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adi-20230429

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)


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

For the quarterly period ended April 29, 2023


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

For the transition period from to

Commission File No. 1-7819

Analog Devices, Inc.

(Exact name of registrant as specified in its charter)

Massachusetts

04-2348234

(State or other jurisdiction of incorporation or organization)

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

One Analog Way,

Wilmington,

01887

(Address of principal executive offices)

(Zip Code)

(781) 935-5565

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock $0.16 2/3 par value per share	ADI	Nasdaq Global Select Market

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 (§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

☑

Accelerated filer

☐

Non-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) of the Exchange Act. ¨

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

As of April 29, 2023 there were 501,418,304 shares of common stock of the registrant, $0.16 2/3 par value per share, outstanding.

PART I — FINANCIAL INFORMATION


ITEM 1.			Financial Statements

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(in thousands, except per share amounts)


	Three Months Ended				Six Months Ended
	April 29, 2023		April 30, 2022		April 29, 2023		April 30, 2022
Revenue	$	3,262,930	$	2,972,064	$	6,512,560	$	5,656,357
Cost of sales	1,118,384		1,027,544		2,243,673		2,309,840
Gross margin	2,144,546		1,944,520		4,268,887		3,346,517
Operating expenses:
Research and development	415,754		420,901		829,849		847,681
Selling, marketing, general and administrative	324,251		305,308		650,535		602,673
Amortization of intangibles	253,021		253,476		506,163		506,843
Special charges, net	23,136		46,674		23,136		106,402
Total operating expenses	1,016,162		1,026,359		2,009,683		2,063,599
Operating income:	1,128,384		918,161		2,259,204		1,282,918
Nonoperating expense (income):
Interest expense	63,252		49,548		123,705		101,512
Interest income	(12,575)		(563)		(23,404)		(781)
Other, net	(10,216)		(10,069)		(2,493)		(20,613)
Total nonoperating expense (income)	40,461		38,916		97,808		80,118
Income before income taxes	1,087,923		879,245		2,161,396		1,202,800
Provision for income taxes	110,267		95,972		222,266		139,450
Net income	$	977,656	$	783,273	$	1,939,130	$	1,063,350

Shares used to compute earnings per common share – basic	504,715		522,370		505,918		523,831
Shares used to compute earnings per common share – diluted	508,725		526,264		509,955		528,203

Basic earnings per common share	$	1.94	$	1.50	$	3.83	$	2.03
Diluted earnings per common share	$	1.92	$	1.49	$	3.80	$	2.01

See accompanying notes.

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(in thousands)


	Three Months Ended				Six Months Ended
	April 29, 2023		April 30, 2022		April 29, 2023		April 30, 2022
Net income	$	977,656	$	783,273	$	1,939,130	$	1,063,350
Foreign currency translation adjustments	(864)		(17,868)		1,635		(22,472)

Change in fair value of derivative instruments designated as cash flow hedges, net	(2,109)		(3,757)		23,358		(2,710)
Changes in pension plans, net actuarial gain/loss and foreign currency translation adjustments, net	344		2,628		796		4,132
Other comprehensive (loss) income	(2,629)		(18,997)		25,789		(21,050)
Comprehensive income	$	975,027	$	764,276	$	1,964,919	$	1,042,300

See accompanying notes.

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share and per share amounts)


	April 29, 2023		October 29, 2022
ASSETS
Current Assets
Cash and cash equivalents	$	1,177,609	$	1,470,572

Accounts receivable	1,616,256		1,800,462
Inventories	1,648,136		1,399,914



Prepaid expenses and other current assets	302,919		267,044
Total current assets	4,744,920		4,937,992
Non-current Assets

Net property, plant and equipment	2,742,016		2,401,304
Goodwill	26,913,134		26,913,134
Intangible assets, net	12,261,693		13,265,406
Deferred tax assets	2,248,858		2,264,888

Other assets	634,118		519,626
Total non-current assets	44,799,819		45,364,358
TOTAL ASSETS	$	49,544,739	$	50,302,350
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	569,002	$	582,160


Income taxes payable	308,968		265,845
Commercial paper notes	253,635		—

Accrued liabilities	1,514,805		1,594,650
Total current liabilities	2,646,410		2,442,655
Non-current Liabilities
Long-term debt	6,475,646		6,548,625
Deferred income taxes	3,325,350		3,622,538

Income taxes payable	523,653		707,846

Other non-current liabilities	560,456		515,363
Total non-current liabilities	10,885,105		11,394,372

Shareholders’ Equity
Preferred stock, $1.00 par value, 471,934 shares authorized, none outstanding	—		—
Common stock, $0.16 2/3 par value, 1,200,000,000 shares authorized, 501,418,304 shares outstanding (509,295,941 on October 29, 2022)	83,571		84,880
Capital in excess of par value	26,262,226		27,857,270
Retained earnings	9,839,790		8,721,325
Accumulated other comprehensive loss	(172,363)		(198,152)
Total shareholders’ equity	36,013,224		36,465,323
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	49,544,739	$	50,302,350

See accompanying notes.

