þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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94-1655526
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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3050 Bowers Avenue, P.O. Box 58039
Santa Clara, California
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95052-8039
(Zip Code)
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(Address of principal executive offices)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $.01 per share
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The NASDAQ Stock Market LLC
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Large accelerated filer
þ
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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Page
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PART I
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Item 1:
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Item 1A:
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Item 1B:
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Item 2:
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Item 3:
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Item 4:
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PART II
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Item 5:
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Item 6:
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Item 7:
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Item 7A:
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Item 8:
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Item 9:
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Item 9A:
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Item 9B:
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PART III
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Item 10:
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Item 11:
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Item 12:
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Item 13:
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Item 14:
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PART IV
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Item 15:
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Item 1:
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Business
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2012
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2011
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2010
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|||||||||||||||
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|||||||||
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(In millions, except percentages)
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|||||||||||||||||||
Silicon Systems Group
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$
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5,536
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64
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%
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$
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5,415
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|
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51
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%
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$
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5,304
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|
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56
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%
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Applied Global Services
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2,285
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|
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26
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%
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2,413
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|
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23
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%
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1,865
|
|
|
20
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%
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|||
Display
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473
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|
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5
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%
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699
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|
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7
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%
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899
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|
|
9
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%
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|||
Energy and Environmental Solutions
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425
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|
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5
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%
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1,990
|
|
|
19
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%
|
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1,481
|
|
|
15
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%
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|||
Total
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$
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8,719
|
|
|
100
|
%
|
|
$
|
10,517
|
|
|
100
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%
|
|
$
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9,549
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|
|
100
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%
|
|
2012
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2011
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||||||||||
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||||||
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(In millions, except percentages)
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||||||||||||
Silicon Systems Group
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$
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705
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44
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%
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$
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913
|
|
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38
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%
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Applied Global Services
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580
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|
|
36
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%
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|
662
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|
|
28
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%
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||
Display
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206
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|
|
13
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%
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337
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|
|
14
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%
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Energy and Environmental Solutions
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115
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|
|
7
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%
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480
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|
|
20
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%
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Total
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$
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1,606
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|
|
100
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%
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$
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2,392
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|
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100
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%
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2012
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2011
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2010
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|||||||||||||||
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(In millions, except percentages)
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Taiwan
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2,411
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28
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%
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2,093
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20
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%
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2,750
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29
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%
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China
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783
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9
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%
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2,574
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24
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%
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1,557
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16
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%
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|||
Korea
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1,897
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22
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%
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1,263
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12
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%
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1,768
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19
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%
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|||
Japan
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704
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8
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%
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912
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9
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%
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768
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8
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%
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|||
Southeast Asia
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312
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3
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%
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592
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5
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%
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578
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6
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%
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Asia Pacific
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6,107
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70
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%
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7,434
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70
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%
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7,421
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78
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%
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United States
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1,749
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20
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%
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1,963
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19
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%
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1,147
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|
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12
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%
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Europe
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863
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10
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%
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1,120
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11
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%
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981
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|
|
10
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%
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|||
Total
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$
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8,719
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|
|
100
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%
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$
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10,517
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|
|
100
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%
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$
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9,549
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|
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100
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%
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2012
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2011
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2010
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Samsung Electronics Co., Ltd.
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20%
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12%
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14%
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Taiwan Semiconductor Manufacturing Company Limited
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16%
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10%
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11%
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Intel Corporation
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*
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10%
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*
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*
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Less than 10%.
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Name of Individual
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Position
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Michael R. Splinter(1)
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Chairman of Board of Directors, Chief Executive Officer
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Gary E. Dickerson(2)
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President
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George S. Davis(3)
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Executive Vice President, Chief Financial Officer
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Randhir Thakur(4)
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Executive Vice President, General Manager Silicon Systems
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Joseph Flanagan(5)
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Senior Vice President, Worldwide Operations and Supply Chain
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Mary Humiston(6)
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Senior Vice President, Global Human Resources
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Manfred Kerschbaum(7)
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Senior Vice President, Chief of Staff
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Thomas F. Larkins(8)
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Senior Vice President, General Counsel and Corporate Secretary
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Omkaram Nalamasu(9)
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Group Vice President, Chief Technology Officer
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Charlie Pappis(10)
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Group Vice President, General Manager Applied Global Services
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Ali Salehpour(11)
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Group Vice President, General Manager Energy and Environmental Solutions and Display Business Groups
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Thomas S. Timko(12)
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Corporate Vice President, Corporate Controller and Chief Accounting Officer
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(1)
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Mr. Splinter, age 62, has been Chief Executive Officer of Applied since April 2003 and Chairman of the Board of Directors since March 2009. Prior to joining Applied, Mr. Splinter was an executive at Intel Corporation (Intel), a manufacturer of chips and computer, networking and communications products, where Mr. Splinter held a number of positions, including Executive Vice President and Director of Sales and Marketing and Executive Vice President and General Manager of the Technology and Manufacturing Group.
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(2)
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Mr. Dickerson, age 55, was named President of Applied in June 2012, after working on merger integration matters since joining Applied following its acquisition of Varian in November 2011. Mr. Dickerson was Chief Executive Officer and a director of Varian from 2004. Prior to joining Varian in 2004, Mr. Dickerson served 18 years with KLA-Tencor Corporation (KLA-Tencor), a supplier of process control and yield management solutions for the semiconductor and related industries, where he held a variety of operations and product development roles before being appointed Chief Operating Officer in 1999 and then President and Chief Operating Officer in 2002. Mr. Dickerson started his semiconductor career in manufacturing and engineering management at General Motors' Delco Electronics Division and then AT&T, Inc.
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(3)
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Mr. Davis, age 55, has been Executive Vice President, Chief Financial Officer of Applied since December 2009, after serving as Senior Vice President, Chief Financial Officer, since December 2006, and Group Vice President, Chief Financial Officer from November 2006. Previously, he had been Group Vice President, General Manager, Corporate Business Development since March 2005. From November 1999 to February 2005, Mr. Davis served as Vice President and Corporate Treasurer, where he managed Applied’s worldwide treasury operations and was responsible for investments, tax, financial risk management, and trade and export matters. Mr. Davis joined Applied in 1999. Prior to joining Applied, Mr. Davis served 19 years with Atlantic Richfield Company, a global oil, gas and chemical company, in a number of finance and other corporate positions.
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(4)
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Dr. Thakur, age 50, has been Executive Vice President, General Manager Silicon Systems Group since December 2009, after serving as Senior Vice President, General Manager Silicon Systems Group since October 2009. Previously, he was Senior Vice President, General Manager, Thin Film Solar and Display. He was appointed Senior Vice President, General Manager, Strategic Operations when he rejoined Applied in May 2008. He previously was with Applied from 2000 to 2005 in a variety of executive roles including Group Vice President, General Manager for Front End Products. From September 2005 to May 2008, Dr. Thakur served as Executive Vice President of Technology and Fab Operations at SanDisk Corporation, a data storage solutions manufacturer, and as head of SanDisk’s worldwide operations. Prior to joining Applied in 2000, Dr. Thakur served in leadership roles at Steag Electronic Systems, an electronics company, and Micron Technology, Inc., a semiconductor manufacturer.
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(5)
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Mr. Flanagan, age 41, joined Applied as Senior Vice President, Worldwide Operations and Supply Chain in February 2010. Prior to joining Applied, Mr. Flanagan held executive positions in global operations for Nortel Networks Corporation, a telecommunications equipment manufacturer, since 2006, including President of Nortel Business Services from August 2009 to February 2010, and Senior Vice President of Global Operations from August 2007 until August 2009. Previously, Mr. Flanagan held a number of positions from 1993 to 2006 at General Electric Company (GE), a global infrastructure, finance and media company.
