ANALOG DEVICES INC — Annual Report 2008

Jun 24, 2008

11-K 1 b70563ade11vk.htm ANALOG DEVICES, INC. THE INVESTMENT PARTNERSHIP PLAN e11vk PAGEBREAK

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 11-K

(Mark One)

þ ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the fiscal year ended December 31, 2007

OR

o TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the transition period from___ to ____

Commission file number 1-7819

ANALOG DEVICES, INC. THE INVESTMENT PARTNERSHIP PLAN

(Full title of the plan and the address of the plan, if different from that of the issuer named below)

ANALOG DEVICES, INC.

(Name of issuer of the securities held pursuant to the plan and the address of its principal executive office)

One Technology Way Norwood, Massachusetts 02062-9106

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TABLE OF CONTENTS

Report of Independent Registered Public Accounting Firm
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
NOTES TO FINANCIAL STATEMENTS
SUPPLEMENTAL SCHEDULE
SCHEDULE H-LINE 4i — SCHEDULE OF ASSETS (HELD AT END OF YEAR)
SIGNATURES
Ex-23.1 Consent of Ernst & Young LLP

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Table of Contents

ANALOG DEVICES, INC.

THE INVESTMENT PARTNERSHIP PLAN

Financial Statements

•	Audited Statements of Net Assets Available for Benefits as of December 31, 2007 and 2006.
•	Audited Statements of Changes in Net Assets Available for Benefits for the Years Ended December 31, 2007 and 2006.

Supplemental Schedule

• Schedule H-Line 4i — Schedule of Assets (Held at End of Year).

Exhibits

• Consent of Independent Registered Public Accounting Firm, filed herewith.

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link1 "Report of Independent Registered Public Accounting Firm"

Report of Independent Registered Public Accounting Firm

The Administration Committee and Participants Analog Devices, Inc. The Investment Partnership Plan

We have audited the accompanying statements of net assets available for benefits of the Analog Devices, Inc. The Investment Partnership Plan as of December 31, 2007 and 2006, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2007 and 2006, and the changes in its net assets available for benefits for the years then ended, in conformity with U.S. generally accepted accounting principles.

Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2007, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.

Boston, Massachusetts June 20, 2008

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ANALOG DEVICES, INC.

THE INVESTMENT PARTNERSHIP PLAN

link1 "STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS"

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

December 31, 2007 and 2006

	2007
ASSETS
Investments, at fair value	$ 821,246,431	$	780,805,925
Accrued interest and dividends	24,230		1,697,696
Participant loans receivable	8,671,238		9,468,752
Total assets	829,941,899		791,972,373
LIABILITIES
Payables — Pending investment transactions	(217,063	)	(693,142	)
Net assets available for benefits	$ 829,724,836	$	791,279,231

See accompanying notes.

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ANALOG DEVICES, INC.

THE INVESTMENT PARTNERSHIP PLAN

link1 "STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS"

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

Years ended December 31, 2007 and 2006

	2007
Investment income:
Interest income on employee loans	$ 553,502	$	559,074
Net appreciation in fair value of investments	1,474,653		12,734,153
Dividends, interest and capital gains distributions	47,443,312		44,035,349
Net investment income	49,471,467		57,328,576
Contributions:
Employer	22,005,673		23,068,616
Employee	31,308,997		31,180,426
Total contributions	53,314,670		54,249,042
Participant withdrawals	(64,340,532	)	(54,497,080	)
Net increase in net assets
available for benefits	38,445,605		57,080,538
Net assets available for benefits at beginning of year	791,279,231		734,198,693
Net assets available for benefits at end of year	$ 829,724,836	$	791,279,231

See accompanying notes.

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ANALOG DEVICES, INC.

THE INVESTMENT PARTNERSHIP PLAN

link1 "NOTES TO FINANCIAL STATEMENTS"

NOTES TO FINANCIAL STATEMENTS

Years ended December 31, 2007 and 2006

A . Description of Plan

The following description of the Analog Devices, Inc. (the “Company”) The Investment Partnership Plan (the “Plan”) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.

1. General . The Plan is a contributory defined contribution plan sponsored and administered by the Company. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).

2. Eligibility . Domestic employees of the Company are eligible to participate in the Plan on the first day of employment. The Company contributions are effective on the first day following one year of service. For eligibility purposes, a year of service is a 12-month period during which an employee completes at least 1,000 hours of service.