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)

(in thousands)


	Three Months Ended April 29, 2023
				Capital in				Accumulated Other
	Common Stock			Excess of		Retained		Comprehensive
	Shares	Amount		Par Value		Earnings		Loss








BALANCE, JANUARY 28, 2023	505,852	$	84,306	$	27,319,566	$	9,297,347	$	(169,734)

Net income						977,656
Dividends declared and paid - $0.86 per share						(435,213)

Issuance of stock under stock plans and other	1,764	294		25,480
Stock-based compensation expense				69,102
Other comprehensive loss								(2,629)
Common stock repurchased	(6,198)	(1,029)		(1,151,922)
BALANCE, APRIL 29, 2023	501,418	$	83,571	$	26,262,226	$	9,839,790	$	(172,363)

	Six Months Ended April 29, 2023
				Capital in				Accumulated Other
	Common Stock			Excess of		Retained		Comprehensive
	Shares	Amount		Par Value		Earnings		Loss
BALANCE, OCTOBER 29, 2022	509,296	$	84,880	$	27,857,270	$	8,721,325	$	(198,152)
Net income						1,939,130
Dividends declared and paid - $1.62 per share						(820,665)
Issuance of stock under stock plans and other	2,381	397		66,615
Stock-based compensation expense				144,143
Other comprehensive income								25,789
Common stock repurchased	(10,259)	(1,706)		(1,805,802)
BALANCE, APRIL 29, 2023	501,418	$	83,571	$	26,262,226	$	9,839,790	$	(172,363)

See accompanying notes.

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)

(in thousands)


	Three Months Ended April 30, 2022
				Capital in				Accumulated Other
	Common Stock			Excess of		Retained		Comprehensive
	Shares	Amount		Par Value		Earnings		Loss







BALANCE, JANUARY 29, 2022	523,315	$	87,221	$	30,093,961	$	7,434,748	$	(188,618)

Net income						783,273
Dividends declared and paid - $0.76 per share						(397,544)
Issuance of stock under stock plans and other	1,404	234		11,348
Stock-based compensation expense				70,996
Other comprehensive loss								(18,997)
Common stock repurchased	(4,913)	(819)		(776,021)
BALANCE, APRIL 30, 2022	519,806	$	86,636	$	29,400,284	$	7,820,477	$	(207,615)

	Six Months Ended April 30, 2022
				Capital in				Accumulated Other
	Common Stock			Excess of		Retained		Comprehensive
	Shares	Amount		Par Value		Earnings		Loss
BALANCE, OCTOBER 30, 2021	525,331	$	87,554	$	30,574,237	$	7,517,316	$	(186,565)
Net income						1,063,350
Dividends declared and paid - $1.45 per share						(760,189)
Issuance of stock under stock plans and other	1,983	332		19,722
Stock-based compensation expense				157,935
Other comprehensive loss								(21,050)
Common stock repurchased	(7,508)	(1,250)		(1,351,610)
BALANCE, APRIL 30, 2022	519,806	$	86,636	$	29,400,284	$	7,820,477	$	(207,615)

See accompanying notes.

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)


	Six Months Ended
	April 29, 2023		April 30, 2022
Cash flows from operating activities:
Net income	$	1,939,130	$	1,063,350
Adjustments to reconcile net income to net cash provided by operations:
Depreciation	165,581		137,016
Amortization of intangibles	1,003,713		1,008,900
Cost of goods sold for inventory acquired	—		271,396
Stock-based compensation expense	144,143		157,935



Deferred income taxes	(280,110)		(122,992)
Non-cash operating lease costs	(6,902)		(27,697)
Other	9,670		(10,225)
Changes in operating assets and liabilities	(487,339)		(399,463)
Total adjustments	548,756		1,014,870
Net cash provided by operating activities	2,487,886		2,078,220
Cash flows from investing activities:



