Diluted | $3.65 | $4.00 | $2.29 | $2.76 | $2.20 |
| Dividends\tdeclared\tper\tcommon\tshare | $2.10 | $1.89 | $1.77 | $1.66 | $1.57 |
| Balance\tSheet\tdata: |  |  |  |  |  |
| Total\tassets | $21,392,641 | $20,438,366 | $21,118,283 | $7,970,278 | $7,058,777 |
| Debt | $5,491,919 | $6,332,674 | $7,851,084 | $1,732,177 | $869,935 |

(1)	Balances	for	fiscal	2018	and	fiscal	2017	have	been	restated	to	reflect	the	adoption	of	Accounting	Standards	Update	(ASU)	2014-09,	Revenue	from	Contracts	with	Customers (ASU	2014-09).	See	Note	2a,	Principles	of	Consolidation,	of	the	Notes	to	Consolidated	Financial	Statements	in	Item	8	of	this	Annual	Report	on	Form	10-K.	Therefore,	balances from	fiscal	2016	and	fiscal	2015	may	not	be	comparable	to	other	periods	presented.

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

The	following	discussion	includes	a	comparison	of	our	Results	of	Operations	and	Liquidity	and	Capital	Resources	for	the	fiscal	year	ended	November	2,	2019 (fiscal	2019)	and	the	fiscal	year	ended	November	3,	2018	(fiscal	2018).	Our	fiscal	year	is	the	52-week	or	53-week	period	ending	on	the	Saturday	closest	to	the	last	day	in October.	Fiscal	2019	and	fiscal	2017	were	52-week	fiscal	periods,	while	fiscal	2018	was	a	53-week	period.	The	additional	week	in	fiscal	2018	was	included	in	the	first quarter	ended	February	3,	2018.	Therefore,	fiscal	2018	included	an	additional	week	of	operations	as	compared	to	fiscal	2019	and	fiscal	2017.

# Results	of	Operations

With	the	exception	of	items	impacted	by	the	adoption	of	ASU	2014-09	and	resulting	restatements,	a	discussion	of	changes	in	our	results	of	operations	from	the fiscal	year	ended	October	28,	2017	(fiscal	2017)	to	fiscal	2018	has	been	omitted	from	this	Form	10-K,	but	may	be	found	in	"Item	7.	Management's	Discussion	and Analysis	of	Financial	Condition	and	Results	of	Operations"	of	our	Form	10-K	for	the	fiscal	year	ended	November	3,	2018	filed	with	the	Securities	and	Exchange Commission	on	November	27,	2018.

|  |  | Fiscal	Year |  | 2019	over	2018 |  | 2018	over	2017 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2019 | 2018\t(1) | 2017\t(1) | \t\t$\tChange | %\tChange | \t\t$\tChange | %\tChange |
| Revenue | $5,991,065 | $6,224,689 | $5,246,354 | $(233,624) | (4) % | $978,335 | 19\t % |
| Gross\tmargin\t% | 67.0\t% | 68.3\t% | 60.4\t% |  |  |  |  |
| Net\tincome | $1,363,011 | $1,506,980 | $805,379 | $(143,969) | (10) % | $701,601 | 87\t % |
| Net\tincome\tas\ta\t%\tof\trevenue | 22.8\t% | 24.2\t% | 15.4\t% |  |  |  |  |
| Diluted\tEPS | $3.65 | $4.00 | $2.29 | $(0.35) | (9) % | $1.71 | 75\t % |

(1)	Balances	have	been	restated	to	reflect	the	adoption	of	Accounting	Standards	Update	(ASU)	2014-09,	Revenue	from	Contracts	with	Customers	(ASU	2014-09).	See	Note	2a, Principles	of	Consolidation,	in	the	Notes	to	Consolidated	Financial	Statements	in	Item	8	of	this	Annual	Report	on	Form	10-K.

On	March	10,	2017	(Acquisition	Date),	we	completed	the	acquisition	of	Linear	Technology	Corporation	(Linear),	a	designer,	manufacturer	and	marketer	of	high performance	analog	integrated	circuits.	The	total	consideration	paid	to	acquire	Linear	was	approximately	$15.8	billion,	consisting	of	$11.1	billion	in	cash	financed through	existing	cash	on	hand,	net	proceeds	from	bridge	and	term	loan	facilities	and	proceeds	received	from	the	issuance	of	senior	unsecured	notes,	$4.6	billion	from	the issuance	of	our	common	stock	and	$0.1	billion	of	consideration	related	to	the	replacement	of	outstanding	equity	awards	held	by	Linear	employees.	The	acquisition	of Linear	is	referred	to	as	the	Acquisition.	The	Consolidated	Financial	Statements	included	in	this	Annual	Report	on	Form	10-K	include	the	financial	results	of	Linear prospectively	from	the	Acquisition	Date.	See	Note	6,	Acquisitions	and	Note	14,	Debt,	of	the	Notes	to	Consolidated	Financial	Statements	contained	in	Item	8	of	this Annual	Report	on	Form	10-K	for	further	information.

# 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	and	our	methodology	evolves	and	improves,	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.

|  | Revenue | %	of<br>Total<br>Product<br>Revenue	(2) | Y/Y% | Revenue | %	of<br>Total<br>Product<br>Revenue	(2) | Y/Y% | Revenue | %	of<br>Total<br>Product<br>Revenue	(2) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Industrial | $3,003,927 | 50\t % | (4)% | $3,129,569 | 50\t % | 35\t% | $2,324,686 | 44\t % |
| Communications | 1,284,087 | 21\t % | 12\t% | 1,151,359 | 18\t % | 27\t% | 908,594 | 17\t % |
| Automotive | 933,143 | 16\t % | (8)% | 1,009,927 | 16\t % | 33\t% | 758,115 | 14\t % |
| Consumer | 769,908 | 13\t % | (18)% | 933,834 | 15\t % | (26)% | 1,254,959 | 24\t % |
| Total\tRevenue | $5,991,065 | 100\t % | (4)% | $6,224,689 | 100\t % | 19\t% | $5,246,354 | 100\t % |

(1) Balances	have	been	restated	to	reflect	the	adoption	of	ASU	2014-09.	See	Note	2a,	Principles	of	Consolidation,	in	the	Notes	to	Consolidated	Financial	Statements	contained	in Item	8	of	this	Annual	Report	on	Form	10-K.

(2) The	sum	of	the	individual	percentages	may	not	equal	the	total	due	to	rounding.

Industrial	-	Industrial	end	market	revenues	decreased	in	fiscal	2019,	as	compared	to	fiscal	year	2018,	primarily	as	a	result	of	a	decrease	in	demand	for	products	sold	into the	automation	and	memory	test	sectors	of	this	end	market	and	one	less	week	of	operations	in	fiscal	2019	as	compared	to	fiscal	2018,	partially	offset	by	an	increase	in demand	for	products	sold	into	the	aerospace	and	defense	sector	of	this	end	market.	Industrial	end	market	revenue	increased	in	fiscal	2018,	as	compared	to	fiscal	2017, primarily	as	a	result	of	the	Acquisition,	which	accounted	for	approximately	$414.5	million	of	the	increase,	a	broad-based	increase	in	demand	for	our	products	in	this	end market	and	an	additional	week	of	operations	in	fiscal	2018	as	compared	to	fiscal	2017.

Communications	-	Communications	end	market	revenue	increased	in	fiscal	2019,	as	compared	to	fiscal	year	2018,	as	a	result	of	an	increase	in	demand	for	our	products sold	into	the	wireless	sector	of	this	end	market,	partially	offset	by	one	less	week	of	operations	in	fiscal	2019	as	compared	to	fiscal	2018.	Communications	end	market revenue	increased	in	fiscal	2018,	as	compared	to	fiscal	2017,	primarily	as	a	result	of	the	Acquisition,	which	accounted	for	approximately	$43.5	million	of	the	increase,	a broad-based	increase	in	demand	for	our	products	in	this	end	market	and	an	additional	week	of	operations	in	fiscal	2018	as	compared	to	fiscal	2017.

Automotive	-	Automotive	end	market	revenue	decreased	in	fiscal	2019,	as	compared	to	fiscal	2018,	primarily	as	a	result	of	a	broad-based	decrease	in	demand	for	our products	and	one	less	week	of	operations	in	fiscal	2019,	as	compared	to	fiscal	2018.	Automotive	end	market	revenue	increased	in	fiscal	2018,	as	compared	to	fiscal	2017, primarily	as	a	result	of	the	Acquisition,	which	accounted	for	approximately	$92.6	million,	a	broad-based	increase	in	demand	for	our	products	in	this	end	market	and	an additional	week	of	operations	in	fiscal	2018	as	compared	to	fiscal	2017.

Consumer	-	Consumer	end	market	revenues	decreased	in	fiscal	2019,	as	compared	to	fiscal	2018,	primarily	as	a	result	of	decreased	demand	for	products	used	in	portable consumer	applications	and	one	less	week	of	operations	in	fiscal	2019	as	compared	to	the	fiscal	2018.	Consumer	end	market	revenue	decreased	in	fiscal	2018,	as compared	to	fiscal	2017,	primarily	as	a	result	of	a	decreased	demand	for	products	used	in	portable	consumer	applications,	partially	offset	by	an	increase	in	revenue	due to	the	Acquisition	and	an	additional	week	of	operations	in	fiscal	2018	as	compared	to	fiscal	2017.

# Revenue	by	Sales	Channel

The	following	tables	summarize	revenue	by	channel.	We	sell	our	products	globally	through	a	direct	sales	force,	third	party	distributors,	independent	sales representatives	and	via	our	website.	Distributors	are	customers	that	buy	products	with	the	intention	of	reselling	them.	Direct	customers	are	non-distributor	customers	and consist	primarily	of	original	equipment	manufacturers	(OEMs).	Other	customers	include	the	U.S.	government,	government	prime	contractors	and	some	commercial customers.

|  | Revenue | %	of<br>Total<br>Revenue	(2) | Revenue | %	of<br>Total<br>Revenue	(2) | Revenue | %	of<br>Total<br>Revenue	(2) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Distributors | $3,409,161 | 57\t % | $3,424,145 | 55\t % | $2,749,335 | 52\t % |
| Direct\tcustomers | 2,506,065 | 42\t % | 2,721,885 | 44\t % | 2,424,514 | 46\t % |
| Other | 75,839 | 1\t % | 78,659 | 1\t % | 72,505 | 1\t % |
| Total\tRevenue | $5,991,065 | 100\t % | $6,224,689 | 100\t % | $5,246,354 | 100\t % |

As	indicated	in	the	above	table,	the	percentage	of	total	revenue	sold	via	each	channel	has	remained	relatively	consistent	in	fiscal	2019,	fiscal	2018	and	fiscal	2017.

# Revenue	Trends	by	Geographic	Region

Revenue	by	geographic	region,	based	upon	the	geographic	location	of	the	distributors	or	OEMs	who	purchased	the	Company's	products,	for	fiscal	2019,	fiscal 2018	and	fiscal	2017	was	as	follows:

|  |  | Fiscal	Year |  | 2019	over	2018 |  | 2018	over	2017 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  |  | %\tChange | %\tChange |  | %\tChange |
|  | 2019 | 2018\t(1) | 2017\t(1) | \t\t$\tChange | (2) | \t\t$\tChange | (2) |
| United\tStates | $2,020,886 | $2,277,084 | $2,110,545 | $(256,198) | (11)% | $166,539 | 8\t% |
| Rest\tof\tNorth\tand\tSouth\tAmerica | 55,059 | 46,276 | 48,620 | 8,783 | 19\t% | (2,344) | (5)% |
| Europe | 1,374,673 | 1,405,686 | 1,164,725 | (31,013) | (2)% | 240,961 | 21\t% |
| Japan | 657,632 | 714,846 | 586,521 | (57,214) | (8)% | 128,325 | 22\t% |
| China | 1,316,275 | 1,215,949 | 898,645 | 100,326 | 8\t% | 317,304 | 35\t% |
| Rest\tof\tAsia | 566,540 | 564,848 | 437,298 | 1,692 | —\t% | 127,550 | 29\t% |
| Total\tRevenue | $5,991,065 | $6,224,689 | $5,246,354 | $(233,624) | (4)% | $978,335 | 19\t% |

In	fiscal	2019,	fiscal	2018	and	fiscal	2017,	the	predominant	countries	comprising	"Rest	of	North	and	South	America"	are	Canada	and	Mexico;	the	predominant countries	comprising	"Europe"	are	Germany,	the	Netherlands	and	Sweden;	and	the	predominant	countries	comprising	"Rest	of	Asia"	are	South	Korea	and	Taiwan.

The	sales	decrease	in	the	United	States	year-over-year	in	fiscal	2019	was	primarily	a	result	a	of	a	broad-based	decrease	in	demand	for	our	products	and	one	less week	of	operations	in	fiscal	2019	as	compared	to	fiscal	2018,	partially	offset	by	an	increase	in	demand	for	products	sold	into	the	aerospace	and	defense	sectors	of	the Industrial	end	market.	The	sales	increase	in	the	United	States	year-over-year	in	fiscal	2018	was	primarily	a	result	of	the	Acquisition,	which	accounted	for	approximately $255.3	million	of	the	increase,	contributing	to	an	increase	in	demand	for	our	products	sold	into	the	Industrial,	Communications	and	Automotive	end	markets	and	an additional	week	of	operations	in	fiscal	2018,	as	compared	to	fiscal	2017,	partially	offset	by	a	decrease	in	demand	for	our	products	sold	into	the	Consumer	end	market.

The	sales	decrease	in	Europe	year-over-year	in	fiscal	2019	was	primarily	a	result	of	a	broad-based	decrease	in	demand	for	our	products	and	one	less	week	of operations	in	fiscal	2019	as	compared	to	fiscal	2018,	partially	offset	by	an	increase	in	demand	for	products	sold	into	the	Communications	end	market	and	aerospace	and defense	sectors	of	the	Industrial	end	market.	The	sales	increase	in	Europe	year-over-year	in	fiscal	2018	was	primarily	a	result	of	the	Acquisition,	which	accounted	for

approximately	$145.9	million	of	the	increase,	and	contributing	to	an	increase	in	demand	for	our	products	sold	into	the	Industrial	end	market	and	an	additional	week	of operations	in	fiscal	2018,	as	compared	to	fiscal	2017.

The	sales	decrease	in	Japan	year-over-year	in	fiscal	2019	was	primarily	a	result	of	a	broad-based	decrease	in	demand	for	our	products	and	one	less	week	of operations	in	fiscal	2019	as	compared	to	fiscal	2018,	partially	offset	by	an	increase	in	demand	for	products	sold	into	the	Automotive	end	market.	The	sales	increase	in Japan	year-over-year	in	fiscal	2018	was	a	result	of	the	Acquisition,	which	accounted	for	approximately	$89.2	million	of	the	increase.

The	sales	increase	in	China	year-over-year	in	fiscal	2019	was	primarily	a	result	of	an	increase	in	demand	for	our	products	sold	into	the	Communications	end market,	partially	offset	by	decreased	demand	for	products	sold	into	the	Consumer	and	Automotive	end	markets	and	one	less	week	of	operations	in	fiscal	2019	as compared	to	fiscal	2018.	The	sales	increase	in	China	year-over-year	in	fiscal	2018	was	primarily	a	result	of	the	Acquisition,	which	accounted	for	approximately	$93.1 million	of	the	increase,	contributing	to	a	broad-based	increase	in	demand	for	our	products	sold	into	all	end	markets	and	an	additional	week	of	operations	in	fiscal	2018	as compared	to	fiscal	2017.

Sales	in	the	Rest	of	Asia	year-over-year	in	fiscal	2019	remained	relatively	flat	as	increase	in	demand	for	our	products	sold	into	the	Communications	and Automotive	end	markets,	were	partially	offset	by	decreased	demand	for	products	sold	into	the	Industrial	end	market	and	one	less	week	of	operations	in	fiscal	2019	as compared	to	fiscal	2018.	The	sales	increase	in	the	Rest	of	Asia	year-over-year	in	fiscal	2018	was	primarily	a	result	of	the	Acquisition,	which	accounted	for	approximately $63.4	million	of	the	increase,	contributing	to	a	broad-based	increase	in	demand	for	our	products	sold	into	the	Industrial,	Communications	and	Automotive	end	markets and	an	additional	week	of	operations	in	fiscal	2018	as	compared	to	fiscal	2017.

# Gross	Margin

|  |  | Fiscal	Year |  | 2019	over	2018 |  | 2018	over	2017 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2019 | 2018\t(1) | 2017\t(1) | $\tChange | %\tChange | $\tChange | %\tChange |
| Gross\tmargin | $4,013,750 | $4,250,396 | $3,168,241 | $(236,646) | (6) % | $1,082,155 | 34\t % |
| Gross\tmargin\t% | 67.0\t% | 68.3\t% | 60.4\t% |  |  |  |  |

Gross	margin	percentage	in	fiscal	2019	decreased	by	130	basis	points	compared	to	fiscal	2018,	primarily	as	a	result	of	lower	internal	utilization	of	our	wafer fabrication	facilities	and	a	write-down	of	inventory	primarily	associated	with	a	customer	within	our	Communications	end	market.

Gross	margin	percentage	in	fiscal	2018	increased	by	790	basis	points	compared	to	fiscal	2017,	primarily	because	fiscal	2017	included	cost	of	sales	adjustments	of $358.7	million	related	to	the	sale	of	acquired	Linear	inventory	written	up	to	fair	value.	Additionally,	the	increase	in	gross	margin	percentage	in	fiscal	2018,	as	compared to	fiscal	2017	was	a	result	of	a	mix	shift	in	favor	of	higher	margin	products	being	sold	resulting	from	the	Acquisition	and	lower	cost	of	sales	resulting	from	favorable factory	variances	related	to	increased	utilization	at	our	manufacturing	facilities.	The	increase	in	gross	margin	percentage	in	fiscal	2018	was	partially	offset	by	increases in	amortization	expense	of	developed	technology	intangible	assets	and	depreciation	expense	related	to	fixed	assets	as	a	result	of	a	full	year	of	expense	for	each	related	to the	Acquisition.

# Research	and	Development	(R&D)

|  |  | Fiscal	Year |  | 2019	over	2018 |  | 2018	over	2017 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2019 | 2018 | 2017 | $\tChange | %\tChange | $\tChange | %\tChange |
| R&amp;D\texpenses | $1,130,348 | $1,165,047 | $968,133 | $(34,699) | (3)% | $196,914 | 20\t% |
| R&amp;D\texpenses\tas\ta\t%\tof\trevenue | 18.9\t% | 18.7\t% | 18.5\t% |  |  |  |  |

R&D	expenses	decreased	in	fiscal	2019	as	compared	to	fiscal	2018	primarily	as	a	result	of	decreases	in	variable	compensation	expense	and	one	less	week	of operations	in	fiscal	2019	as	compared	to	fiscal	2018,	partially	offset	by	increases	in	operational	spending	and	R&D	employee	and	related	benefit	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.	We	have	hundreds	of	R&D	projects	underway,	none	of	which	we	believe	are	material	on	an	individual	basis.	We expect	to	continue	the	development	of	innovative	technologies	and	processes	for	new	products.	We	believe	that	a	continued	commitment	to	R&D	is	essential	to

maintain	product	leadership	with	our	existing	products	as	well	as	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)

Amortization	expenses	was	relatively	flat	in	fiscal	2019	as	compared	to	fiscal	2018	as	we	did	not	have	any	significant	acquisitions	of	intangible	assets	in	fiscal 2019.	Intangible	assets	are	being	amortized	on	a	straight-line	basis	over	their	estimated	useful	lives.

# Special	Charges

We	monitor	global	macroeconomic	conditions	on	an	ongoing	basis	and	continue	to	assess	opportunities	for	improved	operational	effectiveness	and	efficiency,	as well	as	a	better	alignment	of	expenses	with	revenues.	As	a	result	of	these	assessments,	we	have	undertaken	various	restructuring	actions	over	the	past	several	years.

Repositioning	Action:	During	fiscal	2019,	we	recorded	special	charges	of	$88.1	million	as	a	result	of	organizational	initiatives	to	reposition	our	global	workforce skill	set	to	align	with	our	long-term	strategic	plan.	Approximately	$73.9	million	of	these	actions	was	for	severance	and	fringe	benefit	costs	in	accordance	with	either	our ongoing	benefit	plan	or	statutory	requirements.	The	remaining	$14.2	million	related	to	the	write-off	of	acquired	intellectual	property	due	to	the	Company's	decision	to discontinue	 certain	 product	 development	 strategies.	Once	 fully	 implemented,	 the	 repositioning	 actions	 are	 expected	 to	 result	 in	 net	 annualized	 cash	 savings	 of approximately	$48.0	million.

Closure	of	manufacturing	facilities:	As	a	result	of	our	fiscal	2018	decision	to	consolidate	certain	wafer	and	test	facility	operations	acquired	as	part	of	the Acquisition,	we	recorded	special	charges	of	$7.6	million	during	fiscal	2019,	totaling	$52.0	million	on	a	cumulative	basis	through	November	2,	2019.	Over	the	next	one to	three	years,	we	plan	to	close	our	Hillview	wafer	fabrication	facility	located	in	Milpitas,	California	and	our	Singapore	test	facility.	We	intend	to	transfer	Hillview wafer	fabrication	production	to	our	other	internal	facilities	and	to	external	foundries.	In	addition,	we	are	planning	to	transition	testing	operations	currently	handled	in	our Singapore	facility	to	our	facilities	in	Penang,	Malaysia	and	the	Philippines,	in	addition	to	our	outsourced	assembly	and	test	partners.	The	special	charge	recognized	as	a result	of	this	action	consists	of	severance	and	related	benefit	costs.	We	expect	that	this	action	will	result	in	estimated	annual	salary,	variable	compensation	and	employee benefit	savings	of	approximately	$60.0	million	once	fully	implemented.

# Operating	Income

|  |  | Fiscal	Year |  | 2019	over	2018 |  | 2018	over	2017 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2019 | 2018\t(1) | 2017\t(1) | $\tChange | %\tChange | $\tChange | %\tChange |
| Operating\tincome | $1,710,608 | $1,899,589 | $1,162,761 | $(188,981) | (10) % | $736,828 | 63\t % |
| Operating\tincome\tas\ta\t%\tof\trevenue | 28.6\t% | 30.5\t% | 22.2\t% |  |  |  |  |

The	decrease	in	operating	income	in	fiscal	2019	as	compared	to	fiscal	2018	was	primarily	the	result	of	a	$236.6	million	decrease	in	gross	margin	and	a	$34.3 million	increase	in	special	charges,	partially	offset	by	a	$47.4	million	decrease	in	SMG&A	expenses	and	a	$34.7	million	decrease	in	R&D	expenses	as	more	fully described	above	under	the	headings	Gross	Margin,	Special	Charges,	Selling,	Marketing,	General	and	Administrative	(SMG&A)	and	Research	and	Development (R&D).

The	increase	in	operating	income	in	fiscal	2018	as	compared	to	fiscal	2017	was	the	result	of	a	$1.1	billion	increase	in	gross	margin,	partially	offset	by	a	$196.9 million	increase	in	R&D	expenses,	a	$131.6	million	increase	in	amortization	expense,	an	$11.8	million	increase	in	special	charges,	and	a	$5.0	million	increase	in SMG&A	expenses.

# Nonoperating	(Income)	Expenses

|  |  | Fiscal	Year |  | 2019	over	2018 | 2018	over	2017 |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2019 | 2018 | 2017 | $\tChange | $\tChange |
| Interest\texpense | $229,075 | $253,589 | $250,840 | $(24,514) | $2,749 |
| Interest\tincome | (10,229) | (9,383) | (30,333) | (846) | 20,950 |
| Other,\tnet | 6,034 | 69 | 7,507 | 5,965 | (7,438) |
| Total\tnonoperating\texpenses | $224,880 | $244,275 | $228,014 | $(19,395) | $16,261 |

The	year-over-year	decrease	in	nonoperating	expense	in	fiscal	2019	was	primarily	the	result	of	a	decrease	in	interest	expense	including	lower	amortized	finance fees,	which	were	accelerated	as	a	result	of	principal	repayments	related	to	our	previously	outstanding	3-year	and	5-year	term	loans,	partially	offset	by	an	increase	in other,	net	expenses	resulting	from	the	impairment	of	investments	during	fiscal	2019.

See	Note	14,	Debt,	of	the	Notes	to	Consolidated	Financial	Statements	contained	in	Item	8	of	this	Annual	Report	on	Form	10-K	for	further	information	on	debt issuances	and	commitments	related	to	the	Acquisition.

# Provision	for	Income	Taxes

|  |  | Fiscal	Year |  | 2019	over	2018 |  | 2018	over	2017 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2019 | 2018\t(1) | 2017\t(1) | $\tChange | %\tChange | $\tChange | %\tChange |
| Provision\tfor\tincome\ttaxes | $122,717 | $148,334 | $129,368 | $(25,617) | (17) % | $18,966 | 15\t % |
| Effective\tincome\ttax\trate | 8.3\t% | 9.0\t% | 13.8\t% |  |  |  |  |

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	income tax	rate	can	also	be	impacted	each	year	by	discrete	factors	or	events.

The	Tax	Cuts	and	Jobs	Act	of	2017	(Tax	Legislation),	enacted	on	December	22,	2017,	contains	significant	changes	to	U.S.	tax	law,	including	lowering	the	U.S. corporate	income	tax	rate	to	21.0%,	implementing	a	territorial	tax	system,	and	imposing	a	one-time	tax	on	deemed	repatriated	earnings	of	foreign	subsidiaries.	We completed	our	accounting	for	the	income	tax	effects	of	the	Tax	Legislation	during	fiscal	2019,	in	accordance	with	the	U.S.	Securities	and	Exchange	Commission	Staff Accounting	Bulletin	No.	118.

The	tax	rate	for	fiscal	2019	was	below	the	U.S.	statutory	tax	rate	of	21%	partially	due	to	lower	statutory	tax	rates	applicable	to	our	operations	in	the	foreign jurisdictions	from	which	we	earn	income	and	tax	incentives	such	as	the	foreign	derived	intangible	income	deduction	and	research	and	development	tax	credits.	These items	are	partially	offset	by	the	global	intangible	low-tax	income	(GILTI)	tax.	The	tax	rate	for	fiscal	2019	includes	a	$17.2	million	tax	benefit	from	a	voluntary accounting	policy	change	in	the	statutory	statements	of	a	foreign	subsidiary,	an	$11.2	million	tax	benefit	from	an	increase	in	tax	credits	upon	filing	our	fiscal	2018 federal	income	tax	return	and	excess	tax	benefits	from	stock-based	compensation	payments	of	$28.7	million.

Similarly,	our	tax	rate	for	fiscal	2018	was	below	our	then	blended	U.S.	federal	statutory	tax	rate	of	23.4%,	primarily	due	to	lower	statutory	tax	rates	applicable	to our	operations	in	the	foreign	jurisdictions	in	which	we	earn	income	and	$25.6	million	of	tax	benefit	related	to	the	release	of	uncertain	tax	positions	due	to	lapses	in statute	of	limitations.	In	addition,	our	effective	tax	rate	for	fiscal	2018	includes	a	provisional	estimate	for	a	discrete	tax	benefit	of	$637.0	million	from	remeasuring	our U.S.	deferred	tax	assets	and	liabilities	at	the	lower	21.0%	U.S.	federal	statutory	tax	rate	and	a	provisional	estimate	of	$691.0	million	for	the	discrete	tax	charge	from	the Tax	Legislation's	one-time	transition	tax	associated	with	our	undistributed	foreign	earnings,	which	is	comprised	of	a	$755.0	million	transitional	tax	less	a	deferred	tax liability	of	$64.0	million	that	was	recorded	in	prior	years	and	excess	tax	benefits	from	stock-based	compensation	payments	of	$26.2	million.

Non-U.S.	jurisdictions	accounted	for	approximately	75.9%	of	our	total	revenues	for	both	fiscal	2019	and	fiscal	2018.	This	revenue	generated	outside	of	the	U.S. results	in	a	material	portion	of	our	pretax	income	being	taxed	outside	the	U.S.	In	fiscal	2019,	this	was	primarily	in	Ireland	and	Singapore,	at	tax	rates	ranging	from 12.5%	to	17%	and	in	fiscal	2018,	this	was	primarily	in	Bermuda,	Ireland	and	Singapore,	at	tax	rates	ranging	from	0	to	33.3%.	The	impact	on	our	provision	for	income taxes	on	income	earned	in	foreign	jurisdictions	being	taxed	at	rates	different	than	the	U.S.	federal	statutory	rate	was	a	benefit	of	approximately	$242.9	million	and	a foreign	effective	tax	rate	of	approximately	21.1%	for	fiscal	2019	as	compared	to	a	benefit	of	approximately	$420.8	million	and	a	foreign	effective	tax	rate	of approximately	5.2%	for	fiscal	2018.	Our	foreign	effective	tax	rates	for	both	periods	are	inclusive	of	certain	non-deductible	expenses	which	can	result	in	tax	rates	higher than	the	applicable	statutory	tax	rates.	In	addition,	our	effective	income	tax	rate	can	be	impacted	each	year	by	amounts	for	discrete	factors	or	events	and	acquisition- related	accounting	adjustments.

See	Note	12,	Income	Taxes,	of	the	Notes	to	Consolidated	Financial	Statements	contained	in	Item	8	of	this	Annual	Report	on	Form	10-K	for	further	discussion.

|  |  | Fiscal	Year |  | 2019	over	2018 |  | 2018	over	2017 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2019 | 2018\t(1) | 2017\t(1) | $\tChange | %\tChange | $\tChange | %\tChange |
| Net\tincome | $1,363,011 | $1,506,980 | $805,379 | $(143,969) | (10) % | $701,601 | 87\t % |
| Net\tincome,\tas\ta\t%\tof\trevenue | 22.8\t% | 24.2\t% | 15.4\t% |  |  |  |  |
| Diluted\tEPS | $3.65 | $4.00 | $2.29 | $(0.35) | (9) % | $1.71 | 75\t % |

The	decrease	in	net	income	in	fiscal	2019	as	compared	to	fiscal	2018	was	a	result	of	a	$189.0	million	decrease	in	operating	income,	partially	offset	by	a	$25.6 million	decrease	in	provision	for	income	taxes	and	a	$19.4	million	decrease	in	nonoperating	expense.

The	increase	in	net	income	in	fiscal	2018	as	compared	to	fiscal	2017	was	a	result	of	a	$736.8	million	increase	in	operating	income,	partially	offset	by	a	$19.0 million	increase	in	provision	for	income	taxes	and	a	$16.3	increase	in	nonoperating	expense.

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.

# Liquidity	and	Capital	Resources

At	November	2,	2019,	our	principal	source	of	liquidity	was	$648.3	million	of	cash	and	cash	equivalents,	of	which	approximately	$295.7	million	was	held	in	the United	States.	The	balance	of	our	cash	and	cash	equivalents	was	held	outside	the	United	States	in	various	foreign	subsidiaries.	As	we	intend	to	reinvest	substantially	all of	our	foreign	earnings	indefinitely,	certain	cash	held	outside	the	United	States	may	not	be	available	for	repatriation	as	dividends	to	the	United	States	in	the	future.	If such	funds	are	needed	for	U.S.	operations,	we	would	be	required	to	accrue	and	pay	foreign	withholding	and	U.S.	state	income	taxes	to	the	extent	not	already	subject	to taxation.	Our	cash	and	cash	equivalents	consist	of	highly	liquid	investments	with	maturities	of	three	months	or	less,	including	money	market	funds.	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.