3. Contributions . Basic contributions will be made at the sole discretion of the Company. For 2007 and 2006, the Company decided to make the annual basic contribution at 5% of each participant’s total eligible compensation. The Internal Revenue Service defined total eligible compensation as an amount not to exceed $225,000 for 2007 and $220,000 for 2006. For 2008, this amount will increase to $230,000. In addition to the basic contribution, the Company matches each participant’s pre-tax contribution, if any, by contributing an amount not to exceed 3% of such participant’s total eligible compensation. A participant may voluntarily contribute to the Plan up to 50% of his or her pre-tax total eligible compensation; however, pre-tax contributions could not exceed $15,500 in 2007 and $15,000 in 2006. This amount will remain at $15,500 for 2008. Effective as of September 29, 2006, an employee who does not elect to make pre-tax contributions to the Plan nor gives the Company notice of his or her intent not to contribute within sixty days of his or her employment commencement date will be automatically enrolled to make a pre-tax contribution of 4% of his or her compensation.

Company contributions, participants’ pre-tax contributions and the net investment income related to all contributions are excluded from the participants’ income for federal income tax purposes until such amounts are withdrawn or distributed.

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ANALOG DEVICES, INC.

THE INVESTMENT PARTNERSHIP PLAN

NOTES TO FINANCIAL STATEMENTS

Years ended December 31, 2007 and 2006

1. Investment Options . The investment options of the Plan are listed below.

Analog Devices, Inc. Stock Fund Calamos Growth Fund Fidelity Diversified International Fund Fidelity Equity Income Fund Fidelity Growth Company Fund Fidelity Growth & Income Portfolio Fidelity Low-Priced Stock Fund Fidelity Freedom Income Fund Fidelity Freedom 2000 Fund Fidelity Freedom 2005 Fund Fidelity Freedom 2010 Fund Fidelity Freedom 2015 Fund Fidelity Freedom 2020 Fund Fidelity Freedom 2025 Fund Fidelity Freedom 2030 Fund Fidelity Freedom 2035 Fund Fidelity Freedom 2040 Fund Fidelity Freedom 2045 Fund Fidelity Freedom 2050 Fund Fidelity Institutional Money Market Fund Fidelity Magellan Fund Fidelity U.S. Bond Index Fund Fidelity U.S. Equity Index Commingled Pool Hotchkis and Wiley Mid-Cap Value Fund Spartan International Index Fund Templeton Foreign Fund Royce Low-Priced Stock Fund Vanguard Mid-Cap Index Fund Vanguard Short-Term Bond Index Fund Vanguard Small-Cap Index Fund

Additionally, participants have the option to invest assets in Fidelity, non-Fidelity funds and in a self-directed brokerage service that allows participants access to a wide variety of stocks, bonds, short-term securities and mutual funds.

1. Vesting . Employee contributions : Employee contributions are immediately 100% vested and nonforfeitable at the time they are deducted from the participants’ compensation. Investment income on employee contributions vests as earned.

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ANALOG DEVICES, INC.

THE INVESTMENT PARTNERSHIP PLAN

NOTES TO FINANCIAL STATEMENTS

Years ended December 31, 2007 and 2006

Company Contributions: Company basic and match contributions and investment earnings thereon become fully vested upon the first to occur of (i) completion of three years of service with the Company, (ii) reaching age 65 while employed by the Company, (iii) death or permanent disability while employed by the Company or (iv) if employment is terminated by the Company after December 31, 2005 due to job elimination, the closing of a facility or as the result of the disposition of a business unit.

1. Benefits . Upon normal retirement at age 65, death, permanent disability or termination of employment, the participant’s vested benefits are paid to the participant or his or her beneficiary, at the election of the participant, either in a lump sum or in monthly installments over a period of up to ten years. A participant may elect to defer payment of his or her account until he or she attains age 70 1/2. However, if a participant’s vested benefits are less than $1,000 for 2007 and 2006, upon termination of employment, distribution will be made in the form of a lump-sum payment within one year following termination of employment. Participants may request an in-service withdrawal for any reason after he or she attains age 59 1/2.

2. Loans . Participants may borrow the lesser of 50% of their vested account balance, as defined by the plan or $50,000. Participants repay loans plus interest to their accounts through payroll deductions, generally over a five-year period unless for the purchase of a primary residence, in which case the repayment period may be extended up to a maximum of twenty years. The interest rate on loans, which is announced quarterly, is tied to the interest rate of Treasury Bonds with 3- and 10-year maturities. Once determined, the interest rate is fixed for the duration of the loan.

3. Accounting . A separate account is maintained for each participant. Account balances are adjusted periodically for employee and Company contributions, withdrawals and a pro rata share of net investment income or loss. Forfeitures that arise when participants terminate employment with the Company prior to vesting are used to offset future Company contributions and administrative expenses of the Plan. If an employee who had terminated after December 31, 1984 returns to the employment of the Company within five years, any amount that had been forfeited will be reinstated by the Company.