Additions to property, plant and equipment	(460,496)		(229,912)



Other	(81)		13,010
Net cash used for investing activities	(460,577)		(216,902)
Cash flows from financing activities:







Early termination of debt	(65,688)		(519,116)
Dividend payments to shareholders	(820,665)		(760,189)
Repurchase of common stock	(1,807,508)		(852,860)
Proceeds from employee stock plans	67,012		20,054
Proceeds from commercial paper notes	253,635		—

Other	52,942		26,657
Net cash used for financing activities	(2,320,272)		(2,085,454)
Effect of exchange rate changes on cash	—		(16,095)
Net decrease in cash and cash equivalents	(292,963)		(240,231)
Cash and cash equivalents at beginning of period	1,470,572		1,977,964
Cash and cash equivalents at end of period	$	1,177,609	$	1,737,733

See accompanying notes.

ANALOG DEVICES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED APRIL 29, 2023 (UNAUDITED)

(all tabular amounts in thousands except per share amounts and percentages)

Note 1 – Basis of Presentation

In the opinion of management, the information furnished in the accompanying condensed consolidated financial statements reflects all normal recurring adjustments that are necessary to fairly state the results for these interim periods and should be read in conjunction with Analog Devices, Inc.’s (the Company) Annual Report on Form 10-K for the fiscal year ended October 29, 2022 (fiscal 2022) and related notes. The results of operations for the interim periods shown in this report are not necessarily indicative of the results that may be expected for the fiscal year ending October 28, 2023 (fiscal 2023) or any future period.

The Company has a 52-53 week fiscal year that ends on the Saturday closest to the last day in October. Certain amounts reported in previous periods have been reclassified to conform to the fiscal 2023 presentation.

Note 2 – Shareholders' Equity

As of April 29, 2023, the Company had repurchased a total of approximately 199.3 million shares of its common stock for approximately $13.4 billion under the Company's share repurchase program. As of April 29, 2023, an additional $3.2 billion remains available for repurchase of shares under the current authorized program. The Company also repurchases shares in settlement of employee tax withholding obligations due upon the vesting of restricted stock units/awards or the exercise of stock options as well as for the Company's employee stock purchase plan. Future repurchases of common stock will be dependent upon the Company's financial position, results of operations, outlook, liquidity and other factors deemed relevant by the Company.

Note 3 – Accumulated Other Comprehensive (Loss) Income

The following table provides the changes in accumulated other comprehensive (loss) income (AOCI) by component and the related tax effects during the first six months of fiscal 2023.


	Foreign currency translation adjustment		Unrealized holding gains (losses) on derivatives		Pension plans		Total
October 29, 2022	$	(72,136)	$	(119,613)	$	(6,403)	$	(198,152)
Other comprehensive income before reclassifications	1,635		20,324		50		22,009
Amounts reclassified out of other comprehensive income	—		6,911		746		7,657
Tax effects	—		(3,877)		—		(3,877)
Other comprehensive income	1,635		23,358		796		25,789

April 29, 2023	$	(70,501)	$	(96,255)	$	(5,607)	$	(172,363)

The amounts reclassified out of AOCI into the Condensed Consolidated Statements of Income and the Condensed Consolidated Statements of Shareholders' Equity with presentation location during each period were as follows:


	Three Months Ended				Six Months Ended
Comprehensive (Loss) Income Component	April 29, 2023		April 30, 2022		April 29, 2023		April 30, 2022		Location
Unrealized holding (gains) losses on derivatives:
Currency forwards	$	1,342	$	2,113	$	283	$	3,864	Cost of sales
	570		1,373		123		2,583		Research and development
	344		2,485		(953)		4,357		Selling, marketing, general and administrative

Interest rate derivatives	3,731		3,731		7,458		7,462		Interest expense

	5,987		9,702		6,911		18,266		Total before tax
	(701)		(1,485)		(1,503)		(2,786)		Tax

	$	5,286	$	8,217	$	5,408	$	15,480	Net of tax

Amortization of pension components included in the computation of net periodic pension cost:




Actuarial losses	$	376	$	458	$	746	$	947	Net of tax

Total amounts reclassified out of AOCI, net of tax	$	5,662	$	8,675	$	6,154	$	16,427

Note 4 – Earnings Per Share

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


	Three Months Ended				Six Months Ended
	April 29, 2023		April 30, 2022		April 29, 2023		April 30, 2022
Net Income	$	977,656	$	783,273	$	1,939,130	$	1,063,350