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(6)
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Ms. Humiston, age 47, was named Senior Vice President, Global Human Resources in July 2011. She was Corporate Vice President, Global Human Resources from June 2009 to June 2010 and then promoted to Group Vice President in July 2010. Prior to June 2009, she served as the Corporate Vice President of Human Resources for both the Energy and Environmental Solutions and Display groups. Prior to joining Applied, Ms. Humiston was Vice President of Human Resources at Honeywell International Inc., which provides technologies to address safety, security and energy, from October 2002 to June 2008, with responsibility for various corporate and international organizations. She previously held executive positions with PeoplePC, an internet service provider; Gap, Inc., an apparel retailer; and GE.
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(7)
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Mr. Kerschbaum, age 58, was named Senior Vice President, Chief of Staff in September 2009. Prior to that, he served as Senior Vice President, General Manager, Applied Global Services from January 2005 to September 2009. Mr. Kerschbaum was Senior Vice President, Global Operations from July 2004 to January 2005 and from October 2002 to May 2003. From May 2003 to July 2004, he was Group Vice President, Foundation Engineering and Operations. From January 1996 to October 2002, he held various positions in Applied Materials North America, most recently as Group Vice President, General Manager, Applied Materials North America. Mr. Kerschbaum has served in various other operations, customer service and engineering positions since joining Applied in 1983. Mr. Kerschbaum has announced his intent to retire from the Company in January 2013.
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(8)
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Mr. Larkins, age 51, was named Senior Vice President, General Counsel and Corporate Secretary of Applied in November 2012, with responsibility for global legal affairs, intellectual property and security. Previously, Mr. Larkins was employed by Honeywell International (Honeywell), a diversified global technology and manufacturing company, where he was Vice President, Corporate Secretary and Deputy General Counsel from 2002 until joining Applied. Mr. Larkins served in various other positions at Honeywell (formerly AlliedSignal) after joining the company in 1997, including Vice President and General Counsel of its Automation and Control Solutions business segment, and General Counsel of its Aerospace Services business unit.
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(9)
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Dr. Nalamasu, age 54, was promoted to Group Vice President, Chief Technology Officer for Applied in January 2012, after serving as Corporate Vice President, Chief Technology Officer since January 2011. Upon joining Applied in June 2006 and until January 2011, Dr. Nalamasu was an Appointed Vice President of Research and served as Deputy Chief Technology Officer and General Manager for Advanced Technologies Group. From 2002 to 2006, Dr. Nalamasu was a NYSTAR distinguished professor of Materials Science and Engineering at Rensselaer Polytechnic Institute, where he also served as Vice President of Research from 2005 to 2006. Prior to that, he held various R&D leadership positions at Bell Labs and later Lucent Technologies, Inc., a telecommunications company, for 17 years.
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(10)
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Mr. Pappis, age 51, has been Group Vice President and General Manager of Applied Global Services since September 2009. He previously held positions in Applied Global Services as Corporate Vice President and General Manager for the Semiconductor Service Solutions group and as general manager for Equipment Productivity Services. He has held various other management positions since joining Applied in 1986.
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(11)
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Mr. Salehpour, age 51, joined Applied in November 2012 as Group Vice President, General Manager Energy and Environmental Solutions and Display Business Groups. Prior to Applied, Mr. Salehpour worked at KLA-Tencor for 16 years, where he served most recently as Senior Vice President and General Manager SFS-ADE Divisions from 2008. Previous positions at KLA-Tencor included President North America Field Operations from 2005 to 2008, and Senior Vice President and General Manager Intel Business Unit from 2001 to 2005. Prior to KLA-Tencor, Mr. Salehpour worked in the Schlumberger Test Systems unit of Schlumberger Ltd. in marketing, account management and engineering roles.
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(12)
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Mr. Timko, age 44, joined Applied in March 2010 as Corporate Vice President, Corporate Controller and Chief Accounting Officer. From June 2006 until March 2010, Mr. Timko was with Delphi Automotive LLP, a supplier to the automotive, computing, communications, energy and consumer accessories markets, where he was most recently Chief Accounting Officer and Controller. He served as Assistant Controller for The Interpublic Group of Companies, Inc., a global provider of advertising and marketing services, from December 2004 to June 2006, and previously at Dover Corporation, a manufacturer of industrial products. Mr. Timko began his career in 1991 with PricewaterhouseCoopers LLC, a provider of audit and assurance, tax and advisory services, and is a certified public accountant.
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Item 1A:
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Risk Factors
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•
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the nature and timing of changes in end demand for electronic products, including those related to fluctuations in consumer buying patterns tied to seasonality or the introduction of new products, and the effects of these changes on customers’ businesses and, in turn, on demand for Applied’s products;
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•
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increasing capital requirements for building and operating new fabrication plants and customers’ ability to raise the necessary capital, particularly when financial market conditions are difficult;
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•
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differences in growth rates among the semiconductor, display and solar industries;
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•
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the increasing importance of establishing, improving and maintaining strong relationships with customers;
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•
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the increasing cost and complexity for customers to move from product design to volume manufacturing, which may slow the adoption rate of new manufacturing technology;
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•
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the need to continually reduce the total cost of manufacturing system ownership, due in part to greater demand for lower-cost consumer electronics compared to business information technology spending;
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•
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the heightened importance to customers of system reliability and productivity and the effect on demand for fabrication systems as a result of their increasing productivity, device yield and reliability;
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•
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the increasing importance of, and difficulties in, developing products with sufficient differentiation to influence customers’ purchasing decisions;
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•
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requirements for shorter cycle times for the development, manufacture and installation of manufacturing equipment;
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•
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price and performance trends for semiconductor devices, LCDs and solar PVs, and the corresponding effect on demand for such products;
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•
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the increasing importance of the availability of spare parts to maximize the time that customers’ systems are available for production;
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•
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the increasing role for and complexity of software in Applied products; and
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•
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the increasing focus on reducing energy usage and improving the environmental impact and sustainability associated with manufacturing operations.
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•
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the increasing cost of research and development due to many factors, including: decreasing linewidths on a chip, the use of new materials such as cobalt and yttrium, new and more complex device structures, more applications and process steps, increasing chip design costs, and the increasing cost and complexity of integrated manufacturing processes;
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•
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the need to reduce product development time, despite the increasing difficulty of technical challenges;
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•
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the growing number of types and varieties of semiconductors and number of applications across multiple substrate sizes;
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•
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the increasing cost and complexity for semiconductor manufacturers to move more technically advanced capability and smaller linewidths to volume manufacturing, and the resulting impact on the rates of technology transition and investment in capital equipment;
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•
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challenges in generating organic growth given semiconductor manufacturers’ decreasing capital expenditures as a percentage of revenue, and their increasing capital investment in market segments that Applied does not serve, such as lithography, or segments where Applied's products have lower relative market share;
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the importance of increasing market positions in under-penetrated segments, such as etch and inspection;
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•
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the growing demand for mobility products, such as tablets and smartphones, and corresponding industry investment in devices that require fewer Applied products to manufacture, such as NAND flash memory, than are needed to make devices used in other applications, such as DRAM for personal computers;
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the adoption of cloud-based memory storage particularly for mobility products, and the associated inhibiting effect on NAND bit growth rates;
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•
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the increasing frequency and complexity of technology transitions and inflections, such as 3-D transistors and advanced interconnects;
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•
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shorter cycle times between order placements by customers (particularly foundries) and product shipment, which may lead to inventory write-offs and manufacturing inefficiencies that decrease gross margin;
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competitive factors that make it difficult to enhance market share, including challenges in securing development-tool-of-record (DTOR) and production-tool-of-record (PTOR) positions with customers;
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potential shifts in sourcing strategies by a major computer and electronics company that may impact the equipment requirements of Applied's foundry customers;
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•
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the concentration of new wafer starts in Korea, where Applied’s service penetration and service-revenue-per-wafer-start have been lower than in other regions; and
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•
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the increasing fragmentation of semiconductor markets, leading certain markets to become too small to support the cost of a new fabrication plant, while others require less technologically advanced products.
