Rendering

Component: (Network and Table)
Network
2302302 - Disclosure - Summary of Significant Accounting Policies (Tables)
(http://www.analog.com/role/SummaryOfSignificantAccountingPoliciesTables)
Table(Implied)
Slicers (applies to each fact value in each table cell)
Reporting Entity [Axis]0000006281 (http://www.sec.gov/CIK)
Accounting Policies [Abstract]Period [Axis]
2011-10-30 - 2012-11-03
Accounting Policies [Abstract]
 
Unrealized gains and losses on available-for-sale securities classified as short-term investments
Unrealized gains and losses on available-for-sale securities classified as short-term investments at November 3, 2012 and October 29, 2011 were as follows:
 
2012
 
2011
Unrealized gains on securities classified as short-term investments
$
581

 
$
22

Unrealized losses on securities classified as short-term investments
(519
)
 
(600
)
Net unrealized losses on securities classified as short-term investments
$
62

 
$
(578
)
  
Cash and cash equivalents and short term investments
The components of the Company’s cash and cash equivalents and short-term investments as of November 3, 2012 and October 29, 2011 were as follows:
 
2012
 
2011
Cash and cash equivalents:
 

 
 

Cash
$
35,413

 
$
17,857

Available-for-sale
490,904

 
1,374,069

Held-to-maturity
2,516

 
13,174

Total cash and cash equivalents
$
528,833

 
$
1,405,100

Short-term investments:
 

 
 

Available-for-sale
$
3,370,551

 
$
2,186,782

Held-to-maturity (less than one year to maturity)
994

 
580

Total short-term investments
$
3,371,545

 
$
2,187,362

  
Supplemental cash flow statement Information
 
2012
 
2011
 
2010
Cash paid during the fiscal year for:
 

 
 

 
 

Income taxes
$
143,899

 
$
223,716

 
$
137,149

Interest
$
29,177

 
$
16,492

 
$
9,199

  
Inventories
Inventories at November 3, 2012 and October 29, 2011 were as follows:

 
2012
 
2011
Raw materials
$
28,111

 
$
28,085

Work in process
185,773

 
170,398

Finished goods
99,839

 
96,598

Total inventories
$
313,723

 
$
295,081

  
Useful lives of property, plant and equipment
Depreciation and amortization are based on the following useful lives:
Buildings & building equipment
Up to 25 years
Machinery & equipment
3-8 years
Office equipment
3-8 years
  
Changes in goodwill
The following table presents the changes in goodwill during fiscal 2012 and fiscal 2011:
 
2012
 
2011
Balance at beginning of year
$
275,087

 
$
255,580

Acquisition of Lyric Semiconductor (Note 6)
—

 
18,865

Acquisition of Multigig, Inc. (Note 6)
7,298

 
—

Foreign currency translation adjustment
1,448

 
642

Balance at end of year
$
283,833

 
$
275,087

  
Intangible assets consisted of the following:
As of November 3, 2012, the Company’s finite-lived intangible assets consisted of the following which related to the acquisition of Multigig, Inc. (Note 6):
 
November 3, 2012
 
Gross Carrying
Amount
 
Accumulated
Amortization
Technology-based
$
1,100

 
$
128

  
Schedule of expected annual amortization expense
The Company expects annual amortization expense for intangible assets to be:
Fiscal Year
Amortization Expense
2013
$
220

2014
$
220

2015
$
220

2016
$
220

2017
$
92

  
Net gain or loss on the hedged item
The gain or loss on the hedged item (that is, the fixed-rate borrowings) attributable to the hedged benchmark interest rate risk and the offsetting gain or loss on the related interest rate swaps for fiscal year 2012 and fiscal year 2011 were as follows: 
Statement of income classification
November 3, 2012
 
October 29, 2011
Loss on Swaps
 
Gain on Note
 
Net Income Effect
 
Loss on Swaps
 
Gain on Note
 
Net Income Effect
Other income
$
(769
)
 
$
769

 
$
—

 
$
(4,614
)
 
$
4,614

 
$
—

  
Fair value of hedging instruments
The fair values of these hedging instruments in the Company’s consolidated balance sheets as of November 3, 2012 and October 29, 2011 were as follows: 
 
 
 
Fair Value At
 
Balance Sheet Location
 
November 3, 2012
 
October 29, 2011
Interest rate swap agreements
Other assets
 
$
—

 
$
22,187

Forward foreign currency exchange contracts
Prepaid expenses and other current assets
 
$
1,161

 
$
2,038

  
Effect of derivative instruments designated as cash flow hedges
The effect of derivative instruments designated as cash flow hedges on the consolidated statements of income for fiscal 2012 and 2011 were as follows: 
 
November 3, 2012
 
October 29, 2011
(Gain) loss recognized in OCI on derivatives (net of tax of $1,233 in 2012 and $539 in 2011)
$
(7,923
)
 