Basic shares:
Weighted-average shares outstanding	504,715		522,370		505,918		523,831
Earnings per common share basic:	$	1.94	$	1.50	$	3.83	$	2.03
Diluted shares:
Weighted-average shares outstanding	504,715		522,370		505,918		523,831
Assumed exercise of common stock equivalents	4,010		3,894		4,037		4,372
Weighted-average common and common equivalent shares	508,725		526,264		509,955		528,203
Earnings per common share diluted:	$	1.92	$	1.49	$	3.80	$	2.01
Anti-dilutive shares related to:
Outstanding stock-based awards	387		738		354		461

Note 5 – Special Charges, Net

Liabilities related to special charges, net are included in Accrued liabilities and Other non-current liabilities in the Condensed Consolidated Balance Sheets. The activity is detailed below:


Accrued Special Charges	Global Repositioning Actions















































Balance at October 29, 2022	$	52,070


Severance and benefit payments	(16,298)


Balance at January 28, 2023	$	35,772


Severance and benefit payments	(22,820)


Employee severance and benefit costs	23,136
Balance at April 29, 2023	$	36,088






Accrued liabilities	$	12,952
Other non-current liabilities	$	23,136

Note 6 – Commitments and Contingencies

On March 17, 2022, Walter E. Ryan and Ryan Asset Management, LLC, purported stockholders of Maxim Integrated Products, Inc. (Maxim), filed a putative class action in the Court of Chancery of the State of Delaware (C.A. No. 2022—0255) against the Company and the former directors of Maxim. The complaint alleges breach of fiduciary duties by the individual defendants in connection with Maxim’s agreement, as part of the merger negotiations with the Company, to suspend Maxim dividends for up to four quarters prior to the closing of the Company's acquisition of Maxim. The complaint further alleges that the Company aided and abetted that alleged breach of fiduciary duties. The plaintiffs seek damages in an amount to be determined at trial, plaintiffs’ costs and disbursements, including reasonable attorneys’ and experts’ fees, costs and other expenses. On May 2, 2023, the Court of Chancery entered an order dismissing the action in its entirety and with prejudice. On May 9, 2023, plaintiffs filed a Motion for Reargument. The Company believes that it and the other defendants have meritorious arguments in response to the motion and defenses to the underlying allegations; however, the Company is currently unable to determine the ultimate outcome of this matter or determine an estimate, or a range of estimates, of potential losses, if any.

Note 7 – Revenue

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 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 revenue within, each end market.


	Three Months Ended
	April 29, 2023						April 30, 2022
	Revenue		% of Revenue*		Y/Y%		Revenue		% of Revenue*
Industrial	$	1,744,567	53	%	16	%	$	1,502,731	51	%
Automotive	784,775		24	%	24	%	633,255		21	%
Communications	453,530		14	%	(4)	%	474,722		16	%
Consumer	280,058		9	%	(22)	%	361,356		12	%


Total revenue	$	3,262,930	100	%	10	%	$	2,972,064	100	%


	Six Months Ended
	April 29, 2023						April 30, 2022
	Revenue		% of Revenue*		Y/Y%		Revenue		% of Revenue*
Industrial	$	3,438,006	53	%	21	%	$	2,849,577	50	%
Automotive	1,498,178		23	%	27	%	1,183,985		21	%
Communications	941,735		14	%	6	%	887,663		16	%
Consumer	634,641		10	%	(14)	%	735,132		13	%
Total revenue	$	6,512,560	100	%	15	%	$	5,656,357	100	%
* The sum of the individual percentages may not equal the total due to rounding.

Revenue by Sales Channel

The following table summarizes 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. Other customers include the U.S. government, government prime contractors and certain commercial customers for which revenue is recorded over time.


	Three Months Ended
	April 29, 2023				April 30, 2022
Channel	Revenue		% of Revenue*		Revenue		% of Revenue*
Distributors	$	1,996,410	61	%	$	1,849,988	62	%
Direct customers	1,224,786		38	%	1,091,710		37	%
Other	41,734		1	%	30,366		1	%
Total revenue	$	3,262,930	100	%	$	2,972,064	100	%


	Six Months Ended
	April 29, 2023				April 30, 2022
Channel	Revenue		% of Revenue*		Revenue		% of Revenue*
Distributors	$	4,007,733	62	%	$	3,503,042	62	%
Direct customers	2,420,320		37	%	2,094,891		37	%
Other	84,507		1	%	58,424		1	%
Total revenue	$	6,512,560	100	%	$	5,656,357	100	%
* The sum of the individual percentages may not equal the total due to rounding.