On	the	Acquisition	Date,	we	entered	into	a	90-day	Bridge	Credit	Agreement	that	provided	for	unsecured	loans	in	an	aggregate	principal	amount	of	up	to	$4.1 billion	and	borrowed	under	a	term	loan	agreement	consisting	of	a	3-year	unsecured	term	loan	in	the	principal	amount	of	$2.5	billion,	due	March	10,	2020	and	a	5-year unsecured	term	loan	in	the	principal	amount	of	$2.5	billion,	due	March	10,	2022.	During	fiscal	year	2019,	we	refinanced	both	term	loans	into	one	3-year	unsecured	term loan	in	the	principal	amount	of	$1.25	billion,	due	March	10,	2022.	As	of	November	2,	2019,	we	have	repaid	$325	million	of	principal	on	the	3-year	unsecured	term	loan. See	Note	13,	Revolving	Credit	Facility	and	Note	14,	Debt	of	the	Notes	to	Consolidated	Financial	Statements	contained	in	Item	8	of	this	Annual	Report	on	Form	10-K for	further	information.

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	and	dividend	payments	(if	any)	in	the	immediate	future	and for	at	least	the	next	twelve	months.

|  |  | Fiscal	Year |  |
| :--- | :--- | :--- | :--- |
|  | 2019 | 2018\t(1) | 2017\t(1) |
| Net\tcash\tprovided\tby\toperating\tactivities | $2,253,100 | $2,442,361 | $1,154,365 |
| Net\tcash\tprovided\tby\toperating\tactivities\tas\ta\t%\tof\trevenue | 37.6\t% | 39.2\t% | 22.0\t% |
| Net\tcash\tused\tfor\tinvesting\tactivities | $(293,186) | $(313,998) | $(6,618,014) |
| Net\tcash\t(used\tfor)\tprovided\tby\tfinancing\tactivities | $(2,126,794) | $(2,358,042) | $5,586,805 |

At	November	2,	2019,	cash	and	cash	equivalents	totaled	$648.3	million.	The	following	changes	contributed	to	the	net	change	in	cash	and	cash	equivalents	in	fiscal 2019	and	fiscal	2018.	A	discussion	of	changes	in	our	results	of	operations	from	fiscal	2017	to	fiscal	2018	has	been	omitted	from	this	Form	10-K,	but	may	be	found	in "Item	7.	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations"	of	our	Form	10-K	for	the	fiscal	year	ended	November	3,	2018	filed with	the	Securities	and	Exchange	Commission	on	November	27,	2018.

# Operating	Activities

Cash	provided	by	operating	activities	is	net	income	adjusted	for	certain	non-cash	items	and	changes	in	assets	and	liabilities.	The	decrease	in	cash	provided	by operating	activities	during	fiscal	2019,	as	compared	to	fiscal	2018,	was	primarily	a	result	of	changes	in	tax	liabilities	related	to	the	one-time	transition	tax	as	a	result	of the	Tax	Legislation.

# Investing	Activities

Investing	cash	flows	consist	primarily	of	capital	expenditures	and	cash	used	for	acquisitions.	The	decrease	in	cash	used	for	investing	activities	during	fiscal	2019, as	compared	to	fiscal	2018,	was	primarily	the	result	of	decreased	payments	for	acquisitions,	partially	offset	by	increased	capital	spending.

# Financing	Activities

Financing	cash	flows	consist	primarily	of	payments	of	dividends	to	stockholders,	repurchases	of	common	stock,	issuance	and	repayment	of	debt,	and	proceeds from	the	sale	of	shares	of	common	stock	pursuant	to	employee	equity	incentive	plans.	The	decrease	in	cash	used	for	financing	activities	during	fiscal	2019,	as	compared to	fiscal	2018,	was	primarily	due	to	an	increase	in	proceeds	from	debt	related	to	the	June	2019	term	loan	agreement	and	a	decrease	in	debt	repayments,	partially	offset	by increases	in	stock	repurchases	and	dividend	payments.

|  | Fiscal	Year |  |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  | 2019 | 2018 | $\tChange | %\tChange |
| Accounts\treceivable,\tnet | $635,136 | $639,717 | $(4,581) | (1) % |
| Days\tsales\toutstanding\t(1)\t(2) | 39 | 39 |  |  |
| Inventory | $609,886 | $586,760 | $23,126 | 4\t % |
| Days\tcost\tof\tsales\tin\tinventory\t(1)\t(2) | 110 | 105 |  |  |

(2) We	use	the	average	of	the	current	year	and	prior	year	ending	net	accounts	receivable	and	ending	inventory	balance	in	our	calculation	of	days	sales	outstanding	and	days	cost	of sales	in	inventory,	respectively.

The	decrease	in	accounts	receivable	for	fiscal	2019	compared	to	fiscal	2018	was	primarily	the	result	of	normal	variations	in	the	timing	of	collections	and	billings.

Inventory	in	dollars	increased	in	fiscal	2019	as	compared	to	fiscal	2018,	primarily	as	a	result	of	our	efforts	to	balance	manufacturing	production,	demand	and	inventory levels.	Our	inventory	levels	are	impacted	by	our	need	to	support	forecasted	sales	demand	and	variations	between	those	forecasts	and	actual	demand.

Current	liabilities	increased	to	$1.5	billion	at	November	2,	2019	from	$1.1	billion	recorded	at	the	end	of	fiscal	2018.	The	increase	was	primarily	due	to	increases in	the	current	portion	of	our	debt	and	income	taxes	payable.

As	of	November	2,	2019,	we	had	$5.5	billion	of	carrying	value	outstanding	on	our	debt.	The	difference	in	the	carrying	value	of	the	debt	and	the	principal	is	due	to the	unamortized	discount	and	issuance	fees	on	these	instruments	that	will	accrete	to	the	face	value	over	the	term	of	the	debt.	Our	debt	obligations	consist	of	the following:

$500.0	Million	Aggregate	Principal	Amount	of	2.875%	Senior	Unsecured	Notes	(2023	Notes)

On	June	3,	2013,	we	issued	the	2023	Notes	with	semi-annual	fixed	interest	payments	due	on	June	1	and	December	1	of	each	year,	commencing	December	1,

$850.0	Million	Aggregate	Principal	Amount	of	3.9%	Senior	Unsecured	Notes	(2025	Notes)	and	$400.0	Million	Aggregate	Principal	Amount	of	5.3%	Senior Unsecured	Notes	(2045	Notes)

On	December	14,	2015,	we	issued	the	2025	Notes	and	the	2045	Notes	with	semi-annual	fixed	interest	payments	due	on	June	15	and	December	15	of	each	year, commencing	June	15,	2016.

$400	Million	Aggregate	Principal	Amount	of	2.5%	Senior	Unsecured	Notes	(2021	Notes),	$550	Million	Aggregate	Principal	Amount	of	3.125%	Senior	Unsecured Notes	(December	2023	Notes),	$900	Million	Aggregate	Principal	Amount	of	3.5%	Senior	Unsecured	Notes	(2026	Notes)	and	$250	Million	Aggregate	Principal	Amount of	4.5%	Senior	Unsecured	Notes	(2036	Notes)

On	December	5,	2016,	we	issued	the	2021	Notes,	the	December	2023	Notes,	the	2026	Notes	and	the	2036	Notes	with	semi-annual	fixed	interest	payments	due	on June	5	and	December	5	of	each	year,	commencing	June	5,	2017.

$300.0	Million	Aggregate	Principal	Amount	of	2.85%	Senior	Unsecured	Notes	(2020	Notes)	and	$450.0	Million	Aggregate	Principal	Amount	of	2.95%	Senior Unsecured	Notes	(January	2021	Notes)

On	March	12,	2018,	we	issued	the	2020	Notes	with	semi-annual	fixed	interest	payments	due	on	March	12	and	September	12	of	each	year,	commencing	September 12,	2018,	and	the	January	2021	Notes	with	semi-annual	fixed	interest	payments	due	on	January	12	and	July	12	of	each	year,	commencing	July	12,	2018.

The	indentures	governing	the	2020	Notes,	2021	Notes,	January	2021	Notes,	2023	Notes,	December	2023	Notes,	2025	Notes,	2026	Notes,	2036	Notes	and	2045 Notes	contain	covenants	that	may	limit	our	ability	to:	incur,	create,	assume	or	guarantee	any	debt	or	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	November	2,	2019,	we	were	compliant	with	these	covenants.	See	Note	14,	Debt,	of	the	Notes	to	Consolidated	Financial	Statements	contained	in Item	8	of	this	Annual	Report	on	Form	10-K	for	further	information	on	our	outstanding	debt.

# $5.0	Billion	Aggregate	Principal	Term	Loans

On	the	Acquisition	Date,	we	drew	down	on	a	3-year	unsecured	term	loan	in	the	principal	amount	of	$2.5	billion,	due	March	10,	2020	and	a	5-year	unsecured	term loan	in	the	principal	amount	of	$2.5	billion,	due	March	10,	2022.	The	term	loans	bore	interest	at	a	rate	per	annum	equal	to	the	Eurodollar	Rate	plus	a	margin	based	on our	debt	ratings	from	time	to	time	of	between	0.75%	and	1.63%	in	the	case	of	the	3-year	unsecured	term	loan,	and	a	margin	of	between	0.88%	and	1.75%	in	the	case	of the	5-year	unsecured	term	loan.	As	of	November	2,	2019,	we	have	repaid	the	3-year	and	5-year	unsecured	term	loans	in	full.

# $1.25	Billion	Principal	Term	Loan

On	June	28,	2019,	we	entered	into	a	term	loan	credit	agreement	with	JPMorgan	Chase	Bank,	N.A.	as	administrative	agent	and	the	other	banks	identified	therein	as lenders,	under	which	we	borrowed	unsecured	term	loans	in	the	aggregate	principal	amount	of	$1.25	billion,	maturing	March	10,	2022,	to	refinance	our	then-outstanding 3-year	and	5-year	unsecured	term	loans.	Loans	under	the	term	loan	credit	agreement	may	be	either	Eurodollar	Rate	Loans	or	Base	Rate	Loans	at	our	option.	Each Eurodollar	Rate	Loan	will	bear	interest	at	a	rate	per	annum	equal	to	the	Adjusted	LIBO	Rate	plus	a	margin	based	on	our	debt	ratings	from	time	to	time	of	between 0.625%	and	1.500%.	Each	Base	Rate	Loan	will	bear	interest	at	a	rate	per	annum	equal	to	the	Base	Rate	plus	a	margin	based	on	our	debt	ratings	from	time	to	time	of between	0.00%	and	0.500%.	As	of	November	2,	2019,	we	have	repaid	$325.0	million	of	principal	on	the	term	loans.

# Revolving	Credit	Facility

On	June	28,	2019,	we	entered	into	a	second	amended	and	restated	revolving	credit	agreement	with	Bank	of	America	N.A.	as	administrative	agent	and	the	other banks	identified	therein	as	lenders	(Revolving	Credit	Agreement),	which	further	amended	and	restated	our	amended	and	restated	revolving	credit	agreement	dated	as	of September	23,	2016.	The	Revolving	Credit	Agreement	provides	for	a	five	year	unsecured	revolving	credit	facility	in	an	aggregate	principal	amount	of	up	to	$1.25 billion,	expiring	on	June	28,	2024.	Loans	under	the	Revolving	Credit	Agreement	can	be	Eurocurrency	Rate	Loans	or	Base	Rate	Loans	at	our	option.	Each	Eurocurrency Rate	Loan	will	bear	interest	at	a	rate	per	annum	equal	to	the	Eurocurrency	Rate	plus	a	margin	based	on	our	debt	ratings	from	time	to	time	of	between	0.690%	and 1.375%.	Each	Base	Rate	Loan	will	bear	interest	at	a	rate	per	annum	equal	to	the	Base	Rate	plus	a	margin	based	on	our	debt	ratings	from	time	to	time	of	between	0.00% and	0.375%.	In	December	2018,	we	borrowed	$75.0	million	under	the	previous	revolving	credit	facility	and	utilized	the	proceeds	for	the	repayment	of	existing indebtedness	and	working	capital	requirements.	We	repaid	the	$75.0	million	plus	interest	of	$0.2	million	in	January	2019.

As	of	November	2,	2019,	we	have	no	outstanding	borrowings	under	the	revolving	credit	facility,	but	we	may	borrow	in	the	future	and	use	the	proceeds	for repayment	of	existing	indebtedness,	stock	repurchases,	acquisitions,	capital	expenditures,	working	capital	and	other	lawful	corporate	purposes.	The	terms	of	the Revolving	Credit	Agreement	impose	restrictions	on	our	ability	to	undertake	certain	transactions,	to	create	certain	liens	on	assets	and	to	incur	certain	subsidiary indebtedness.	In	addition,	the	Revolving	Credit	Agreement	contains	a	consolidated	leverage	ratio	covenant	of	total	consolidated	funded	debt	to	consolidated	earnings before	interest,	taxes,	depreciation,	and	amortization	(EBITDA)	of	not	greater	than	4.0	to	1.0.	The	debt	covenant	will	be	reduced	over	time	to	3.5	to	1.0,	beginning	in fiscal	2020	depending	upon	facts	and	circumstances.	As	of	November	2,	2019,	we	were	compliant	with	these	covenants.	See	Note	13,	Revolving	Credit	Facility,	of	the Notes	to	Consolidated	Financial	Statements	contained	in	Item	8	of	this	Annual	Report	on	Form	10-K	for	further	information	on	our	revolving	credit	facility.

# Stock	Repurchase	Program

Our	common	stock	repurchase	program	has	been	in	place	since	August	2004.	In	the	aggregate,	our	Board	of	Directors	has	authorized	us	to	repurchase	$8.2	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.

In	connection	with	the	Acquisition,	we	temporarily	suspended	the	share	repurchase	program.	On	August	21,	2018,	we	reinstated	the	share	repurchase	program,	and as	of	November	2,	2019,	we	had	repurchased	a	total	of	approximately	154.4	million	shares	of	its	common	stock	for	approximately	$6.1	billion	under	this	program.	An additional	$2.1	billion	remains	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 units/awards	or	the	exercise	of	stock	options.

# Capital	Expenditures

Net	additions	to	property,	plant	and	equipment	were	$275.4	million	in	fiscal	2019	and	were	funded	with	a	combination	of	cash	on	hand	and	cash	generated	from operations.	We	expect	capital	expenditures	for	fiscal	2020	to	be	slightly	below	4%	of

fiscal	2020	revenue.	These	capital	expenditures	will	be	funded	with	a	combination	of	cash	on	hand	and	cash	generated	from	operations.

# Dividends

On	November	25,	2019,	our	Board	of	Directors	declared	a	cash	dividend	of	$0.54	per	outstanding	share	of	common	stock.	The	dividend	will	be	paid	on December	17,	2019	to	all	shareholders	of	record	at	the	close	of	business	on	December	6,	2019	and	is	expected	to	total	approximately	$198.9	million.	We	currently	expect quarterly	dividends	to	continue	in	future	periods,	although	they	remain	subject	to	determination	and	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.

# Contractual	Obligations

The	table	below	summarizes	our	contractual	obligations	and	the	amounts	we	owe	under	these	contracts	in	specified	periods	as	of	November	2,	2019:

|  |  | Less	than |  |  | More	than |
| :--- | :--- | :--- | :--- | :--- | :--- |
| (thousands) | Total | 1\tYear | 1-3\tYears | 3-5\tYears | 5\tYears |
| Contractual\tobligations: |  |  |  |  |  |
| Transition\ttax\t(1) | $659,773 | $33,032 | $119,379 | $171,608 | $335,754 |
| Operating\tleases\t(2) | 448,721 | 79,789 | 108,331 | 70,430 | 190,171 |
| Debt\tobligations\t(3) | 5,525,000 | 300,000 | 1,775,000 | 1,050,000 | 2,400,000 |
| Interest\tpayments\tassociated\twith\tdebt\tobligations | 1,456,063 | 182,268 | 314,539 | 234,356 | 724,900 |
| Deferred\tcompensation\tplan\t(4) | 48,302 | 1,148 | — | — | 47,154 |
| Pension\tfunding\t(5) | 7,565 | 7,565 | — | — | — |
| Total | $8,145,424 | $603,802 | $2,317,249 | $1,526,394 | $3,697,979 |

(1) The	Tax	Legislation,	enacted	on	December	22,	2017,	contains	significant	changes	to	U.S.	tax	law,	including	lowering	the	U.S.	corporate	income	tax	rate	to	21.0%,	implementing a	territorial	tax	system,	and	imposing	a	one-time	tax	on	deemed	repatriated	earnings	of	foreign	subsidiaries	that	we	elected	to	pay	over	a	period	of	eight	years	that	begins	in	fiscal 2019	on	an	interest	free	basis.

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

(3) Debt	obligations	are	assumed	to	be	held	to	maturity.

(4) 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.

(5) 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	2019.	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.

As	of	November	2,	2019,	our	total	liabilities	associated	with	uncertain	tax	positions	was	$27.7	million,	which	are	included	in	non-current	income	taxes	payable	in our	consolidated	balance	sheets	contained	in	Item	8	of	this	Annual	Report	on	Form	10-K.	Due	to	the	complexity	associated	with	our	deferred	taxes	and	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	deferred	taxes	and	uncertain	tax positions.	Therefore,	we	have	not	included	these	deferred	taxes	and	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	November	2, 2019.

# Off-balance	Sheet	Arrangements

As	of	November	2,	2019,	we	had	no	off-balance	sheet	financing	arrangements.

# New	Accounting	Pronouncements

From	time	to	time,	new	accounting	pronouncements	are	issued	by	the	Financial	Accounting	Standards	Board	(FASB)	and	are	adopted	by	us	as	of	the	specified effective	date.	Unless	otherwise	discussed,	management	believes	that	the	impact	of	recently	issued	standards	will	not	have	a	material	impact	on	our	future	financial condition	and	results	of	operations.	See	Note	2s,	New	Accounting	Pronouncements,	of	the	Notes	to	Consolidated	Financial	Statements	contained	in	Item	8	of	this Annual	Report	on	Form	10-K	for	a	description	of	recently	issued	and	adopted	accounting	pronouncements,	including	the	dates	of	adoption	and	impact	on	our	historical 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.	GAAP.	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;	however,	the application	of	these	policies	does	not	require	us	to	make	significant	estimates	or	judgments	that	are	difficult	or	subjective.

# Revenue	Recognition

Recognition	of	revenue	occurs	when	a	customer	obtains	control	of	promised	goods	or	services	in	an	amount	that	reflects	the	consideration	to	which	the	providing entity	expects	to	be	entitled	in	exchange	for	those	goods	or	services.	As	a	result	of	the	adoption	of	new	revenue	accounting	rules	in	the	first	quarter	of	fiscal	2019,	we revised	our	revenue	recognition	policy.	We	now	recognize	revenue	upon	transfer	of	control	of	promised	products	or	services	to	customers	in	an	amount	that	reflects	the consideration	that	we	expect	to	receive	in	exchange	for	those	products	or	services.	Under	this	rule,	we	recognize	revenue	when	all	of	the	following	criteria	are	met:	(1) we	have	entered	into	a	binding	agreement,	(2)	the	performance	obligations	have	been	identified,	(3)	the	transaction	price	to	the	customer	has	been	determined,	(4)	the transaction	price	has	been	allocated	to	the	performance	obligations	in	the	contract,	and	(5)	the	performance	obligations	have	been	satisfied.	The	majority	of	our	shipping terms	permit	us	to	recognize	revenue	at	point	of	shipment	or	delivery.	Certain	shipping	terms	require	the	goods	to	be	through	customs	or	be	received	by	the	customer before	title	passes.	In	those	instances,	we	defer	the	revenue	recognized	until	title	has	passed.	Shipping	costs	are	charged	to	selling,	marketing,	general	and	administrative expense	as	incurred.	Sales	taxes	are	excluded	from	revenue.

Revenue	from	contracts	with	the	United	States	government,	government	prime	contractors	and	certain	commercial	customers	is	recorded	over	time	using	either units	delivered	or	costs	incurred	as	the	measurement	basis	for	progress	toward	completion.	These	measures	are	used	to	measure	results	directly	and	is	generally	the	best measure	of	progress	toward	completion	in	circumstances	in	which	a	reliable	measure	of	output	can	be	established.	Estimated	revenue	in	excess	of	amounts	billed	is reported	as	unbilled	receivables.	Contract	accounting	requires	judgment	in	estimating	costs	and	assumptions	related	to	technical	issues	and	delivery	schedule.	Contract costs	include	material,	subcontract	costs,	labor	and	an	allocation	of	indirect	costs.	The	estimation	of	costs	at	completion	of	a	contract	is	subject	to	numerous	variables involving	contract	costs	and	estimates	as	to	the	length	of	time	to	complete	the	contract.	Changes	in	contract	performance,	estimated	gross	margin,	including	the	impact	of final	contract	settlements,	and	estimated	losses	are	recognized	in	the	period	in	which	the	changes	or	losses	are	determined.

Performance	Obligations:	Substantially	all	of	our	contracts	with	customers	contain	a	single	performance	obligation,	the	sale	of	mixed-signal	integrated	circuit	(IC) products.	Such	sales	represent	a	single	performance	obligation	because	the	sale	is	one	type	of	good	or	includes	multiple	goods	that	are	neither	capable	of	being	distinct nor	separable	from	the	other	promises	in	the	contract.	This	performance	obligation	is	satisfied	when	control	of	the	product	is	transferred	to	the	customer,	which	occurs upon	shipment	or	delivery.	Unsatisfied	performance	obligations	primarily	represent	contracts	for	products	with	future	delivery	dates	and	with	an	original	expected duration	of	one	year	or	less.	As	allowed	under	ASU	2014-09,	we	have	opted	to	not	disclose	the	amount	of	unsatisfied	performance	obligations	as	these	contracts	have original	expected	durations	of	less	than	one	year.	We	generally	warrant	that	our	products	will	meet	their	published	specifications,	and	that	we	will	repair	or	replace defective	products,	for	one	year	from	the	date	title	passes	from	us	to	the	customer.	Specific	accruals	are	recorded	for	known	product	warranty	issues.

Transaction	Price:	The	transaction	price	reflects	our	expectations	about	the	consideration	we	will	be	entitled	to	receive	from	the	customer	and	may	include	fixed	or variable	amounts.	Fixed	consideration	primarily	includes	sales	to	direct	customers	and	sales	to	distributors	in	which	both	the	sale	to	the	distributor	and	the	sale	to	the	end customer	occur	within	the	same	reporting	period.	Variable	consideration	includes	sales	in	which	the	amount	of	consideration	that	we	will	receive	is	unknown	as	of	the end	of	a	reporting	period.	Such	consideration	primarily	includes	credits	issued	to	the	distributor	due	to	price	protection	and	sales	made	to	distributors	under	agreements that	allow	certain	rights	of	return,	referred	to	as	stock	rotation.	Price	protection	represents	price	discounts	granted	to	certain	distributors	to	allow	the	distributor	to	earn	an appropriate	margin	on	sales	negotiated	with	certain	customers	and	in	the	event	of	a	price	decrease	subsequent	to	the	date	the	product	was	shipped	and	billed	to	the distributor.	Stock	rotation	allows	distributors	limited	levels	of	returns	in	order	to	reduce	the	amounts	of	slow-moving,	discontinued	or	obsolete	product	from	their inventory.	A	liability	for	distributor	credits	covering	variable	consideration	is	made	based	on	management's	estimate	of	historical	experience	rates	as	well	as	considering economic	conditions	and	contractual	terms.	To	date,	actual	distributor	claims	activity	has	been	materially	consistent	with	the	provisions	we	have	made	based	on	our historical	estimates.

Contract	Balances:	Accounts	receivable	represents	our	unconditional	right	to	receive	consideration	from	its	customers.	Payments	are	typically	due	within	30	to	45 days	of	invoicing	and	do	not	include	a	significant	financing	component.	To	date,	there	have	been	no	material	impairment	losses	on	accounts	receivable.	There	were	no material	contract	assets	or	contract	liabilities	recorded	on	the	consolidated	balance	sheets	in	any	of	the	periods	presented.

# 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.

# 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	determined	by	comparison	of	their	carrying	value	to	the	estimated	future	undiscounted	cash flows	that	the	assets	are	expected	to	generate	over	their	remaining	estimated	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	4)	or	more	frequently	if	indicators of	impairment	exist.	We	perform	a	qualitative	assessment	on	our	indefinite-lived	intangible	assets	to	determine	whether	it	is	more	likely-than	not	that	the	indefinite-lived intangible	asset	is	impaired.	If	it	is	determined	that	the	fair	value	of	the	indefinite-lived	intangible	asset	is	less	than	the	carrying	value,	we	would	compare	the	fair	value of	the	intangible	asset	with	its	carrying	amount	and	recognize	an	impairment	equal	to	any	amount	by	which	the	carrying	value	of	the	assets	exceeds	the	fair	value.

# 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,	which	we	determined	to	be	the	same	level	as our	eight	identified	operating	segments,	on	an	annual	basis	in	the	fourth	quarter	(on	or	about	August	4)	or	more	frequently	if	we	believe	indicators	of	impairment	exist. We	have	the	option	to	first	assess	qualitative	factors	to	determine	whether	it	is	more	likely	than	not	that	the	fair	value	of	a	reporting	unit	is	less	than	its	net	book	value.	If we	elect	not	to	use	this	option,	or	we	determine	that	it	is	more	likely	than	not	that	the	fair	value	of	a	reporting	unit	is	less	than	its	net	book	value,	then	we	perform	the quantitative	goodwill	impairment	test.	The	quantitative	goodwill	impairment	test	requires	an	entity	to	compare	the	fair	value	of	a	reporting	unit	with	its	carrying amount.	If	fair	value	is	determined	to	be	less	than	carrying	value,	an	impairment	loss	is	recognized	for	the	amount	of	the	carrying	value	that	exceeds	the	amount	of	the reporting	unit's	fair	value,	not	to	exceed	the	total	amount	of	goodwill	allocated	to	the	reporting	unit.	Additionally,	we	consider	income	tax	effects	from	any	tax	deductible goodwill	on	the	carrying	amount	of	the	reporting	unit	when	measuring	the	goodwill	impairment	loss,	if	applicable.	We	determine	the	fair	value	of	our	reporting	units using	a	weighting	of	the	income	and	market	approaches.	Under	the	income	approach,	we	use	a	discounted	cash	flow	methodology	which	requires	management	to	make significant	estimates	and	assumptions	related	to	forecasted	revenues,	gross	profit	margins,	operating	income	margins,	working	capital	cash	flow,	perpetual	growth	rates, and	long-term	discount	rates,	among	others.	For	the	market	approach,	we	use	the	guideline	public	company	method.	Under	this	method	we	utilize	information	from comparable	publicly	traded	companies	with	similar	operating	and	investment	characteristics	as	the	reporting	units,	to	create	valuation	multiples	that	are	applied	to	the operating	performance	of	the	reporting	unit	being	tested,	in	order	to	obtain	their	respective	fair	values.	In	order	to	assess	the	reasonableness	of	the	calculated	reporting unit	fair	values,	we	reconcile	the	aggregate	fair	values	of	our	reporting	units	determined,	as	described	above,	to	its	current	market	capitalization,	allowing	for	a reasonable	control	premium.

In	fiscal	2017	and	prior	periods,	we	did	not	elect	to	use	the	qualitative	option	for	assessing	goodwill	and	instead	proceeded	directly	to	the	quantitative	goodwill impairment	analysis.	In	fiscal	2018,	we	used	the	qualitative	method	of	assessing	goodwill	for	all	eight	of	our	reporting	units.

In	our	latest	annual	impairment	evaluation	that	occurred	as	of	August	4,	2019,	we	used	the	qualitative	method	of	assessing	goodwill	for	seven	of	our	eight reporting	units	and	the	quantitative	method	for	one	reporting	unit.	For	each	of	the	reporting	units	evaluated	using	the	qualitative	method,	we	determined	that	it	was	not more	likely	than	not	that	the	fair	values	were	less	than	their	net	book	values.	In	making	this	determination,	we	considered	several	factors,	including	the	following:

– the	amount	by	which	the	fair	values	of	each	reporting	unit	exceeded	their	carrying	values	as	of	the	date	of	the	most	recent	quantitative	impairment	analysis, which	indicated	there	would	need	to	be	substantial	negative	developments	in	the	markets	in	which	these	reporting	units	operate	in	order	for	there	to	be	potential impairment;

– the	carrying	values	of	these	reporting	units	as	of	August	4,	2019	compared	to	the	previously	calculated	fair	values	as	of	the	date	of	the	most	recent	quantitative impairment	analysis;

– the	current	forecasts	as	compared	to	the	forecasts	included	in	the	most	recent	quantitative	impairment	analysis;

– public	information	from	competitors	and	other	industry	information	to	determine	if	there	were	any	significant	adverse	trends	in	our	competitors'	businesses, such	as	significant	declines	in	market	capitalization	or	significant	goodwill	impairment	charges	that	could	be	an	indication	that	the	goodwill	of	our	reporting units	was	potentially	impaired;

– changes	in	the	value	of	major	U.S.	stock	indices	that	could	suggest	declines	in	overall	market	stability	that	could	impact	the	valuation	of	our	reporting	units;

– changes	in	our	market	capitalization	and	overall	enterprise	valuation	to	determine	if	there	were	any	significant	decreases	that	could	be	an	indication	that	the valuation	of	our	reporting	units	had	significantly	decreased;	and

– whether	there	had	been	any	significant	increases	to	the	weighted-average	cost	of	capital	(WACC)	rates	for	each	reporting	unit,	which	could	materially	lower our	prior	valuation	conclusions	under	a	discounted	cash	flow	approach.

For	the	reporting	unit	we	assessed	goodwill	using	the	quantitative	method,	we	calculated	its	fair	value	and	compared	it	with	its	carrying	value.	In	calculating	fair value,	we	used	a	weighting	of	the	income	and	market	approaches.	Under	the	income	approach,	we	used	a	discounted	cash	flow	methodology	which	required	significant estimates	and	assumptions	related	to	forecasted	revenues,	gross	profit	margins,	operating	income	margins,	working	capital	cash	flow,	perpetual	growth	rates,	and	long- term	discount	rates,	among	others.	For	the	market	approach,	we	used	the	guideline	public	company	method.	Under	this	method	we	utilized	information	from	comparable publicly	traded	companies	with	similar	operating	and	investment	characteristics	as	the	reporting	unit,	to	create	valuation	multiples	that	were	applied	to	the	operating performance	of	the	reporting	unit,	in	order	to	obtain	its	fair	value.	As	a	result	of	this	analysis,	we	concluded	the	reporting	unit's	fair	value	exceeded	its	carrying	amount as	of	the	assessment	date	and	no	risk	of	impairment	existed.

# Business	Combinations

Under	the	acquisition	method	of	accounting,	we	recognize	tangible	and	identifiable	intangible	assets	acquired	and	liabilities	assumed	based	on	their	estimated	fair values.	We	record	the	excess	of	the	fair	value	of	the	purchase	consideration	over	the	value	of	the	net	assets	acquired	as	goodwill.	The	accounting	for	business combinations	requires	us	to	make	significant	estimates	and	assumptions,	especially	with	respect	to	intangible	assets	and	the	fair	value	of	contingent	payment	obligations. Critical	estimates	in	valuing	purchased	technology,	customer	lists	and	other	identifiable	intangible	assets	include	future	cash	flows	that	we	expect	to	generate	from	the acquired	assets.	If	the	subsequent	actual	results	and	updated	projections	of	the	underlying	business	activity	change	compared	with	the	assumptions	and	projections	used to	develop	these	values,	we	could	experience	impairment	charges	which	could	be	material.	In	addition,	we	have	estimated	the	economic	lives	of	certain	acquired	assets and	these	lives	are	used	to	calculate	depreciation	and	amortization	expense.	If	our	estimates	of	the	economic	lives	change,	depreciation	or	amortization	expenses	could be	accelerated	or	slowed.