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•
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the need to continually decrease the cost-per-watt of electricity produced by solar PV products to at or below grid parity in more global regions by, among other things, reducing operating costs and increasing throughputs for solar PV manufacturing, and improving the conversion efficiency of solar PVs;
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•
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the variability and uncertainty of government energy policies and their effect in influencing the rate of growth of the solar PV market, including the availability and amount of incentives for solar power such as tax credits, feed-in tariffs, rebates, renewable portfolio standards that require electricity providers to sell a targeted amount of energy from renewable sources, and goals for solar installations on government facilities;
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•
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the number of solar PV manufacturers and amount of global production capacity for solar PVs, primarily in China;
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•
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the filing of regulatory unfair trade proceedings against solar PVs from China, where most of Applied’s solar equipment sales are concentrated, which has resulted in the assessment of duties on solar cells and modules imported from China and led to other trade-related conflicts and outcomes;
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•
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the varying levels of operating and industry experience among solar PV manufacturers and the resulting differences in the nature and extent of customer support services requested from Applied;
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•
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challenges associated with marketing and selling manufacturing equipment and services to a diverse and diffuse customer base;
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•
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the growth of market segments in which Applied does not participate, such as passivation and furnaces;
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•
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the increasing number of government-affiliated entities in China that are becoming customers;
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•
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the financial condition of solar PV customers and their access to affordable financing and capital; and
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•
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increasing solar industry challenges of solar panel manufacturing overcapacity and weaker operating performance and outlook, leading to the increasing deterioration of the solar equipment market and of the financial condition of Applied's customers.
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•
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the timing and extent of a planned expansion of manufacturing facilities in China by Chinese display manufacturers and manufacturers from other countries, and the ability of non-Chinese manufacturers to obtain government approvals on a timely basis;
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•
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the slowing rate of transition to larger substrate sizes for LCD TVs and the resulting effect on capital intensity in the industry and on Applied’s product differentiation, gross margin and return on investment;
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•
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the increasing importance of new types of display technologies, such as low temperature polysilicon (LTPS), organic light-emitting diode (OLED) and metal oxide, and new touch panel films, such as anti-reflective and anti-fingerprint; and
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•
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uncertainty with respect to future LCD technology end-use applications and growth drivers.
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•
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identify and address technology inflections, market changes, new applications, customer requirements and end-use demand;
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•
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develop new products (including disruptive technologies), improve and/or develop new applications for existing products, and adapt similar products for use by customers in different applications and/or markets with varying technical requirements;
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•
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differentiate its products from those of competitors and any disruptive technologies, meet customers’ performance specifications, appropriately price products, and achieve market acceptance;
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•
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maintain operating flexibility to enable different responses to different markets, customers and applications;
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•
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enhance its worldwide operations across all business segments to reduce cycle time, enable continuous quality improvement, reduce costs, and enhance design for manufacturability and serviceability;
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•
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focus on sales and marketing strategies that foster strong customer relationships;
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•
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allocate resources, including people and R&D funding, among Applied’s products and between the development of new products and the enhancement of existing products, as most appropriate and effective for future growth;
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•
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reduce the cost and improve the productivity of capital invested in R&D activities;
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•
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accurately forecast demand, work with suppliers and meet production schedules for its products;
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•
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improve its manufacturing processes and achieve cost efficiencies across product offerings;
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•
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adapt to changes in value offered by companies in different parts of the supply chain;
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•
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qualify products for evaluation and, in turn, volume manufacturing with its customers; and
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•
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implement changes in its design engineering methodology, including those that enable reduction of material costs and cycle time, greater commonality of platforms and types of parts used in different systems, greater effectiveness of product life cycle management, and reduced energy usage and environmental impact.
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•
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varying regional and geopolitical business conditions and demands;
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•
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political and social attitudes, laws, rules, regulations and policies within countries that favor domestic companies over non-domestic companies, including customer- or government-supported efforts to promote the development and growth of local competitors;
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•
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customer- or government-supported efforts to influence Applied to conduct more of its operations in a particular country, such as Korea and China;
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•
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variations among, and changes in, local, regional, national or international laws and regulations (including intellectual
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•
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global trade issues, including those related to the interpretation and application of import and export licenses, as well as international trade disputes;
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•
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positions taken by governmental agencies regarding possible national commercial and/or security issues posed by international business operations;
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•
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fluctuating raw material, commodity, energy and shipping costs or shipping delays;
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•
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challenges associated with managing more geographically diverse operations and projects, which require an effective organizational structure and appropriate business processes, procedures and controls;
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•
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a more diverse workforce with different experience levels, cultures, customs, business practices and worker expectations;
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•
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variations in the ability to develop relationships with local customers, suppliers and governments;
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•
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fluctuations in interest rates and currency exchange rates, including the relative strength or weakness of the U.S. dollar against the Japanese yen, euro, Taiwanese dollar, Israeli shekel or Chinese yuan;
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•
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the need to provide sufficient levels of technical support in different locations around the world;
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•
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political instability, natural disasters (such as earthquakes, floods or storms), pandemics, social unrest, terrorism or acts of war in locations where Applied has operations, suppliers or sales, or that may influence the value chain of the industries that Applied serves;
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•
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the need for an effective business continuity plan if a disaster or other event occurs that could disrupt business operations;
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•
|
reliance on various information systems, data centers and software applications to conduct many aspects of Applied's business, which may be vulnerable to cyberattacks by third parties or breached due to employee error, misuse or other causes that could result in business disruptions, misappropriation of confidential information, or other adverse consequences in the event that Applied’s firewalls and security processes and practices are ineffective;
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•
|
the need to regularly reassess the size, capability and location of global infrastructure and make appropriate changes;
|
•
|
cultural and language differences;
|
•
|
difficulties and uncertainties associated with the entry into new countries;
|
•
|
hiring and integration of an increasing number of new workers, including in countries such as India and China;
|
•
|
the increasing need for the workforce to be more mobile and work in or travel to different regions;
|
•
|
uncertainties with respect to economic growth rates in various countries; and
|
•
|
uncertainties with respect to growth rates for the manufacture and sale of semiconductors, LCDs and solar PVs in the developing economies of certain countries.
|
•
|
the need to devote additional resources to develop new products for, and operate in, new markets;
|
•
|
the need to develop new sales and technical marketing strategies, cultivate relationships with new customers and meet different customer service requirements;
|
•
|
differing rates of profitability and growth among multiple businesses;
|
•
|
Applied’s ability to anticipate demand, capitalize on opportunities, and avoid or minimize risks;
|
•
|
the complexity of managing multiple businesses with variations in production planning, execution, supply chain management and logistics;
|
•
|
the adoption of new business models, business processes and systems;
|
•
|
Applied’s ability to rapidly expand or reduce its operations to meet increased or decreased demand, respectively, and the associated effect on working capital;
|
•
|
the need to attract, motivate and retain employees with skills and expertise in these new areas;
|
•
|
new and more diverse customers and suppliers, including some with limited operating histories, uncertain and/or limited funding, evolving business models and/or locations in regions where Applied does not have, or has limited, operations;
|
•
|
new or different competitors with potentially more financial or other resources, industry experience and/or established customer relationships;
|
•
|
entry into new industries and countries, with differing levels of government involvement, laws and regulations, and business, employment and safety practices;
|
•
|
third parties’ intellectual property rights; and
|
•
|
the need to comply with, or work to establish, industry standards and practices.