$
3,347

Loss (gain) reclassified from OCI into income (net of tax of $1,160 in 2012 and $1,171 in 2011)
$
7,401

 
$
(7,793
)
  
Cash flow hedge reclassified into earnings
The amounts reclassified into earnings before tax are recognized in cost of sales and operating expenses for fiscal 2012 and fiscal 2011 were as follows: 
 
November 3, 2012
 
October 29, 2011
Cost of sales
$
3,096

 
$
(4,363
)
Research and development
$
2,344

 
$
(2,264
)
Selling, marketing, general and administrative
$
3,121

 
$
(2,337
)
  
Summary of activity in accumulated other comprehensive (loss) income related to derivatives
The following table summarizes activity in accumulated other comprehensive (loss) income related to derivatives classified as cash flow hedges held by the Company during the period from October 31, 2010 through November 3, 2012:
 
2012
 
2011
Balance at beginning of year
$
1,687

 
$
6,133

Changes in fair value of derivatives — (loss) gain, net of tax
(7,923
)
 
3,347

Loss (gain) reclassified into earnings from other comprehensive income (loss), net of tax
7,401

 
(7,793
)
Balance at end of year
$
1,165

 
$
1,687

  
Fair value of financial assets and liabilities
The tables below, set forth by level, the Company’s financial assets and liabilities, excluding accrued interest components that were accounted for at fair value on a recurring basis as of November 3, 2012 and October 29, 2011. 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 3, 2012 and October 29, 2011, the Company held $38.9 million and $31.6 million, respectively, of cash and held-to-maturity investments that were excluded from the tables below. The carrying value of the debt outstanding on our $145 million term loan facility is considered to approximate fair value as the term loan bears interest at a variable rate.
 
November 3, 2012
 
Fair Value measurement at
Reporting Date using:
 
 
 
Quoted
Prices in
Active
Markets
for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Other
Unobservable
Inputs
(Level 3)
 
Total
Assets
 
 
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
 
 
Available-for-sale:
 
 
 
 
 
 
 
Institutional money market funds
$
143,876

 
$
—

 
$
—

 
$
143,876

Corporate obligations (1)
—

 
347,028

 
—

 
347,028

Short - term investments:
 
 
 
 
 
 
 
Available-for-sale:
 
 
 
 
 
 
 
Securities with one year or less to maturity:
 
 
 
 
 
 
 
Corporate obligations (1)
—

 
2,818,798

 
—

 
2,818,798

Floating rate notes, issued at par
—

 
280,065

 
—

 
280,065

Floating rate notes (1)
—

 
234,280

 
—

 
234,280

Securities with greater than one year to maturity:
 
 
 
 
 
 
 
Floating rate notes, issued at par
 
 
37,408

 
 
 
37,408

Other assets:
 
 
 
 
 
 
 
Forward foreign currency exchange contracts (2)
$
—

 
$
1,061

 
$
—

 
$
1,061

Deferred compensation investments
28,480

 
—

 
—

 
28,480

Total assets measured at fair value
$
172,356

 
$
3,718,640

 
$
—

 
$
3,890,996

Liabilities
 
 
 
 
 
 
 
Contingent consideration
—

 
—

 
12,219

 
12,219

Total liabilities measured at fair value
$
—

 
$
—

 
$
12,219

 
$
12,219

 
(1)
The amortized cost of the Company’s investments classified as available-for-sale as of November 3, 2012 was $3,327.5 million.
(2)
The Company has a master netting arrangement by counterparty with respect to derivative contracts. As of November 3, 2012, contracts in a liability position of $1.9 million were netted against contracts in an asset position in the consolidated balance sheet.
 
October 29, 2011
 
Fair Value measurement at
Reporting Date using:
 
 
 
Quoted
Prices in
Active
Markets
for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Other
Unobservable
Inputs
(Level 3)
 
Total
Assets
 
 
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
 
 
Available-for-sale:
 
 
 
 
 
 
 
Institutional money market funds
$
1,278,121

 
$
—

 
$
—

 
$
1,278,121

Corporate obligations (1)
—

 
95,948

 
—

 
95,948

Short - term investments:
 
 
 
 
 
 
 
Available-for-sale:
 
 
 
 
 
 
 
Securities with one year or less to maturity:
 
 
 
 
 
 
 
Corporate obligations (1)
—

 
2,169,078

 
—

 
2,169,078

Floating rate notes (1)
—

 
17,704

 
—

 
17,704

Other assets:
 
 
 
 
 
 
 
Forward foreign currency exchange contracts (2)
—

 
2,472

 
—

 
2,472

Deferred compensation investments
26,410

 
—

 
—

 
26,410

Other investments
1,135

 
—

 
—

 
1,135

Interest rate swap agreements
—

 
22,187

 
—

 
22,187

Total assets measured at fair value
$
1,305,666

 
$
2,307,389

 
$
—

 
$
3,613,055

Liabilities
 
 
 