Note 8 – Fair Value

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 April 29, 2023 and October 29, 2022. 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 April 29, 2023 and October 29, 2022, the Company held $661.3 million and $1,016.0 million, respectively, of cash that was

excluded from the tables below.


	April 29, 2023
	Fair Value measurement at Reporting Date using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
Assets
Cash equivalents:
Available-for-sale:
Government and institutional money market funds	$	516,265	$	—	$	516,265















Other assets:
Deferred compensation plan investments	68,645		—		68,645

Forward foreign currency exchange contracts	—		8,541		8,541
Total assets measured at fair value	$	584,910	$	8,541	$	593,451
Liabilities


Interest rate derivatives (1)	$	—	$	1,866	$	1,866
Total liabilities measured at fair value	$	—	$	1,866	$	1,866

(1)The carrying value of the related debt was adjusted by an equal and offsetting amount. The fair value of interest rate derivatives is estimated using a discounted cash flow analysis based on the contractual terms of the derivatives. See Note 9, Derivatives, in these Notes to Condensed Consolidated Financial Statements.


	October 29, 2022
	Fair Value measurement at Reporting Date using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
Assets
Cash equivalents:
Available-for-sale:
Government and institutional money market funds	$	454,545	$	—	$	454,545









Other assets:

Deferred compensation plan investments	63,211		—		63,211

Total assets measured at fair value	$	517,756	$	—	$	517,756
Liabilities

Forward foreign currency exchange contracts	$	—	$	16,984	$	16,984

Total liabilities measured at fair value	$	—	$	16,984	$	16,984

In addition to the methods and assumptions used by the Company in estimating its fair value disclosure for financial instruments disclosed in Note 2j, Summary of Significant Accounting Policies, in the Company's Annual Report on Form 10-K for fiscal 2022, which was filed with the Securities and Exchange Commission on November 22, 2022, the following methods and assumptions were used by the Company in estimating its fair value disclosure for financial instruments:

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

Assets and Liabilities Not Recorded at Fair Value on a Recurring Basis

Commercial paper — The fair value of commercial paper is obtained from indicative market prices and are classified as Level 2 measurements according to the fair value hierarchy. As of April 29, 2023, the fair value of the commercial paper notes was $254.2 million.

Debt — The table below presents the estimated fair value of certain financial instruments not recorded at fair value on a

recurring basis. The fair values of the senior unsecured notes are obtained from broker prices and are classified as Level 1 measurements according to the fair value hierarchy.


	April 29, 2023				October 29, 2022
	Principal Amount Outstanding		Fair Value		Principal Amount Outstanding		Fair Value
2024 Notes, due October 2024	$	500,000	$	492,992	$	500,000	$	491,982
2025 Notes, due April 2025	400,000		389,004		400,000		383,378
2026 Notes, due December 2026	900,000		877,748		900,000		851,479
Maxim 2027 Notes, due June 2027	—		—		59,788		54,771
2027 Notes, due June 2027	440,212		427,235		440,212		410,091
2028 Notes, due October 2028	750,000		661,084		750,000		621,093
2031 Notes, due October 2031	1,000,000		848,781		1,000,000		786,772
2032 Notes, due October 2032	300,000		293,269		300,000		278,359
2036 Notes, due December 2036	144,278		136,193		144,278		126,274
2041 Notes, due October 2041	750,000		573,996		750,000		513,709
2045 Notes, due December 2045	332,587		345,948		332,587		313,931
2051 Notes, due October 2051	1,000,000		723,063		1,000,000		640,766
Total debt	$	6,517,077	$	5,769,313	$	6,576,865	$	5,472,605

Note 9 – Derivatives

Foreign Exchange Exposure Management — 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, Thai Baht, South Korean Won and Japanese Yen as of April 29, 2023 and October 29, 2022 were $307.0 million and $307.1 million, respectively. The fair values of forward foreign currency derivative instruments designated as hedging instruments in the Company’s Condensed Consolidated Balance Sheets as of April 29, 2023 and October 29, 2022 were as follows:


		Fair Value At
	Balance Sheet Location	April 29, 2023		October 29, 2022
Forward foreign currency exchange contracts	Prepaid expenses and other current assets	$	6,022	$	—
Forward foreign currency exchange contracts	Accrued liabilities	$	—	$	18,050

As of April 29, 2023 and October 29, 2022, the total notional amounts of undesignated hedges related to forward foreign currency exchange contracts were $413.6 million and $246.4 million, respectively.