|
•
|
the failure or inability of suppliers to timely deliver sufficient quantities of quality parts on a cost-effective basis;
|
•
|
volatility in the availability and cost of materials, including rare earth elements;
|
•
|
difficulties or delays in obtaining required import or export approvals;
|
•
|
information technology or infrastructure failures; and
|
•
|
natural disasters or other events beyond Applied's control (such as earthquakes, floods or storms, regional economic downturns, pandemics, social unrest, political instability, terrorism, or acts of war), particularly where it conducts manufacturing (such as Israel, which has recently experienced increased geopolitical conflict).
|
•
|
diversion of management’s attention from other operational matters;
|
•
|
inability to complete acquisitions as anticipated or at all;
|
•
|
the appropriateness of valuation and other transaction terms;
|
•
|
requirements imposed by government regulators in connection with their review of a transaction, which may include, among other things, divestitures and/or restrictions on the conduct of Applied’s existing business or the acquired business;
|
•
|
ineffective integration of operations, systems, technologies, products or employees of an acquired business, which can impact the ability to realize anticipated synergies or other benefits;
|
•
|
failure to commercialize purchased technologies;
|
•
|
initial dependence on unfamiliar supply chains or relatively small supply partners;
|
•
|
inability to capitalize on characteristics of new markets that may be significantly different from Applied’s existing markets and where competitors may have stronger market positions and customer relationships;
|
•
|
failure to attract, retain and motivate key employees from the acquired business;
|
•
|
reductions in cash balances and/or increases in debt obligations to finance the acquisition, which reduce the availability of cash flow for general corporate or other purposes;
|
•
|
exposure to new operational risks, rules, regulations, worker expectations, customs and practices to the extent acquired businesses are located in regions where Applied has not historically conducted business;
|
•
|
challenges associated with managing new, more diverse and more widespread operations, projects and people;
|
•
|
inability to obtain and protect intellectual property rights in key technologies;
|
•
|
inadequacy or ineffectiveness of an acquired company’s internal financial controls, disclosure controls and procedures, and/or environmental, health and safety, anti-corruption, human resource, or other policies or practices;
|
•
|
impairment of acquired intangible assets and goodwill as a result of changing business conditions, technological advancements or worse-than-expected performance of the segment;
|
•
|
the risk of litigation or claims associated with a proposed or completed transaction;
|
•
|
unknown, underestimated and/or undisclosed commitments or liabilities; and
|
•
|
the inappropriate scale of acquired entities’ critical resources or facilities for business needs.
|
Item 1B:
|
Unresolved Staff Comments
|
Item 2:
|
Properties
|
Item 3:
|
Legal Proceedings
|
Item 4:
|
Mine Safety Disclosures
|
Item 5:
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
Price Range
|
||||||
|
High
|
|
Low
|
||||
Fiscal 2011
|
|
|
|
||||
First quarter
|
$
|
16.10
|
|
|
$
|
12.37
|
|
Second quarter
|
$
|
16.85
|
|
|
$
|
14.46
|
|
Third quarter
|
$
|
15.24
|
|
|
$
|
12.27
|
|
Fourth quarter
|
$
|
12.62
|
|
|
$
|
9.85
|
|
Fiscal 2012
|
|
|
|
||||
First quarter
|
$
|
12.73
|
|
|
$
|
10.13
|
|
Second quarter
|
$
|
13.21
|
|
|
$
|
11.49
|
|
Third quarter
|
$
|
11.99
|
|
|
$
|
10.01
|
|
Fourth quarter
|
$
|
12.05
|
|
|
$
|
10.65
|
|
*
|
$100 invested on 10/28/07 in stock or 10/31/07 in index, including reinvestment of dividends.
|
|
10/28/2007
|
|
10/26/2008
|
|
10/25/2009
|
|
10/31/2010
|
|
10/30/2011
|
|
10/28/2012
|
||||||
Applied Materials
|
100.00
|
|
|
61.22
|
|
|
71.06
|
|
|
69.23
|
|
|
72.37
|
|
|
62.92
|
|
S&P 500 Index
|
100.00
|
|
|
63.90
|
|
|
70.17
|
|
|
81.76
|
|
|
88.37
|
|
|
101.81
|
|
RDG Semiconductor Composite Index
|
100.00
|
|
|
54.74
|
|
|
68.59
|
|
|
84.46
|
|
|
91.33
|
|
|
82.37
|
|
Period
|
Total Number of
Shares Purchased
|
|
Average
Price Paid
per Share
|
|
Aggregate
Price Paid
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Program*
|
|
Maximum Dollar
Value of Shares
That May Yet be
Purchased Under
the Program*
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
(In millions, except per share amounts)
|
||||||||||||||||
Month #1
|
|
|
|
|
|
|
|
|
|
||||||||
(July 30, 2012 to August 26, 2012)
|
5.7
|
|
|
$
|
11.82
|
|
|
$
|
67
|
|
|
5.7
|
|
|
$
|
2,279
|
|
Month #2
|
|
|
|
|
|
|
|
|
|
||||||||
(August 27, 2012 to September 23, 2012)
|
19.2
|
|
|
$
|
11.69
|
|
|
224
|
|
|
19.2
|
|
|
$
|
2,055
|
|
|
Month #3
|
|
|
|
|
|
|
|
|
|
||||||||
(September 24, 2012 to October 28, 2012)
|
20.2
|
|
|
$
|
11.13
|
|
|
225
|
|
|
20.2
|
|
|
$
|
1,830
|
|
|
Total
|
45.1
|
|
|
$
|
11.46
|
|
|
$
|
516
|
|
|
45.1
|
|
|
|
*
|
On March 5, 2012, the Board of Directors approved a new stock repurchase program authorizing up to $3.0 billion in repurchases over the next three years, ending March 2015.