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	statements	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	realize	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.

See	Note	12,	Income	Taxes,	of	the	of	the	Notes	to	Consolidated	Financial	Statements	contained	in	Item	8	of	this	Annual	Report	on	Form	10-K	for	further discussion.

# Stock-Based	Compensation

Stock-based	compensation	expense	associated	with	stock	options	and	related	awards	is	recognized	in	the	consolidated	statements	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	and	market-based restricted	stock	units.	We	calculate	the	grant-date	fair	values	of	stock	options	using	the	Black-Scholes	valuation	model.	The	use	of	valuation	models	requires	us	to	make estimates	of	key	assumptions	such	as	expected	option	term	and	stock	price	volatility	to	determine	the	fair	value	of	a	stock	option.	The	estimate	of	these	key	assumptions is	based	on	historical	information	and	judgment	regarding	market	factors	and	trends.	We	recognize	the	expense	related	to	equity	awards	on	a	straight-line	basis	over	the vesting	period.	See	Note	3,	Stock-Based	Compensation	and	Shareholders'	Equity,	of	the	Notes	to	Consolidated	Financial	Statements	contained	in	Item	8	of	this	Annual Report	on	Form	10-K	for	more	information	related	to	stock	based	compensation.

# Contingencies

From	time	to	time,	in	the	ordinary	course	of	business,	various	claims,	charges	and	litigation	are	asserted	or	commenced	against	us	arising	from,	or	related	to, among	other	things,	contractual	matters,	patents,	trademarks,	personal	injury,	environmental	matters,	product	liability,	insurance	coverage,	employment	or	employment benefits.	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	or paid	on	our	marketable	securities	and	debt,	as	well	as	the	fair	value	of	our	investments	and	debt.

During	fiscal	2019,	we	entered	into	a	term	loan	credit	agreement,	under	which	we	borrowed	unsecured	term	loans	in	the	aggregate	principal	amount	of	$1.25 billion,	maturing	March	10,	2022.	Loans	under	the	term	loan	agreement	may	be	Eurodollar	Rate	Loans	or	Base	Rate	Loans	at	our	option.	Each	Eurodollar	Rate	Loan will	bear	interest	at	a	rate	per	annum	equal	to	the	Adjusted	LIBO	Rate	plus	a	margin	based	on	our	debt	ratings	from	time	to	time	of	between	0.625%	and	1.500%.	Each Base	Rate	Loan	will	bear	interest	at	a	rate	per	annum	equal	to	the	Base	Rate	plus	a	margin	based	on	our	debt	ratings	from	time	to	time	of	between	0.000%	and	0.500%. In	fiscal	2019,	we	made	principal	payments	on	the	term	loans	in	the	amount	of	$325.0	million.	Based	on	the	$925	million	of	floating	rate	debt	outstanding	as of	November	2,	2019,	our	annual	interest	expense	would	change	by	approximately	$9.3	million	for	each	100	basis	point	increase	in	interest	rates.

We	utilize	interest	rate	derivatives	to	manage	interest	rate	exposure	on	both	outstanding	debt	as	well	as	future	issuances.	As	of	November	2,	2019,	for	each	100 basis	point	decrease	in	the	ten-year	U.S.	Treasury	rate,	the	fair	value	of	our	outstanding	derivative	instruments	would	change	by	approximately	$100	million.

Based	on	our	marketable	securities	outstanding	as	of	November	2,	2019	and	November	3,	2018,	our	annual	interest	income	would	change	by	approximately	$6.5 million	and	$8.2	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	November	2,	2019	and	November	3,	2018,	a	hypothetical	100	basis	point	increase	in	interest	rates	across	all	maturities	would	not	materially	impact	the	fair	market value	of	the	portfolio	in	either	period.	If	significant,	such	losses	would	only	be	realized	if	we	sold	the	investments	prior	to	maturity.

As	of	November	2,	2019,	we	had	$4.6	billion	in	principal	amount	of	senior	unsecured	notes	outstanding,	with	a	fair	value	of	$4.9	billion.	The	fair	value	of	our	notes is	subject	to	interest	rate	risk,	market	risk,	and	other	factors.	Generally,	the	fair	value	of	our	notes	will	increase	as	interest	rates	fall	and	decrease	as	interest	rates	rise.	The fair	values	of	our	notes	as	of	November	2,	2019	and	November	3,	2018,	assuming	a	hypothetical	100	basis	point	increase	in	market	interest	rates,	are	as	follows:

|  |  | November	2,	2019 |  |  | November	3,	2018 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (thousands) | Principal\tAmount\nOutstanding | Fair\tValue | Fair\tValue\tgiven\tan\nincrease\tin\tinterest\nrates\tof\t100\tbasis\npoints | Principal\tAmount\nOutstanding | Fair\tValue | Fair\tValue\tgiven\tan\nincrease\tin\tinterest\nrates\tof\t100\tbasis\npoints |
| 2020\tNotes,\tdue\tMarch\t2020 | $300,000 | $300,872 | $299,793 | $300,000 | $298,147 | $294,237 |
| 2021\tNotes,\tdue\tJanuary\t2021 | 450,000 | 454,634 | 449,354 | 450,000 | 444,568 | 435,334 |
| 2021\tNotes,\tdue\tDecember\t2021 | 400,000 | 402,591 | 394,524 | 400,000 | 386,375 | 375,215 |
| 2023\tNotes,\tdue\tJune\t2023 | 500,000 | 511,190 | 494,186 | 500,000 | 479,189 | 459,377 |
| 2023\tNotes,\tdue\tDecember\t2023 | 550,000 | 567,159 | 545,897 | 550,000 | 529,120 | 505,176 |
| 2025\tNotes,\tdue\tDecember\t2025 | 850,000 | 914,567 | 866,162 | 850,000 | 829,611 | 780,432 |
| 2026\tNotes,\tdue\tDecember\t2026 | 900,000 | 940,192 | 883,276 | 900,000 | 848,027 | 791,549 |
| 2036\tNotes,\tdue\tDecember\t2036 | 250,000 | 270,891 | 240,492 | 250,000 | 232,627 | 206,716 |
| 2045\tNotes,\tdue\tDecember\t2045 | 400,000 | 491,439 | 423,591 | 400,000 | 407,984 | 354,806 |

# Foreign	Currency	Exposure

As	more	fully	described	in	Note	2i,	Derivative	and	Hedging	Agreements,	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	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	November	2,	2019	and	November	3,	2018,	a	10%	unfavorable	movement	in	foreign	currency	exchange	rates	over	the	course	of	the	year	would result	in	approximately	$12.1	million	of	losses	and	$14.1	million	of	losses,	respectively,	in	changes	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	November	2,	2019,	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	November	2,	2019	and	November	3,	2018:

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.

# REPORT	OF	INDEPENDENT	REGISTERED	PUBLIC	ACCOUNTING	FIRM

# The	Board	of	Directors	and	Shareholders

# Opinion	on	the	Financial	Statements

We	have	audited	the	accompanying	consolidated	balance	sheets	of	Analog	Devices,	Inc.	(the	Company)	as	of	November	2,	2019	and	November	3,	2018,	the	related consolidated	statements	of	income,	comprehensive	income,	shareholders'	equity	and	cash	flows	for	each	of	the	three	years	in	the	period	ended	November	2,	2019,	and the	related	notes	and	financial	statement	schedule	listed	in	the	Index	at	Item	15(a)(2)	(collectively	referred	to	as	the	"consolidated	financial	statements").	In	our	opinion, the	consolidated	financial	statements	present	fairly,	in	all	material	respects,	the	financial	position	of	the	Company	at	November	2,	2019	and	November	3,	2018,	and	the results	of	its	operations	and	its	cash	flows	for	each	of	the	three	years	in	the	period	ended	November	2,	2019,	in	conformity	with	U.S.	generally	accepted	accounting principles.

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States)	(PCAOB),	the	Company's	internal	control over	financial	reporting	as	of	November	2,	2019,	based	on	criteria	established	in	Internal	Control-Integrated	Framework	issued	by	the	Committee	of	Sponsoring Organizations	of	the	Treadway	Commission	(2013	framework),	and	our	report	dated	November	26,	2019	expressed	an	unqualified	opinion	thereon.

As	discussed	in	Note	2	to	the	consolidated	financial	statements,	the	Company	changed	its	method	of	accounting	for	revenue	in	the	year	ended	November	2,	2019	due	to the	adoption	of	Accounting	Standards	Update	(ASU)	No.	2014-09,	Revenue	from	Contracts	with	Customers	(Topic	606),	and	the	related	amendments.

As	discussed	in	Note	12	to	the	consolidated	financial	statements,	the	Company	changed	its	method	of	accounting	for	the	income	tax	consequences	of	intra-entity transfers,	other	than	inventory,	in	the	year	ended	November	2,	2019	due	to	the	adoption	of	ASU	No.	2016-16,	Income	Taxes	(Topic	740):	Intra-Entity	Transfers	of	Assets

Other	Than	Inventory.

# Basis	for	Opinion

These	financial	statements	are	the	responsibility	of	the	Company's	management.	Our	responsibility	is	to	express	an	opinion	on	the	Company's	financial	statements	based on	our	audits.	We	are	a	public	accounting	firm	registered	with	the	PCAOB	and	are	required	to	be	independent	with	respect	to	the	Company	in	accordance	with	the	U.S. federal	securities	laws	and	the	applicable	rules	and	regulations	of	the	Securities	and	Exchange	Commission	and	the	PCAOB.

We	conducted	our	audits	in	accordance	with	the	standards	of	the	PCAOB.	Those	standards	require	that	we	plan	and	perform	the	audit	to	obtain	reasonable	assurance about	whether	the	financial	statements	are	free	of	material	misstatement,	whether	due	to	error	or	fraud.	Our	audits	included	performing	procedures	to	assess	the	risks	of material	misstatement	of	the	financial	statements,	whether	due	to	error	or	fraud,	and	performing	procedures	that	respond	to	those	risks.	Such	procedures	included examining,	on	a	test	basis,	evidence	regarding	the	amounts	and	disclosures	in	the	financial	statements.	Our	audits	also	included	evaluating	the	accounting	principles	used and	significant	estimates	made	by	management,	as	well	as	evaluating	the	overall	presentation	of	the	financial	statements.	We	believe	that	our	audits	provide	a	reasonable basis	for	our	opinion.

# Critical	Audit	Matters

The	critical	audit	matters	communicated	below	are	matters	arising	from	the	current	period	audit	of	the	financial	statements	that	were	communicated	or	required	to	be communicated	 to	 the	audit	committee	and	 that:	(1)	relate	 to	accounts	or	disclosures	 that	are	material	 to	 the	financial	statements	and	(2)	 involved	our	especially challenging,	subjective	or	complex	 judgments.	The	communication	of	critical	audit	matters	does	not	alter	 in	any	way	our	opinion	on	 the	consolidated	financial statements,	taken	as	a	whole,	and	we	are	not,	by	communicating	the	critical	audit	matters	below,	providing	separate	opinions	on	the	critical	audit	matters	or	on	the accounts	or	disclosures	to	which	they	relate.

# Revenue	Recognition	–	Measuring	Variable	Consideration

# Description	of	the	Matter

As	described	in	Note	2	to	the	consolidated	financial	statements,	the	Company's	sales	contracts	provide	certain	distributors	with	credits	for price	protection	and	rights	of	return,	which	results	in	variable	consideration.	During	2019,	sales	to	distributors	were	$3.4	billion	net	of expected	price	protection	discounts	and	rights	of	return	for	which	the	liability	balance	as	of	November	2,	2019	was	$227.0	million.

Auditing	the	Company's	measurement	of	variable	consideration	under	distributor	contracts	involved	especially	challenging	judgment	because the	calculation	involves	subjective	management	assumptions	about	estimates	of	expected	price	protection	discounts	and	returns.	For	example, estimated	variable	consideration	included	in	the	transaction	price	reflects	management's	evaluation	of	contractual	terms,	historical	experience and	assumptions	about	future	economic	conditions.	Changes	in	those	assumptions	can	have	a	material	effect	on	the	amount	of	variable consideration	recognized.

How	We	Addressed	the Matter	in	Our	Audit We	obtained	an	understanding,	evaluated	the	design	and	tested	the	operating	effectiveness	of	controls	over	the	Company's	process	to calculate	the	variable	consideration.	For	example,	we	tested	controls	over	the	appropriateness	of	assumptions	management	used	as	well	as controls	over	the	completeness	and	accuracy	of	the	data	underlying	estimates	of	expected	price	protection	discounts	and	returns.

Our	audit	procedures	included,	among	others,	inspecting	contractual	terms	in	distributor	agreements	and	testing	the	underlying	data	used	in management's	calculation	for	completeness	and	accuracy	as	well	as	evaluating	the	significant	assumptions	used	in	the	estimation	of	variable consideration.	We	evaluated	the	Company's	methods	and	assumptions	used	in	the	estimates,	which	included	comparing	the	assumptions	to historical	trends.	We	inspected	and	tested	the	results	of	the	Company's	retrospective	review	analysis	of	actual	returns	and	price	protection discounts	claimed	by	distributors,	evaluated	the	estimates	made	based	on	historical	experience	and	performed	sensitivity	analyses	of	the Company's	significant	assumptions	to	assess	the	impact	on	the	variable	consideration.	We	also	evaluated	whether	the	Company	appropriately considered	new	information	that	could	significantly	change	the	estimated	future	price	protection	discounts	or	returns.

# Goodwill	–	Quantitative	Impairment	Assessment

Description	of	the	Matter The	Company's	consolidated	goodwill	balance	was	$12.3	billion	as	of	November	2,	2019.	As	described	in	Note	2	to	the	consolidated financial	statements,	the	Company	evaluates	goodwill	for	impairment	at	the	reporting	unit	level	annually	and	performed	a	quantitative goodwill	impairment	assessment	for	one	of	its	eight	reporting	units.	The	quantitative	impairment	assessment	involves	the	comparison	of	the fair	value	of	a	reporting	unit	to	its	carrying	amount.	The	Company	used	a	weighting	of	the	income	and	market	approaches	to	determine	the fair	value	of	the	reporting	unit.

Auditing	management's	quantitative	goodwill	impairment	test	involved	a	high	degree	of	auditor	judgment	due	to	the	significant	estimation required	to	determine	the	fair	value	of	the	reporting	unit.	In	particular,	the	fair	value	estimate	was	sensitive	to	significant	assumptions,	such	as forecasted	revenues,	gross	profit	margins,	operating	income	margins,	long-term	discount	rate,	perpetual	growth	rate,	identification	of comparable	publicly	traded	companies	and	estimated	valuation	multiples.

To	test	the	estimated	fair	value	of	the	reporting	unit,	our	audit	procedures	included,	among	others,	assessing	methodologies	and	testing	the significant	assumptions	discussed	above	and	the	underlying	data	used	by	the	Company	in	its	analysis.	We	tested	significant	assumptions	by comparing	to	current	and	forecasted	industry	and	economic	trends,	analyst	reports,	and	forecasted	peer	company	information.	We	evaluated management's	ability	to	accurately	forecast	by	comparing	actual	results	to	historical	forecasts.	We	also	performed	sensitivity	analyses	of certain	assumptions	to	evaluate	changes	in	the	fair	value	that	would	result	from	changes	in	the	assumptions.	With	the	assistance	of	our valuation	specialists,	we	evaluated	the	selection	of	the	long-term	discount	rate	and	perpetual	growth	rate,	including	testing	the	underlying source	information	and	the	mathematical	accuracy	of	the	calculations	by	developing	a	range	of	independent	estimates	and	comparing	those	to the	rates	selected	by	management.	We	also	involved	our	valuation	specialists	to	evaluate	the	market	approach,	including	evaluating	the reasonableness	of	the	selected	comparable	publicly	traded	companies	and	the	resulting	market	multiples	calculation.

# /s/	Ernst	&	Young	LLP

# We	have	served	as	the	Company's	auditor	since	1967.

Boston,	Massachusetts

# ITEM	8.	FINANCIAL	STATEMENTS	AND	SUPPLEMENTARY	DATA

# CONSOLIDATED	STATEMENTS	OF	INCOME

| (thousands,	except	per	share	amounts) | 2019 | 2018	(1) | 2017	(1) |
| :--- | :--- | :--- | :--- |
| Revenue |  |  |  |
| Revenue | $5,991,065 | $6,224,689 | $5,246,354 |
| Costs\tand\tExpenses |  |  |  |
| Cost\tof\tsales | 1,977,315 | 1,974,293 | 2,078,113 |
| Gross\tmargin | 4,013,750 | 4,250,396 | 3,168,241 |
| Operating\texpenses: |  |  |  |
| Research\tand\tdevelopment | 1,130,348 | 1,165,047 | 968,133 |
| Selling,\tmarketing,\tgeneral\tand\tadministrative | 648,094 | 695,540 | 690,533 |
| Amortization\tof\tintangibles | 429,041 | 428,902 | 297,351 |
| Special\tcharges | 95,659 | 61,318 | 49,463 |
|  | 2,303,142 | 2,350,807 | 2,005,480 |
| Operating\tincome | 1,710,608 | 1,899,589 | 1,162,761 |
| Nonoperating\t(income)\texpenses: |  |  |  |
| Interest\texpense | 229,075 | 253,589 | 250,840 |
| Interest\tincome | (10,229) | (9,383) | (30,333) |
| Other,\tnet | 6,034 | 69 | 7,507 |
|  | 224,880 | 244,275 | 228,014 |
| Earnings |  |  |  |
| Income\tbefore\tincome\ttaxes | 1,485,728 | 1,655,314 | 934,747 |
| Provision\tfor\tincome\ttaxes | 122,717 | 148,334 | 129,368 |
| Net\tincome | $1,363,011 | $1,506,980 | $805,379 |
| Shares\tused\tto\tcompute\tearnings\tper\tcommon\tshare\t—\tBasic | 369,133 | 370,430 | 346,371 |
| Shares\tused\tto\tcompute\tearnings\tper\tcommon\tshare\t—\tDiluted | 372,871 | 374,938 | 350,484 |
| Basic\tearnings\tper\tcommon\tshare | $3.68 | $4.05 | $2.32 |
| Diluted\tearnings\tper\tcommon\tshare | $3.65 | $4.00 | $2.29 |

(1)	Balances	have	been	restated	to	reflect	the	adoption	of	Accounting	Standards	Update	(ASU)	2014-09,	Revenue	from	Contracts	with	Customers	(ASU	2014-09).	See	Note	2a,

Principles	of	Consolidation,	in	the	Notes	to	Consolidated	Financial	Statements.

See	accompanying	Notes.

# CONSOLIDATED	STATEMENTS	OF	COMPREHENSIVE	INCOME

| (thousands) | 2019 | 2018	(1) | 2017	(1) |
| :--- | :--- | :--- | :--- |
| Net\tincome | $1,363,011 | $1,506,980 | $805,379 |
| Foreign\tcurrency\ttranslation\tadjustment\t(net\tof\ttaxes\tof\t$0\tin\t2019,\t$0\tin\t2018\tand\t$1,556\tin\t2017) | (1,365) | (6,222) | 1,572 |
| Change\tin\tfair\tvalue\tof\tavailable-for-sale\tsecurities\t(net\tof\ttaxes\tof\t$0\tin\t2019,\t$0\tin\t2018\tand\t$35\tin\t2017) | 10 | (10) | (517) |
| Change\tin\tunrecognized\tgains/losses\ton\tderivative\tinstruments\tdesignated\tas\tcash\tflow\thedges: |  |  |  |
| Changes\tin\tfair\tvalue\tof\tderivatives\t(net\tof\ttaxes\tof\t$29,401\tin\t2019,\t$416\tin\t2018\tand\t$920\tin\t2017) | (111,327) | (1,863) | 3,806 |
| Adjustment\tfor\trealized\tgain/loss\treclassified\tinto\tearnings\t(net\tof\ttaxes\tof\t$ 1,518\tin\t2019,\t$94\tin\t2018\tand\n$1,326\tin\t2017) | 7,667 | (1,613) | 4,199 |
| Total\tchange\tin\tderivative\tinstruments\tdesignated\tas\tcash\tflow\thedges,\tnet\tof\ttax | (103,660) | (3,476) | 8,005 |
| Changes\tin\taccumulated\tother\tcomprehensive\tloss\t—\tpension\tplans: |  |  |  |
| Change\tin\ttransition\tasset\t(net\tof\ttaxes\tof\t$0\tin\t2019,\t$0\tin\t2018\tand\t$1\tin\t2017) | — | 10 | 14 |
| Change\tin\tactuarial\tloss/gain\t(net\tof\ttaxes\tof\t$5,734\tin\t2019,\t$2,363\tin\t2018\tand\t$355\tin\t2017) | (24,344) | 12,616 | 3,513 |
| Change\tin\tprior\tservice\tcost/income\t(net\tof\ttaxes\tof\t$0\tin\t2019,\t$0\tin\t2018\tand\t$61\tin\t2017) | — | 1 | (132) |
| Total\tchange\tin\taccumulated\tother\tcomprehensive\tloss\t\t—\tpension\tplans,\tnet\tof\ttax | (24,344) | 12,627 | 3,395 |
| Other\tcomprehensive\t(loss)\tincome | (129,359) | 2,919 | 12,455 |
| Comprehensive\tincome | $1,233,652 | $1,509,899 | $817,834 |

# CONSOLIDATED	BALANCE	SHEETS

| (thousands,	except	per	share	amounts) | 2019 | 2018	(1) |
| :--- | :--- | :--- |
| ASSETS |  |  |
| Current\tAssets |  |  |
| Cash\tand\tcash\tequivalents | $648,322 | $816,591 |
| Accounts\treceivable\tless\tallowances\tof\t$8,387\t($2,284\tin\t2018) | 635,136 | 639,717 |
| Inventories | 609,886 | 586,760 |
| Prepaid\texpenses\tand\tother\tcurrent\tassets | 91,782 | 69,058 |
| Total\tcurrent\tassets | 1,985,126 | 2,112,126 |
| Property,\tPlant\tand\tEquipment,\tat\tCost |  |  |
| Land\tand\tbuildings | 956,099 | 873,186 |
| Machinery\tand\tequipment | 2,609,493 | 2,478,032 |
| Office\tequipment | 85,490 | 76,233 |
| Leasehold\timprovements | 160,175 | 100,374 |
|  | 3,811,257 | 3,527,825 |
| Less\taccumulated\tdepreciation\tand\tamortization | 2,591,268 | 2,373,497 |
| Net\tproperty,\tplant\tand\tequipment | 1,219,989 | 1,154,328 |
| Other\tAssets |  |  |
| Deferred\tcompensation\tplan\tinvestments | 47,154 | 39,853 |
| Other\tinvestments | 30,170 | 28,730 |
| Goodwill | 12,256,880 | 12,252,604 |
| Intangible\tassets,\tnet | 4,217,224 | 4,778,192 |
| Deferred\ttax\tassets | 1,582,382 | 9,665 |
| Other\tassets | 53,716 | 62,868 |
| Total\tother\tassets | 18,187,526 | 17,171,912 |
|  | $21,392,641 | $20,438,366 |
| LIABILITIES\tAND\tSHAREHOLDERS'\tEQUITY |  |  |
| Current\tLiabilities |  |  |
| Accounts\tpayable | $225,270 | $260,919 |
| Income\ttaxes\tpayable | 187,879 | 93,722 |
| Debt,\tcurrent | 299,667 | 67,000 |
| Accrued\tliabilities | 795,816 | 630,107 |
| Total\tcurrent\tliabilities | 1,508,632 | 1,051,748 |
| Non-current\tLiabilities |  |  |
| Long-term\tdebt | 5,192,252 | 6,265,674 |
| Deferred\tincome\ttaxes | 2,088,212 | 990,409 |
| Deferred\tcompensation\tplan\tliability | 47,154 | 39,846 |
| Income\ttaxes\tpayable | 654,420 | 710,179 |
| Other\tnon-current\tliabilities | 192,783 | 112,337 |
| Total\tnon-current\tliabilities | 8,174,821 | 8,118,445 |
| Commitments\tand\tcontingencies\t(Note\t10) |  |  |
| Shareholders'\tEquity |  |  |
| Preferred\tstock,\t$1.00\tpar\tvalue,\t471,934\tshares\tauthorized,\tnone\toutstanding | — | — |
|  | 61,385 | 61,694 |
| Capital\tin\texcess\tof\tpar\tvalue | 4,936,349 | 5,282,222 |
| Retained\tearnings | 6,899,253 | 5,982,697 |
| Accumulated\tother\tcomprehensive\tloss | (187,799) | (58,440) |
| Total\tshareholders'\tequity | 11,709,188 | 11,268,173 |
|  | $21,392,641 | $20,438,366 |

(1) Balances	have	been	restated	to	reflect	the	adoption	of	Accounting	Standards	Update	(ASU)	2014-09,	Revenue	from	Contracts	with	Customers	(ASU	2014-09).	See	Note	2a, Principles	of	Consolidation,	in	the	Notes	to	Consolidated	Financial	Statements.

# CONSOLIDATED	STATEMENTS	OF	SHAREHOLDERS'	EQUITY

|  |  |  | Capital	in |  | Accumulated<br>Other |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | Common\tStock | Common\tStock | Excess\tof | Retained | Comprehensive |
| (thousands) | Shares | Amount | Par\tValue | Earnings | (Loss)\tIncome |
| BALANCE,\tOCTOBER\t29,\t2016\t(1) | 308,171 | $51,363 | $402,270 | $4,975,764 | $(73,814) |
| Activity\tin\tFiscal\t2017 |  |  |  |  |  |
| Net\tIncome\t—\t2017\t(1) |  |  |  | 805,379 |  |
| Dividends\tdeclared\tand\tpaid |  |  |  | (602,119) |  |
| Issuance\tof\tstock\tunder\tstock\tplans\tand\tother | 5,153 | 859 | 132,439 |  |  |
| Issuance\tof\tstock\tin\tconnection\twith\tacquisition | 55,884 | 9,314 | 4,584,341 |  |  |
| Tax\tbenefit\t—\tequity\tbased\tawards |  |  | 40,189 |  |  |
| Stock-based\tcompensation\texpense |  |  | 104,188 |  |  |
| Replacement\tshare-based\tawards\tissued\tin\tconnection\twith\tacquisition |  |  | 33,530 |  |  |
| Other\tcomprehensive\tincome |  |  |  |  | 12,455 |
| Common\tstock\trepurchased | (572) | (95) | (46,438) |  |  |
| BALANCE,\tOCTOBER\t28,\t2017\t(1) | 368,636 | 61,441 | 5,250,519 | 5,179,024 | (61,359) |
| Activity\tin\tFiscal\t2018 |  |  |  |  |  |
| Net\tIncome\t—\t2018\t(1) |  |  |  | 1,506,980 |  |
| Dividends\tdeclared\tand\tpaid |  |  |  | (703,307) |  |
| Issuance\tof\tstock\tunder\tstock\tplans\tand\tother | 4,012 | 668 | 98,359 |  |  |
| Tax\tbenefit\t—\tequity\tbased\tawards |  |  | 7,741 |  |  |
| Stock-based\tcompensation\texpense |  |  | 151,165 |  |  |
| Other\tcomprehensive\tincome |  |  |  |  | 2,919 |
| Common\tstock\trepurchased | (2,488) | (415) | (225,562) |  |  |
| BALANCE,\tNOVEMBER\t3,\t2018\t(1) | 370,160 | 61,694 | 5,282,222 | 5,982,697 | (58,440) |
| Activity\tin\tFiscal\t2019 |  |  |  |  |  |
| Effect\tof\tAccounting\tStandards\tUpdate\t2016-16 |  |  |  | 331,026 |  |
| Net\tIncome\t—\t2019 |  |  |  | 1,363,011 |  |
| Dividends\tdeclared\tand\tpaid |  |  |  | (777,481) |  |
| Issuance\tof\tstock\tunder\tstock\tplans\tand\tother | 4,271 | 712 | 115,811 |  |  |
| Stock-based\tcompensation\texpense |  |  | 150,300 |  |  |
| Other\tcomprehensive\tloss |  |  |  |  | (129,359) |
| Common\tstock\trepurchased | (6,129) | (1,021) | (611,984) |  |  |
| BALANCE,\tNOVEMBER\t2,\t2019 | 368,302 | $61,385 | $4,936,349 | $6,899,253 | $(187,799) |

# CONSOLIDATED	STATEMENTS	OF	CASH	FLOWS

| (thousands) | 2019 | 2018	(1) | 2017	(1) |
| :--- | :--- | :--- | :--- |
| Operations |  |  |  |
| Cash\tflows\tfrom\toperating\tactivities: |  |  |  |
| Net\tincome | $1,363,011 | $1,506,980 | $805,379 |
| Adjustments\tto\treconcile\tnet\tincome\tto\tnet\tcash\tprovided\tby\toperations: |  |  |  |
| Depreciation | 240,677 | 228,525 | 194,666 |
| Amortization\tof\tintangibles | 570,574 | 570,538 | 389,393 |
| Cost\tof\tgoods\tsold\tfor\tinventory\tacquired | — | — | 358,718 |
| Stock-based\tcompensation\texpense | 150,300 | 151,165 | 104,188 |
| Non-cash\tportion\tof\tspecial\tcharges | 14,167 | — | — |
| Other\tnon-cash\tactivity | 40,907 | 36,569 | (10,865) |
| Deferred\tincome\ttaxes | (91,253) | (730,376) | (810,398) |
| Change\tin\toperating\tassets\tand\tliabilities: |  |  |  |
| Accounts\treceivable | 5,890 | 45,979 | (65,669) |
| Inventories | (42,771) | (34,636) | (47,354) |
| Prepaid\texpenses\tand\tother\tcurrent\tassets | (9,475) | (1,721) | (1,875) |
| Deferred\tcompensation\tplan\tinvestments | (7,301) | (7,484) | (7,358) |
| Prepaid\tincome\ttax | (2,322) | 133 | 2,679 |
| Accounts\tpayable\tand\taccrued\tliabilities | (6,371) | (18,397) | 85,987 |
| Deferred\tcompensation\tplan\tliability | 7,308 | 7,484 | 7,358 |
| Income\ttaxes\tpayable,\tcurrent | 74,993 | (8,506) | 132,289 |
| Other\tliabilities | (55,234) | 696,108 | 17,227 |
| Total\tadjustments | 890,089 | 935,381 | 348,986 |
| Net\tcash\tprovided\tby\toperating\tactivities | 2,253,100 | 2,442,361 | 1,154,365 |
| Investing\tActivities |  |  |  |
| Cash\tflows\tfrom\tinvesting: |  |  |  |
| Purchases\tof\tshort-term\tavailable-for-sale\tinvestments | — | — | (705,485) |
| Maturities\tof\tshort-term\tavailable-for-sale\tinvestments | — | — | 3,362,792 |
| Sales\tof\tshort-term\tavailable-for-sale\tinvestments | — | — | 577,187 |
| Additions\tto\tproperty,\tplant\tand\tequipment,\tnet | (275,372) | (254,876) | (204,098) |
| Payments\tfor\tacquisitions,\tnet\tof\tcash\tacquired | (11,170) | (52,839) | (9,632,568) |
| Change\tin\tother\tassets | (6,644) | (6,283) | (15,842) |
| Net\tcash\tused\tfor\tinvesting\tactivities | (293,186) | (313,998) | (6,618,014) |
| Financing\tActivities |  |  |  |
| Cash\tflows\tfrom\tfinancing\tactivities: |  |  |  |
| Proceeds\tfrom\tdebt | 1,250,000 | 743,778 | 11,156,164 |
| Early\ttermination\tof\tdebt | (1,250,000) | — | — |
| Debt\trepayments | (850,000) | (2,275,000) | (5,050,000) |
| Payments\ton\trevolver | (75,000) | — | — |
| Proceeds\tfrom\trevolver | 75,000 | — | — |
| Proceeds\tfrom\tderivative\tinstruments | — | — | 3,904 |
| Payments\tof\tdeferred\tfinancing\tfees | — | — | (5,625) |
| Dividend\tpayments\tto\tshareholders | (777,481) | (703,307) | (602,119) |
| Repurchase\tof\tcommon\tstock | (613,005) | (225,977) | (46,533) |
| Proceeds\tfrom\temployee\tstock\tplans | 116,523 | 99,027 | 133,302 |
| Change\tin\tother\tfinancing\tactivities | (2,831) | 3,437 | (2,288) |
| Net\tcash\t(used\tfor)\tprovided\tby\tfinancing\tactivities | (2,126,794) | (2,358,042) | 5,586,805 |
| Effect\tof\texchange\trate\tchanges\ton\tcash | (1,389) | (1,568) | 3,550 |
| Net\t(decrease)\tincrease\tin\tcash\tand\tcash\tequivalents | (168,269) | (231,247) | 126,706 |
| Cash\tand\tcash\tequivalents\tat\tbeginning\tof\tyear | 816,591 | 1,047,838 | 921,132 |
| Cash\tand\tcash\tequivalents\tat\tend\tof\tyear | $648,322 | $816,591 | $1,047,838 |

# 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	leading	global	high-performance	analog	technology	company.	Since	the	Company's	inception	in	1965, it	has	focused	on	solving	its	customers'	toughest	signal	processing	engineering	challenges	and	playing	a	fundamental	role	in	efficiently	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 applications.	The	Company	produces	innovative	products	and	technologies	that	accurately	and	securely	sense,	measure,	connect,	interpret	and	power,	allowing	its customers	to	intelligently	bridge	the	physical	and	digital	domains.