 
 
 
 
$375 million aggregate principal 5.0% debt (3)
$
—

 
$
396,337

 
$
—

 
$
396,337

Contingent consideration
—

 
—

 
13,973

 
13,973

Total liabilities measured at fair value
$
—

 
$
396,337

 
$
13,973

 
$
410,310

 
(1)
The amortized cost of the Company’s investments classified as available-for-sale as of October 29, 2011 was $2,284.9 million.
(2)
The Company has a master netting arrangement by counterparty with respect to derivative contracts. As of October 29, 2011, contracts in a liability position of $0.8 million were netted against contracts in an asset position in the consolidated balance sheet.
(3)
Equal to the accreted notional value of the debt plus the fair value of the interest rate component of the long-term debt. The fair value of the long-term debt as of October 29, 2011 was $413.4 million, which is classified as a level 1 measurement according to the fair value hierarchy.
  
Schedule of fair value inputs
The fair value measurement of the contingent consideration encompasses the following significant unobservable inputs: 
Unobservable Inputs
Range
Estimated contingent consideration payments
$13,000
Discount rate
7% - 10%
Timing of cash flows
1 - 20 months
Probability of achievement
100%
  
Change in the fair value of the contingent consideration
The following table summarizes the change in the fair value of the contingent consideration measured using significant unobservable inputs (Level 3) as of October 29, 2011 and November 3, 2012:
 
 
Contingent
Consideration
Balance as of October 30, 2010
$
—

Contingent consideration liability recorded
13,790

Fair value adjustment (1)
183

Balance as of October 29, 2011
$
13,973

Payment made (2)
(2,000
)
Fair value adjustment (1)
246

Balance as of November 3, 2012
$
12,219

 
(1)
Recorded in research and development expense in the consolidated statements of income.
(2)
The payment is reflected in the statements of cash flows as cash used in financing activities related to the liability recognized at fair value as of the acquisition date and as cash provided by operating activities related to the fair value adjustments previously recognized in earnings.
  
Components of accumulated other comprehensive (loss)
The components of accumulated other comprehensive loss at November 3, 2012 and October 29, 2011 consisted of the following, net of tax:
 
2012
 
2011
Foreign currency translation adjustment
$
982

 
$
(2,038
)
Unrealized gains on available-for-sale securities
444

 
695

Unrealized losses on available-for-sale securities
(423
)
 
(641
)
Unrealized gains on derivative instruments
1,165

 
1,687

Pension plans
 
 
 
Prior Service Cost
4,079

 
—

Transition obligation
(102
)
 
(117
)
Net actuarial loss
(70,539
)
 
(25,755
)
Total accumulated other comprehensive loss
$
(64,394
)
 
$
(26,169
)
  
Computation of basic and diluted earnings per share
The following table sets forth the computation of basic and diluted earnings per share:
 
2012
 
2011
 
2010
Income from continuing operations, net of tax
$
651,236

 
$
860,894

 
$
711,225

Gain on sale of discontinued operations, net of tax
—

 
6,500

 
859

Net income
$
651,236

 
$
867,394

 
$
712,084

Basic shares:
 

 
 

 
 

Weighted average shares outstanding
298,761

 
299,417

 
297,387

Earnings per share-basic:
 

 
 

 
 

Income from continuing operations, net of tax
$
2.18

 
$
2.88

 
$
2.39

Total income from discontinued operations, net of tax
—

 
0.02

 
—

Net income
$
2.18

 
$
2.90

 
$
2.39

Diluted shares:
 

 
 

 
 

Weighted average shares outstanding
298,761

 
299,417

 
297,387

Assumed exercise of common stock equivalents
7,430

 
8,819

 
8,474

Weighted average common and common equivalent shares
306,191

 
308,236

 
305,861

Earnings per share-diluted:
 

 
 

 
 

Income from continuing operations, net of tax
$
2.13

 
$
2.79

 
$
2.33

Total income from discontinued operations, net of tax
—

 
0.02

 
0.00

Net income
$
2.13

 
$
2.81

 
$
2.33

Weighted average anti-dilutive shares related to:
 

 
 

 
 

Outstanding stock options
5,860

 
7,298

 
18,206

  
Income from discontinued operations, net of tax
The following amounts related to the CPU voltage regulation and PC thermal monitoring and baseband chipset businesses have been segregated from continuing operations and reported as discontinued operations.
 
2012
 
2011
 
2010
Gain on sale of discontinued operations before income taxes
$
—

 
$
10,000

 
$
1,316

Provision for income taxes
—

 
3,500

 
457

Gain on sale of discontinued operations, net of tax
$
—

 
$
6,500

 
$
859