|
Item 6:
|
Selected Financial Data
|
Fiscal Year(1)
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except percentages, per share amounts
and number of employees)
|
||||||||||||||||||
Net sales
|
$
|
8,719
|
|
|
$
|
10,517
|
|
|
$
|
9,549
|
|
|
$
|
5,014
|
|
|
$
|
8,129
|
|
Gross margin
|
$
|
3,313
|
|
|
$
|
4,360
|
|
|
$
|
3,715
|
|
|
$
|
1,431
|
|
|
$
|
3,443
|
|
(% of net sales)
|
38.0
|
|
|
41.5
|
|
|
38.9
|
|
|
28.5
|
|
|
42.4
|
|
|||||
Research, development and engineering
|
$
|
1,237
|
|
|
$
|
1,118
|
|
|
$
|
1,143
|
|
|
$
|
934
|
|
|
$
|
1,104
|
|
(% of net sales)
|
14.2
|
|
|
10.6
|
|
|
12.0
|
|
|
18.6
|
|
|
13.6
|
|
|||||
Selling, general and administrative
|
$
|
1,076
|
|
|
$
|
901
|
|
|
$
|
942
|
|
|
$
|
735
|
|
|
$
|
965
|
|
(% of net sales)
|
12.3
|
|
|
8.6
|
|
|
9.9
|
|
|
14.7
|
|
|
11.9
|
|
|||||
Operating income (loss)
|
$
|
411
|
|
|
$
|
2,398
|
|
|
$
|
1,384
|
|
|
$
|
(394
|
)
|
|
$
|
1,355
|
|
(% of net sales)
|
4.7
|
|
|
22.8
|
|
|
14.5
|
|
|
(7.9
|
)
|
|
16.7
|
|
|||||
Income (loss) before income taxes
|
$
|
316
|
|
|
$
|
2,378
|
|
|
$
|
1,387
|
|
|
$
|
(486
|
)
|
|
$
|
1,409
|
|
Effective tax rate (%)
|
65.5
|
|
|
19.0
|
|
|
32.4
|
|
|
(37.2
|
)
|
|
31.8
|
|
|||||
Net income (loss)
|
$
|
109
|
|
|
$
|
1,926
|
|
|
$
|
938
|
|
|
$
|
(305
|
)
|
|
$
|
961
|
|
(% of net sales)
|
1.3
|
|
|
18.3
|
|
|
9.8
|
|
|
(6.1
|
)
|
|
11.8
|
|
|||||
Earnings (loss) per diluted share
|
$
|
0.09
|
|
|
$
|
1.45
|
|
|
$
|
0.70
|
|
|
$
|
(0.23
|
)
|
|
$
|
0.70
|
|
Weighted average common shares, diluted
|
1,277
|
|
|
1,330
|
|
|
1,349
|
|
|
1,333
|
|
|
1,375
|
|
|||||
New orders
|
$
|
8,037
|
|
|
$
|
10,142
|
|
|
$
|
10,249
|
|
|
$
|
4,097
|
|
|
$
|
9,155
|
|
Order backlog
|
$
|
1,606
|
|
|
$
|
2,392
|
|
|
$
|
3,244
|
|
|
$
|
2,735
|
|
|
$
|
4,848
|
|
Working capital
|
$
|
2,837
|
|
|
$
|
7,561
|
|
|
$
|
3,877
|
|
|
$
|
3,749
|
|
|
$
|
3,719
|
|
Long-term debt
|
$
|
1,946
|
|
|
$
|
1,947
|
|
|
$
|
204
|
|
|
$
|
201
|
|
|
$
|
202
|
|
Cash dividends declared per common share
|
$
|
0.35
|
|
|
$
|
0.31
|
|
|
$
|
0.27
|
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
Stockholders’ equity
|
$
|
7,235
|
|
|
$
|
8,800
|
|
|
$
|
7,536
|
|
|
$
|
7,095
|
|
|
$
|
7,549
|
|
Total assets
|
$
|
12,102
|
|
|
$
|
13,861
|
|
|
$
|
10,943
|
|
|
$
|
9,574
|
|
|
$
|
11,006
|
|
Capital expenditures
|
$
|
162
|
|
|
$
|
209
|
|
|
$
|
169
|
|
|
$
|
249
|
|
|
$
|
288
|
|
Regular employees
|
14,526
|
|
|
12,973
|
|
|
13,045
|
|
|
12,619
|
|
|
14,824
|
|
(1)
|
Each fiscal year ended on the last Sunday in October.
|
Item 7:
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Overview:
a summary of Applied’s business and measurements
|
•
|
Results of Operations:
a discussion of operating results
|
•
|
Segment Information:
a discussion of segment operating results
|
•
|
Business Combinations:
a summary or overview of acquired businesses
|
•
|
Recent Accounting Pronouncements:
a discussion of new accounting pronouncements and its impact to Applied's consolidated financial statements
|
•
|
Financial Condition, Liquidity and Capital Resources:
an analysis of cash flows, sources and uses of cash, contractual obligations and financial position
|
•
|
Off-Balance Sheet Arrangements and Contractual Obligations
|
•
|
Critical Accounting Policies:
a discussion of critical accounting policies that require the exercise of judgments and estimates
|
•
|
Non-GAAP Results:
a presentation of results reconciling GAAP to non-GAAP measures
|
|
|
|
|
|
|
|
Change
|
||||||||||||
Fiscal Year
|
2012
|
|
2011
|
|
2010
|
|
2012 over 2011
|
|
2011 over 2010
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except per share amounts and percentages)
|
||||||||||||||||||
New orders
|
$
|
8,037
|
|
|
$
|
10,142
|
|
|
$
|
10,249
|
|
|
$
|
(2,105
|
)
|
|
$
|
(107
|
)
|
Net sales
|
$
|
8,719
|
|
|
$
|
10,517
|
|
|
$
|
9,549
|
|
|
$
|
(1,798
|
)
|
|
$
|
968
|
|
Gross margin
|
$
|
3,313
|
|
|
$
|
4,360
|
|
|
$
|
3,715
|
|
|
$
|
(1,047
|
)
|
|
$
|
645
|
|
Gross margin percent
|
38.0
|
%
|
|
41.5
|
%
|
|
38.9
|
%
|
|
(3.5) points
|
|
2.6 points
|
|||||||
Operating income
|
$
|
411
|
|
|
$
|
2,398
|
|
|
$
|
1,384
|
|
|
$
|
(1,987
|
)
|
|
$
|
1,014
|
|
Operating margin percent
|
4.7
|
%
|
|
22.8
|
%
|
|
14.5
|
%
|
|
(18.1) points
|
|
8.3 points
|
|||||||
Net income
|
$
|
109
|
|
|
$
|
1,926
|
|
|
$
|
938
|
|
|
$
|
(1,817
|
)
|
|
$
|
988
|
|
Earnings per diluted share
|
$
|
0.09
|
|
|
$
|
1.45
|
|
|
$
|
0.70
|
|
|
$
|
(1.36
|
)
|
|
$
|
0.75
|
|
Non-GAAP Results
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross margin
|
$
|
3,566
|
|
|
$
|
4,397
|
|
|
$
|
3,788
|
|
|
$
|
(831
|
)
|
|
$
|
609
|
|
Gross margin percent
|
40.9
|
%
|
|
41.8
|
%
|
|
39.7
|
%
|
|
(0.9) points
|
|
2.1 points
|
|||||||
Operating income
|
$
|
1,379
|
|
|
$
|
2,411
|
|
|
$
|
1,731
|
|
|
$
|
(1,032
|
)
|
|
$
|
680
|
|
Operating margin percent
|
15.8
|
%
|
|
22.9
|
%
|
|
18.1
|
%
|
|
(7.1) points
|
|