The following table presents the gross amounts of the Company's forward foreign currency exchange contract derivative assets and liabilities and the net amounts recorded in the Company's Condensed Consolidated Balance Sheets:


	April 29, 2023		October 29, 2022
Gross amounts of recognized liabilities	$	(3,802)	$	(19,846)
Gross amount of recognized assets	12,343		2,862

Net assets (liabilities) presented in the Condensed Consolidated Balance Sheets	$	8,541	$	(16,984)

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 changes in interest rates. During fiscal 2023, the Company entered into interest rate swap transactions related to its outstanding $1,000.0 million aggregate principal amount of 2.1% senior unsecured notes (the 2031 Notes) where the Company swapped the notional amount of its $1,000.0 million of fixed rate debt at 2.1% into floating interest rate debt through April 1, 2031. The fair value of the swaps at inception was zero and subsequent changes in the fair value of the interest rate swaps were reflected in the carrying value of the interest rate swaps on the balance sheet. The carrying value of the debt on the balance sheet was adjusted by an equal and offsetting amount. The interest rate swaps were designated and qualified as fair value hedges. The Company does not consider the risk of counterparty default to be significant. The gain or loss on the hedged item attributable to the hedged benchmark interest rate risk and the offsetting gain or loss on the related interest rate swaps were recorded as follows:


	April 29, 2023
Balance Sheet location	Loss on Swaps		Gain on Note
Accrued liabilities	$	1,866	$	—
Long term debt	$	—	$	1,866

For information on the unrealized holding gains (losses) on derivatives included in and reclassified out of AOCI into the Condensed Consolidated Statements of Income related to forward foreign currency exchange contracts, see Note 3, Accumulated Other Comprehensive (Loss) Income, in these Notes to Condensed Consolidated Financial Statements for further information.

Note 10 – Inventories

Inventories at April 29, 2023 and October 29, 2022 were as follows:


	April 29, 2023		October 29, 2022
Raw materials	$	122,518	$	110,908
Work in process	1,084,541		904,648
Finished goods	441,077		384,358
Total inventories	$	1,648,136	$	1,399,914

Note 11 – Debt

Revolving Credit Facility. On June 23, 2021, the Company entered into a Third Amended and Restated Credit Agreement (Revolving Credit Agreement) with Bank of America, N.A. as administrative agent and the other banks identified therein as lenders. The Revolving Credit Agreement provides for a five year unsecured revolving credit facility in an aggregate principal amount not to exceed $2.5 billion (subject to certain terms and conditions).

In the first quarter of fiscal 2023, the Company amended the Revolving Credit Agreement, replacing the LIBOR interest rate provisions with interest rate provisions based on a forward-looking term rate based on the secured overnight financing rate (SOFR) plus a 10 basis point credit spread adjustment. After the amendment, revolving loans under the Revolving Credit Agreement can be Term SOFR Loans or Base Rate Loans (each as defined in the Revolving Credit Agreement, as amended) at the Company's option. Each Term SOFR Loan will bear interest at a rate per annum equal to the applicable adjusted term SOFR plus a margin based on the Company's Debt Ratings (as defined in the Revolving Credit Agreement, as amended) from time to time of between 0.690% and 1.175%. As of April 29, 2023, 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.

Outstanding Debt. On April 26, 2023 (Redemption Date), the Company redeemed for cash $59.8 million representing all of the outstanding 3.450% senior notes due June 15, 2027 issued by Maxim (Maxim Notes) in accordance with the terms of the indenture governing the Maxim Notes. The Maxim Notes were redeemed for cash at a redemption price equal to $1,012.55 for each $1,000 principal of the Maxim Notes and included accrued interest.

Commercial Paper Program. On April 14, 2023, the Company established a commercial paper program under which the Company may issue short-term, unsecured commercial paper notes (CP Notes) in an amount up to a maximum aggregate face amount of $2.5 billion outstanding at any time, with maturities up to 397 days from the date of issuance. The CP Notes will be sold under customary market terms in the U.S. commercial paper market at a discount from par or at par and bear interest at rates determined at the time of issuance. The Company intends to use the net proceeds of the CP Notes for general corporate purposes, including without limitation, repayment of indebtedness, stock repurchases, acquisitions, capital expenditures and working capital. As of April 29, 2023, the Company had $