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ANALOG DEVICES, INC.

THE INVESTMENT PARTNERSHIP PLAN

NOTES TO FINANCIAL STATEMENTS

Years ended December 31, 2007 and 2006

All transactions of the Plan (including contributions, withdrawals and exchanges) have been accounted for and reported using units as well as dollars. Net investment income (loss) in each fund is allocated based on the shares or units in each participant’s account, except for the Self-Directed Brokerage Service, whereby earnings are recorded on a transaction specific basis.

1. Investment allocation . The vested and nonvested share of a participant’s account balance is invested in one or more of the funds depending upon the allocation instructions of the participant. In the absence of such allocation instructions, all amounts accruing to the participant are invested in a Fidelity Freedom Fund, based on their projected retirement timeframe. They may change this election at any time.

2. Continuation of the Plan . While the Company has not expressed any intent to terminate the Plan or suspend contributions, it is free to do so at any time. In the event of such termination or suspension, each participant would have a nonforfeitable right to all monies in his or her account.

B. Summary of Significant Accounting Policies

1. Basis of presentation . The accompanying financial statements have been prepared on the accrual basis of accounting.

2. Investments. Investments are reported at fair value, based on quoted market prices. Participant loans are reported at their outstanding carrying balance, which approximates fair value.

3. Contributions. Contributions from employees are recorded when the Company makes payroll deductions from plan participants. Company contributions are accrued at the end of the period in which they become obligations of the Company based upon the terms of the Plan.

4. Investment income (loss) . Net investment income (loss) consists of interest income, dividends and capital gain/loss distributions from the money market and mutual funds, realized gains or losses on sales of investments and the change in net unrealized appreciation (depreciation) between the cost and market value of investments at the beginning and end of the period.

All interest, dividends and capital gains distributions are reinvested in the respective funds and are recorded as earned on an accrual basis.

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ANALOG DEVICES, INC.

THE INVESTMENT PARTNERSHIP PLAN

NOTES TO FINANCIAL STATEMENTS

Years ended December 31, 2007 and 2006

5. Income tax status. The Plan has received a determination letter from the Internal Revenue Service, dated May 1, 2003, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the “Code”) and, therefore, the related trust is exempt from taxation. Subsequent to this determination by the Internal Revenue Service, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Committee believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, that the Plan, as amended, is qualified and the related trust is tax exempt.

6. Related Party. Certain Plan investments are shares of mutual funds managed by FMR Corp. FMR Corp. is a related party to the trustee and recordkeeper of the Plan, and therefore, these transactions qualify as party-in-interest transactions. Fees paid by the Company to the trustee and recordkeeper for administrative expenses amounted to $42,525 and $41,178 for the years ended December 31, 2007 and 2006, respectively.

The Plan also offers the Analog Devices, Inc. Common Stock Fund investment option. The Analog Devices, Inc. Common Stock Fund is designed for investment in the common stock of the Company. In addition, some of the investments in the Plan hold the Company’s Common stock. These transactions qualify as party-in-interest transactions.

Loans to participants also qualify as party-in-interest transactions.

7. Administrative expenses . For the years ended December 31, 2007 and 2006, the Company elected to pay the administrative expenses of the Plan . Certain expenses resulting from participant loans and investment fees are deducted directly from participant accounts.

8. Use of estimates. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of changes in net assets available for benefits during the reporting period. Actual results could differ from those estimates .

9. Risk and uncertainties. The Plan and its participants invest in various securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statements of net assets available for benefits.

1. New accounting pronouncement . In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157 (SFAS 157), Fair Value Measurements . This standard clarifies the definition of fair value for financial reporting,

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ANALOG DEVICES, INC.

THE INVESTMENT PARTNERSHIP PLAN

NOTES TO FINANCIAL STATEMENTS

Years ended December 31, 2007 and 2006

establishes a framework for measuring fair value and requires additional disclosure about the use of fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. Plan management is currently evaluating the effect that the provisions of SFAS 157 will have on the Plan’s financial Statements.

C . Trustee and Plan Recordkeeper

Fidelity Management Trust Company and Fidelity Institutional Retirement Services Company serve as trustee and recordkeeper, respectively, to the Plan.