4.8 points
|
|||||||
Net income
|
$
|
960
|
|
|
$
|
1,723
|
|
|
$
|
1,181
|
|
|
$
|
(763
|
)
|
|
$
|
542
|
|
Earnings per diluted share
|
$
|
0.75
|
|
|
$
|
1.30
|
|
|
$
|
0.88
|
|
|
$
|
(0.55
|
)
|
|
$
|
0.42
|
|
|
Fiscal Quarter
|
|
Fiscal
Year
|
||||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except per share amounts)
|
||||||||||||||||||
2012:
|
|
|
|
|
|
|
|
|
|
||||||||||
New orders
|
$
|
2,008
|
|
|
$
|
2,765
|
|
|
$
|
1,799
|
|
|
$
|
1,465
|
|
|
$
|
8,037
|
|
Net sales
|
$
|
2,189
|
|
|
$
|
2,541
|
|
|
$
|
2,343
|
|
|
$
|
1,646
|
|
|
$
|
8,719
|
|
Gross margin
|
$
|
786
|
|
|
$
|
1,011
|
|
|
$
|
930
|
|
|
$
|
586
|
|
|
$
|
3,313
|
|
Operating income (loss)
|
$
|
179
|
|
|
$
|
409
|
|
|
$
|
322
|
|
|
$
|
(499
|
)
|
|
$
|
411
|
|
Net income (loss)
|
$
|
117
|
|
|
$
|
289
|
|
|
$
|
218
|
|
|
$
|
(515
|
)
|
|
$
|
109
|
|
Earnings (loss) per diluted share
|
$
|
0.09
|
|
|
$
|
0.22
|
|
|
$
|
0.17
|
|
|
$
|
(0.42
|
)
|
|
$
|
0.09
|
|
2011:
|
|
|
|
|
|
|
|
|
|
||||||||||
New orders
|
$
|
2,971
|
|
|
$
|
3,185
|
|
|
$
|
2,390
|
|
|
$
|
1,596
|
|
|
$
|
10,142
|
|
Net sales
|
$
|
2,686
|
|
|
$
|
2,862
|
|
|
$
|
2,787
|
|
|
$
|
2,182
|
|
|
$
|
10,517
|
|
Gross margin
|
$
|
1,136
|
|
|
$
|
1,189
|
|
|
$
|
1,184
|
|
|
$
|
852
|
|
|
$
|
4,360
|
|
Operating income
|
$
|
674
|
|
|
$
|
677
|
|
|
$
|
687
|
|
|
$
|
361
|
|
|
$
|
2,398
|
|
Net income
|
$
|
506
|
|
|
$
|
489
|
|
|
$
|
476
|
|
|
$
|
456
|
|
|
$
|
1,926
|
|
Earnings per diluted share
|
$
|
0.38
|
|
|
$
|
0.37
|
|
|
$
|
0.36
|
|
|
$
|
0.34
|
|
|
$
|
1.45
|
|
2010:
|
|
|
|
|
|
|
|
|
|
||||||||||
New orders
|
$
|
1,965
|
|
|
$
|
2,533
|
|
|
$
|
2,725
|
|
|
$
|
3,026
|
|
|
$
|
10,249
|
|
Net sales
|
$
|
1,849
|
|
|
$
|
2,296
|
|
|
$
|
2,518
|
|
|
$
|
2,886
|
|
|
$
|
9,549
|
|
Gross margin
|
$
|
711
|
|
|
$
|
927
|
|
|
$
|
860
|
|
|
$
|
1,217
|
|
|
$
|
3,715
|
|
Operating income
|
$
|
116
|
|
|
$
|
386
|
|
|
$
|
183
|
|
|
$
|
699
|
|
|
$
|
1,384
|
|
Net income
|
$
|
83
|
|
|
$
|
264
|
|
|
$
|
123
|
|
|
$
|
468
|
|
|
$
|
938
|
|
Earnings per diluted share
|
$
|
0.06
|
|
|
$
|
0.20
|
|
|
$
|
0.09
|
|
|
$
|
0.35
|
|
|
$
|
0.70
|
|
|
2012
|
|
Change
2012 over 2011 |
|
2011
|
|
Change
2011 over 2010 |
|
2010
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
(In millions, except percentages)
|
|||||||||||||||||||||||
Taiwan
|
$
|
2,155
|
|
|
27
|
%
|
|
(4)%
|
|
$
|
2,235
|
|
|
22
|
%
|
|
(19)%
|
|
$
|
2,760
|
|
|
27
|
%
|
China
|
403
|
|
|
5
|
%
|
|
(80)%
|
|
2,066
|
|
|
20
|
%
|
|
(4)%
|
|
2,155
|
|
|
21
|
%
|
|||
Korea
|
1,784
|
|
|
22
|
%
|
|
39%
|
|
1,286
|
|
|
13
|
%
|
|
(24)%
|
|
1,703
|
|
|
17
|
%
|
|||
Japan
|
600
|
|
|
7
|
%
|
|
(40)%
|
|
1,001
|
|
|
10
|
%
|
|
35%
|
|
741
|
|
|
7
|
%
|
|||
Southeast Asia
|
283
|
|
|
4
|
%
|
|
(39)%
|
|
463
|
|
|
5
|
%
|
|
(31)%
|
|
675
|
|
|
7
|
%
|
|||
Asia Pacific
|
5,225
|
|
|
65
|
%
|
|
(26)%
|
|
7,051
|
|
|
70
|
%
|
|
(12)%
|
|
8,034
|
|
|
79
|
%
|
|||
United States
|
1,995
|
|
|
25
|
%
|
|
(4)%
|
|
2,069
|
|
|
20
|
%
|
|
53%
|
|
1,348
|
|
|
13
|
%
|
|||
Europe
|
817
|
|
|
10
|
%
|
|
(20)%
|
|
1,022
|
|
|
10
|
%
|
|
18%
|
|
867
|
|
|
8
|
%
|
|||
Total
|
$
|
8,037
|
|
|
100
|
%
|
|
(21)%
|
|
$
|
10,142
|
|
|
100
|
%
|
|
(1)%
|
|
$
|
10,249
|
|
|
100
|
%
|
|
2012
|
|
Change
2012 over 2011 |
|
2011
|
|
Change
2011 over 2010 |
|
2010
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
(In millions, except percentages)
|
|||||||||||||||||||||||
Silicon Systems Group
|
$
|
5,294
|
|
|
66
|
%
|
|
(4)%
|
|
$
|
5,489
|
|
|
54
|
%
|
|
(5)%
|
|
$
|
5,759
|
|
|
56
|
%
|
Applied Global Services
|
2,274
|
|
|
28
|
%
|
|
(3)%
|
|
2,333
|
|
|
23
|
%
|
|
7%
|
|
2,183
|
|
|
21
|
%
|
|||
Display
|
274
|
|
|
4
|
%
|
|
(57)%
|
|
636
|
|
|
6
|
%
|
|
(20)%
|
|
799
|
|
|
8
|
%
|
|||
Energy and Environmental Solutions
|
195
|
|
|
2
|
%
|
|
(88)%
|
|
1,684
|
|
|
17
|
%
|
|
12%
|
|
1,508
|
|
|
15
|
%
|
|||
Total
|
$
|
8,037
|
|
|
100
|
%
|
|
(21)%
|
|
$
|
10,142
|
|
|
100
|
%
|
|
(1)%
|
|
$
|
10,249
|
|
|
100
|
%
|
|
2012
|
|
2011
|
||||
|
(In millions)
|
||||||
Beginning balance
|
$
|
2,392
|
|
|
$
|
3,244
|
|
New orders
|
8,037
|
|
|
10,142
|
|
||
Net sales
|
(8,719
|
)
|
|
(10,517
|
)
|
||
Net adjustments
|
(104
|
)
|
|
(477
|
)
|
||
Ending balance
|
$
|
1,606
|
|
|
$
|
2,392
|
|
|
2012
|
|
Change
2012 over 2011 |
|
2011
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
(In millions, except percentages)
|
||||||||||||||
Silicon Systems Group
|
$
|
705
|
|
|
44
|
%
|
|
(23)%
|
|
$
|
913
|
|
|
38
|
%
|
Applied Global Services
|
580
|
|
|
36
|
%
|
|
(12)%
|
|
662
|
|
|
28
|
%
|
||
Display
|
206
|
|
|
13
|
%
|
|
(39)%
|
|
337
|
|
|
14
|
%
|
||
Energy and Environmental Solutions
|
115
|
|
|
7
|
%
|
|
(76)%
|
|
480
|
|
|
20
|
%
|
||
Total
|
$
|
1,606
|
|
|
100
|
%
|
|
(33)%
|
|
$
|
2,392
|
|
|
100
|
%
|
|
2012
|
|
Change
2012 over 2011 |
|
2011
|
|
Change
2011 over 2010 |
|
2010
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
(In millions, except percentages)
