Tax Related Items: Income tax effect of the non-GAAP items discussed above. We excluded the income tax benefit/provision effect of these tax related items from our non-GAAP measures because they are not associated with the tax expense on our ongoing operating results.

About Analog Devices

Analog Devices (Nasdaq: ADI) is a leading global semiconductor company dedicated to solving the toughest engineering challenges. We enable our customers to interpret the world around us by intelligently bridging the physical and digital with unmatched technologies that sense, measure, power, connect and interpret. Visit http://www.analog.com.

Forward-Looking Statements

This press release contains forward-looking statements, which address a variety of subjects including, for example, our statements regarding our proposed acquisition of Maxim Integrated Products, Inc. (“Maxim”); the impact of the COVID-19 pandemic on our business, financial condition and results of operations; expected revenue, operating margin, tax rate, earnings per share, and other financial results; expected market trends, market share gains, operating leverage, production and inventory levels; expected customer demand and order rates for our products and expected product offerings; product development; and marketing position. Statements that are not historical facts, including statements about our beliefs, plans and expectations, are forward-looking statements. Such statements are based on our current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. The following important factors and uncertainties, among others, could cause actual results to differ materially from those described in these forward-looking statements: the uncertainty as to the extent of the duration, scope and impacts of the COVID-19 pandemic; political and economic uncertainty, including any faltering in global economic conditions or the stability of credit and financial markets; erosion of consumer confidence and declines in customer spending; unavailability of raw materials, services, supplies or manufacturing capacity; changes in geographic, product or customer mix; changes in export classifications, import and export regulations or duties and tariffs; changes in our or Maxim’s estimates of our respective expected tax rates based on current tax law; our ability to successfully integrate Maxim’s businesses and technologies; the risk that the expected benefits and synergies of the proposed transaction and growth prospects of the combined company may not be fully achieved in a timely manner, or at all; adverse results in litigation matters, including the potential for litigation related to the proposed transaction; the risk that we or Maxim will be unable to retain and hire key personnel; the risk associated with the timing of the closing of the proposed transaction, including the risk that the conditions to the transaction are not satisfied on a timely basis or at all or the failure of the transaction to close for any other reason or to close on the anticipated terms, including the anticipated tax treatment; the risk that any regulatory approval, consent or authorization that may be required for the proposed transaction is not obtained or is obtained subject to conditions that are not anticipated; unanticipated difficulties or expenditures relating to the transaction, the response of business partners and retention as a result of the announcement and pendency of the transaction; uncertainty as to the long-term value of our common stock; the diversion of management time on transaction-related matters; our ability to successfully integrate acquired businesses and technologies; and the risk that expected benefits, synergies and growth prospects of acquisitions may not be fully achieved in a timely manner, or at all. For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to our filings with the Securities and Exchange Commission (“SEC”), including the risk factors contained in our most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K. Forward-looking statements represent management’s current expectations and are inherently uncertain. Except as required by law, we do not undertake any obligation to update forward-looking statements made by us to reflect subsequent events or circumstances.

Analog Devices and the Analog Devices logo are registered trademarks or trademarks of Analog Devices, Inc. All other trademarks mentioned in this document are the property of their respective owners.

ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
	Three Months Ended								Six Months Ended
	May 1, 2021				May 2, 2020				May 1, 2021				May 2, 2020
Revenue	$	1,661,407			$	1,317,060			$	3,219,865			$	2,620,625
Cost of sales	524,770				470,386				1,037,857				925,809
Gross margin	1,136,637				846,674				2,182,008				1,694,816
Operating expenses:
Research and development	302,238				252,413				590,388				509,486
Selling, marketing, general and administrative	206,612				141,775				391,887				341,055
Amortization of intangibles	107,786				107,146				215,434				214,371
Special charges	311				1,320				749				12,456
Total operating expenses	616,947				502,654				1,198,458				1,077,368
Operating income	519,690				344,020				983,550				617,448
Nonoperating expense (income):
Interest expense	43,066				49,985				85,545				98,798
Interest income	(290		)		(1,334		)		(499		)		(3,274		)
Other, net	929				308				(14,099		)		646
	43,705				48,959				70,947				96,170
Income before income taxes	475,985				295,061				912,603				521,278
Provision for income taxes	53,080				27,365				101,179				49,708
Net income	$	422,905			$	267,696			$	811,424			$	471,570
Shares used to compute earnings per common share - basic	368,823				368,217				369,013				368,229
Shares used to compute earnings per common share - diluted	372,418				371,305				372,762				371,784
Basic earnings per common share	$	1.15			$	0.73			$	2.20			$	1.28
Diluted earnings per common share	$	1.14			$	0.72			$	2.18			$	1.27

ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
	May 1, 2021				Oct. 31, 2020
Cash & cash equivalents	$	1,305,216			$	1,055,860
Accounts receivable	814,135				737,536
Inventories	641,202				608,260
Other current assets	142,247				116,032
Total current assets	2,902,800				2,517,688
Net property, plant and equipment	1,160,586				1,120,561
Other investments	94,033				86,729
Goodwill	12,282,465				12,278,425
Intangible assets, net	3,393,546				3,650,280
Deferred tax assets	1,448,018				1,503,064
Other assets	306,769				311,856
Total assets	$	21,588,217			$	21,468,603
Other current liabilities	$	1,452,378			$	1,364,986
Debt, current	1,324,451				—
Long-term debt	3,823,595				5,145,102
Deferred income taxes	1,833,520				1,919,595
Other non-current liabilities	987,169				1,040,975
Shareholders' equity	12,167,104				11,997,945
Total liabilities & equity	$	21,588,217			$	21,468,603

ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
	Three Months Ended								Six Months Ended
	May 1, 2021				May 2, 2020				May 1, 2021				May 2, 2020
Cash flows from operating activities:
Net income	$	422,905			$	267,696			$	811,424			$	471,570
Adjustments to reconcile net income to net cash provided by operations:
Depreciation	52,466				59,261				108,775				119,124
Amortization of intangibles	145,701				144,051				290,745				288,120
Stock-based compensation expense	40,358				35,900				76,996				73,401
Deferred income taxes	(21,017		)		(21,408		)		(48,292		)		(35,390		)
Non-cash contribution to charitable foundation	—				—				—				40,000
Other non-cash activity	2,431				1,469				(12,122		)		3,801
Changes in operating assets and liabilities	93,517				(57,928		)		(63,223		)		(181,937		)
Total adjustments	313,456				161,345				352,879				307,119
Net cash provided by operating activities	736,361				429,041				1,164,303				778,689
Percent of revenue	44		%		33		%		36		%		30		%
Cash flows from investing activities:
Proceeds from other investments	—				—				18,566				—
Additions to property, plant and equipment	(59,170		)		(60,161		)		(126,558		)		(115,000		)
Cash paid for asset acquisition	—				—				(22,522		)		—
Payments for acquisitions, net of cash acquired	—				—				(2,428		)		—
Changes in other assets	(1,526		)		(1,391		)		(2,826		)		(1,284		)
Net cash used for investing activities	(60,696		)		(61,552		)		(135,768		)		(116,284		)
Cash flows from financing activities:
Proceeds from debt	—				395,646				—				395,646
Payments on revolver	—				(350,000		)		—				(350,000		)
Proceeds from revolver	—				350,000				—				350,000
Debt repayments	—				(300,000		)		—				(300,000		)
Dividend payments to shareholders	(254,429		)		(228,600		)		(483,608		)		(427,760		)
Repurchase of common stock	(188,814		)		(113,584		)		(345,871		)		(219,614		)
Proceeds from employee stock plans	23,752				14,784				43,672				30,897
Changes in other financing activities	(94		)		(3,956		)		2,399				(4,451		)
Net cash used for financing activities	(419,585		)		(235,710		)		(783,408		)		(525,282		)
Effect of exchange rate changes on cash	1,073				(1,250		)		4,229				(508		)
Net increase in cash and cash equivalents	257,153				130,529				249,356				136,615
Cash and cash equivalents at beginning of period	1,048,063				654,408				1,055,860				648,322
Cash and cash equivalents at end of period	$	1,305,216			$	784,937			$	1,305,216			$	784,937

ANALOG DEVICES, INC.