The	Company	designs,	manufactures,	and	markets	a	broad	portfolio	of	solutions,	including	integrated	circuits	(ICs),	algorithms,	software,	and	subsystems,	that leverage	high-performance	analog,	mixed-signal,	and	digital	signal	processing	technologies.	The	Company's	fusion	of	cutting-edge	sensors,	data	converters,	amplifiers and	linear	products,	radio	frequency	(RF)	ICs,	power	management	products,	and	other	signal	processing	products	with	deep	industry	expertise	allows	it	to	create	robust technology	platforms	that	meet	a	broad	spectrum	of	customer	and	market	needs.	As	new	generations	of	applications	evolve	-	such	as	autonomous	vehicles,	5G	networks, intelligent	factories,	and	smart	healthcare	devices	-	the	demand	for	Analog	Devices'	high-performance	analog	signal	processing	and	digital	signal	processing	(DSP) products	and	technologies	is	increasing.

# 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	presentation	for	the	fiscal	year	ended	November	2,	2019 (fiscal	2019).

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	2019	and	fiscal	2017	were	52-week fiscal	periods,	while	fiscal	2018	was	a	53-week	period.	The	additional	week	in	fiscal	2018	was	included	in	the	first	quarter	ended	February	3,	2018.	Therefore,	fiscal 2018	included	an	additional	week	of	operations	as	compared	to	fiscal	2019	and	fiscal	2017.

On	March	10,	2017	(Acquisition	Date),	the	Company	completed	the	acquisition	of	all	of	the	voting	interests	of	Linear	Technology	Corporation	(Linear),	an independent	manufacturer	of	high	performance	analog	integrated	circuits.	The	total	consideration	paid	to	acquire	Linear	was	approximately	$15.8	billion,	consisting	of $11.1	billion	in	cash	financed	through	existing	cash	on	hand,	net	proceeds	from	bridge	and	term	loan	facilities	and	proceeds	received	from	the	issuance	of	senior unsecured	notes,	$4.6	billion	from	the	issuance	of	the	Company's	common	stock	and	$0.1	billion	of	consideration	related	to	the	replacement	of	outstanding	equity awards	held	by	Linear	employees.	The	acquisition	of	Linear	is	referred	to	as	the	Acquisition.	The	Consolidated	Financial	Statements	included	in	this	Annual	Report	on Form	10-K	include	the	financial	results	of	Linear	prospectively	from	the	Acquisition	Date.	See	Note	6,	Acquisitions,	of	these	Notes	to	Consolidated	Financial Statements	for	further	discussion	related	to	the	Acquisition.

As	further	discussed	in	Note	2n,	Revenue	Recognition,	the	Company	adopted	the	Financial	Accounting	Standards	Board	(FASB)	Accounting	Standards	Update (ASU)	2014-09,	Revenue	from	Contracts	with	Customers	(ASU	2014-09),	in	the	first	quarter	of	fiscal	2019.	The	two	permitted	transition	methods	under	the	new standard	are	the	full	retrospective	method,	in	which	case	the	standard	would	be	applied	to	each	prior	reporting	period	presented	and	the	cumulative	effect	of	applying	the standard	would	be	recognized	at	the	earliest	period	showing,	or	the	modified	retrospective	method,	in	which	case	the	cumulative	effect	of	applying	the	standard	would be	recognized	as	of	the	date	of	initial	application.	The	Company	adopted	ASU	2014-09	using	the	full	retrospective	method	and	applied	the	practical	expedient,	in	which the	Company	is	not	required	to	disclose	the	amount	of	consideration	allocated	to	any	remaining	performance	obligations	or	an	explanation	of	when	the	Company	expects to	recognize	that	amount	as	revenue	for	all	reporting	periods	presented	before	the	date	of	the	initial	application.

As	a	result	of	the	adoption	of	ASU	2014-09,	the	Company	changed	its	accounting	policy	for	revenue	recognition	and	recognizes	revenue	from	product	sales	to	its customers	and	distributors	when	title	passes,	which	is	generally	upon	shipment.	Prior	to	the	adoption	of	ASU	2014-09,	revenue	and	the	related	cost	of	sales	on	shipments to	certain	distributors	were	deferred	until	the	distributor	resold	the	products	to	their	end	customers.	See	Note	2n,	Revenue	Recognition,	in	these	Notes	to

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS	—	(Continued)

Consolidated	Financial	Statements	for	the	details	of	the	Company's	revenue	recognition	policies.	The	adoption	of	ASU	2014-09	impacted	the	Company's	consolidated statements	of	income	and	consolidated	balance	sheets	but	did	not	impact	its	consolidated	statements	of	cash	flows,	with	the	exceptions	of	net	income	and reclassifications	within	adjustments	to	reconcile	net	income	to	cash	provided	by	operations,	and	did	not	impact	the	consolidated	statement	of	shareholders'	equity,	with the	exceptions	of	retained	earnings	and	net	income.	As	shown	in	the	tables	below,	pursuant	to	the	guidance	in	ASU	2014-09,	the	Company	restated	its	historical financial	results	to	be	consistent	with	the	standard.	Accordingly,	the	amounts	for	fiscal	2019,	fiscal	2018	and	fiscal	2017	periods	presented	in	this	Form	10-K	reflect	the impact	of	ASU	2014-09.

In	addition,	the	Company	adopted	ASU	2017-07,	Compensation	-	Retirement	Benefits	(Topic	715):	Improving	the	Presentation	of	Net	Periodic	Pension	Cost	and Net	Periodic	Postretirement	Benefit	Cost	in	the	first	quarter	of	fiscal	2019.	Under	this	ASU,	the	service	cost	component	of	net	periodic	benefit	cost	is	recorded	in	Cost	of sales,	Research	and	development,	Selling,	marketing,	general	and	administrate	expenses,	while	the	remaining	components	are	recorded	to	Other,	net	within	the Company's	consolidated	statements	of	income.	As	such,	the	prior	year	amounts	have	been	reclassified	to	provide	comparable	presentation	in	line	with	the	guidance	in ASU	2017-07	based	on	amounts	previously	disclosed	for	the	various	components	of	net	periodic	pension	cost.	See	Note	11,	Retirement	Plans,	in	these	Notes	to Consolidated	Financial	Statements	for	more	information	on	the	adoption	of	ASU	2017-07.

The	tables	below	reconcile	the	impact	of	ASU	2014-09	and	ASU	2017-07	on	the	consolidated	statements	of	income:

|  |  | Year	Ended	November	3,	2018 |  |  |
| :--- | :--- | :--- | :--- | :--- |
| Consolidated\tStatement\tof\tIncome | As\tReported | Impact\tof\nAdoption\tof\tASU\n2014-09 | Impact\tof\nAdoption\tof\tASU\n2017-07 | As\tAdjusted |
| Revenue | $6,200,942 | $23,747 | $— | $6,224,689 |
| Cost\tof\tsales | 1,967,640 | 6,950 | (297) | 1,974,293 |
| Gross\tmargin | 4,233,302 | 16,797 | 297 | 4,250,396 |
| Operating\texpenses: |  |  |  |  |
| Research\tand\tdevelopment | 1,165,410 | — | (363) | 1,165,047 |
| Selling,\tmarketing,\tgeneral\tand\tadministrative | 695,937 | — | (397) | 695,540 |
| Amortization\tof\tintangibles | 428,902 | — | — | 428,902 |
| Special\tcharges | 61,318 | — | — | 61,318 |
|  | 2,351,567 | — | (760) | 2,350,807 |
| Operating\tincome | 1,881,735 | 16,797 | 1,057 | 1,899,589 |
| Nonoperating\texpense\t(income): |  |  |  |  |
| Interest\texpense | 253,589 | — | — | 253,589 |
| Interest\tincome | (9,383) | — | — | (9,383) |
| Other,\tnet | (988) | — | 1,057 | 69 |
|  | 243,218 | — | 1,057 | 244,275 |
| Income\tbefore\tincome\ttaxes | 1,638,517 | 16,797 | — | 1,655,314 |
| Provision\tfor\tincome\ttaxes | 143,085 | 5,249 | — | 148,334 |
| Net\tincome | $1,495,432 | $11,548 | $— | $1,506,980 |
| Shares\tused\tto\tcompute\tearnings\tper\tcommon\tshare\t–\tbasic | 370,430 | — | — | 370,430 |
| Shares\tused\tto\tcompute\tearnings\tper\tcommon\tshare\t–\tdiluted | 374,938 | — | — | 374,938 |
| Basic\tearnings\tper\tcommon\tshare | $4.02 | $0.03 | $— | $4.05 |
| Diluted\tearnings\tper\tcommon\tshare | $3.97 | $0.03 | $— | $4.00 |

|  |  | Year	Ended	October	28,	2017 |  |  |
| :--- | :--- | :--- | :--- | :--- |
| Consolidated\tStatement\tof\tIncome | As\tReported | Impact\tof\nAdoption\tof\tASU\n2014-09 | Impact\tof\nAdoption\tof\tASU\n2017-07 | As\tAdjusted |
| Revenue | $5,107,503 | $138,851 | $— | $5,246,354 |
| Cost\tof\tsales | 2,045,907 | 32,589 | (383) | 2,078,113 |
| Gross\tmargin | 3,061,596 | 106,262 | 383 | 3,168,241 |
| Operating\texpenses: |  |  |  |  |
| Research\tand\tdevelopment | 968,602 | — | (469) | 968,133 |
| Selling,\tmarketing,\tgeneral\tand\tadministrative | 691,046 | — | (513) | 690,533 |
| Amortization\tof\tintangibles | 297,351 | — | — | 297,351 |
| Special\tcharges | 49,463 | — | — | 49,463 |
|  | 2,006,462 | — | (982) | 2,005,480 |
| Operating\tincome | 1,055,134 | 106,262 | 1,365 | 1,162,761 |
| Nonoperating\texpense\t(income): |  |  |  |  |
| Interest\texpense | 250,840 | — | — | 250,840 |
| Interest\tincome | (30,333) | — | — | (30,333) |
| Other,\tnet | 6,142 | — | 1,365 | 7,507 |
|  | 226,649 | — | 1,365 | 228,014 |
| Income\tbefore\tincome\ttaxes | 828,485 | 106,262 | — | 934,747 |
| Provision\tfor\tincome\ttaxes | 101,226 | 28,142 | — | 129,368 |
| Net\tincome | $727,259 | $78,120 | $— | $805,379 |
| Shares\tused\tto\tcompute\tearnings\tper\tcommon\tshare\t–\tbasic | 346,371 | — | — | 346,371 |
| Shares\tused\tto\tcompute\tearnings\tper\tcommon\tshare\t–\tdiluted | 350,484 | — | — | 350,484 |
| Basic\tearnings\tper\tcommon\tshare | $2.09 | $0.23 | $— | $2.32 |
| Diluted\tearnings\tper\tcommon\tshare | $2.07 | $0.22 | $— | $2.29 |

The	impact	on	the	Company's	previously	reported	consolidated	balance	sheet	line	items	is	as	follows:

|  | As	Reported | ASU	2014-09 | As	Adjusted |
| :--- | :--- | :--- | :--- |
| Deferred\ttax\tassets | $21,078 | $(11,413) | $9,665 |
| Deferred\tincome\ton\tshipments\tto\tdistributors,\tnet | $487,417 | $(487,417) | $— |
| Accrued\tliabilities | $497,080 | $133,027 | $630,107 |
| Deferred\tincome\ttaxes | $927,065 | $63,344 | $990,409 |
| Retained\tearnings | $5,703,064 | $279,633 | $5,982,697 |

In	addition,	in	the	first	quarter	of	fiscal	2019,	the	Company	adopted	ASU	2016-16,	Income	Taxes	(Topic	740)	(ASU	2016-16)	using	the	modified	retrospective method	with	a	cumulative-effect	adjustment	directly	to	retained	earnings.	ASU	2016-16	requires	an	entity	to	recognize	the	income	tax	consequences	of	an	intra-entity transfer	of	an	asset,	other	than	inventory,	when	the	transfer	occurs.	The	adoption	of	ASU	2016-16	resulted	in	the	following	cumulative-effect	increase	in	the	Company's deferred	tax	assets,	deferred	tax	liabilities	and	retained	earnings	as	follows:

|  | November	3,	2018	as<br>Adjusted | Impact	of	Adoption	of<br>ASU	2016-16 | Balance	November	4,	2018 |
| :--- | :--- | :--- | :--- |
| Deferred\ttax\tassets | $9,665 | $1,655,129 | $1,664,794 |
| Deferred\tincome\ttaxes | $990,409 | $1,324,103 | $2,314,512 |
| Retained\tearnings | $5,982,697 | $331,026 | $6,313,723 |

See	Note	12,	Income	Taxes,	in	these	Notes	to	Consolidated	Financial	Statements	for	more	information	on	the	adoption	of	ASU	2016-16.

# b. Cash	and	Cash	Equivalents

Cash	and	cash	equivalents	are	highly	liquid	investments	with	insignificant	interest	rate	risk	and	maturities	of	ninety	days	or	less	at	the	time	of	acquisition.	Cash and	cash	equivalents	consist	primarily	of	government	and	institutional	money	market	funds,	corporate	obligations	such	as	commercial	paper	and	floating	rate	notes, bonds	and	bank	time	deposits.

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	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	(AOCI).	Adjustments	to	the	fair value	of	investments	classified	as	available-for-sale	are	recorded	as	an	increase	or	decrease	in	AOCI,	unless	the	adjustment	is	considered	an	other-than-temporary impairment,	in	which	case	the	adjustment	is	recorded	as	a	charge	in	the	consolidated	statements	of	income.

The	Company's	deferred	compensation	plan	investments	are	classified	as	trading.	See	Note	2j,	Fair	Value	and	Note	11,	Retirement	Plans,	of	these	Notes	to Consolidated	Financial	Statements	for	additional	information	on	these	investments.

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

Realized	gains	or	losses	on	investments	are	determined	based	on	the	specific	identification	basis	and	are	recognized	in	nonoperating	(income)	expense.	There	were no	material	net	realized	gains	or	losses	from	the	sales	of	available-for-sale	investments	during	any	of	the	fiscal	periods	presented.

The	components	of	the	Company's	cash	and	cash	equivalents	as	of	November	2,	2019	and	November	3,	2018	were	as	follows:

|  | 2019 | 2018 |
| :--- | :--- | :--- |
| Cash\tand\tcash\tequivalents: |  |  |
| Cash | $152,432 | $147,629 |
| Available-for-sale | 416,890 | 598,962 |
| Held-to-maturity | 79,000 | 70,000 |
| Total\tcash\tand\tcash\tequivalents | $648,322 | $816,591 |

See	Note	2j,	Fair	Value,	of	these	Notes	to	Consolidated	Financial	Statements	for	additional	information	on	the	Company's	cash	equivalents.

| c.<br>Supplemental	Cash	Flow	Statement	Information | 2019 | 2018 | 2017 |
| :--- | :--- | :--- | :--- |
| Cash\tpaid\tduring\tthe\tfiscal\tyear\tfor: |  |  |  |
| Income\ttaxes | $205,762 | $211,473 | $868,492 |
| Interest | $216,143 | $233,436 | $183,117 |

Inventories	are	valued	at	the	lower	of	cost	(first-in,	first-out	method)	or	market.	The	valuation	of	inventory	requires	the	Company	to	estimate	obsolete	or	excess inventory	as	well	as	inventory	that	is	not	of	saleable	quality.	The	Company	employs	a	variety	of	methodologies	to	determine	the	net	realizable	value	of	its	inventory. While	a	portion	of	the	calculation	to	record	inventory	at	its	net	realizable	value	is	based	on	the	age	of	the	inventory	and	lower	of	cost	or	market	calculations,	a	key	factor in	estimating	obsolete	or	excess	inventory	requires	the	Company	to	estimate	the	future	demand	for	its	products.	If	actual	demand	is	less	than	the	Company's	estimates, impairment	charges,	which	are	recorded	to	cost	of	sales,	may	need	to	be	recorded	in	future	periods.	Inventory	in	excess	of	saleable	amounts	is	not	valued,	and	the remaining	inventory	is	valued	at	the	lower	of	cost	or	market.

Inventories	at	November	2,	2019	and	November	3,	2018	were	as	follows:

|  | 2019 | 2018 |
| :--- | :--- | :--- |
| Raw\tmaterials | $35,447 | $30,511 |
| Work\tin\tprocess | 400,409 | 375,908 |
| Finished\tgoods | 174,030 | 180,341 |
| Total\tinventories | $609,886 | $586,760 |

# 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	depreciated	over	the	lesser of	the	term	of	the	lease	or	the	useful	life	of	the	asset.	Repairs	and	maintenance	charges	are	expensed	as	incurred.	Depreciation	is	based	on	the	following	ranges	of estimated	useful	lives:

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	determined	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	depreciated	over	the	revised	useful	life.	The	Company has	not	recorded	any	material	impairment	charges	related	to	our	property,	plant	and	equipment	in	fiscal	2019,	fiscal	2018	or	fiscal	2017.

# f. Goodwill	and	Intangible	Assets

The	Company	evaluates	goodwill	for	impairment	annually,	utilizing	either	the	qualitative	or	quantitative	method,	as	well	as	whenever	events	or	changes	in circumstances	suggest	that	the	carrying	value	of	goodwill	may	not	be	recoverable.	The	Company	tests	goodwill	for	impairment	at	the	reporting	unit	level,	which	the Company	has	determined	is	consistent	with	our	eight	identified	operating	segments,	on	an	annual	basis	on	the	first	day	of	the	fourth	quarter	(on	or	about	August	4)	or more	frequently	if	indicators	of	impairment	exist	or	the	Company	reorganizes	its	reporting	units.	The	Company	has	the	option	to	first	assess	qualitative	factors	to determine	whether	it	is	more	likely	than	not	that	the	fair	value	of	a	reporting	unit	is	less	than	its	net

book	value.	If	the	Company	elects	not	to	use	this	option,	or	it	determines	that	it	is	more	likely	than	not	that	the	fair	value	of	a	reporting	unit	is	less	than	its	net	book value,	then	the	Company	performs	the	quantitative	goodwill	impairment	test.

In	the	Company's	annual	impairment	evaluation	that	occurred	for	fiscal	2019,	management	used	the	qualitative	method	of	assessing	goodwill	for	seven	of	its	eight reporting	units	and	the	quantitative	method	for	one	reporting	unit.	In	fiscal	2018,	the	Company	used	the	qualitative	method	for	all	eight	of	its	identified	reporting	units. For	each	of	the	reporting	units	evaluated	using	the	qualitative	method	in	fiscal	2019	and	fiscal	2018,	the	Company	determined	that	it	was	not	more	likely	than	not	that the	fair	values	were	less	than	their	net	book	values.	In	making	this	determination,	the	Company	considered	several	factors,	including	the	following:

– the	carrying	values	of	these	reporting	units	as	of	the	first	day	of	the	fourth	quarter	compared	to	the	previously	calculated	fair	values	as	of	the	date	of	the	most recent	quantitative	impairment	analysis;

– the	Company's	current	forecasts	as	compared	to	the	forecasts	included	in	the	most	recent	quantitative	impairment	analysis;

As	a	result	of	the	quantitative	goodwill	impairment	analysis	performed	in	fiscal	2019	for	one	of	the	Company's	reporting	units,	the	Company	concluded	the	reporting unit's	fair	value	exceeded	its	carrying	amount	as	of	the	assessment	date	and	no	risk	of	impairment	existed.	The	first	step	of	the	goodwill	impairment	test	requires	an entity	to	compare	the	fair	value	of	a	reporting	unit	with	its	carrying	amount.	The	Company	determined	the	fair	value	of	its	reporting	unit	using	a	weighting	of	the	income and	market	approaches.	Under	the	income	approach,	the	Company	used	a	discounted	cash	flow	methodology	which	required	management	to	make	significant	estimates and	assumptions	related	to	forecasted	revenues,	gross	profit	margins,	operating	income	margins,	perpetual	growth	rates,	and	long-term	discount	rates,	among	others.	For the	market	approach,	the	Company	used	the	guideline	public	company	method.	Under	this	method	the	Company	utilized	information	from	comparable	publicly	traded companies	with	similar	operating	and	investment	characteristics	as	the	reporting	unit,	to	estimate	valuation	multiples	that	are	applied	to	the	operating	performance	of	the reporting	unit,	in	order	to	estimate	its	fair	value.

There	was	no	impairment	of	goodwill	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	the	fiscal	year	ending	October	31,	2020	(fiscal	2020)	unless	indicators	arise	that	would	require	the	Company	to	reevaluate	at	an	earlier	date.

The	following	table	presents	the	changes	in	goodwill	during	fiscal	2019	and	fiscal	2018:

|  | 2019 | 2018 |
| :--- | :--- | :--- |
| Balance\tat\tbeginning\tof\tyear | $12,252,604 | $12,217,455 |
| Acquisition\tof\tLinear\t(Note\t6) | — | 1,647 |
| Goodwill\tadjustment\trelated\tto\tother\tacquisitions\t(1) | 6,702 | 36,558 |
| Foreign\tcurrency\ttranslation\tadjustment | (2,426) | (3,056) |
| Balance\tat\tend\tof\tyear | $12,256,880 | $12,252,604 |

(1)	Represents	goodwill	related	to	other	acquisitions	that	were	not	material	to	the	Company	on	either	an	individual	or	aggregate	basis.

# Intangible	Assets

The	Company	reviews	finite-lived	intangible	assets	for	impairment	whenever	events	or	changes	in	circumstances	indicate	that	the	carrying	value	of	assets	may	not be	recoverable.	If	required,	recoverability	of	these	assets	is	determined	by	comparison	of	their	carrying	value	to	the	estimated	future	undiscounted	cash	flows	the	assets are	expected	to	generate	over	their	remaining	estimated	useful	lives.	If	such	assets	are	considered	to	be	impaired,	the	impairment	to	be	recognized	in	earnings	equals	the amount	by	which	the	carrying	value	of	the	assets	exceeds	their	estimated	fair	value	determined	by	either	a	quoted	market	price,	if	any,	or	a	value	determined	by	utilizing a	discounted	cash	flow	technique.

In-process	research	and	development	(IPR&D)	assets	are	considered	indefinite-lived	intangible	assets	until	completion	or	abandonment	of	the	associated	research and	development	(R&D)	efforts.	Upon	completion	of	the	projects,	the	IPR&D	assets	are	reclassified	to	technology-based	intangible	assets	and	amortized	over	their estimated	useful	lives.	During	fiscal	2019,	the	company	recorded	$14.2	million	of	special	charges	related	to	the	write-off	of	acquired	intellectual	property,	classified	as IPR&D,	due	to	the	Company's	decision	to	discontinue	certain	product	development	strategies.

As	of	November	2,	2019	and	November	3,	2018,	the	Company's	intangible	assets	consisted	of	the	following:

|  | Gross	Carrying<br>Amount | Accumulated<br>Amortization | Gross	Carrying<br>Amount | Accumulated<br>Amortization |
| :--- | :--- | :--- | :--- | :--- |
| Customer\trelationships | $4,696,562 | $1,284,256 | $4,697,716 | $867,207 |
| Technology-based | 1,145,283 | 385,618 | 1,114,080 | 243,350 |
| Trade-name | 73,417 | 28,164 | 74,031 | 17,846 |
| IPR&amp;D | — | — | 20,768 | — |
| Total\t(1)\t(2) | $5,915,262 | $1,698,038 | $5,906,595 | $1,128,403 |

(1)	Foreign	intangible	asset	carrying	amounts	are	affected	by	foreign	currency	translation.

(2)	Increases	in	intangible	assets	primarily	relate	to	acquisitions	that	were	not	material	to	the	Company	on	either	an	individual	or	aggregate	basis.	Intangible	assets,	along	with	the related	accumulated	amortization,	are	removed	from	the	table	above	at	the	end	of	the	fiscal	year	they	become	fully	amortized.

Amortization	expense	related	to	finite-lived	intangible	assets	was	$570.6	million,	$570.5	million	and	$389.4	million	in	fiscal	2019,	2018	and	2017,	respectively, and	is	recorded	in	Cost	of	sales	and	Amortization	of	intangibles	on	the	consolidated	statements	of	income.	The	remaining	amortization	expense	will	be	recognized	over	a weighted	average	life	of	approximately	4.1	years.

      The	Company	expects	annual	amortization	expense	for	intangible	assets	as	follows:

# 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	estimated	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.	The	amounts	recognized	were	not	material	in	fiscal	2019, fiscal	2018	or	fiscal	2017.

# 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	AOCI.	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,	net,	were	not	material	in	fiscal	2019,	2018	or	2017.

# 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	British	Pound,	Philippine	Peso	and	the	Japanese Yen.	Derivative	instruments	are	employed	to	eliminate	or	minimize	certain	foreign	currency	exposures	that	can	be	confidently	identified	and	quantified.	These	foreign currency	exchange	contracts	are	entered	into	to	support	transactions	made	in	the	normal	course	of	business,	and	accordingly,	are	not	speculative	in	nature.	The	contracts are	for	periods	consistent	with	the	terms	of	the	underlying	transactions,	generally	one	year	or	less.	Hedges	related	to	anticipated	transactions	are	matched	with	the underlying	exposures	at	inception	and	designated	and	documented	as	cash	flow	hedges.	They	are	qualitatively	evaluated	for	effectiveness	on	a	quarterly	basis.	The	gain or	loss	on	the	derivatives	are	reported	as	a	component	of	AOCI	in	shareholders'	equity	and	reclassified	into	earnings	in	the	same	line	item	on	the	consolidated	statements of	income	as	the	impact	of	the	hedged	transaction	in	the	same	period	during	which	the	hedged	transaction	affects	earnings.

The	total	notional	amounts	of	forward	foreign	currency	derivative	instruments	designated	as	hedging	instruments	of	cash	flow	hedges	denominated	in	Euros, British	Pounds,	Philippine	Pesos	and	Japanese	Yen	as	of	November	2,	2019	and	November	3,	2018	was	$191.1	million	and	$194.4	million,	respectively.	The	fair	values of	forward	foreign	currency	derivative	instruments	designated	as	hedging	instruments	in	the	Company's	consolidated	balance	sheets	as	of	November	2,	2019	and November	3,	2018	were	as	follows:

|  | Fair	Value	At | Fair	Value	At |
| :--- | :--- | :--- |
| Balance\tSheet\tLocation | November\t2,\t2019 | November\t3,\t2018 |
| Prepaid\texpenses\tand\tother\tcurrent\tassets | $65 | $— |
| Accrued\tliabilities | $— | $6,934 |

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	November	2,	2019	and	November	3,	2018,	the	total	notional	amount	of	these undesignated	hedges	was	$55.3	million	and	$40.6	million,	respectively.	The	fair	value	of	these	hedging	instruments	in	the	Company's	consolidated	balance	sheets	was immaterial	as	of	November	2,	2019	and	November	3,	2018.

The	Company	estimates	that	settlements	of	forward	foreign	currency	derivative	instruments	included	in	OCI	that	will	be	reclassified	into	earnings	will	be immaterial	within	the	next	12	months.

All	of	the	Company's	derivative	financial	instruments	are	eligible	for	netting	arrangements	that	allow	the	Company	and	its	counterparties	to	net	settle	amounts owed	to	each	other.	Derivative	assets	and	liabilities	that	can	be	net	settled	under	these	arrangements	have	been	presented	in	the	Company's	consolidated	balance	sheets on	a	net	basis.	As	of	November	2,	2019	and	November	3,	2018,	none	of	the	netting	arrangements	involved	collateral.	The	following	table	presents	the	gross	amounts	of the	Company's	derivative	assets	and	liabilities	and	the	net	amounts	recorded	in	the	Company's	consolidated	balance	sheets	as	of	November	2,	2019	and	November	3, 2018:

Interest	Rate	Exposure	Management	—	The	Company's	current	and	future	debt	may	be	subject	to	interest	rate	risk.		The	Company	utilizes	interest	rate	derivatives to	alter	interest	rate	exposure	in	an	attempt	to	reduce	the	effects	of	the	changes	in	interest	rates.	During	fiscal	2019,	the	Company	entered	into	an	interest	rate	swap agreement	which	locked	in	the	interest	rate	for	up	to	$1	billion	in	future	debt	issuances.	The	interest	rate	swap	was	designated	and	qualified	as	a	cash	flow	hedge.	The fair	value	of	this	hedge	was	$138.8	million	as	of	November	2,	2019	and	is	included	within	accrued	liabilities	in	the	Company's	consolidated	balance	sheets.

The	market	risk	associated	with	the	Company's	derivative	instruments	results	from	currency	exchange	rate	or	interest	rate	movements	that	are	expected	to	offset the	market	risk	of	the	underlying	transactions,	assets	and	liabilities	being	hedged.	The

counterparties	to	the	agreements	relating	to	the	Company's	derivative	instruments	consist	of	a	number	of	major	international	financial	institutions	with	high	credit ratings.	Based	on	the	credit	ratings	of	the	Company's	counterparties	as	of	November	2,	2019	and	November	3,	2018,	nonperformance	is	not	perceived	to	be	a	material risk.	Furthermore,	none	of	the	Company's	derivatives	are	subject	to	collateral	or	other	security	arrangements	and	none	contain	provisions	that	are	dependent	on	the Company's	credit	ratings	from	any	credit	rating	agency.	While	the	contract	or	notional	amounts	of	derivative	financial	instruments	provide	one	measure	of	the	volume of	these	transactions,	they	do	not	represent	the	amount	of	the	Company's	exposure	to	credit	risk.	The	amounts	potentially	subject	to	credit	risk	(arising	from	the	possible inability	of	counterparties	to	meet	the	terms	of	their	contracts)	are	generally	limited	to	the	amounts,	if	any,	by	which	the	counterparties'	obligations	under	the	contracts exceed	the	obligations	of	the	Company	to	the	counterparties.	As	a	result	of	the	above	considerations,	the	Company	does	not	consider	the	risk	of	counterparty	default	to be	significant.