|
|||||||||||||||||||||||
Taiwan
|
2,411
|
|
|
28
|
%
|
|
15%
|
|
2,093
|
|
|
20
|
%
|
|
(24)%
|
|
2,750
|
|
|
29
|
%
|
|||
China
|
783
|
|
|
9
|
%
|
|
(70)%
|
|
2,574
|
|
|
24
|
%
|
|
65%
|
|
1,557
|
|
|
16
|
%
|
|||
Korea
|
1,897
|
|
|
22
|
%
|
|
50%
|
|
1,263
|
|
|
12
|
%
|
|
(29)%
|
|
1,768
|
|
|
19
|
%
|
|||
Japan
|
704
|
|
|
8
|
%
|
|
(23)%
|
|
912
|
|
|
9
|
%
|
|
19%
|
|
768
|
|
|
8
|
%
|
|||
Southeast Asia
|
312
|
|
|
3
|
%
|
|
(47)%
|
|
592
|
|
|
5
|
%
|
|
2%
|
|
578
|
|
|
6
|
%
|
|||
Asia Pacific
|
6,107
|
|
|
70
|
%
|
|
(18)%
|
|
7,434
|
|
|
70
|
%
|
|
—%
|
|
7,421
|
|
|
78
|
%
|
|||
United States
|
1,749
|
|
|
20
|
%
|
|
(11)%
|
|
1,963
|
|
|
19
|
%
|
|
71%
|
|
1,147
|
|
|
12
|
%
|
|||
Europe
|
863
|
|
|
10
|
%
|
|
(23)%
|
|
1,120
|
|
|
11
|
%
|
|
14%
|
|
981
|
|
|
10
|
%
|
|||
Total
|
$
|
8,719
|
|
|
100
|
%
|
|
(17)%
|
|
$
|
10,517
|
|
|
100
|
%
|
|
10%
|
|
$
|
9,549
|
|
|
100
|
%
|
|
2012
|
|
Change
2012 over 2011 |
|
2011
|
|
Change
2011 over 2010 |
|
2010
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
(In millions, except percentages)
|
|||||||||||||||||||||||
Silicon Systems Group
|
$
|
5,536
|
|
|
64
|
%
|
|
2%
|
|
$
|
5,415
|
|
|
51
|
%
|
|
2%
|
|
$
|
5,304
|
|
|
56
|
%
|
Applied Global Services
|
2,285
|
|
|
26
|
%
|
|
(5)%
|
|
2,413
|
|
|
23
|
%
|
|
29%
|
|
1,865
|
|
|
20
|
%
|
|||
Display
|
473
|
|
|
5
|
%
|
|
(32)%
|
|
699
|
|
|
7
|
%
|
|
(22)%
|
|
899
|
|
|
9
|
%
|
|||
Energy and Environmental Solutions
|
425
|
|
|
5
|
%
|
|
(79)%
|
|
1,990
|
|
|
19
|
%
|
|
34%
|
|
1,481
|
|
|
15
|
%
|
|||
Total
|
$
|
8,719
|
|
|
100
|
%
|
|
(17)%
|
|
$
|
10,517
|
|
|
100
|
%
|
|
10%
|
|
$
|
9,549
|
|
|
100
|
%
|
|
|
|
|
|
|
|
Change
|
||||||||||||
|
2012
|
|
2011
|
|
2010
|
|
2012 over 2011
|
|
2011 over 2010
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||
Gross margin
|
$
|
3,313
|
|
|
$
|
4,360
|
|
|
$
|
3,715
|
|
|
$
|
(1,047
|
)
|
|
$
|
645
|
|
Gross margin (% of net sales)
|
38.0
|
%
|
|
41.5
|
%
|
|
38.9
|
%
|
|
(3.5) points
|
|
2.6 points
|
|||||||
Non-GAAP Results
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross margin
|
$
|
3,566
|
|
|
$
|
4,397
|
|
|
$
|
3,788
|
|
|
$
|
(831
|
)
|
|
$
|
609
|
|
Gross margin (% of net sales)
|
40.9
|
%
|
|
41.8
|
%
|
|
39.7
|
%
|
|
(0.9) points
|
|
2.1 points
|
|
|
|
|
|
|
|
Change
|
||||||||||||
|
2012
|
|
2011
|
|
2010
|
|
2012 over 2011
|
|
2011 over 2010
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Research, development and engineering
|
$
|
1,237
|
|
|
$
|
1,118
|
|
|
$
|
1,143
|
|
|
$
|
119
|
|
|
$
|
(25
|
)
|
|
|
|
|
|
|
|
Change
|
||||||||||||
|
2012
|
|
2011
|
|
2010
|
|
2012 over 2011
|
|
2011 over 2010
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Selling, general and administrative
|
$
|
1,076
|
|
|
$
|
901
|
|
|
$
|
942
|
|
|
$
|
175
|
|
|
$
|
(41
|
)
|
|
|
|
|
|
|
|
Change
|
||||||||||||
|
2012
|
|
2011
|
|
2010
|
|
2012 over 2011
|
|
2011 over 2010
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Restructuring and asset impairments, net
|
$
|
168
|
|
|
$
|
(30
|
)
|
|
$
|
246
|
|
|
$
|
198
|
|
|
$
|
(276
|
)
|
|
|
|
|
|
|
|
Change
|
||||||||||||
2012
|
|
2011
|
|
2010
|
2012 over 2011
|
|
2011 over 2010
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Interest and other expense
|
$
|
95
|
|
|
$
|
59
|
|
|
$
|
21
|
|
|
$
|
36
|
|
|
$
|
38
|
|
|
|
|
|
|
|
|
Change
|
||||||||||||
2012
|
|
2011
|
|
2010
|
|
2012 over 2011
|
|
2011 over 2010
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Interest and other income, net
|
$
|
17
|
|
|
$
|
42
|
|
|
$
|
37
|
|
|
$
|
(25
|
)
|
|
$
|
5
|
|
|
|
|
|
|
|
|
Change
|
||||||||||||
2012
|
|
2011
|
|
2010
|
|
2012 over 2011
|
|
2011 over 2010
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||
Provision (benefit) for income taxes
|
$
|
207
|
|
|
$
|
452
|
|
|
$
|
449
|
|
|
$
|
(245
|
)
|
|
$
|
3
|
|
Effective income tax rate
|
65.5
|
%
|
|
19.0
|
%
|
|
32.4
|
%
|
|
46.5 points
|
|
(13.4) points
|
|
|
|
|
|
|
|
Change
|
||||||||||||||||
2012
|
|
2011
|
|
2010
|
2012 over 2011
|
|
2011 over 2010
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except percentages and ratios)
|
||||||||||||||||||||||
New orders
|
$
|
5,294
|
|
|
$
|
5,489
|
|
|
$
|
5,759
|
|
|
$
|
(195
|
)
|
|
(4)%
|
|
$
|
(270
|
)
|
|
(5)%
|
Net sales
|
5,536
|
|
|
5,415
|
|
|
5,304
|
|
|
121
|
|
|
2%
|
|
111
|
|
|
2%
|
|||||
Book to bill ratio
|
1.0
|
|
|
1.0
|
|
|
1.1
|
|
|
|
|
|
|
|
|
|
|||||||
Operating income
|
1,243
|
|
|
1,764
|
|
|
1,892
|
|
|
(521
|
)
|
|
(30)%
|
|
(128
|
)
|
|
(7)%
|
|||||
Operating margin
|
22.5
|
%
|
|
32.6
|
%
|
|
35.7
|
%
|
|
|
|
(10.1) points
|
|
|
|
(3.1) points
|
|||||||
Non-GAAP Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income
|
$
|
1,537
|
|
|
$
|
1,779
|
|
|
$
|
1,919
|
|
|
(242
|
)
|
|
(14)%
|
|
(140
|
)
|
|
(7)%
|
||
Operating margin
|
27.8
|
%
|
|
32.9
|
%
|
|
36.2
|
%
|
|
|
|
(5.1) points
|
|
|
|
(3.3) points
|
|
2012
|
|
2011
|
|
2010
|
|||