D . Investments

The following investments represent five percent or more of the Plan’s net assets:

	December 31, — 2007	2006
Analog Devices, Inc. Common Stock Fund	$ 100,885,397	$ 125,861,256
Fidelity Income Fund	*	133,130,425
Fidelity Institutional Money Market Fund	137,392,372	*
Fidelity Equity Income Fund	59,729,987	60,971,905
Fidelity Growth Company Fund	60,559,307	50,664,578
Fidelity Low-Priced Stock Fund	46,436,095	50,900,019
Fidelity Diversified International Fund	43,464,600	*

• The balance is less than 5% of the Plan’s net assets.

The Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value as follows:

	Year Ended
	December 31,
	2007	2006
Common stock	$ 1,689,368	$	(8,304,622	)
Mutual funds	(1,497,646	)	17,731,678
Commingled funds	1,287,003		3,142,153
Bonds	18,490		3,348
Others	(22,562	)	161,596
Net appreciation in fair value of investments	$ 1,474,653	$	12,734,153

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ANALOG DEVICES, INC.

THE INVESTMENT PARTNERSHIP PLAN

link1 "SUPPLEMENTAL SCHEDULE"

SUPPLEMENTAL SCHEDULE

DECEMBER 31, 2007

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ANALOG DEVICES, INC. THE INVESTMENT PARTNERSHIP PLAN EIN NO: 04-2348234 PLAN NO: 003

link1 "SCHEDULE H-LINE 4i — SCHEDULE OF ASSETS (HELD AT END OF YEAR)"

SCHEDULE H-LINE 4i — SCHEDULE OF ASSETS (HELD AT END OF YEAR)

December 31, 2007

Shares		Current — Value
Description of Investment:
Fidelity (1) Institutional Money Market Fund	137,392,372	$ 137,392,372
Fidelity (1) Diversified International Fund	1,089,338	43,464,600
Fidelity (1) Equity Income Fund	1,082,850	59,729,987
Fidelity (1) Freedom Income Fund	291,753	3,340,567
Fidelity (1) Freedom 2000 Fund	139,788	1,729,180
Fidelity (1) Freedom 2005 Fund	54,123	638,109
Fidelity (1) Freedom 2010 Fund	857,736	12,711,650
Fidelity (1) Freedom 2015 Fund	175,792	2,192,122
Fidelity (1) Freedom 2020 Fund	920,544	14,553,804
Fidelity (1) Freedom 2025 Fund	260,808	3,437,447
Fidelity (1) Freedom 2030 Fund	1,067,672	17,637,944
Fidelity (1) Freedom 2035 Fund	168,401	2,303,720
Fidelity (1) Freedom 2040 Fund	677,403	6,591,128
Fidelity (1) Freedom 2045 Fund	12,451	141,314
Fidelity (1) Freedom 2050 Fund	62,296	712,045
Fidelity (1) Growth Company Fund	730,288	60,599,307
Fidelity (1) Growth & Income Portfolio	542,308	14,794,166
Fidelity (1) Low-Priced Stock Fund	1,129,008	46,436,095
Fidelity (1) Magellan Fund	400,512	37,596,057
Fidelity (1) U.S. Bond Index Fund	2,535,786	27,614,713
Calamos Growth Fund	226,392	13,277,886
Hotchkis and Wiley Mid-Cap Value Fund	913,640	18,720,475
Royce Low-Priced Stock Fund	874,201	12,903,201
Templeton Foreign Fund	1,821,625	22,697,444
Spartan International Index Fund	421,733	19,947,977
Vanguard Mid-Cap Index Fund	782,266	16,239,848
Vanguard Short-Term Bond Index Fund	875,100	8,864,760
Vanguard Small-Cap Index Fund	208,448	6,795,394
Fidelity (1) U.S. Equity Index Commingled Pool	569,301	27,258,118
Participants Self-Directed Brokerage Accounts		80,039,604
		720,361,034
Analog Devices, Inc. Common Stock Fund:
Analog Devices Inc. Common Stock (1)		95,895,924
Fidelity (1) Institutional Cash
Portfolio — Money Market Portfolio		4,989,473
		100,885,397
		$ 821,246,431
Participant
Loans Receivable (1) (2)		$ 8,671,238

(1)	Indicates party-in-interest to the Plan.
(2)	The loan account at December 31, 2007 bears interest at rates ranging from 3.5% to
10.00%, with terms ranging from less than 1 year to 20 years.

Note: Cost information has not been included because all investments are participant-directed.

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link1 "SIGNATURES"

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed by the undersigned hereunto duly authorized.

ANALOG DEVICES, INC. THE INVESTMENT PARTNERSHIP PLAN
(the Plan)
By:	/s/ Joseph E. McDonough
	Joseph E. McDonough
	Vice President-Finance and Chief Financial Officer of
Analog Devices, Inc. and Member of The Investment
Partnership Plan Administration Committee

June 24, 2008

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