The	Company	records	the	fair	value	of	its	derivative	financial	instruments	in	its	consolidated	financial	statements	in	other	current	assets,	other	assets,	accrued liabilities	and	other	non-current	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	in	the	same	line	item	on	the	consolidated	statements	of	income	as	the	impact	of	the	hedged transaction	when	the	underlying	contract	matures.	Changes	in	the	fair	values	of	derivatives	not	qualifying	for	hedge	accounting	are	reported	in	earnings	as	they	occur.

For	information	on	the	unrealized	holding	gains	(losses)	on	derivatives	included	in	and	reclassified	out	of	AOCI	into	the	consolidated	statements	of	income	related to	forward	foreign	currency	exchange	contracts,	see	Note	2o,	Accumulated	Other	Comprehensive	(Loss)	Income	of	these	Notes	to	Consolidated	Financial	Statements.

# 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.

The	tables	below,	set	forth	by	level,	presents	the	Company's	financial	assets	and	liabilities,	excluding	accrued	interest	components,	that	were	accounted	for	at	fair value	on	a	recurring	basis	as	of	November	2,	2019	and	November	3,	2018.	The	tables	exclude	cash	on	hand	and	assets	and	liabilities	that	are	measured	at	historical	cost or	any	basis	other	than	fair	value.	As	of	November	2,	2019	and	November	3,	2018,	the	Company	held	$231.4	million	and	$217.6	million,	respectively,	of	cash	and	held- to-maturity	investments	that	were	excluded	from	the	tables	below.

# Fair	Value	measurement	at

Reporting	Date	using:

Quoted

Prices	in

|  | 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: |  |  |  |
| Government\tand\tinstitutional\tmoney\tmarket\tfunds | $416,890 | $— | $416,890 |
| Other\tassets: |  |  |  |
| Deferred\tcompensation\tinvestments | 48,302 | — | 48,302 |
| Total\tassets\tmeasured\tat\tfair\tvalue | $465,192 | $— | $465,192 |
| Liabilities |  |  |  |
| Interest\trate\tderivatives | — | 138,798 | 138,798 |
| Total\tliabilities\tmeasured\tat\tfair\tvalue | $— | $138,798 | $138,798 |

|  | 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: |  |  |  |
| Government\tand\tinstitutional\tmoney\tmarket\tfunds | $394,076 | $— | $394,076 |
| Corporate\tobligations\t(1) | — | 204,886 | 204,886 |
| Other\tassets: |  |  |  |
| Deferred\tcompensation\tinvestments | 41,001 | — | 41,001 |
| Interest\trate\tderivatives | — | 1,436 | 1,436 |
| Total\tassets\tmeasured\tat\tfair\tvalue | $435,077 | $206,322 | $641,399 |
| Liabilities |  |  |  |
| Forward\tforeign\tcurrency\texchange\tcontracts\t(2) | — | 7,150 | 7,150 |
| Total\tliabilities\tmeasured\tat\tfair\tvalue | $— | $7,150 | $7,150 |

(1) The	amortized	cost	of	the	Company's	investments	classified	as	available-for-sale	as	of	November	3,	2018	was	$205.0	million.

(2) The	Company	has	master	netting	arrangements	by	counterparty	with	respect	to	derivative	contracts.	See	Note	2i,	Derivative	Instruments	and	Hedging	Agreements,	of	these	Notes to	Consolidated	Financial	Statements	for	more	information	related	to	the	Company's	master	netting	arrangements.

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

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

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

Interest	rate	derivatives	—	The	fair	value	of	interest	rate	derivatives	is	estimated	using	a	discounted	cash	flow	analysis	based	on	the	contractual	terms	of	the derivatives.

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

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

The	table	below	presents	the	estimated	fair	value	of	certain	financial	instruments	not	recorded	at	fair	value	on	a	recurring	basis.	The	carrying	amounts	of	the	term loan	approximates	fair	value.	The	term	loan	is	classified	as	Level	2	measurements	according	to	the	fair	value	hierarchy.	The	fair	values	of	the	senior	unsecured	notes debt	are	obtained	from	broker	prices	and	are	classified	as	Level	1	measurements	according	to	the	fair	value	hierarchy.	See	Note	14,	Debt,	of	these	Notes	to	Consolidated Financial	Statements	for	further	discussion	related	to	outstanding	debt.

|  | November	2,	2019 |  | November	3,	2018 | November	3,	2018 |
| :--- | :--- | :--- | :--- | :--- |
|  | Principal\tAmount\nOutstanding | Fair\tValue | Principal\tAmount\nOutstanding | Fair\tValue |
| 3-Year\tterm\tloan,\tdue\tMarch\t2022 | $925,000 | $925,000 | $— | $— |
| 3-Year\tterm\tloan,\tdue\tMarch\t2020 | — | — | 425,000 | 425,000 |
| 5-Year\tterm\tloan,\tdue\tMarch\t2022 | — | — | 1,350,000 | 1,350,000 |
| 2020\tNotes,\tdue\tMarch\t2020 | 300,000 | 300,872 | 300,000 | 298,147 |
| 2021\tNotes,\tdue\tJanuary\t2021 | 450,000 | 454,634 | 450,000 | 444,568 |
| 2021\tNotes,\tdue\tDecember\t2021 | 400,000 | 402,591 | 400,000 | 386,375 |
| 2023\tNotes,\tdue\tJune\t2023 | 500,000 | 511,190 | 500,000 | 479,189 |
| 2023\tNotes,\tdue\tDecember\t2023 | 550,000 | 567,159 | 550,000 | 529,120 |
| 2025\tNotes,\tdue\tDecember\t2025 | 850,000 | 914,567 | 850,000 | 829,611 |
| 2026\tNotes,\tdue\tDecember\t2026 | 900,000 | 940,192 | 900,000 | 848,027 |
| 2036\tNotes,\tdue\tDecember\t2036 | 250,000 | 270,891 | 250,000 | 232,627 |
| 2045\tNotes,\tdue\tDecember\t2045 | 400,000 | 491,439 | 400,000 | 407,984 |
| Total\tDebt | $5,525,000 | $5,778,535 | $6,375,000 | $6,230,648 |

# 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,	including	estimates	of	variable consideration	related	to	distributor	sales;	accrued	taxes;	uncertain	tax	positions;	deferred	tax	valuation	allowances;	assumptions	pertaining	to	stock-based	compensation payments	and	defined	benefit	plans;	and	fair	value	of	acquired	assets	and	liabilities,	including	inventory,	property,	plant	and	equipment,	goodwill,	and	acquired intangibles;	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	and	cash	equivalents	with	high	credit	quality	counterparties,	continuously	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	(OEMs)	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.

Our	largest	customer	(through	distributors	and	direct	sales	to	OEMs),	accounted	for	approximately	30%,	28%,	and	14%	of	net	revenues	in	fiscal	2019,	fiscal	2018 and	fiscal	2017,	respectively.	Our	next	largest	customer	accounted	for	approximately	10%	of	net	revenues	in	fiscal	2019,	less	than	10%	of	net	revenues	in	fiscal	2018, and	12%	of	net	revenues	in	fiscal	2017.

# 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,	such	as	Taiwan Semiconductor	Manufacturing	Company	(TSMC)	and	others.	If	these	suppliers	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

Recognition	of	revenue	occurs	when	a	customer	obtains	control	of	promised	goods	or	services	in	an	amount	that	reflects	the	consideration	to	which	the	providing entity	expects	to	be	entitled	in	exchange	for	those	goods	or	services.	As	a	result	of	the	adoption	of	new	revenue	accounting	rules	in	the	first	quarter	of	fiscal	2019,	the Company	revised	its	revenue	recognition	policy.	The	Company	now	recognizes	revenue	upon	transfer	of	control	of	promised	products	or	services	to	customers	in	an amount	that	reflects	the	consideration	the	Company	expects	to	receive	in	exchange	for	those	products	or	services.	Under	this	rule,	the	Company	recognizes	revenue	when all	of	the	following	criteria	are	met:	(1)	the	Company	has	entered	into	a	binding	agreement,	(2)	the	performance	obligations	have	been	identified,	(3)	the	transaction	price to	the	customer	has	been	determined,	(4)	the	transaction	price	has	been	allocated	to	the	performance	obligations	in	the	contract,	and	(5)	the	performance	obligations	have been	satisfied.	The	majority	of	the	Company's	shipping	terms	permit	the	Company	to	recognize	revenue	at	point	of	shipment	or	delivery.	Certain	shipping	terms	require the	goods	to	be	through	customs	or	be	received	by	the	customer	before	title	passes.	In	those	instances,	the	Company	defers	the	revenue	recognized	until	title	has	passed. Shipping	costs	are	charged	to	selling,	marketing,	general	and	administrative	expense	as	incurred.	Sales	taxes	are	excluded	from	revenue.

Performance	Obligations:	Substantially	all	of	the	Company's	contracts	with	customers	contain	a	single	performance	obligation,	the	sale	of	mixed-signal	integrated circuit	(IC)	products.	Such	sales	represent	a	single	performance	obligation	because	the	sale	is	one	type	of	good	or	includes	multiple	goods	that	are	neither	capable	of being	distinct	nor	separable	from	the	other	promises	in	the	contract.	This	performance	obligation	is	satisfied	when	control	of	the	product	is	transferred	to	the	customer, which	occurs	upon	shipment	or	delivery.	Unsatisfied	performance	obligations	primarily	represent	contracts	for	products	with	future	delivery	dates	and	with	an	original expected	duration	of	one	year	or	less.	As	allowed	under	ASU	2014-09,	the	Company	has	opted	to	not	disclose	the	amount	of	unsatisfied	performance	obligations	as these	contracts	have	original

expected	durations	of	less	than	one	year.	The	Company	generally	offers	a	twelve-month	warranty	for	its	products.	The	Company's	warranty	policy	provides	for replacement	of	defective	products.	Specific	accruals	are	recorded	for	known	product	warranty	issues.

Transaction	Price:	The	transaction	price	reflects	the	Company's	expectations	about	the	consideration	it	will	be	entitled	to	receive	from	the	customer	and	may include	fixed	or	variable	amounts.	Fixed	consideration	primarily	includes	sales	to	direct	customers	and	sales	to	distributors	in	which	both	the	sale	to	the	distributor	and the	sale	to	the	end	customer	occur	within	the	same	reporting	period.	Variable	consideration	includes	sales	in	which	the	amount	of	consideration	that	the	Company	will receive	is	unknown	as	of	the	end	of	a	reporting	period.	Such	consideration	primarily	includes	credits	issued	to	the	distributor	due	to	price	protection	and	sales	made	to distributors	under	agreements	that	allow	certain	rights	of	return,	referred	to	as	stock	rotation.	Price	protection	represents	price	discounts	granted	to	certain	distributors	to allow	the	distributor	to	earn	an	appropriate	margin	on	sales	negotiated	with	certain	customers	and	in	the	event	of	a	price	decrease	subsequent	to	the	date	the	product	was shipped	and	billed	to	the	distributor.	Stock	rotation	allows	distributors	limited	levels	of	returns	in	order	to	reduce	the	amounts	of	slow-moving,	discontinued	or	obsolete product	from	their	inventory.	A	liability	for	distributor	credits	covering	variable	consideration	is	made	based	on	the	Company's	estimate	of	historical	experience	rates	as well	as	considering	economic	conditions	and	contractual	terms.	To	date,	actual	distributor	claims	activity	has	been	materially	consistent	with	the	provisions	the	Company has	made	based	on	its	historical	estimates.	For	the	years	ended	November	2,	2019	and	November	3,	2018,	sales	to	distributors	were	$3.4	billion	in	both	periods,	net	of variable	consideration	for	which	the	liability	balances	as	of	November	2,	2019	and	November	3,	2018	were	$227.0	million	and	$144.9	million,	respectively.

Contract	Balances:	Accounts	receivable	represents	the	Company's	unconditional	right	to	receive	consideration	from	its	customers.	Payments	are	typically	due within	30	to	45	days	of	invoicing	and	do	not	include	a	significant	financing	component.	To	date,	there	have	been	no	material	impairment	losses	on	accounts	receivable. There	were	no	material	contract	assets	or	contract	liabilities	recorded	on	the	consolidated	balance	sheets	in	any	of	the	periods	presented.

The	Company	generally	warrants	that	products	will	meet	their	published	specifications	and	that	the	Company	will	repair	or	replace	defective	products	for	twelve- months	from	the	date	title	passes	to	the	customer.	Specific	accruals	are	recorded	for	known	product	warranty	issues.	Product	warranty	expenses	during	fiscal	2019,	fiscal 2018	and	fiscal	2017	were	not	material.

# o. Accumulated	Other	Comprehensive	(Loss)	Income

Accumulated	other	comprehensive	(loss)	income	(AOCI)	includes	certain	transactions	that	have	generally	been	reported	in	the	consolidated	statement	of shareholders'	equity.	The	components	of	AOCI	at	November	2,	2019	and	November	3,	2018	consisted	of	the	following,	net	of	tax:

|  | Foreign<br>currency<br>translation<br>adjustment | Unrealized	holding<br>gains	(losses)	on<br>available	for	sale<br>securities | Unrealized<br>holding	gains<br>(losses)	on<br>derivatives | Pension	plans | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| November\t3,\t2018 | $(28,711) | $(10) | $(14,355) | $(15,364) | $(58,440) |
| Other\tcomprehensive\t(loss)\tincome\tbefore\treclassifications | (1,365) | 10 | (140,728) | (31,082) | (173,165) |
| Amounts\treclassified\tout\tof\tother\tcomprehensive\tloss | — | — | 9,185 | 1,004 | 10,189 |
| Tax\teffects | — | — | 27,883 | 5,734 | 33,617 |
| Other\tcomprehensive\t(loss)\tincome | (1,365) | 10 | (103,660) | (24,344) | (129,359) |
| November\t2,\t2019 | $(30,076) | $— | $(118,015) | $(39,708) | $(187,799) |

The	amounts	reclassified	out	of	AOCI	into	the	consolidated	statements	of	income,	with	presentation	location	during	each	period	were	as	follows:

| Comprehensive	Income	Component | 2019 | 2018 | Location |
| :--- | :--- | :--- | :--- |
| Unrealized\tholding\tgains\t(losses)\ton\tderivatives |  |  |  |
| \t\t\t\tCurrency\tforwards | $1,736 | $396 | Cost\tof\tsales |
|  | 2,956 | (462) | Research\tand\tdevelopment |
|  | 3,056 | (317) | Selling,\tmarketing,\tgeneral\tand\tadministrative |
| \t\t\t\t\tInterest\trate\tderivatives | 1,437 | (1,324) | Interest\texpense |
|  | 9,185 | (1,707) | Total\tbefore\ttax |
|  | (1,518) | 94 | Tax |
|  | $7,667 | $(1,613) | Net\tof\ttax |
| Amortization\tof\tpension\tcomponents |  |  |  |
| \t\t\t\t\tTransition\tobligation | $— | $10 | (1) |
| \t\t\t\t\tPrior\tservice\tcredit\tand\tcurtailment\trecognition | — | 1 | (1) |
| \t\t\t\t\tActuarial\tlosses\tand\tsettlement\trecognition | 1,004 | 1,621 | (1) |
|  | 1,004 | 1,632 | Total\tbefore\ttax |
|  | (248) | (395) | Tax |
|  | $756 | $1,237 | Net\tof\ttax |
| Total\tamounts\treclassified\tout\tof\tAOCI,\tnet\tof\ttax | $8,423 | $(376) |  |

(1) The	amortization	of	pension	components	is	included	in	the	computation	of	net	periodic	pension	cost.	See	Note	11,	Retirement	Plans,	of	these	Notes	to	Consolidated	Financial Statements	for	further	information.

# p. Income	Taxes

Deferred	tax	assets	and	liabilities	are	determined	based	on	the	differences	between	financial	reporting	and	tax	basis	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.	A	valuation	allowance	is	recorded	when	it is	more	likely	than	not	that	some	or	all	of	the	deferred	tax	assets	will	not	be	realized.	The	calculation	of	the	tax	liabilities	involves	dealing	with	uncertainties	in	the application	of	complex	tax	regulations.	If	it	is	more	likely	than	not	that	the	tax	position	will	not	be	sustained	on	audit,	an	uncertain	tax	position	is	recorded.	The Company	re-evaluates	these	uncertain	tax	positions	on	a	quarterly	basis.	See	Note	12,	Income	Taxes,	of	these	Notes	to	Consolidated	Financial	Statements	for	further information	related	to	income	taxes.

# q. 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	and	restricted	stock	units	is	computed	using	the	average	market	price	for	the	respective	period.	In	addition,	the	assumed	proceeds	under	the	treasury	stock method	include	the	average	unrecognized	compensation	expense	of	stock	options	that	are	in-the-money	and	restricted	stock	units.	This	results	in	the	"assumed"	buyback of	additional	shares,	thereby	reducing	the	dilutive	impact	of	in-the-money	stock	options.	Potential	shares	related	to	certain	of	the	Company's	outstanding	stock	options and	restricted	stock	units	were	excluded	because	they	were	anti-dilutive.	Those	potential	shares,	determined	based	on	the	weighted	average	exercise	prices	during	the respective	periods,	could	be	dilutive	in	the	future.

In	connection	with	the	Acquisition,	the	Company	granted	restricted	stock	awards	to	replace	outstanding	restricted	stock	awards	of	Linear	employees.	These restricted	stock	awards	entitle	recipients	to	voting	and	nonforfeitable	dividend	rights	from	the	date	of	grant.	These	unvested	stock-based	compensation	awards	are considered	participating	securities	and	the	two-class	method	is	used	for	purposes	of	calculating	earnings	per	share.	Under	the	two-class	method,	a	portion	of	net	income is	allocated	to	these	participating	securities	and	therefore	is	excluded	from	the	calculation	of	earnings	per	share	allocated	to	common	stock,	as	shown	in	the	table	below. The	difference	between	the	income	allocated	to	participating	securities	under	the	basic	and	diluted	two-class	methods	is	not	material.

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

|  | 2019 | 2018	(1) | 2017	(1) |
| :--- | :--- | :--- | :--- |
| Net\tincome | $1,363,011 | $1,506,980 | $805,379 |
| Less:\tincome\tallocated\tto\tparticipating\tsecurities | 3,229 | 5,909 | 2,243 |
| Net\tincome\tallocated\tto\tcommon\tshareholders | $1,359,782 | $1,501,071 | $803,136 |
| Basic\tshares: |  |  |  |
| Weighted-average\tshares\toutstanding | 369,133 | 370,430 | 346,371 |
| Earnings\tper\tcommon\tshare\tbasic | $3.68 | $4.05 | $2.32 |
| Diluted\tshares: |  |  |  |
| Weighted-average\tshares\toutstanding | 369,133 | 370,430 | 346,371 |
| Assumed\texercise\tof\tcommon\tstock\tequivalents | 3,738 | 4,508 | 4,113 |
| Weighted-average\tcommon\tand\tcommon\tequivalent\tshares | 372,871 | 374,938 | 350,484 |
| Earnings\tper\tcommon\tshare\tdiluted | $3.65 | $4.00 | $2.29 |
| Anti-dilutive\tshares\trelated\tto: |  |  |  |
| Outstanding\tstock\toptions | 826 | 1,649 | 1,527 |

(1) Balances	have	been	restated	to	reflect	the	adoption	of	ASU	2014-09.	See	Note	2a,	Principles	of	Consolidation,	in	the	Notes	to	Consolidated	Financial	Statements.

# r. 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	four	years	for	stock	options	and	restricted	stock	units,	or	in	annual	installments	of	25%	on each	of	the	first,	second,	third	and	fourth	anniversaries	of	the	date	of	grant.	For	grants	issued	prior	to	fiscal	2018,	the	vesting	period	was	generally	five	years	for	stock options,	or	in	annual	installments	of	20%	on	each	of	the	first,	second,	third,	fourth	and	fifth	anniversaries	of	the	date	of	grant	and	in	one	installment	on	the	third anniversary	of	the	date	of	grant	for	restricted	stock	units/awards.	Determining	the	amount	of	stock-based	compensation	to	be	recorded	for	stock	options	requires	the Company	to	develop	estimates	used	in	calculating	the	grant-date	fair	value	of	awards.	The	Company	uses	the	Black-Scholes	valuation	model	to	calculate	the	grant-date fair	value	of	stock	option	awards.	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.	The	grant-date	fair	value	of	restricted	stock	units	with	only	a	service	condition	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.	See Note	3,	Stock-Based	Compensation	and	Shareholders'	Equity,	of	these	Notes	to	Consolidated	Financial	Statements	for	additional	information	relating	to	stock-based compensation.

# s. New	Accounting	Pronouncements

# Standards	Implemented

In	May	2014,	the	FASB	issued	ASU	2014-09,	which	supersedes	nearly	all	existing	revenue	recognition	guidance	under	U.S.	GAAP.	The	core	principle	of	ASU 2014-09	is	that	an	entity	should	recognize	revenue	to	depict	the	transfer	of	promised	goods	or	services	to	customers	in	an	amount	that	reflects	the	consideration	to	which the	entity	expects	to	be	entitled	in	exchange	for	those	goods	or	services.	Additionally,	the	guidance	requires	improved	disclosures	to	help	users	of	financial	statements better	understand	the	nature,	amount,	timing,	and	uncertainty	of	revenue	and	cash	flows	arising	from	contracts	with	customers.	The	FASB	issued	several	amendments and	updates	to	the	new	revenue	standard,	including	guidance	related	to	when	an	entity	should	recognize	revenue	gross	as	a	principal	or	net	as	an	agent	and	how	an	entity should	identify	performance	obligations.		The	Company	adopted	ASU	2014-09	in	the	first	quarter	of	fiscal	2019	using	the	full	retrospective	method	and	restated	prior periods.	As	a	result	of	the	adoption	of	ASU	2014-09	the	Company	changed	its	accounting	policy	for	revenue	recognition.	See	Note	2a,	Principles	of	Consolidation,	and Note	2n,	Revenue	Recognition,	in	these	Notes	to	Consolidated	Financial	Statements	for	details	of	the	impact	of	ASU	2014-09	on	the	Company's	financial	statements.

# Income	Taxes

In	October	2016,	the	FASB	issued	ASU	2016-16,	Income	Taxes	(Topic	740)	(ASU	2016-16).	ASU	2016-16	requires	an	entity	to	recognize	the	income	tax consequences	of	an	intra-entity	transfer	of	an	asset,	other	than	inventory,	when	the	transfer	occurs.	ASU	2016-16	is	effective	for	fiscal	years	beginning	after	December 15,	2017,	and	interim	periods	within	those	fiscal	years.	The	Company	adopted	ASU	2016-16	in	the	first	quarter	of	fiscal	2019	using	the	modified	retrospective	method with	a	cumulative-effect	adjustment	directly	to	retained	earnings.	The	adoption	of	ASU	2016-16	resulted	in	a	net	cumulative-effect	adjustment	that	resulted	in	an increase	in	retained	earnings	of	$331.0	million,	by	recording	new	deferred	tax	assets	from	intra-entity	transfers	involving	assets	other	than	inventory,	partially	offset	by a	U.S.	deferred	tax	liability	related	to	GILTI.	Adoption	of	the	standard	resulted	in	an	increase	in	long-term	deferred	tax	assets	of	$1.7	billion	and	an	increase	in	long- term	deferred	tax	liabilities	of	$1.3	billion.

# Other

The	following	standards	were	adopted	during	the	first	quarter	of	fiscal	2019	and	did	not	have	a	material	impact	on	the	Company's	financial	position	and	results	of operations:

•ASU	2016-01,	Financial	Instruments-Overall	(Subtopic	825-10):	Recognition	and	Measurement	of	Financial	Assets	and	Financial	Liabilities.

•ASU	2016-15,	Statement	of	Cash	Flows	(Topic	230):	Classification	of	Certain	Cash	Receipts	and	Cash	Payments.

•ASU	2017-01,	Business	Combinations	(Topic	805):	Clarifying	the	Definition	of	a	Business.

•ASU	2017-07,	Improving	the	Presentation	of	Net	Period	Pension	Cost	and	Net	Period	Postretirement	Benefit	Cost.

•ASU	2017-09,	Compensation-Stock	Compensation	(Topic	718):	Scope	of	Modification	Accounting.

# Standards	to	Be	Implemented

# Comprehensive	Income

In	February	2018,	the	FASB	issued	ASU	2018-02,	Income	Statement	-	Reporting	Comprehensive	Income	(Topic	220):	Reclassification	of	Certain	Tax	Effects	from Accumulated	Other	Comprehensive	Income	(ASU	2018-02).	ASU	2018-02	allows	for	reclassification	of	stranded	tax	effects	resulting	from	the	Tax	Legislation	from AOCI	to	retained	earnings.	ASU	2018-02	is	effective	for	fiscal	years	beginning	after	December	15,	2018,	with	early	adoption	permitted.	ASU	2018-02	is	effective	for the	Company	in	the	first	quarter	of	the	fiscal	year	ending	October	31,	2020	(fiscal	2020).	The	Company	is	currently	evaluating	the	adoption	date	and	the	impact,	if	any, adoption	will	have	on	its	financial	position	and	results	of	operations.

# Leases

In	February	2016,	the	FASB	issued	ASU	2016-02,	Leases	(Topic	842)	(ASU	2016-02).	ASU	2016-02	requires	a	lessee	to	recognize	most	leases	on	the	balance sheet	but	recognize	expenses	on	the	income	statement	in	a	manner	similar	to	current	practice.	The	update	states	that	a	lessee	will	recognize	a	lease	liability	for	the obligation	to	make	lease	payments	and	a	right-to-use	asset	for	the	right	to	use	the	underlying	assets	for	the	lease	term.	Leases	will	continue	to	be	classified	as	either financing	or	operating,	with	classification	affecting	the	recognition,	measurement	and	presentation	of	expenses	and	cash	flows	arising	from	a	lease.	In	January	2018,	the FASB	issued	ASU	2018-01,	Leases	(Topic	842):	Land	Easement	Practical	Expedient	for	Transition	to	Topic	842	(ASU	2018-01).	ASU	2018-01	permits	an	entity	to elect	an	optional	transition	practical	expedient	to	not	evaluate	land	easements	that	exist	or	expired	before	the	entity's	adoption	of	Topic	842	and	that	were	not	previously accounted	for	as	leases	under	Topic	840.	In	July	2018,	the	FASB	issued	ASU	2018-11,	Leases	–	Targeted	Improvements	(Topic	842)	(ASU	2018-11),	which	provides for	an	additional	transition	method	that	allows	companies	to	apply	the	new	lease	standard	at	the	adoption	date,	eliminating	the	requirement	to	apply	the	standard	to	the earliest	period	presented	in	the	financial	statements.

ASU	2016-02,	ASU	2018-01	and	ASU	2018-11	are	effective	for	financial	statements	issued	for	fiscal	years	beginning	after	December	15,	2018,	and	interim periods	within	those	fiscal	years.	ASU	2016-02	and	ASU	2018-01	are	effective	for	the	Company	in	the	first	quarter	of	fiscal	2020.	The	Company	is	nearing	completion in	assessing	all	potential	aspects	of	the	standard	on	its	Consolidated	Financial	Statements	and	related	disclosures	and	expects	that	there	will	be	an	increase	in	assets	and liabilities	on	the	consolidated	balance	sheets	at	adoption	due	to	the	recognition	of	right-of-use	assets	and	related	lease	liabilities,	which	the	Company	expects	to	be recorded	using	an	incremental	borrowing	rate.	The	Company	plans	to	adopt	the	standard	using	the	transition	method	provided	by	ASC	2018-11,	in	which	prior	periods will	not	be	adjusted,	and	also	plans	to	apply	the	package	of	practical	expedients	permitted	under	the	transition	guidance	to	its	lease	portfolio.	At	November	2,	2019,	the Company	was	contractually	obligated	to	make	future	payments	of	approximately	$0.4	billion	under	its	operating	lease	obligations	in	existence	as	of	that	date,	primarily related	to	long-term	facility	leases.	The	Company	does	not	expect	the	adoption	of	ASU	2016-02,	ASU	2018-01	and	ASU	2018-11	to	have	a	material	impact	on	its results	of	operations.	See	Note	9,	Lease

Commitments,	in	these	Notes	to	Consolidated	Financial	Statements	for	information	regarding	our	leases	under	Accounting	Standard	Codification	Topic	840,	Leases.

# Retirement	Benefits

In	August	2018,	the	FASB	issued	ASU	2018-14,	Compensation-Retirement	Benefits-Defined	Benefit	Plans-General	(Topic	715-20):	Disclosure	Framework- Changes	to	the	Disclosure	Requirements	for	Defined	Benefit	Plans	(ASU	2018-14),	which	modifies	the	disclosure	requirements	for	defined	benefit	pension	plans	and other	post-retirement	plans.	ASU	2018-14	is	effective	for	fiscal	years	ending	after	December	15,	2020,	with	early	adoption	permitted.	ASU	2018-14	is	effective	for	the Company	in	the	first	quarter	of	the	fiscal	year	ending	October	30,	2021	(fiscal	2021).	The	Company	is	currently	evaluating	the	adoption	date.	The	adoption	of	ASU 2018-14	will	modify	the	Company's	disclosures	for	defined	benefit	plans	and	other	post-retirement	plans	but	is	not	expected	to	impact	its	financial	position	or	results	of operations.

# Financial	Instruments

In	June	2016,	the	FASB	issued	ASU	2016-13,	Financial	Instruments	-	Credit	Losses	(Topic	326),	Measurement	of	Credit	Losses	on	Financial	Instruments	(ASU 2016-13).	ASU	2016-13	requires	a	financial	asset	(or	group	of	financial	assets)	measured	at	amortized	cost	basis	to	be	presented	at	the	net	amount	expected	to	be collected.	The	allowance	for	credit	losses	is	a	valuation	account	that	is	deducted	from	the	amortized	cost	basis	of	the	financial	asset(s)	to	present	the	net	carrying	value	at the	amount	expected	to	be	collected	on	the	financial	asset.	In	May	2019,	the	FASB	issued	ASU	2019-05,	Financial	Instruments	-	Credit	Losses	(Topic	326):	Targeted Transition	Relief	(ASU	2019-05).	ASU	2019-05	allows	an	entity	to	irrevocably	elect	the	fair	value	option	for	certain	financial	instruments.	Once	elected,	an	entity	would recognize	the	difference	between	the	carrying	amount	and	the	fair	value	of	the	financial	instrument	as	part	of	the	cumulative	effect	adjustments	associated	with	the adoption	of	ASU	2016-13.	ASU	2016-13	and	ASU	2019-05	are	effective	for	fiscal	years	beginning	after	December	15,	2019,	and	for	interim	periods	within	those	fiscal years.	ASU	2016-13	and	ASU	2019-05	are	effective	for	the	Company	in	the	first	quarter	of	fiscal	2021.	The	Company	is	currently	evaluating	the	adoption	date	and	the impact,	if	any,	adoption	will	have	on	its	financial	position	and	results	of	operations.

# 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	Company's	Amended	and	Restated	2006	Stock	Incentive Plan	(2006	Plan).	This	plan	was	originally	approved	by	shareholders	on	March	14,	2006,	and	shareholders	subsequently	approved	the	amended	and	restated	2006	Plan	in March	2014.	The	2006	Plan	provides	for	the	grant	of	up	to	34	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	equity	compensation	plans	that	have	not	been	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	12,	2021,	but	awards	previously	granted	may	extend	beyond	that	date.	The	Company	will	not	grant	further	equity	awards	under	any	previous	equity compensation	plans.	In	connection	with	the	Acquisition,	the	Company	assumed	the	Linear	Technology	Corporation	Amended	and	Restated	2005	Equity	Incentive	Plan (the	2005	Plan)	and	the	Linear	Technology	Corporation	Amended	and	Restated	2010	Equity	Incentive	Plan	(now	referred	to	as	the	Analog	Devices,	Inc.	Amended	and Restated	2010	Equity	Incentive	Plan)	(the	2010	Plan).	The	Company	will	not	grant	further	equity	awards	under	the	2005	Plan	but	may	grant	stock	options	and	other stock	and	stock-based	awards	under	the	2010	Plan.

While	the	Company	may	grant	options	to	employees	that	become	exercisable	at	different	times	or	within	different	periods,	the	Company	generally	grants	to employees	options	that	vest	over	four	years	and	become	exercisable	in	annual	installments	of	25%	on	each	of	the	first,	second,	third	and	fourth	anniversaries	of	the	date of	grant.	For	grants	issued	prior	to	fiscal	2018	the	options	granted	to	employees	generally	vested	over	five	years	and	became	exercisable	in	annual	installments	of	20% on	each	of	the	first,	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	grants	to	employees	restricted	stock	units	that	generally	vest	over	four	years	in	annual	installments	of	25%	on	each	of	the	first,	second, third	and	fourth	anniversaries	of	the	date	of	grant.	For	grants	issued	prior	to	fiscal	2018	restricted	stock	units	generally	vested	in	one	installment	on	the	third	anniversary of	the	date	of	grant.

As	of	November	2,	2019,	a	total	of	10.2	million	and	1.4	million	common	shares	were	available	for	future	grant	under	the	2006	Plan	and	2010	Plan,	respectively, and	21.2	million	common	shares	were	reserved	for	issuance	under	the	2006	Plan,	2010	Plan	and	the	Company's	previous	equity	compensation	plans.

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.	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.

# Linear	Replacement	Awards

In	connection	with	the	Acquisition,	the	Company	issued	equity	awards,	consisting	of	restricted	stock	awards	and	restricted	stock	units	(replacement	awards),	to certain	Linear	employees	in	replacement	of	Linear	equity	awards.	The	replacement	awards	consisted	of	restricted	stock	awards	and	restricted	stock	units	for approximately	2.8	million	shares	of	the	Company's	common	stock	with	a	weighted	average	grant	date	fair	value	of	$82.20.	The	terms	and	intrinsic	value	of	these replacement	awards	are	substantially	the	same	as	the	converted	Linear	awards.	The	fair	value	of	the	replacement	awards	associated	with	services	rendered	through	the Acquisition	Date	was	recognized	as	a	component	of	the	total	acquisition	consideration,	and	the	remaining	fair	value	of	the	replacement	awards	associated	with	post- Acquisition	services	will	be	recognized	as	an	expense	on	a	straight-line	basis	over	the	remaining	vesting	period.

# Modification	of	Awards

The	Company	has,	from	time	to	time,	modified	the	terms	of	its	equity	awards	to	employees	and	directors.	The	modifications	made	to	the	Company's	equity	awards in	fiscal	2019,	fiscal	2018	and	fiscal	2017	did	not	result	in	significant	incremental	compensation	costs,	either	individually	or	in	the	aggregate.

# Grant-Date	Fair	Value

The	Company	uses	the	Black-Scholes	valuation	model	to	calculate	the	grant-date	fair	value	of	stock	option	awards.	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.	The	grant- date	fair	value	of	restricted	stock	units	with	a	service	condition	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 using	the	Black-Scholes	valuation	model	granted	in	fiscal	2018,	fiscal	2017	and	fiscal	2016	is	as	follows:

| Stock	Options | 2019 | 2018 | 2017 |
| :--- | :--- | :--- | :--- |
| Options\tgranted\t(in\tthousands) | 454 | 603 | 1,480 |
| Weighted-average\texercise\tprice | $107.11 | $90.98 | $82.99 |
| Weighted-average\tgrant-date\tfair\tvalue | $23.29 | $20.82 | $17.12 |
| Assumptions: |  |  |  |
| Weighted-average\texpected\tvolatility | 26.4\t% | 27.7\t% | 26.4\t% |
| Weighted-average\texpected\tterm\t(in\tyears) | 5.0 | 5.0 | 5.1 |
| Weighted-average\trisk-free\tinterest\trate | 2.4\t% | 2.6\t% | 2.1\t% |
| Weighted-average\texpected\tdividend\tyield | 2.0\t% | 2.1\t% | 2.2\t% |

Expected	volatility	—	The	Company	is	responsible	for	estimating	volatility	and	has	considered	a	number	of	factors,	including	third-party	estimates.	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.

Risk-free	interest	rate	—	The	yield	on	zero-coupon	U.S.	Treasury	securities	for	a	period	that	is	commensurate	with	the	expected	term	assumption	is	used	as	the risk-free	interest	rate.

Expected	dividend	yield	—	Expected	dividend	yield	is	calculated	by	annualizing	the	cash	dividend	declared	by	the	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.	In	connection	with	the	Acquisition,	the	Company	granted	restricted	stock	awards	to	replace	outstanding	restricted	stock	awards of	Linear	employees.	These	restricted	stock	awards	entitle	recipients	to	voting	and	nonforfeitable	dividend	rights	from	the	date	of	grant.

# 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	5.0%	to	all	unvested	stock-based	awards	as	of	November	2,	2019.	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	awards	that	vest.

Total	stock-based	compensation	expense	recognized	is	as	follows:

|  | 2019 | 2018 | 2017 |
| :--- | :--- | :--- | :--- |
| Cost\tof\tsales | $20,628 | $18,733 | $12,569 |
| Research\tand\tdevelopment | 75,305 | 81,444 | 51,258 |
| Selling,\tmarketing,\tgeneral\tand\tadministrative | 51,829 | 50,988 | 40,361 |
| Special\tcharges | 2,538 | — | — |
| Total\tstock-based\tcompensation\texpense | $150,300 | $151,165 | $104,188 |

As	of	November	2,	2019	and	November	3,	2018,	the	Company	capitalized	$6.8	million	and	$7.1	million,	respectively,	of	stock-based	compensation	in	inventory.

# Additional	paid-in-capital	(APIC)	Pool

The	Company	adopted	ASU	2016-09	during	fiscal	2018.	ASU	2016-09	eliminated	the	APIC	pool	and	requires	that	excess	tax	benefits	and	tax	deficiencies	be recorded	in	the	income	statement	when	awards	are	settled.	As	a	result	of	this	adoption	the	Company	recorded	total	excess	tax	benefits	of	$28.7	million	and	$26.2	million in	fiscal	2019	and	fiscal	2018,	respectively,	from	its	stock-based	compensation	payments	within	income	tax	expense	in	its	consolidated	statements	of	income.

For	fiscal	2017,	the	APIC	pool	represented	the	excess	tax	benefits	related	to	stock-based	compensation	that	were	available	to	absorb	future	tax	deficiencies.	If	the amount	of	future	tax	deficiencies	was	greater	than	the	available	APIC	pool,	the	Company	recorded	the	excess	as	income	tax	expense	in	its	consolidated	statements	of income.	For	fiscal	2017,	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.

# Stock-Based	Compensation	Activity

A	summary	of	the	activity	under	the	Company's	stock	option	plans	as	of	November	2,	2019	and	changes	during	the	fiscal	year	then	ended	is	presented	below:

|  | Options<br>Outstanding<br>(in	thousands) | Weighted-<br>Average	Exercise<br>Price	Per	Share | Weighted-<br>Average<br>Remaining<br>Contractual<br>Term	in	Years | Aggregate<br>Intrinsic<br>Value |
| :--- | :--- | :--- | :--- | :--- |
| Options\toutstanding\tat\tNovember\t3,\t2018 | 7,297 | $58.42 |  |  |
| Options\tgranted | 454 | $107.11 |  |  |
| Options\texercised | (2,364) | $49.67 |  |  |
| Options\tforfeited | (198) | $78.05 |  |  |
| Options\texpired | (6) | $21.97 |  |  |
| Options\toutstanding\tat\tNovember\t2,\t2019 | 5,183 | $65.97 | 5.9 | $224,945 |
| Options\texercisable\tat\tNovember\t2,\t2019 | 2,933 | $55.23 | 4.7 | $158,789 |
| Options\tvested\tor\texpected\tto\tvest\tat\tNovember\t2,\t2019\t(1) | 5,046 | $65.42 | 5.9 | $221,766 |

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

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	2019,	fiscal	2018	and	fiscal	2017	was	$132.3	million,	$123.8	million	and	$144.6	million,	respectively,	and	the	total	amount	of	proceeds	received	by	the Company	from	exercise	of	these	options	during	fiscal	2019,	fiscal	2018	and	fiscal	2017	was	$116.5	million,	$99.0	million	and	$133.3	million,	respectively.

A	summary	of	the	Company's	restricted	stock	unit	award	activity	as	of	November	2,	2019	and	changes	during	the	fiscal	year	then	ended	is	presented	below:

|  | Restricted<br>Stock	Units/Awards<br>Outstanding<br>(in	thousands) | Weighted-<br>Average	Grant-<br>Date	Fair	Value<br>Per	Share |
| :--- | :--- | :--- |
| Restricted\tstock\tunits/awards\toutstanding\tat\tNovember\t3,\t2018 | 5,289 | $77.54 |
| Units/Awards\tgranted | 1,317 | $98.82 |
| Restrictions\tlapsed | (1,896) | $69.38 |
| Forfeited | (314) | $80.44 |
| Restricted\tstock\tunits/awards\toutstanding\tat\tNovember\t2,\t2019 | 4,396 | $87.18 |

As	of	November	2,	2019,	there	was	$318.3	million	of	total	unrecognized	compensation	cost	related	to	unvested	stock-based	awards	comprised	of	stock	options and	restricted	stock	units.	That	cost	is	expected	to	be	recognized	over	a	weighted-average	period	of	1.4	years.	The	total	grant-date	fair	value	of	shares	that	vested	during fiscal	2019,	fiscal	2018	and	fiscal	2017	was	approximately	$150.6	million,	$136.1	million	and	$114.8	million,	respectively.

# Common	Stock	Repurchases

The	Company's	share	repurchase	program	has	been	in	place	since	August	2004.	In	the	aggregate,	the	Board	of	Directors	has	authorized	the	Company	to repurchase	$8.2	billion	of	the	Company's	common	stock	under	the	program,	which	includes	the	$2.0	billion	authorization	approved	by	the	Board	of	Directors	on	August 21,	2018.	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.

In	connection	with	the	Acquisition,	the	Company	temporarily	suspended	the	share	repurchase	program.	On	August	21,	2018,	the	Company	reinstated	the	share repurchase	program	and,	as	of	November	2,	2019,	the	Company	had	repurchased	a	total	of	approximately	154.4	million	shares	of	its	common	stock	for	approximately $6.1	billion	under	this	program.	An	additional	$2.1	billion	remains	available	for	repurchase	of	shares	under	the	current	authorized	program.	The	repurchased	shares	are held	as	authorized	but	unissued	shares	of	common	stock.

The	Company	also,	from	time	to	time,	repurchases	shares	in	settlement	of	employee	tax	withholding	obligations	due	upon	the	vesting	of	restricted	stock units/awards	or	the	exercise	of	stock	options.	The	withholding	amount	is	based	on	the	employee's	minimum	statutory	withholding	requirement.	Any	future	common stock	repurchases	will	be	dependent	upon	several	factors,	including	the	Company's	financial	performance,	outlook,	liquidity	and	the	amount	of	cash	the	Company	has available	in	the	United	States.

# 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	eight	operating	segments.	The	Company	designs,	develops, manufactures	and	markets	a	broad	range	of	integrated	circuits	(ICs).	The	Chief	Executive	Officer	has	been	identified	as	the	Company's	Chief	Operating	Decision	Maker. The	Company	has	determined	that	all	of	the	Company's	operating	segments	share	the	following	similar	economic	characteristics,	and	therefore	meet	the	criteria established	for	operating	segments	to	be	aggregated	into	one	reportable	segment,	namely:

•The	primary	source	of	revenue	for	each	operating	segment	is	the	sale	of	ICs.

•The	ICs	sold	by	each	of	the	Company's	operating	segments	are	manufactured	using	similar	semiconductor	manufacturing	processes	and	raw	materials	in	either the	Company's	own	production	facilities	or	by	third-party	wafer	fabricators	using	proprietary	processes.

•The	Company	sells	its	products	to	tens	of	thousands	of	customers	worldwide.	Many	of	these	customers	use	products	spanning	all	operating	segments	in	a	wide range	of	applications.

•The	ICs	marketed	by	each	of	the	Company's	operating	segments	are	sold	globally	through	a	direct	sales	force,	third-party	distributors,	independent	sales representatives	and	via	our	website	to	the	same	types	of	customers.

All	of	the	Company's	operating	segments	share	a	similar	long-term	financial	model	as	they	have	similar	economic	characteristics.	The	causes	for	variation	in operating	and	financial	performance	are	the	same	among	the	Company's	operating	segments	and	include	factors	such	as	(i)	life	cycle	and	price	and	cost	fluctuations,	(ii) number	of	competitors,	(iii)	product	differentiation	and	(iv)	size	of	market	opportunity.	Additionally,	each	operating	segment	is	subject	to	the	overall	cyclical	nature	of the	semiconductor	industry.	Lastly,	the	number	and	composition	of	employees	and	the	amounts	and	types	of	tools	and	materials	required	for	production	of	products	are proportionally	similar	for	each	operating	segment.

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

|  | Revenue | %	of<br>Total<br>Revenue	(2) | Revenue | %	of<br>Total<br>Revenue	(2) | Revenue | %	of<br>Total<br>Revenue	(2) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Industrial | $3,003,927 | 50\t % | $3,129,569 | 50\t % | $2,324,686 | 44\t % |
| Communications | 1,284,087 | 21\t % | 1,151,359 | 18\t % | 908,594 | 17\t % |
| Automotive | 933,143 | 16\t % | 1,009,927 | 16\t % | 758,115 | 14\t % |
| Consumer | 769,908 | 13\t % | 933,834 | 15\t % | 1,254,959 | 24\t % |
| Total\tRevenue | $5,991,065 | 100\t % | $6,224,689 | 100\t % | $5,246,354 | 100\t % |

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

|  | Revenue | %	of<br>Total<br>Revenue	(2) | Revenue | %	of<br>Total<br>Revenue	(2) | Revenue | %	of<br>Total<br>Revenue	(2) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Distributors | $3,409,161 | 57\t % | $3,424,145 | 55\t % | $2,749,335 | 52\t % |
| Direct\tcustomers | 2,506,065 | 42\t % | 2,721,885 | 44\t % | 2,424,514 | 46\t % |
| Other | 75,839 | 1\t % | 78,659 | 1\t % | 72,505 | 1\t % |
| Total\tRevenue | $5,991,065 | 100\t % | $6,224,689 | 100\t % | $5,246,354 | 100\t % |

# Geographic	Information

Geographic	revenue	information	for	fiscal	2019,	fiscal	2018	and	fiscal	2017	reflects	the	geographic	location	of	the	distributors	or	OEMs	who	purchased	the Company's	products.	This	may	differ	from	the	geographic	location	of	the	end	customers.	In	all	periods	presented,	the	predominant	countries	comprising	"Rest	of	North and	South	America"	are	Canada	and	Mexico;	the	predominant	countries	comprising	"Europe"	are	Germany,	Sweden,	and	the	Netherlands;	and	the	predominant countries	comprising	"Rest	of	Asia"	are	Taiwan,	Malaysia,	South	Korea	and	Singapore.

|  | 2019 | 2018 | 2017 |
| :--- | :--- | :--- | :--- |
| Revenue\t(1) |  |  |  |
| United\tStates | $2,020,886 | $2,277,084 | $2,110,545 |
| Rest\tof\tNorth\tand\tSouth\tAmerica | 55,059 | 46,276 | 48,620 |
| Europe | 1,374,673 | 1,405,686 | 1,164,725 |
| Japan | 657,632 | 714,846 | 586,521 |
| China | 1,316,275 | 1,215,949 | 898,645 |
| Rest\tof\tAsia | 566,540 | 564,848 | 437,298 |
| Subtotal\tall\tforeign\tcountries | 3,970,179 | 3,947,605 | 3,135,809 |
| Total\trevenue | $5,991,065 | $6,224,689 | $5,246,354 |
| Property,\tplant\tand\tequipment |  |  |  |
| United\tStates | $592,591 | $505,646 | $504,968 |
| Ireland | 184,791 | 202,611 | 188,728 |
| Philippines | 247,823 | 260,355 | 228,629 |
| Singapore | 88,385 | 80,383 | 77,015 |
| Malaysia | 56,292 | 57,514 | 71,756 |
| All\tother\tcountries | 50,107 | 47,819 | 36,208 |
| Subtotal\tall\tforeign\tcountries | 627,398 | 648,682 | 602,336 |
| Total\tproperty,\tplant\tand\tequipment | $1,219,989 | $1,154,328 | $1,107,304 |

(1) Balances	for	fiscal	2018	and	fiscal	2017	have	been	restated	to	reflect	the	adoption	of	ASU	2014-09.	See	Note	2a,	Principles	of	Consolidation,	in	the	Notes	to	Consolidated Financial	Statements.

The	Company	monitors	global	macroeconomic	conditions	on	an	ongoing	basis	and	continues	to	assess	opportunities	for	improved	operational	effectiveness	and efficiency,	as	well	as	a	better	alignment	of	expenses	with	revenues.	As	a	result	of	these	assessments,	the	Company	has	undertaken	various	restructuring	actions	over	the past	several	years.	These	actions	are	described	below.	The	following	table	displays	a	roll-forward	from	October	29,	2016	to	November	2,	2019	of	the	employee separation	and	exit	cost	accruals	established	related	to	these	actions.

| Accrued	Restructuring | Closure	of<br>Manufacturing<br>Facilities | Reduction	of<br>Operating<br>Costs	Action | Early	Retirement<br>Action | Repositioning	Action |
| :--- | :--- | :--- | :--- | :--- |
| Balance\tat\tOctober\t29,\t2016 | $— | $12,374 | $— | $— |
| Fiscal\t2017\tspecial\tcharges | — | 8,126 | 41,337 | — |
| Severance\tpayments | — | (15,764) | (9,126) | — |
| Effect\tof\tforeign\tcurrency\ton\taccrual | — | 401 | — | — |
| Balance\tat\tOctober\t28,\t2017 | $— | $5,137 | $32,211 | $— |
| Fiscal\t2018\tspecial\tcharges | 44,452 | 16,866 | — | — |
| Severance\tpayments | — | (16,785) | (22,314) | — |
| Effect\tof\tforeign\tcurrency\ton\taccrual | (1,478) | 37 | — | — |
| Balance\tat\tNovember\t3,\t2018 | $42,974 | $5,255 | $9,897 | $— |
| Fiscal\t2019\tspecial\tcharges | 7,556 | — | — | 88,103 |
| Severance\tpayments | — | (4,320) | (5,314) | (12,487) |
| Non-cash\timpairment\tcharge | — | — | — | (14,167) |
| Non-cash\taccelerated\tstock\tbased\tcompensation | — | — | — | (2,538) |
| Effect\tof\tforeign\tcurrency\ton\taccrual | (129) | 5 | — | (16) |
| Balance\tat\tNovember\t2,\t2019 | $50,401 | $940 | $4,583 | $58,895 |
| Current\t-\taccrued\tliabilities | $— | $940 | $4,583 | $58,895 |
| Other\tnon-current\tliabilities | $50,401 | $— | $— | $— |

# Closure	of	Manufacturing	Facilities

The	Company	recorded	special	charges	of	$52.0	million	on	a	cumulative	basis	through	November	2,	2019	as	a	result	of	its	decision	to	consolidate	certain	wafer	and test	facility	operations	acquired	as	part	of	the	acquisition	of	Linear	Technology	Corporation	(Linear).	Over	the	next	one	to	three	years,	the	Company	plans	to	close	its Hillview	wafer	fabrication	facility	located	in	Milpitas,	California	and	its	Singapore	test	facility.	The	Company	intends	to	transfer	Hillview	wafer	fabrication	production to	its	other	internal	facilities	and	to	external	foundries.	In	addition,	the	Company	is	planning	to	transition	testing	operations	currently	handled	in	its	Singapore	facility	to its	facilities	in	Penang,	Malaysia	and	the	Philippines,	in	addition	to	its	outsourced	assembly	and	test	partners.	The	special	charges	include	severance	and	fringe	benefit costs,	in	accordance	with	the	Company's	ongoing	benefit	plan	or	statutory	requirements	at	foreign	locations	and	one-time	termination	benefits	for	approximately	1,100 manufacturing,	engineering	and	SMG&A	employees.	These	one-time	termination	benefits	are	being	recognized	over	the	future	service	period	required	for	employees	to earn	these	benefits.	Employees	included	in	this	action	must	continue	to	be	employed	by	the	Company	until	their	employment	is	terminated	by	the	Company	in	order	to receive	the	severance	benefits.

# Reduction	of	Operating	Costs	Actions

During	fiscal	2018,	the	Company	recorded	special	charges	of	approximately	$16.9	million	for	severance	and	fringe	benefit	costs	in	accordance	with	the	Company's ongoing	benefit	plan	or	statutory	requirements	at	foreign	locations	for	126	manufacturing,	engineering	and	SMG&A	employees.	During	fiscal	2017,	the	Company recorded	special	charges	of	approximately	$8.1	million	for	severance	and	fringe	benefit	costs	in	accordance	with	the	Company's	ongoing	benefit	plan	or	statutory requirements	at	foreign	locations	for	177	manufacturing,	engineering	and	SMG&A	employees.	The	Company	terminated	the	employment	of	all	employees	associated with	this	action.

# Early	Retirement	Action

During	fiscal	2017,	the	Company	initiated	an	early	retirement	action.	This	resulted	in	a	special	charge	of	approximately	$41.3	million	for	severance,	related benefits	and	other	costs	in	accordance	with	this	program	for	225	manufacturing,	engineering	and	SMG&A	employees.	The	Company	terminated	the	employment	of	all employees	associated	with	this	action.

# Repositioning	Action

During	fiscal	2019,	the	Company	recorded	special	charges	of	$88.1	million,	as	a	result	of	organizational	initiatives	to	reposition	the	Company's	global	workforce skill	set	to	align	with	the	Company's	long-term	strategic	plan.	Approximately	$73.9	million	of	the	total	charges	were	for	severance	and	fringe	benefit	costs	in	accordance with	either	the	Company's	ongoing	benefit	plan	or	statutory	requirements	for	464	manufacturing,	engineering	and	selling,	marketing,	general	and	administrative (SMG&A)	employees.	As	of	November	2,	2019,	the	Company	still	employed	307	of	the	464	employees	included	in	this	action.	These	employees	must	continue	to	be employed	by	the	Company	until	their	employment	is	involuntarily	terminated	in	order	to	receive	the	severance	benefits.	The	remaining	$14.2	million	of	the	charges related	to	the	write-off	of	acquired	intellectual	property	due	to	the	Company's	decision	to	discontinue	certain	product	development	strategies.

# Linear	Technology	Corporation

On	the	Acquisition	Date,	the	Company	completed	its	acquisition	of	all	of	the	voting	interests	of	Linear,	an	independent	manufacturer	of	high	performance	analog integrated	circuits.	Under	the	terms	of	the	agreement	pursuant	to	which	the	Company	acquired	Linear	(Merger	Agreement),	Linear	stockholders	received,	for	each outstanding	share	of	Linear	common	stock,	$46.00	in	cash	and	0.2321	of	a	share	of	the	Company's	common	stock	at	the	closing.	The	Company	believes	the	combination creates	the	premier	analog	technology	company	with	the	industry's	most	comprehensive	suite	of	high-performance	analog	offerings.	The	results	of	operations	of	Linear from	the	Acquisition	Date	are	included	in	the	Company's	consolidated	statements	of	income,	consolidated	balance	sheets,	consolidated	statements	of	cash	flows	and shareholders'	equity	for	fiscal	2017.	The	amount	of	revenue	attributable	to	Linear	included	in	the	Company's	consolidated	statements	of	income	for	fiscal	2017	was $913.2	million.

      The	Acquisition	Date	fair	value	of	the	consideration	transferred	in	the	Acquisition	consisted	of	the	following:

(1) The	cash	consideration	was	funded	utilizing	cash	on	hand,	the	net	proceeds	from	bridge	credit	and	term	loan	facilities	and	the	proceeds	received	from	the	Company's	issuance	of the	Notes	(as	defined	in	Note	14,	Debt,	of	these	Notes	to	Consolidated	Financial	Statements).	This	reflects	the	cash	portion	of	the	purchase	consideration	paid	to	Linear stockholders	of	approximately	$11.1	billion,	as	well	as	$16.3	million	for	the	cash-settled	portion	of	consideration	paid	to	holders	of	restricted	stock	and	restricted	stock	awards that	automatically	vested	at	the	effective	time	of	the	Acquisition	pursuant	to	pre-existing	change-of-control	agreements.

(2) The	fair	value	is	based	on	the	issuance	of	approximately	55.9	million	shares	of	the	Company's	common	stock	with	a	per-share	value	of	$82.20	(the	closing	price	of	the Company's	common	stock	on	The	Nasdaq	Global	Select	Market	on	the	acquisition	Date).

(3) In	connection	with	the	Acquisition,	the	Company	issued	equity	and	cash	awards	to	certain	Linear	employees	to	replace	Linear	equity	awards.	This	amount	represents	the	portion of	the	fair	value	of	the	replacement	equity	and	cash	awards	associated	with	services	rendered	though	the	Acquisition	Date	and	have	been	included	as	a	component	of	the	total estimated	purchase	consideration.

During	fiscal	2018,	the	Company	completed	the	acquisition	accounting	for	the	Acquisition.	The	following	is	a	summary	of	the	amounts	recognized	in	accounting for	the	Acquisition:

| for	the	Acquisition: |  |
| :--- | :--- |
| Cash\tand\tcash\tequivalents | $1,466,445 |
| Marketable\tsecurities | 100,246 |
| Accounts\treceivable\t(1) | 143,542 |
| Inventories | 461,695 |
| Prepaid\texpenses\tand\tother\tassets | 14,782 |
| Property,\tplant\tand\tequipment | 462,285 |
| Intangible\tassets\t(Note\t2f) | 5,157,300 |
| Goodwill\t(Note\t2f) | 10,533,919 |
| Total\tassets | 18,340,214 |
| Assumed\tliabilities | 190,925 |
| Deferred\ttax\tliabilities | 2,392,633 |
| Total\testimated\tpurchase\tconsideration | $15,756,656 |

(1) The	fair	value	of	accounts	receivable	was	$143.5	million,	with	the	gross	contractual	amount	being	$145.2	million,	of	which	the	Company	estimates	that	$1.7	million	is uncollectible.

The	acquired	intangible	assets	consisted	of	the	following,	which	are	being	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.

|  | Fair	Value | Lives<br>(in	Years) |
| :--- | :--- | :--- |
| Technology-based | $1,046,100 | 8 |
| Trade\tname | 72,200 | 7 |
| Customer\trelationships | 4,039,000 | 12 |
| \t\t\t\tTotal\tamortizable\tintangible\tassets | $5,157,300 | 11 |

The	goodwill	recognized	is	attributable	to	synergies	which	are	expected	to	enhance	and	expand	the	Company's	overall	product	portfolio	and	opportunities	in	new and	existing	markets,	future	technologies	that	have	yet	to	be	determined	and	Linear's	assembled	workforce.	Future	technologies	did	not	meet	the	criteria	for	recognition separately	from	goodwill	because	they	are	part	of	future	development	and	growth	of	the	business.

There	were	no	significant	contingent	obligations	assumed	as	part	of	the	Acquisition.

The	Company	recognized	$47.5	million	of	transaction-related	costs,	including	legal,	accounting	and	other	related	fees	that	were	expensed	in	fiscal	2017.	These costs	are	included	in	the	consolidated	statements	of	income	within	SMG&A	expenses.

The	following	unaudited	pro	forma	consolidated	financial	information	combines	the	unaudited	results	of	the	Company	for	the	year	ended	October	28,	2017	and	the unaudited	results	of	Linear	for	the	year	ended	October	28,	2017	and	assumes	that	the	Acquisition,	which	closed	on	March	10,	2017,	was	completed	on	November	1, 2015	(the	first	day	of	fiscal	2016).	The	pro	forma	consolidated	financial	information	has	been	calculated	after	applying	the	Company's	accounting	policies	and	includes adjustments	for	amortization	expense	of	acquired	intangible	assets,	transaction-related	costs,	a	step-up	in	the	value	of	acquired	inventory	and	property,	plant	and equipment,	compensation	expense	for	ongoing	stock-based	compensation	arrangements	replaced	and	interest	expense	for	the	debt	incurred	to	fund	the	Acquisition, together	with	the	consequential	tax	effects.	These	pro	forma	results	have	been	prepared	for	comparative	purposes	only	and	do	not	purport	to	be	indicative	of	the operating	results	of	the	Company	that	would	have	been	achieved	had	the	Acquisition	actually	taken	place	on	November	1,	2015.	In	addition,	these	results	are	not intended	to	be	a	projection	of	future	results	and	do	not	reflect	events	that	may	occur	after	the	Acquisition,	including	but	not	limited	to	revenue	enhancements,	cost savings	or	operating	synergies	that	the	combined	Company	may	achieve	as	a	result	of	the	Acquisition.

# Other	Acquisitions

The	Company	has	not	provided	pro	forma	results	of	operations	for	any	other	acquisitions	completed	in	fiscal	2019,	fiscal	2018	or	fiscal	2017	herein	as	they	were not	material	to	the	Company	on	either	an	individual	or	an	aggregate	basis.	The	Company	included	the	results	of	operations	of	each	acquisition	in	its	consolidated statements	of	income	from	the	date	of	each	acquisition.

# 7.	Other	Investments

Other	investments	consist	of	interests	in	venture	capital	funds	and	other	long-term	investments.	Investments	are	accounted	for	using	the	equity	method	of accounting	or	cost,	less	any	impairment,	plus	or	minus	changes	resulting	from	observable	price	changes	in	orderly	transactions	for	an	identical	or	similar	investment	of the	same	issuer.	Realized	gains	and	losses	are	reflected	in	nonoperating	(income)	expense	based	upon	the	Company's	ownership	share	of	the	investee's	financial	results.

The	Company	recognized	other-than-temporary	impairments	of	$6.6	million	and	$5.0	million	in	fiscal	2019	and	fiscal	2017,	respectively.	These	charges	were recorded	in	the	consolidated	statements	of	income	in	other,	net,	within	non-operating	(income)	expense.	There	were	no	other-than-temporary	impairments	recognized	in fiscal	2018.

There	were	no	material	net	realized	or	unrealized	gains	or	losses	from	other	investments	during	fiscal	2019,	fiscal	2018	and	fiscal	2017.

# 8.	Accrued	Liabilities

Accrued	liabilities	at	November	2,	2019	and	November	3,	2018	consisted	of	the	following:

|  | 2019 | 2018	(1) |
| :--- | :--- | :--- |
| Distributor\tprice\tadjustments\tand\tother\trevenue\treserves | $227,020 | $144,887 |
| Accrued\tcompensation\tand\tbenefits | 168,471 | 254,932 |
| Interest\trate\tswap | 138,798 | — |
| Accrued\tinterest | 61,255 | 64,974 |
| Accrued\trestructuring | 64,418 | 15,152 |
| Other | 135,854 | 150,162 |
| Total\taccrued\tliabilities | $795,816 | $630,107 |

# 9.	Lease	Commitments

The	Company	leases	certain	land,	facilities,	equipment	and	software	under	various	operating	leases	that	expire	at	various	dates	through	2057.	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	$92.3	million	in	fiscal	2019,	$84.9	million	in	fiscal	2018	and	$58.8	million	in	fiscal	2017.

      The	following	is	a	schedule	of	future	minimum	rental	payments	required	under	long-term	operating	leases	at	November	2,	2019:

# 10.	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,	among	other	things,	contractual	matters,	patents,	trademarks,	personal	injury,	environmental	matters,	product	liability,	insurance	coverage, employment	or	employment	benefits.	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.

# 11.	Retirement	Plans

The	Company	and	its	subsidiaries	have	various	savings	and	retirement	plans	covering	substantially	all	employees.

# Defined	Contribution	Plans

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	plans	for	U.S.	employees	was	$47.7	million	in	fiscal	2019, $41.4	million	in	fiscal	2018	and	$35.8	million	in	fiscal	2017.

# Non-Qualified	Deferred	Compensation	Plan

The	Deferred	Compensation	Plan	(DCP)	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	DCP	was	established	to	provide	participants	with	the	opportunity	to	defer	receiving	all	or	a	portion	of	their compensation,	which	includes	salary,	bonus,	commissions	and	director	fees.	Under	the	DCP,	the	Company	provides	all	participants	(other	than	non-employee	directors) with	Company	contributions	equal	to	8%	of	eligible	deferred	contributions.	The	DCP	is	a	non-qualified	plan	that	is	maintained	in	a	rabbi	trust.	The	fair	value	of	the investments	held	in	the	rabbi	trust	are	presented	separately	as	deferred	compensation	plan	investments,	with	the	current	portion	of	the	investment	included	in	prepaid expenses	and	other	current	assets	in	the	consolidated	balance	sheets.	See	Note	2j,	Fair	Value,	for	further	information	on	these	investments.	The	deferred	compensation obligation	represents	DCP	participant	accumulated	deferrals	and	earnings	thereon	since	the	inception	of	the	DCP	net	of	withdrawals.	The	deferred	compensation obligation	is	presented	separately	as	deferred	compensation	plan	liability,	with	the	current	portion	of	the	obligation	in	accrued	liabilities	in	the	consolidated	balance sheets.	The	Company's	liability	under	the	DCP	is	an	unsecured	general	obligation	of	the	Company.

# Defined	Benefit	Pension	Plans

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,	contribution	and	other	retirement	plans	for	certain	non-U.S.	employees	was $35.8	million	in	fiscal	2019,	$36.3	million	in	fiscal	2018	and	$33.0	million	in	fiscal	2017.

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	Company	has	elected	to	measure	defined	benefit	plan	assets	and	obligations	as	of October	31,	which	is	the	month-end	that	is	closest	to	its	fiscal	year-ends,	which	were	November	2,	2019	for	fiscal	2019	and	November	3,	2018	for	fiscal	2018.

# Components	of	Net	Periodic	Benefit	Cost

Net	annual	periodic	pension	cost	of	non-U.S.	plans	for	fiscal	2019,	fiscal	2018	and	fiscal	2017	is	presented	in	the	following	table:

|  | 2019 | 2018 | 2017 |
| :--- | :--- | :--- | :--- |
| Service\tcost | $5,578 | $6,891 | $6,688 |
| Interest\tcost | 4,079 | 3,984 | 3,581 |
| Expected\treturn\ton\tplan\tassets | (5,279) | (4,559) | (4,086) |
| Amortization\tof\tprior\tservice\tcost | 3 | 1 | (9) |
| Amortization\tof\ttransition\tobligation | — | 10 | 14 |
| Recognized\tactuarial\tloss | 1,000 | 1,621 | 1,865 |
| Net\tperiodic\tpension\tcost | $5,381 | $7,948 | $8,053 |

The	Company	adopted	ASU	2017-07	the	first	quarter	of	fiscal	2019.	The	service	cost	component	of	net	periodic	benefit	cost	above	is	recorded	in	Cost	of	sales, Research	and	development,	Selling,	marketing,	general	and	administrate	expenses	within	the	consolidated	statements	of	income,	while	the	remaining	components	are recorded	to	Other,	net.	The	prior	year	amounts	have	been	reclassified	to	provide	comparable	presentation	in	line	with	the	guidance	in	ASU	2017-07	based	on	amounts previously	disclosed	for	the	various	components	of	net	periodic	pension	cost.

# Benefit	Obligations	and	Plan	Assets

Obligation	and	asset	data	of	the	Company's	non-U.S.	plans	at	November	2,	2019	and	November	3,	2018	is	presented	in	the	following	table:

|  | 2019 | 2018 |
| :--- | :--- | :--- |
| Change\tin\tBenefit\tObligation |  |  |
| Benefit\tobligation\tat\tbeginning\tof\tyear | $123,538 | $139,516 |
| Service\tcost | 5,578 | 6,891 |
| Interest\tcost | 4,079 | 3,984 |
| Actuarial\tloss\t(gain) | 38,210 | (20,406) |
| Benefits\tpaid | (3,053) | (4,301) |
| Exchange\trate\tadjustment | 1,296 | (2,146) |
| Benefit\tobligation\tat\tend\tof\tyear | $169,648 | $123,538 |
| Change\tin\tPlan\tAssets |  |  |
| Fair\tvalue\tof\tplan\tassets\tat\tbeginning\tof\tyear | $84,655 | $79,616 |
| Actual\treturn\ton\tplan\tassets | 12,389 | (2,626) |
| Employer\tcontributions | 4,177 | 13,793 |
| Benefits\tpaid | (3,053) | (4,301) |
| Exchange\trate\tadjustment | 1,771 | (1,827) |
| Fair\tvalue\tof\tplan\tassets\tat\tend\tof\tyear | $99,939 | $84,655 |
| Reconciliation\tof\tFunded\tStatus |  |  |
| Funded\tstatus | $(69,709) | $(38,883) |
| Amounts\tRecognized\tin\tthe\tBalance\tSheet |  |  |
| Non-current\tassets | $— | $6,569 |
| Current\tliabilities | (846) | (767) |
| Non-current\tliabilities | (68,863) | (44,685) |
| Net\tamount\trecognized | $(69,709) | $(38,883) |

|  | 2019 | 2018 |
| :--- | :--- | :--- |
| Reconciliation\tof\tAmounts\tRecognized\tin\tthe\tStatement\tof\tFinancial\tPosition |  |  |
| Prior\tservice\tcredit | (44) | (44) |
| Net\tloss | (50,878) | (20,800) |
| Accumulated\tother\tcomprehensive\tloss | (50,922) | (20,844) |
| Accumulated\tcontributions\tless\tthan\tnet\tperiodic\tbenefit\tcost | (18,787) | (18,039) |
| Net\tamount\trecognized | $(69,709) | $(38,883) |
| Changes\tRecognized\tin\tOther\tComprehensive\tIncome\t(Loss) |  |  |
| Changes\tin\tplan\tassets\tand\tbenefit\tobligations\trecognized\tin\tother\tcomprehensive\tincome\t(loss) |  |  |
| Net\tloss\t(gain)\tarising\tduring\tthe\tyear | $31,100 | $(13,220) |
| Effect\tof\texchange\trates\ton\tamounts\tincluded\tin\tAOCI | (18) | (138) |
| Amounts\trecognized\tas\ta\tcomponent\tof\tnet\tperiodic\tbenefit\tcost |  |  |
| Amortization,\tsettlement\tor\tcurtailment\trecognition\tof\tnet\ttransition\tobligation | — | (10) |
| Amortization\tor\tcurtailment\trecognition\tof\tprior\tservice\tcredit\t(cost) | — | (1) |
| Amortization\tor\tsettlement\trecognition\tof\tnet\tloss | (1,004) | (1,621) |
| Total\trecognized\tin\tother\tcomprehensive\tloss | $30,078 | $(14,990) |
| Total\trecognized\tin\tnet\tperiodic\tcost\tand\tother\tcomprehensive\tloss | $35,459 | $(7,042) |
| Estimated\tamounts\tthat\twill\tbe\tamortized\tfrom\tAOCI\tover\tthe\tnext\tfiscal\tyear |  |  |
| Prior\tservice\tcredit | (2) | (2) |
| Net\tloss | (2,581) | (1,015) |
| Total | $(2,583) | $(1,017) |

The	accumulated	benefit	obligation	for	non-U.S.	pension	plans	was	$138.1	million	and	$105.8	million	at	November	2,	2019	and	November	3,	2018,	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	November	2,	2019	and	November	3,	2018	is	presented	in	the	following	table:

|  | 2019 | 2018 |
| :--- | :--- | :--- |
| Plans\twith\tprojected\tbenefit\tobligations\tin\texcess\tof\tplan\tassets: |  |  |
| Projected\tbenefit\tobligation | $169,648 | $46,626 |
| Fair\tvalue\tof\tplan\tassets | $99,939 | $1,174 |
| Plans\twith\taccumulated\tbenefit\tobligations\tin\texcess\tof\tplan\tassets: |  |  |
| Projected\tbenefit\tobligation | $61,019 | $46,626 |
| Accumulated\tbenefit\tobligation | $54,318 | $41,701 |
| Fair\tvalue\tof\tplan\tassets | $1,305 | $1,174 |

# Assumptions

The	range	of	assumptions	used	for	the	non-U.S.	defined	benefit	plans	reflects	the	different	economic	environments	within	the	various	countries	as	well	as	the differences	in	the	attributes	of	the	participants.

The	projected	benefit	obligation	was	determined	using	the	following	weighted-average	assumptions:

|  | 2019 |  | 2018 |  |
| :--- | :--- | :--- | :--- | :--- |
| Discount\trate |  | 2.45\t% |  | 3.53\t% |
| Rate\tof\tincrease\tin\tcompensation\tlevels |  | 3.38\t% |  | 3.26\t% |
| Net\tannual\tperiodic\tpension\tcost\twas\tdetermined\tusing\tthe\tfollowing\tweighted\taverage\tassumptions: |  |  |  |  |
|  | 2019 |  | 2018 |  |
| Discount\trate |  | 3.53\t% |  | 3.02\t% |
| Expected\tlong-term\treturn\ton\tplan\tassets |  | 6.16\t% |  | 5.54\t% |
| Rate\tof\tincrease\tin\tcompensation\tlevels |  | 3.26\t% |  | 3.18\t% |

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	November	2,	2019	and	November	3,	2018	using the	same	three-level	hierarchy	described	in	Note	2j,	Fair	Value,	of	these	Notes	to	Consolidated	Financial	Statements:

|  | Quoted	Prices	in<br>Active	Markets	for<br>Identical	Assets<br>(Level	1) | Significant	Other<br>Observable	Inputs<br>(Level	2) | Total | Quoted	Prices	in<br>Active	Markets	for<br>Identical	Assets<br>(Level	1) | Significant	Other<br>Observable	Inputs<br>(Level	2) | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Unit\ttrust\tfunds(1) | $— | $4,736 | $4,736 | $— | $2,549 | $2,549 |
| Equities(1) | 6,114 | 39,189 | 45,303 | 3,437 | 35,221 | 38,658 |
| Fixed\tincome\tsecurities(2) | — | 48,274 | 48,274 | — | 42,312 | 42,312 |
| Cash\tand\tcash\tequivalents | 1,626 | — | 1,626 | 1,136 | — | 1,136 |
| Total\tassets\tmeasured\tat\tfair\tvalue | $7,740 | $92,199 | $99,939 | $4,573 | $80,082 | $84,655 |

(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.

(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.

# Estimated	future	cash	flows

      Expected	fiscal	2020	Company	contributions	and	estimated	future	benefit	payments	are	as	follows:

| Estimated	future	cash	flows |  |
| :--- | :--- |
| Expected\tfiscal\t2020\tCompany\tcontributions\tand\testimated\tfuture\tbenefit\tpayments\tare\tas\tfollows: |  |
| Expected\tCompany\tContributions |  |
| 2020 | $7,565 |
| Expected\tBenefit\tPayments |  |
| 2021 | $3,027 |
| 2022 | $2,316 |
| 2023 | $2,899 |
| 2024 | $3,363 |
| 2024 | $3,363 |
| 2025\tthrough\t2028 | $25,159 |

The	Tax	Cuts	and	Jobs	Act	of	2017	(Tax	Legislation),	enacted	on	December	22,	2017,	contains	significant	changes	to	U.S.	tax	law,	including	lowering	the	U.S. corporate	income	tax	rate	to	21.0%,	implementing	a	territorial	tax	system,	and	imposing	a	one-time	tax	on	deemed	repatriated	earnings	of	foreign	subsidiaries.	As	a result,	the	Tax	Legislation	reduced	the	U.S.	statutory	tax	rate	from	35.0%	to	21.0%,	effective	January	1,	2018,	which	results	in	a	blended	statutory	income	tax	rate	for the	Company	of	23.4%	for	fiscal	2018.

The	Company's	effective	tax	rate	reflects	the	applicable	tax	rate	in	effect	in	the	various	tax	jurisdictions	around	the	world	where	the	Company's	income	is	earned. The	reconciliation	of	income	tax	computed	at	the	U.S.	federal	statutory	rates	to	income	tax	expense	for	fiscal	2019,	fiscal	2018	and	fiscal	2017	is	as	follows:

|  | 2019 | 2018	(1) | 2017	(1) |
| :--- | :--- | :--- | :--- |
| U.S.\tfederal\tstatutory\ttax\trate | 21.0\t% | 23.4\t% | 35.0\t% |
| Income\ttax\tprovision\treconciliation: |  |  |  |
| Tax\tat\tstatutory\trate: | 312,003 | $387,343 | $327,161 |
| Net\tforeign\tincome\tsubject\tto\tlower\ttax\trate | (242,893) | (420,756) | (395,800) |
| State\tincome\ttaxes,\tnet\tof\tfederal\tbenefit | (31,265) | 4,428 | (7,239) |
| Valuation\tallowance | 34,069 | 2,232 | (7,778) |
| Federal\tresearch\tand\tdevelopment\ttax\tcredits | (50,769) | (33,602) | (16,475) |
| Change\tin\tuncertain\ttax\tpositions | 7,233 | (32,945) | (51,088) |
| Amortization\tof\tpurchased\tintangibles | 111,547 | 213,198 | 159,466 |
| Acquisition\tand\tintegration\tcosts | — | — | 109,040 |
| Taxes\tattributable\tto\tthe\tTax\tCuts\tand\tJobs\tAct\tof\t2017 | (7,500) | 56,608 | — |
| U.S.\teffects\tof\tinternational\toperations | 19,782 | — | — |
| Windfalls\t(under\tASU\t2016-09) | (28,677) | (26,237) | — |
| Other,\tnet | (813) | (1,935) | 12,081 |
| Total\tincome\ttax\tprovision | $122,717 | $148,334 | $129,368 |

Income	before	income	taxes	for	fiscal	2019,	fiscal	2018	and	fiscal	2017	includes	the	following	components:

|  | 2019 | 2018	(1) | 2017	(1) |
| :--- | :--- | :--- | :--- |
| Domestic | $484,876 | $615,238 | $161,248 |
| Foreign | 1,000,852 | 1,040,076 | 773,499 |
| Income\tbefore\tincome\ttaxes | $1,485,728 | $1,655,314 | $934,747 |

The	components	of	the	provision	for	income	taxes	for	fiscal	2019,	fiscal	2018	and	fiscal	2017	are	as	follows:

|  | 2019 | 2018	(1) | 2017	(1) |
| :--- | :--- | :--- | :--- |
| Current: |  |  |  |
| Federal\ttax | $74,049 | $824,848 | $868,051 |
| State | 2 | 6,043 | 8,594 |
| Foreign | 139,919 | 47,819 | 63,121 |
| Total\tcurrent | $213,970 | $878,710 | $939,766 |
| Deferred: |  |  |  |
| Federal | $(158,472) | $(738,163) | $(780,310) |
| State | (3,627) | 1,092 | (23,982) |
| Foreign | 70,846 | 6,695 | (6,106) |
| Total\tdeferred | $(91,253) | $(730,376) | $(810,398) |
| Provision\tfor\tincome\ttax | $122,717 | $148,334 | $129,368 |

In	fiscal	2018,	the	Company	recorded	a	$637.0	million	tax	benefit	for	the	re-measurement	of	deferred	tax	assets	and	liabilities	based	on	the	rates	at	which	they	are expected	to	reverse	in	the	future,	which	is	generally	21.0%.	In	addition,	in	fiscal	2018,	the	Company	recorded	a	provisional	tax	expense	amount	for	the	one-time transition	tax	of	$691.0	million,	which	is	comprised	of	the	$755.0	million	transition	tax	liability	less	a	deferred	tax	liability	of	$64.0	million	that	was	recorded	in	prior years.	In	the	first	quarter	of	fiscal	2019,	the	Company	completed	its	accounting	for	the	income	tax	effects	of	the	Tax	Legislation,	in	accordance	with	the	U.S.	Securities and	Exchange	Commission	Staff	Accounting	Bulletin	No.	118	and	adjusted	its	provisional	net	charge	by	recording	an	additional	tax	benefit	of	$7.5	million	for	a	change to	its	estimate	for	the	transition	tax	due	to	the	finalization	of	the	aggregate	foreign	cash	positions.

Additionally,	the	Tax	Legislation	subjects	a	U.S.	shareholder	to	tax	on	global	intangible	low-taxed	income	(GILTI).	Under	U.S.	GAAP,	an	accounting	policy election	can	be	made	to	either	treat	taxes	due	on	the	GILTI	inclusion	as	a	current	period	expense	or	to	recognize	deferred	taxes	for	temporary	basis	differences	expected to	reverse	as	GILTI	in	future	years.	The	Company	elected	the	deferral	method	and	recorded	the	corresponding	GILTI	deferred	tax	assets	and	liabilities	on	its consolidated	balance	sheets.

The	Company	carries	other	outside	basis	differences	in	its	subsidiaries,	primarily	arising	from	purchase	accounting	adjustments	and	undistributed	earnings	that	are considered	indefinitely	reinvested.	As	of	November	2,	2019,	the	Company	has	not	recognized	deferred	income	tax	on	$22.8	billion	of	outside	basis	differences	because of	its	intent	and	ability	to	indefinitely	reinvest	these	basis	differences.	These	basis	differences	could	be	reversed	through	a	sale	of	the	subsidiaries	or	the	receipt	of dividends	from	the	subsidiaries,	as	well	as	various	other	events,	none	of	which	are	considered	probable	at	this	time.	Determination	of	the	amount	of	unrecognized deferred	income	tax	liability	related	to	these	outside	basis	differences	is	not	practicable.

The	Company	adopted	ASU	2016-16	in	the	first	quarter	of	fiscal	2019	using	the	modified	retrospective	method	with	a	cumulative-effect	adjustment	directly	to retained	earnings.	The	adoption	of	ASU	2016-16	resulted	in	a	net	cumulative-effect	adjustment	that	resulted	in	an	increase	in	retained	earnings	of	$331.0	million,	by recording	new	deferred	tax	assets	from	intra-entity	transfers	involving	assets	other	than	inventory,	partially	offset	by	a	U.S.	deferred	tax	liability	related	to	GILTI. Adoption	of	the	standard	resulted	in	an	increase	in	long-term	deferred	tax	assets	of	$1.7	billion	and	an	increase	in	long-term	deferred	tax	liabilities	of	$1.3	billion.

The	significant	components	of	the	Company's	deferred	tax	assets	and	liabilities	for	fiscal	2019	and	fiscal	2018	are	as	follows:

|  | 2019 | 2018	(1) |
| :--- | :--- | :--- |
| Deferred\ttax\tassets: |  |  |
| Inventory\treserves | $21,081 | $22,184 |
| Reserves\tfor\tcompensation\tand\tbenefits | 53,090 | 39,185 |
| Tax\tcredit\tcarryovers | 133,485 | 112,851 |
| Stock-based\tcompensation | 63,589 | 53,105 |
| Net\toperating\tlosses | 5,299 | 5,997 |
| Intra-entity\ttransfer\tof\tintangible\tassets | 1,567,536 | — |
| Other | 70,974 | 36,898 |
| Total\tgross\tdeferred\ttax\tassets | 1,915,054 | 270,220 |
| Valuation\tallowance | (116,349) | (82,280) |
| Total\tdeferred\ttax\tassets | 1,798,705 | 187,940 |
| Deferred\ttax\tliabilities: |  |  |
| Depreciation | (38,464) | (37,023) |
| Deferred\tGILTI\ttax\tliabilities | (1,254,029) | — |
| Acquisition-related\tintangible | (1,012,042) | (1,129,747) |
| Other | — | (1,914) |
| Total\tgross\tdeferred\ttax\tliabilities | (2,304,535) | (1,168,684) |
| Net\tdeferred\ttax\tliabilities | $(505,830) | $(980,744) |

The	valuation	allowances	of	$116.3	million	and	$82.3	million	at	November	2,	2019	and	November	3,	2018,	respectively,	are	valuation	allowances	primarily	for the	Company's	state	credit	carryforwards.	The	Company	believes	that	it	is	more-likely-than-not	that	these	credit	carryovers	will	not	be	realized	and	as	a	result	has recorded	a	partial	valuation	allowance.	The	state	credit	carryover	of	$133.5	million	will	begin	to	expire	in	2020.

As	of	November	2,	2019	and	November	3,	2018,	the	Company	had	gross	unrealized	tax	benefits	of	$34.3	million	and	$13.3	million,	respectively,	which	if	settled in	the	Company's	favor,	would	lower	the	Company's	effective	tax	rate	in	the	period	recorded.	Liabilities	for	uncertain	tax	benefits	are	classified	as	non-current	because the	Company	believes	that	the	ultimate	payment	or	settlement	of	these	liabilities	may	not	occur	within	the	next	twelve	months.	As	of	November	2,	2019	and November	3,	2018,	the	Company	had	a	liability	of	approximately	$4.7	million	and	$3.5	million,	respectively,	for	interest	and	penalties,	which	is	included	within	the provision	for	taxes	in	the	consolidated	statements	of	income.	The	consolidated	statements	of	income	for	fiscal	year	2019,	fiscal	2018	and	fiscal	2017	include	$1.5 million,	$7.3	million	and	$12.3	million,	respectively,	of	interest	and	penalties	related	to	these	uncertain	tax	positions.

      The	following	table	summarizes	the	changes	in	the	total	amounts	of	unrealized	tax	benefits	for	fiscal	2017	through	fiscal	2019:

| The	following	table	summarizes	the	changes	in	the	total	amounts	of	unrealized	tax	benefits	for	fiscal	2017	through	fiscal	2019: |  |
| :--- | :--- |
|  | Unrealized\tTax\tBenefits |
| Balance,\tOctober\t29,\t2016 | $68,535 |
| Additions\tfor\ttax\tpositions\trelated\tto\tcurrent\tyear | 1,742 |
| Additions\tfor\ttax\tpositions\trelated\tto\tacquisition | 12,332 |
| Reductions\tfor\ttax\tpositions\trelated\tto\tprior\tyears | (43,186) |
| Reductions\tdue\tto\tlapse\tof\tapplicable\tstatute\tof\tlimitations | (1,566) |
| Balance,\tOctober\t28,\t2017 | $37,857 |
| Additions\tfor\ttax\tpositions\trelated\tto\tcurrent\tyear | 1,334 |
| Reductions\tfor\ttax\tpositions\trelated\tto\tprior\tyears | (295) |
| Reductions\tdue\tto\tlapse\tof\tapplicable\tstatute\tof\tlimitations | (25,640) |
| Balance,\tNovember\t3,\t2018 | $13,256 |
| Additions\tfor\ttax\tpositions\trelated\tto\tcurrent\tyear | 3,398 |
| Additions\tfor\ttax\tpositions\trelated\tto\tprior\tyears | 18,613 |
| Reductions\tdue\tto\tlapse\tof\tapplicable\tstatute\tof\tlimitations | (924) |
| Balance,\tNovember\t2,\t2019 | $34,343 |

In	fiscal	2017	the	Company	released	a	reserve	of	$50.5	million,	which	was	comprised	of	the	$41.7	million	in	accrued	tax	and	$8.8	million	of	accrued	net	interest due	to	favorable	settlement	with	the	U.S.	Tax	Court.	The	settled	issue	pertained	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.

In	fiscal	2018,	the	Company	released	reserves	of	$18.1	million	relating	to	certain	international	transfer	pricing	matters,	$4.2	million	relating	to	worthless	stock deductions	and	$3.3	million	relating	to	other	releases	in	fiscal	year	2013	due	to	the	lapse	of	the	statute	of	limitations.	With	accrued	interest	of	$9.9	million,	the	released reserves	totaled	$35.5	million.

In	fiscal	2019,	the	Company	has	reflected	an	unrealized	tax	benefit	related	to	a	refund	claim	of	$11.4	million	on	a	recently	filed	amended	tax	return	that	is currently	being	reviewed	by	the	Joint	Committee	on	Taxation.

The	Company	has	numerous	audits	ongoing	at	any	time	throughout	the	world	including:	an	Internal	Revenue	Service	income	tax	audit	for	Linear's	pre-acquisition fiscal	years	2015,	2016,	and	2017;	various	U.S.	state	and	local	tax	audits;	and	international	audits,	including	the	transfer	pricing	audit	in	Ireland	discussed	below.

Except	for	the	Linear	pre-acquisition	audit	years,	the	Company's	U.S.	federal	tax	returns	prior	to	fiscal	year	ended	October	29,	2016	are	no	longer	subject	to examination.

The	Company's	Ireland	tax	returns	prior	to	fiscal	year	ended	November	2,	2013	are	no	longer	subject	to	examination.	During	the	fourth	quarter	of	fiscal	2018,	the Company's	Irish	tax	resident	subsidiary	received	an	assessment	for	fiscal	2013	of	approximately	€43.0	million,	or	$48.0	million	(as	of	November	2,	2019),	from	the Irish	Revenue	Commissioners	(Irish	Revenue).	This	assessment	excludes	any	penalties	and	interest.		The	assessment	claims	that	the	Company's	Irish	entity	failed	to conform	to	2010	OECD	Transfer	Pricing	Guidelines.	The	Company	strongly	disagrees	with	the	assessment	and	maintains	that	its	transfer	pricing	is	appropriate. Therefore,	the	Company	has	not	recorded	any	additional	tax	liability	related	to	fiscal	2013	or	any	other	periods.		The	Company	intends	to	vigorously	defend	its originally	filed	tax	return	position	and	is	currently	preparing	for	an	appeal	with	the	Irish	Tax	Appeals	Commission,	which	is	the	normal	process	for	the	resolution	of differences	between	Irish	Revenue	and	taxpayers.		If	Irish	Revenue	were	ultimately	to	prevail	with	respect	to	its	assessment	for	fiscal	2013,	such	assessment	and	any potential	impact	related	to	years	subsequent	to	2013	could	have	a	material	unfavorable	impact	on	the	Company's	income	tax	expense	and	net	earnings	in	future	periods. During	the	first	quarter	of	fiscal	2019,	Irish	Revenue	commenced	transfer	pricing	audits	of	the	fiscal	years	ended	November	1,	2014;	October	31,	2015;	October	29, 2016;	and	October	28,	2017.	During	the	fourth	quarter	of	fiscal	2019,	the	Company	received	confirmation	from	Irish	Revenue	that	the	audit	relating	to	the	period	ended November	1,	2014	was	complete	and	that	no	further	tax	assessment	arose	in	respect	of	that	period.	The	audits	related	to	fiscal	2015,	fiscal	2016	and	fiscal	2017	are	on- going.

The	Company	has	a	partial	tax	holiday	in	Malaysia	whereby	the	local	statutory	rate	is	significantly	reduced,	if	certain	conditions	are	met.	The	tax	holiday	for Malaysia	is	effective	through	July	2025.	A	partial	tax	holiday	in	Singapore	was	terminated	in	September	2018	through	negotiations	with	the	Economic	Development Board.	The	impact	of	the	Singapore	and

Malaysia	tax	holidays	increased	net	income	by	approximately	$14.9	million,	$27.7	million	and	$27.4	million	in	fiscal	2019,	fiscal	2018	and	fiscal	2017,	respectively, resulting	in	increases	in	basic	and	diluted	net	income	per	common	share	by	$0.04,	$0.07	and	$0.08	in	fiscal	2019,	fiscal	2018	and	fiscal	2017,	respectively.

On	June	28,	2019,	the	Company	entered	into	a	second	amended	and	restated	revolving	credit	agreement	with	certain	institutional	lenders	that	expires	on	June	28, 2024.	The	agreement	for	such	revolving	credit	facility	(Revolving	Credit	Agreement),	which	further	amended	and	restated	our	amended	and	restated	revolving	credit agreement	dated	as	of	September	23,	2016,	provides	for	a	five	year	unsecured	revolving	credit	facility	in	an	aggregate	principal	amount	of	up	to	$1.25	billion.	As	of November	2,	2019.	the	Company	had	no	outstanding	borrowings	under	this	revolving	credit	facility	but	may	borrow	in	the	future	and	use	the	proceeds	for	repayment	of existing	indebtedness,	stock	repurchases,	acquisitions,	capital	expenditures,	working	capital	and	other	lawful	corporate	purposes.	Loans	under	the	Revolving	Credit Agreement	can	be	Eurocurrency	Rate	Loans	or	Base	Rate	Loans	at	the	Company's	option.	Each	Eurocurrency	Loan	will	bear	interest	at	a	rate	per	annum	equal	to	the Eurocurrency	Rate	plus	a	margin	based	on	the	Company's	debt	ratings	from	time	to	time	of	between	0.690%	and	1.375%.	Each	Base	Rate	Loan	will	bear	interest	at	a rate	per	annum	equal	to	the	Base	Rate	plus	a	margin	based	on	our	debt	ratings	from	time	to	time	of	between	0.000%	and	0.375%.	The	Revolving	Credit	Agreement imposes	restrictions	on	the	Company's	ability	to	undertake	certain	transactions,	to	create	certain	liens	on	assets	and	to	incur	certain	subsidiary	indebtedness.	In	addition, the	Credit	Agreement	contains	a	consolidated	leverage	ratio	covenant	of	total	consolidated	funded	debt	to	consolidated	EBITDA	(earnings	before	interest,	taxes, depreciation,	and	amortization)	of	not	greater	than	4.0	to	1.0.	The	debt	covenant	will	be	reduced	over	time	to	3.5	to	1.0,	beginning	in	fiscal	2020	depending	on	facts	and circumstances.	As	of	November	2,	2019,	the	Company	was	compliant	with	these	covenants.

On	June	3,	2013,	the	Company	issued	$500.0	million	aggregate	principal	amount	of	2.875%	senior	unsecured	notes	due	June	1,	2023	(the	2023	Notes)	with	semi- annual	fixed	interest	payments	due	on	June	1	and	December	1	of	each	year,	commencing	December	1,	2013.	Prior	to	issuing	the	2023	Notes,	on	April	24,	2013,	the Company	entered	into	a	treasury	rate	lock	agreement	with	Bank	of	America.	This	agreement	allowed	the	Company	to	lock	a	10-year	US	Treasury	rate	of	1.7845% through	June	14,	2013	for	its	anticipated	issuance	of	the	2023	Notes.	The	net	proceeds	of	the	offering	were	$493.9	million,	after	discount	and	issuance	costs.	Debt discount	and	issuance	costs	will	be	amortized	through	interest	expense	over	the	term	of	the	2023	Notes.	The	indenture	governing	the	2023	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	November	2,	2019,	the	Company	was	compliant	with	these	covenants.	The	notes	are	subordinated	to	any	future	secured	debt	and	to	the	other	liabilities	of	the Company's	subsidiaries.

On	December	14,	2015,	the	Company	issued	$850.0	million	aggregate	principal	amount	of	3.9%	senior	unsecured	notes	due	December	15,	2025	(the	2025	Notes) and	$400.0	million	aggregate	principal	amount	of	5.3%	senior	unsecured	notes	due	December	15,	2045	(the	2045	Notes)	with	semi-annual	fixed	interest	payments	due on	June	15	and	December	15	of	each	year,	commencing	June	15,	2016.	The	net	proceeds	of	the	offering	were	$1.2	billion,	after	discount	and	issuance	costs.	Debt discount	and	issuance	costs	will	be	amortized	through	interest	expense	over	the	term	of	the	2025	Notes	and	2045	Notes.	The	indenture	governing	the	2025	Notes	and 2045	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	November	2,	2019,	the	Company	was	compliant	with	these	covenants.	The	2025	Notes	and	2045	Notes	are subordinated	to	any	future	secured	debt	and	to	the	other	liabilities	of	the	Company's	subsidiaries.

On	July	26,	2016,	the	Company	entered	into	a	definitive	agreement	to	acquire	Linear	(the	Merger	Agreement).	In	connection	with	the	Acquisition,	the	Company announced	that	it	had	obtained	commitment	financing	in	the	form	of	a	364-day	senior	unsecured	bridge	facility	in	an	aggregate	principal	amount	of	up	to	$7.5	billion (364-day	Bridge	Commitment)	and	a	90-day	senior	unsecured	bridge	facility	in	an	aggregate	principal	amount	of	up	to	$4.1	billion	(90-day	Bridge	Commitment).	As discussed	below,	as	a	result	of	entering	into	the	term	loan	facility	and	the	issuance	of	$2.1	billion	senior	unsecured	notes,	the	364-day	Bridge	Commitment	was terminated	and	$13.7	million	and	$7.2	million	of	unamortized	bridge	fees	relating	to	the	364-day	Bridge	Commitment	were	accelerated	and	amortized	into	interest expense	in	fiscal	2016	and	first	quarter	of	fiscal	2017,	respectively.	Total	fees	incurred	by	the	Company	for	the	364-day	Bridge	Commitment	were	approximately	$27.5 million.

On	the	Acquisition	Date,	the	Company	entered	into	a	90-day	Bridge	Credit	Agreement	(the	Bridge	Credit	Agreement).	The	Bridge	Credit	Agreement	provided	for unsecured	loans	in	an	aggregate	principal	amount	of	up	to	$4.1	billion.	In	the	third

quarter	of	fiscal	2017,	the	Company	repaid	all	of	the	$4.1	billion	of	outstanding	loans	under	the	Bridge	Credit	Agreement.	Total	fees	incurred	by	the	Company	for	the 90-day	Bridge	Commitment	and	Bridge	Credit	Agreement	were	approximately	$15.0	million.

On	September	23,	2016,	the	Company	entered	into	a	term	loan	facility	consisting	of	a	3-year	unsecured	term	loan	facility	in	the	principal	amount	of	$2.5	billion and	a	5-year	unsecured	term	loan	facility	in	the	principal	amount	of	$2.5	billion	established	pursuant	to	a	credit	agreement	(2016	Term	Loan	Agreement).	On	the Acquisition	Date,	the	Company	borrowed	under	the	2016	Term	Loan	Agreement,	consisting	of	a	3-year	unsecured	term	loan	in	the	principal	amount	of	$2.5	billion,	due March	10,	2020	and	a	5-year	unsecured	term	loan	in	the	principal	amount	of	$2.5	billion,	due	March	10,	2022.	The	5-year	term	loan	required	repayment	in	quarterly installments	on	the	last	business	day	of	each	March,	June,	September	and	December	with	the	first	required	payment	due	June	2017.	Prepayments	of	principal	on	the	term loans	could	be	made	at	any	time	without	penalty.	The	term	loans	bore	interest	at	a	rate	per	annum	equal	to	the	Eurodollar	Rate	plus	a	margin	based	on	the	Company's debt	ratings	from	time	to	time	of	between	0.75%	and	1.63%	in	the	case	of	the	3-year	term	loan,	and	a	margin	of	between	0.88%	and	1.75%	in	the	case	of	the	5-year	term loan.	As	a	result	of	entering	into	the	2016	Term	Loan	Agreement	and	drawing	on	the	available	borrowings,	the	Company	incurred	fees	of	approximately	$11.5	million. The	Company	recorded	these	costs	as	deferred	financing	costs	and	amortized	them	to	expense	pro-rata	over	the	term	of	the	instrument,	accelerating	proportionally	with any	prepayment.	During	fiscal	2017,	fiscal	2018	and	fiscal	2019,	the	Company	made	various	payments	on	both	the	3-year	and	5-	year	term	loans.	During	fiscal	2019,	the Company	repaid	these	3-year	and	5-year	term	loans	in	full.

On	December	5,	2016,	the	Company	issued	$400.0	million	aggregate	principal	amount	of	2.5%	senior	unsecured	notes	due	December	5,	2021	(the	2021	Notes), $550.0	million	aggregate	principal	amount	of	3.125%	senior	unsecured	notes	due	December	5,	2023	(the	December	2023	Notes),	$900.0	million	aggregate	principal amount	of	3.5%	senior	unsecured	notes	due	December	5,	2026	(the	2026	Notes)	and	$250.0	million	aggregate	principal	amount	of	4.5%	senior	unsecured	notes	due December	5,	2036	(the	2036	Notes,	and	together	with	the	2021	Notes,	the	December	2023	Notes	and	the	2026	Notes,	the	Notes)	with	semi-annual	fixed	interest payments	due	on	June	5	and	December	5	of	each	year,	commencing	June	5,	2017.	The	net	proceeds	of	the	offering	were	$2.1	billion,	after	discount	and	issuance	costs. Debt	discount	and	issuance	costs	will	be	amortized	through	interest	expense	over	the	term	of	the	Notes.	The	Notes	were	issued	pursuant	to	an	indenture,	as	supplemented by	a	supplemental	indenture,	and	the	indenture	and	supplemental	indenture	contain	certain	covenants,	events	of	default	and	other	customary	provisions.	As	of November	2,	2019,	the	Company	was	compliant	with	these	covenants.	The	Notes	rank	without	preference	or	priority	among	themselves	and	equally	in	right	of	payment with	all	other	existing	and	future	senior	unsecured	debt	and	senior	in	right	of	payment	to	all	of	the	Company's	future	subordinated	debt.	The	issuance	of	the	Notes replaced	the	remaining	$2.5	billion	of	the	364-day	Bridge	Commitment.

On	March	12,	2018,	in	an	underwritten	public	offering,	the	Company	issued	$300.0	million	aggregate	principal	amount	of	2.850%	senior	unsecured	notes	due March	12,	2020	(the	2020	Notes)	and	$450.0	million	aggregate	principal	amount	of	2.950%	senior	unsecured	notes	due	January	12,	2021	(the	January	2021	Notes	and, together	with	the	2020	Notes,	the	2018	Note	Offerings).	Interest	on	the	2020	Notes	is	payable	on	March	12	and	September	12	of	each	year,	beginning	on	September	12, 2018.	Interest	on	the	January	2021	Notes	is	payable	on	January	12	and	July	12	of	each	year,	beginning	on	July	12,	2018.	The	net	proceeds	of	the	offering	were	$743.8 million,	after	discount	and	issuance	costs,	which	were	used	to	repay	a	portion	of	the	Company's	outstanding	5-year	term	loan.	Debt	discount	and	issuance	costs	will	be amortized	through	interest	expense	over	the	term	of	the	2018	Note	Offerings.	At	any	time	prior	to	the	applicable	maturity	date	of	the	2018	Note	Offerings,	the	Company may,	at	its	option,	redeem	some	or	all	of	the	applicable	series	of	the	2018	Note	Offerings	by	paying	a	make-whole	premium,	plus	accrued	and	unpaid	interest,	if	any,	to the	date	of	redemption.	The	2018	Note	Offerings	are	unsecured	and	rank	equally	in	right	of	payment	with	all	of	the	Company's	other	unsecured	senior	indebtedness.	The 2018	Note	Offerings	were	issued	pursuant	to	an	indenture,	as	supplemented	by	a	supplemental	indenture,	and	the	indenture	and	supplemental	indenture	contain	certain covenants,	events	of	default	and	other	customary	provisions.	As	of	November	2,	2019,	the	Company	was	in	compliance	with	these	covenants.

On	June	28,	2019,	the	Company	entered	into	a	term	loan	credit	agreement	(Term	Loan	Agreement)	with	the	Company	as	the	borrower	and	JPMorgan	Chase	Bank, N.A.	as	administrative	agent	and	the	other	banks	identified	therein	as	lenders,	under	which	the	Company	borrowed	unsecured	term	loans	in	the	aggregate	principal amount	of	$1.25	billion,	maturing	on	March	10,	2022.	Loans	under	the	term	loan	credit	agreement	bear	interest,	at	the	Company's	option,	at	either	a	rate	equal	to	(a)	the Adjusted	LIBO	Rate	(as	defined	in	the	Term	Loan	Agreement)	plus	a	margin	based	on	the	Company's	debt	rating	or	(b)	the	Base	Rate	(defined	as	the	highest	of	(i)	the prime	rate,	(ii)	the	NYFRB	Rate	(as	defined	in	the	Term	Loan	Agreement)	plus	0.50%,	and	(iii)	one	month	Adjusted	LIBO	Rate	plus	1.00%)	plus	a	margin	based	on	the Company's	debt	rating.	The	Term	Loan	Agreement	contains	customary	representations	and	warranties,	affirmative	and	negative	covenants	and	events	of	default applicable	to	the	Company	and	its	subsidiaries.	The	events	of	default	include,	among	others,	nonpayment	of	principal,	interest,	fees	or	other	amounts,	failure	to	perform certain	covenants,	cross-defaults	to	certain	other	indebtedness,	insolvency	or	bankruptcy,	customary	ERISA	defaults	or	the	occurrence	of	a	change	of	control.	The negative	covenants	include	limitations	on

liens,	indebtedness	of	non-guarantor	subsidiaries	and	mergers	and	other	fundamental	changes,	among	others.	The	Term	Loan	Agreement	also	requires	the	Company	to maintain	a	consolidated	leverage	ratio	of	total	consolidated	funded	debt	to	consolidated	EBITDA	(earnings	before	interest,	taxes,	depreciation,	and	amortization)	for	a trailing	twelve-month	period	of	not	greater	than	4.0	to	1.0.	The	covenant	will	be	reduced	to	3.5	to	1.0	beginning	in	fiscal	year	2020,	assuming	the	Company	does	not undertake	any	significant	acquisitions,	mergers,	and	other	fundamental	changes.	Should	such	a	change	occur,	the	Company	may	be	authorized	to	increase	the	covenant back	to	4.0	to	1.0.		As	of	November	2,	2019,	the	Company	was	compliant	with	these	covenants.	In	fiscal	2019,	the	Company	made	principal	payments	on	the	term	loans in	the	amount	of	$325.0	million.	These	amounts	were	not	contractually	due	under	the	terms	of	the	term	loan	credit	agreement.

The	Company's	debt	consisted	of	the	following	as	of	November	2,	2019	and	November	3,	2018:

|  | November	2,	2019 |  | November	3,	2018 | November	3,	2018 |
| :--- | :--- | :--- | :--- | :--- |
|  | Principal | Unamortized\tdiscount\nand\tdebt\tissuance\tcosts | Principal | Unamortized\tdiscount\nand\tdebt\tissuance\tcosts |
| 3-Year\tterm\tloan,\tdue\tMarch\t2022 | $925,000 | $— | $— | $— |
| 3-Year\tterm\tloan,\tdue\tMarch\t2020 | — | — | 358,000 | 318 |
| 5-Year\tterm\tloan,\tdue\tMarch\t2022 | — | — | 1,350,000 | 1,503 |
| 2020\tNotes,\tdue\tMarch\t2020 | — | — | 300,000 | 1,273 |
| 2021\tNotes,\tdue\tJanuary\t2021 | 450,000 | 1,819 | 450,000 | 3,344 |
| 2021\tNotes,\tdue\tDecember\t2021 | 400,000 | 1,918 | 400,000 | 2,830 |
| 2023\tNotes,\tdue\tJune\t2023 | 500,000 | 2,200 | 500,000 | 2,813 |
| 2023\tNotes,\tdue\tDecember\t2023 | 550,000 | 3,619 | 550,000 | 4,499 |
| 2025\tNotes,\tdue\tDecember\t2025 | 850,000 | 5,382 | 850,000 | 6,262 |
| 2026\tNotes,\tdue\tDecember\t2026 | 900,000 | 9,086 | 900,000 | 10,361 |
| 2036\tNotes,\tdue\tDecember\t2036 | 250,000 | 3,576 | 250,000 | 3,778 |
| 2045\tNotes,\tdue\tDecember\t2045 | 400,000 | 5,148 | 400,000 | 5,345 |
| \t\t\tTotal\tLong-Term\tDebt | $5,225,000 | $32,748 | $6,308,000 | $42,326 |
| 2020\tNotes,\tdue\tMarch\t2020 | 300,000 | 333 | — | — |
| 3-Year\tterm\tloan,\tdue\tMarch\t2020,\tcurrent | — | — | 67,000 | — |
| \t\t\t\tTotal\tCurrent\tDebt | $300,000 | $333 | $67,000 | $— |
| Total\tDebt | $5,525,000 | $33,081 | $6,375,000 | $42,326 |

# 15.	Subsequent	Events

On	November	25,	2019,	the	Board	of	Directors	of	the	Company	declared	a	cash	dividend	of	$0.54	per	outstanding	share	of	common	stock.	The	dividend	will	be paid	on	December	17,	2019	to	all	shareholders	of	record	at	the	close	of	business	on	December	6,	2019.

# SUPPLEMENTARY	FINANCIAL	INFORMATION

# (Unaudited)	(thousands,	except	per	share	amounts)

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	2019	is	a	52-week	fiscal	year.	Fiscal 2018	was	a	53-week	fiscal	year.	The	Company's	interim	periods	operate	on	a	4-4-5	fiscal	calendar,	where	each	fiscal	quarter	is	comprised	of	two	4-week	periods	and	one 5-week	period,	with	each	week	ending	on	a	Saturday.	The	additional	week	in	fiscal	2018	was	included	in	the	first	quarter	ended	February	3,	2018.	Therefore,	fiscal	2018 included	an	additional	week	of	operations	as	compared	to	fiscal	2019.

|  | 4Q19 | 3Q19 | 2Q19 | 1Q19 | 4Q18	(1) | 3Q18	(1) | 2Q18	(1) | 1Q18	(1) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Revenue | $1,443,219 | $1,480,143 | $1,526,602 | $1,541,101 | $1,536,128 | $1,558,189 | $1,563,502 | $1,566,870 |
| Cost\tof\tsales | 501,028 | 482,332 | 492,510 | 501,445 | 490,585 | 497,557 | 491,038 | 495,113 |
| Gross\tmargin | 942,191 | 997,811 | 1,034,092 | 1,039,656 | 1,045,543 | 1,060,632 | 1,072,464 | 1,071,757 |
| %\tof\tRevenue | 65.3\t% | 67.4\t% | 67.7\t% | 67.5\t% | 68.1\t% | 68.1\t% | 68.6\t% | 68.4\t% |
| Research\tand\tdevelopment | 277,018 | 280,102 | 285,846 | 287,382 | 295,609 | 291,551 | 289,381 | 288,506 |
| Selling,\tmarketing,\tgeneral\tand\nadministrative | 154,799 | 162,825 | 163,128 | 167,342 | 175,296 | 171,388 | 172,047 | 176,809 |
| Special\tcharges\t(2) | 64,788 | 927 | 8,162 | 21,782 | 1,842 | 1,069 | 1,089 | 57,318 |
| Amortization\tof\tintangibles | 107,225 | 107,231 | 107,261 | 107,324 | 107,345 | 107,409 | 107,129 | 107,019 |
| Total\toperating\texpenses | 603,830 | 551,085 | 564,397 | 583,830 | 580,092 | 571,417 | 569,646 | 629,652 |
| Operating\tincome | 338,361 | 446,726 | 469,695 | 455,826 | 465,451 | 489,215 | 502,818 | 442,105 |
| %\tof\tRevenue | 23\t% | 30\t% | 31\t% | 30\t% | 30\t% | 31\t% | 32\t% | 28\t% |
| Nonoperating\t(income)\texpenses: |  |  |  |  |  |  |  |  |
| Interest\texpense | 50,775 | 59,871 | 59,701 | 58,728 | 59,102 | 61,665 | 64,792 | 68,030 |
| Interest\tincome | (1,988) | (2,625) | (2,928) | (2,688) | (2,791) | (2,588) | (1,912) | (2,092) |
| Other,\tnet | 1,747 | (78) | 4,525 | (160) | (196) | (368) | (187) | 820 |
| Total\tnonoperating\t(income)\texpense | 50,534 | 57,168 | 61,298 | 55,880 | 56,115 | 58,709 | 62,693 | 66,758 |
| Income\tbefore\tincome\ttaxes | 287,827 | 389,558 | 408,397 | 399,946 | 409,336 | 430,506 | 440,125 | 375,347 |
| %\tof\tRevenue | 20\t% | 26\t% | 27\t% | 26\t% | 27\t% | 28\t% | 28\t% | 24\t% |
| Provision\tfor\tincome\ttaxes\t(3) | 10,133 | 27,184 | 40,460 | 44,940 | 4,481 | 21,949 | 39,797 | 82,107 |
| Net\tincome | $277,694 | $362,374 | $367,937 | $355,006 | $404,855 | $408,557 | $400,328 | $293,240 |
| %\tof\tRevenue | 19\t% | 24\t% | 24\t% | 23\t% | 26\t% | 26\t% | 26\t% | 19\t% |
| Net\tincome\tallocable\tto\tcommon\nshares\t(4) | $277,182 | $361,562 | $367,029 | $353,969 | $403,511 | $407,031 | $398,796 | $291,997 |
| Basic\tearnings\tper\tcommon\tshare | $0.75 | $0.98 | $0.99 | $0.96 | $1.09 | $1.10 | $1.08 | $0.79 |
| Diluted\tearnings\tper\tcommon\tshare | $0.74 | $0.97 | $0.98 | $0.95 | $1.08 | $1.08 | $1.06 | $0.78 |
| Shares\tused\tto\tcompute\tearnings\tper\tshare\n(in\tthousands): |  |  |  |  |  |  |  |  |
| Basic | 369,051 | 369,533 | 369,246 | 368,703 | 371,074 | 371,315 | 370,384 | 369,093 |
| Diluted | 372,584 | 373,077 | 373,342 | 372,506 | 375,116 | 375,815 | 374,778 | 374,189 |
| Dividends\tdeclared\tper\tshare | $0.54 | $0.54 | $0.54 | $0.48 | $0.48 | $0.48 | $0.48 | $0.45 |

(2) Represents	charges	recorded	for	various	restructuring	actions.	See	Note	5,	Special	Charges,	of	the	Notes	to	Consolidated	Financial	Statements	in	Item	8	of	this	Annual	Report	on Form	10-K.

(3) See	Note	12,	Income	Taxes,	of	the	Notes	to	Consolidated	Financial	Statements	in	Item	8	of	this	Annual	Report	on	Form	10-K.

(4) Under	the	two-class	method,	earnings	per	share	is	calculated	using	net	earnings	allocable	to	common	shares,	which	is	derived	by	reducing	net	income	by	the	income	allocable	to participating	securities.

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

# 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	November	2,	2019.	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	November	2,	2019,	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	November	2,	2019.	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	2013 Framework.

Based	on	this	assessment,	our	management	concluded	that,	as	of	November	2,	2019,	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

# Opinion	on	Internal	Control	over	Financial	Reporting

We	have	audited	Analog	Devices,	Inc.'s	internal	control	over	financial	reporting	as	of	November	2,	2019,	based	on	criteria	established	in	Internal	Control—Integrated Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(2013	framework)	(the	COSO	criteria).	In	our	opinion,	Analog	Devices, Inc.	(the	Company)	maintained,	in	all	material	respects,	effective	internal	control	over	financial	reporting	as	of	November	2,	2019,	based	on	the	COSO	criteria.

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States)	(PCAOB),	the	consolidated	balance	sheets of	Analog	Devices,	Inc.	as	of	November	2,	2019	and	November	3,	2018,	the	related	consolidated	statements	of	income,	comprehensive	income,	shareholders'	equity	and cash	flows	for	each	of	the	three	years	in	the	period	ended	November	2,	2019,	and	the	related	notes	and	financial	statement	schedule	listed	in	the	Index	at	Item	15(a)(2) and	our	report	dated	November	26,	2019	expressed	an	unqualified	opinion	thereon.

The	Company'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	are	a	public	accounting	firm	registered	with	the	PCAOB	and	are	required	to be	independent	with	respect	to	the	Company	in	accordance	with	the	U.S.	federal	securities	laws	and	the	applicable	rules	and	regulations	of	the	Securities	and	Exchange Commission	and	the	PCAOB.

We	conducted	our	audit	in	accordance	with	the	standards	of	the	PCAOB.	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.

# Definition	and	Limitations	of	Internal	Control	Over	Financial	Reporting

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.

(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	November	2,	2019	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	under	the	caption	"Proposal	1	—	Election	of	Directors"	contained	in	our 2020	proxy	statement	to	be	filed	with	the	U.S.	Securities	and	Exchange	Commission	(the	SEC)	within	120	days	after	November	2,	2019	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	REGISTRANT"	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	under	the	caption	"Section	16(a)	Beneficial	Ownership	Reporting	Compliance"	in	our	2020	proxy	statement	to	be	filed with	the	SEC	within	120	days	after	November	2,	2019	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	Nasdaq	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	fiscal	2019,	we	made	no	material	change	to	the	procedures	by	which	shareholders	may	recommend	nominees	to	our	Board	of	Directors,	as	described	in	our 2019	proxy	statement.

Information	required	by	this	item	relating	to	the	audit	committee	of	our	Board	of	Directors	is	contained	under	the	caption	"Corporate	Governance	—	Board	of Directors	Meetings	and	Committees	—	Audit	Committee"	in	our	2020	proxy	statement	to	be	filed	with	the	SEC	within	120	days	after	November	2,	2019	and	is incorporated	herein	by	reference.

# ITEM	11.	EXECUTIVE	COMPENSATION

Information	required	by	this	item	is	contained	under	the	captions	"Corporate	Governance	—	Director	Compensation"	and	"Information	About	Executive Compensation"	in	our	2020	proxy	statement	to	be	filed	with	the	SEC	within	120	days	after	November	2,	2019	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	under	the	caption	"Security	Ownership of	Certain	Beneficial	Owners	and	Management"	in	our	2020	proxy	statement	to	be	filed	with	the	SEC	within	120	days	after	November	2,	2019	and	is	incorporated herein	by	reference.	Information	required	by	this	item	relating	to	securities	authorized	for	issuance	under	equity	compensation	plans	is	contained	under	the	caption "Information	About	Executive	Compensation	—	Securities	Authorized	for	Issuance	Under	Equity	Compensation	Plans"	in	our	2020	proxy	statement	to	be	filed	with	the SEC	within	120	days	after	November	2,	2019	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	under	the	caption	"Corporate	Governance	—	Certain	Relationships	and Related	Transactions"	in	our	2020	proxy	statement	to	be	filed	with	the	SEC	within	120	days	after	November	2,	2019	and	is	incorporated	herein	by	reference. Information	required	by	this	item	relating	to	director	independence	is	contained	under	the	caption	"Corporate	Governance	—	Determination	of	Independence"	in	our 2020	proxy	statement	to	be	filed	with	the	SEC	within	120	days	after	November	2,	2019	and	is	incorporated	herein	by	reference.

# ITEM	14.	PRINCIPAL	ACCOUNTING	FEES	AND	SERVICES

Information	required	by	this	item	is	contained	under	the	caption	"Corporate	Governance	—	Independent	Registered	Public	Accounting	Firm	Fees	and	Other Matters"	in	our	2020	proxy	statement	to	be	filed	with	the	SEC	within	120	days	after	November	2,	2019	and	is	incorporated	herein	by	reference.

# PART	IV

# ITEM	15.	EXHIBITS,	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	Income	for	the	years	ended	November	2,	2019,	November	3,	2018	and	October	28,	2017 	 —	 Consolidated	Statements	of	Comprehensive	Income	for	the	years	ended	November	2,	2019,	November	3,	2018	and	October	28,	2017 	 —	 Consolidated	Balance	Sheets	as	of	November	2,	2019	and	November	3,	2018

# 2.	Financial	Statement	Schedules

# 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.

# 3.	Exhibits

4.2 Supplemental	Indenture,	dated	as	of	June	3,	2013,	by	and	between	Analog	Devices,	Inc.	and	The	Bank	of	New	York	Mellon	Trust	Company,	N.A.,	as trustee,	filed	as	exhibit	4.2	to	the	Company's	Current	Report	on	Form	8-K	(File	No.	1-7819)	as	filed	with	the	Commission	on	June	3,	2013	and incorporated	herein	by	reference.

4.3 Supplemental	Indenture,	dated	December	14,	2015,	between	Analog	Devices,	Inc.	and	The	Bank	of	New	York	Mellon	Trust	Company,	N.A.,	as trustee,	filed	as	exhibit	4.2	to	the	Company's	Current	Report	on	Form	8-K	(File	No.	1-7819)	as	filed	with	the	Commission	on	December	14,	2015	and incorporated	herein	by	reference.

4.5 Supplemental	Indenture,	dated	March	12,	2018,	between	Analog	Devices,	Inc.	and	The	Bank	of	New	York	Mellon	Trust	Company,	N.A.,	as	trustee, filed	as	exhibit	4.2	to	the	Company's	Current	Report	on	Form	8-K	(File	No.	1-7819)	as	filed	with	the	Commission	on	March	12,	2018	and incorporated	herein	by	reference.

†4.6 Description	of	Registrant's	Securities.

*10.7 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	exhibit	10.3	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.

*10.8 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.

*10.9 Amended	and	Restated	2006	Stock	Incentive	Plan	of	Analog	Devices,	Inc.,	filed	as	exhibit	10.1	to	the	Company's	Quarterly	Report	on	Form	10-Q for	the	fiscal	quarter	ended	February	1,	2014	(File	No.	1-7819)	as	filed	with	the	Commission	on	February	18,	2014	and	incorporated	herein	by reference.

*10.15 Form	of	Performance	Restricted	Stock	Unit	Agreement	for	Employees	for	usage	under	the	Company's	Amended	and	Restated	2006	Stock	Incentive Plan,	filed	as	exhibit	10.7	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	fiscal	quarter	ended	February	3,	2018	(File	No.	1-7819)	as	filed with	the	Commission	on	February	28,	2018	and	incorporated	herein	by	reference.

*10.16 Form	of	Relative	TSR	Performance	Restricted	Stock	Unit	Agreement	for	Employees	for	usage	under	the	Company's	Amended	and	Restated	2006 Stock	Incentive	Plan,	filed	as	exhibit	10.1	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	fiscal	quarter	ended	May	4,	2019	(File	No.	1- 7819)	as	filed	with	the	Commission	on	May	22,	2019	and	incorporated	herein	by	reference.

*10.17 Form	of	Financial	Key	Metric	Performance	Restricted	Stock	Unit	Agreement	for	Employees	for	usage	under	the	Company's	Amended	and	Restated 2006	Stock	Incentive	Plan,	filed	as	Exhibit	10.2	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	fiscal	quarter	ended	May	4,	2019	(File	No. 1-7819)	as	filed	with	the	Commission	on	May	22,	2019	and	incorporated	herein	by	reference.

*10.28 Second	Amendment	and	Restated	Agreement,	dated	as	of	June	28,	2019,	among	Analog	Devices,	Inc.,	as	Borrower,	Bank	of	America,	N.A.	as Administrative	Agent,	Swing	Line	Lender	and	L/C	Issuer	and	each	lender	from	time	to	time	party	thereto,	filed	as	exhibit	10.2	to	the	Company's Current	Report	on	Form	8-K	(File	No.	1-7819)	as	filed	with	the	Commission	on	July	1,	2019	and	incorporated	herein	by	reference.

† 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.

** Submitted	electronically	herewith.

Attached	as	Exhibit	101	to	this	report	are	the	following	formatted	in	iXBRL	(Inline	Extensible	Business	Reporting	Language):	(i)	Consolidated	Statements	of	Income	for the	years	ended	November	2,	2019,	November	3,	2018	and	October	28,	2017,	(ii)	Consolidated	Balance	Sheets	as	of	November	2,	2019	and	November	3,	2018, (iii)	Consolidated	Statements	of	Shareholders'	Equity	for	the	years	ended	November	2,	2019,	November	3,	2018	and	October	28,	2017,	(iv)	Consolidated	Statements	of Comprehensive	Income	for	the	years	ended	November	2,	2019,	November	3,	2018	and	October	28,	2017,	(v)	Consolidated	Statements	of	Cash	Flows	for	the	years	ended November	2,	2019,	November	3,	2018	and	October	28,	2017,	(vi)	Notes	to	Consolidated	Financial	Statements	for	the	years	ended	November	2,	2019,	November	3,	2018 and	October	28,	2017.

# ANNUAL	REPORT	ON	FORM	10-K

# FINANCIAL	STATEMENT	SCHEDULE

# (dollar	amounts	in	thousands)

|  | (dollar	amounts	in	thousands) | (dollar	amounts	in	thousands) |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Description | Balance\tat\nBeginning\tof\tPeriod | Additions\n(Reductions)\nCharged\tto\tIncome\nStatement | Other | Deductions | Balance\tat\nEnd\tof\tPeriod |
| Accounts\tReceivable\tReserves\tand\tAllowances: |  |  |  |  |  |
| Year\tended\tOctober\t28,\t2017 | $5,117 | $12,284 | $— | $10,188 | $7,213 |
| Year\tended\tNovember\t3,\t2018 | $7,213 | $2,313 | $— | $7,242 | $2,284 |
| Year\tended\tNovember\t2,\t2019 | $2,284 | $13,979 | $— | $7,876 | $8,387 |
| Valuation\tReserve\tfor\tDeferred\tTax\tAsset: |  |  |  |  |  |
| Year\tended\tOctober\t28,\t2017 | $67,094 | $(7,778) | $— | $5,529 | $53,787 |
| Year\tended\tNovember\t3,\t2018 | $53,787 | $30,254 | $(1,761) | $— | $82,280 |
| Year\tended\tNovember\t2,\t2019 | $82,280 | $34,069 | $— | $— | $116,349 |

# 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.

/s/		Vincent	Roche

Vincent	Roche

President	and	Chief	Executive	Officer

(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.



Question: what is the total cash used of the stock repurchase during september 2019 , ( in millions ) ?
Calculation:   shares_repurchased = 342313
 price = 113.39
 cash_used = shares_repurchased * price
 answer = cash_used / 1000000 
Answer: 38.8