Foundry
|
62
|
%
|
|
47
|
%
|
|
41
|
%
|
Memory
|
22
|
%
|
|
28
|
%
|
|
43
|
%
|
Logic and other
|
16
|
%
|
|
25
|
%
|
|
16
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
Change
|
||||||||||||||||||
|
2012
|
|
2011
|
|
2010
|
2012 over 2011
|
|
2011 over 2010
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||||
Taiwan
|
$
|
1,744
|
|
|
$
|
1,309
|
|
|
$
|
1,976
|
|
|
$
|
435
|
|
|
33
|
%
|
|
$
|
(667
|
)
|
|
(34
|
)%
|
|
|
|
|
|
|
|
Change
|
|||||||||||||||||
2012
|
|
2011
|
|
2010
|
2012 over 2011
|
|
2011 over 2010
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
(In millions, except percentages and ratios)
|
|||||||||||||||||||||||
New orders
|
$
|
2,274
|
|
|
$
|
2,333
|
|
|
$
|
2,183
|
|
|
$
|
(59
|
)
|
|
(3)%
|
|
$
|
150
|
|
|
7
|
%
|
Net sales
|
2,285
|
|
|
2,413
|
|
|
1,865
|
|
|
(128
|
)
|
|
(5)%
|
|
548
|
|
|
29
|
%
|
|||||
Book to bill ratio
|
1.0
|
|
|
1.0
|
|
|
1.2
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income
|
502
|
|
|
482
|
|
|
337
|
|
|
20
|
|
|
4%
|
|
145
|
|
|
43
|
%
|
|||||
Operating margin
|
22.0
|
%
|
|
20.0
|
%
|
|
18.1
|
%
|
|
|
|
2.0 points
|
|
|
|
1.9 points
|
||||||||
Non-GAAP Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating income
|
530
|
|
|
513
|
|
|
348
|
|
|
17
|
|
|
3%
|
|
165
|
|
|
47
|
%
|
|||||
Operating margin
|
23.2
|
%
|
|
21.3
|
%
|
|
18.7
|
%
|
|
|
|
1.9 points
|
|
|
|
2.6 points
|
|
|
|
|
|
|
|
Change
|
||||||||||||||||
2012
|
|
2011
|
|
2010
|
2012 over 2011
|
|
2011 over 2010
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except percentages and ratios)
|
||||||||||||||||||||||
New orders
|
$
|
274
|
|
|
$
|
636
|
|
|
$
|
799
|
|
|
$
|
(362
|
)
|
|
(57)%
|
|
$
|
(163
|
)
|
|
(20)%
|
Net sales
|
473
|
|
|
699
|
|
|
899
|
|
|
(226
|
)
|
|
(32)%
|
|
(200
|
)
|
|
(22)%
|
|||||
Book to bill ratio
|
0.6
|
|
|
0.9
|
|
|
0.9
|
|
|
|
|
|
|
|
|
|
|||||||
Operating income
|
25
|
|
|
147
|
|
|
267
|
|
|
(122
|
)
|
|
(83)%
|
|
(120
|
)
|
|
(45)%
|
|||||
Operating margin
|
5.3
|
%
|
|
21.0
|
%
|
|
29.7
|
%
|
|
|
|
(15.7) points
|
|
|
|
(8.7) points
|
|||||||
Non-GAAP Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income
|
$
|
32
|
|
|
$
|
154
|
|
|
$
|
274
|
|
|
(122
|
)
|
|
(79)%
|
|
(120
|
)
|
|
(44)%
|
||
Operating margin
|
6.8
|
%
|
|
22.0
|
%
|
|
30.5
|
%
|
|
|
|
(15.2) points
|
|
|
|
(8.5) points
|
|
|
|
|
|
|
|
Change
|
||||||||||||||||||
|
2012
|
|
2011
|
|
2010
|
2012 over 2011
|
|
2011 over 2010
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||||
China
|
$
|
133
|
|
|
$
|
330
|
|
|
$
|
162
|
|
|
$
|
(197
|
)
|
|
(60
|
)%
|
|
$
|
168
|
|
|
104
|
%
|
Taiwan
|
$
|
179
|
|
|
$
|
216
|
|
|
$
|
311
|
|
|
$
|
(37
|
)
|
|
(17
|
)%
|
|
$
|
(95
|
)
|
|
(31
|
)%
|
Korea
|
$
|
88
|
|
|
$
|
111
|
|
|
$
|
334
|
|
|
$
|
(23
|
)
|
|
(21
|
)%
|
|
$
|
(223
|
)
|
|
(67
|
)%
|
|
|
|
|
|
|
|
Change
|
||||||||||||||||
2012
|
|
2011
|
|
2010
|
2012 over 2011
|
|
2011 over 2010
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except percentages and ratios)
|
||||||||||||||||||||||
New orders
|
$
|
195
|
|
|
$
|
1,684
|
|
|
$
|
1,508
|
|
|
$
|
(1,489
|
)
|
|
(88)%
|
|
$
|
176
|
|
|
12%
|
Net sales
|
425
|
|
|
1,990
|
|
|
1,481
|
|
|
(1,565
|
)
|
|
(79)%
|
|
509
|
|
|
34%
|
|||||
Book to bill ratio
|
0.5
|
|
|
0.8
|
|
|
1.0
|
|
|
|
|
|
|
|
|
|
|||||||
Operating income (loss)
|
(668
|
)
|
|
453
|
|
|
(466
|
)
|
|
(1,121
|
)
|
|
(247)%
|
|
919
|
|
|
(197)%
|
|||||
Operating margin
|
(157.2
|
)%
|
|
22.8
|
%
|
|
(31.5
|
)%
|
|
|
|
(180.0) points
|
|
|
|
54.3 points
|
|||||||
Non-GAAP Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income (loss)
|
(184
|
)
|
|
444
|
|
|
(267
|
)
|
|
(628
|
)
|
|
(141)%
|
|
711
|
|
|
(266)%
|
|||||
Operating margin
|
(43.3
|
)%
|
|
22.3
|
%
|
|
(18.0
|
)%
|
|
|
|
(65.6) points
|
|
|
|
40.3 points
|
|
|
|
|
|
|
|
Change
|
||||||||||||||||||
|
2012
|
|
2011
|
|
2010
|
2012 over 2011
|
|
2011 over 2010
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||||
China
|
$
|
210
|
|
|
$
|
1,584
|
|
|
$
|
935
|
|
|
$
|
(1,374
|
)
|
|
(87
|
)%
|
|
$
|
649
|
|
|
69
|
%
|
|
October 28,
2012 |
|
October 30,
2011 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Cash and cash equivalents
|
$
|
1,392
|
|
|
$
|
5,960
|
|
Short-term investments
|
545
|
|
|
283
|
|
||
Long-term investments
|
1,055
|
|
|
931
|
|
||
Total cash, cash-equivalents and investments
|
$
|
2,992
|
|
|
$
|
7,174
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Cash provided by operating activities
|
$
|
1,851
|
|
|
$
|
2,429
|
|
|
$
|
1,723
|
|
Cash provided by (used in) investing activities
|
$
|
(4,660
|
)
|
|
$
|
707
|
|
|
$
|
(862
|
)
|
Cash provided by (used in) financing activities
|
$
|
(1,754
|
)
|
|
$
|
960
|
|
|
$
|
(576
|
)
|
|
2012
|
|
2011
|
|
2010
|
|
|
|
|
|
|
Days sales outstanding
|
67
|
|
62
|
|
58
|
Days inventory outstanding
|
109
|
|
116
|
|
84
|
Days payable outstanding
|
34
|
|
33
|
|
36
|
Due Date
|
Principal
Amount
|
|
Effective
Interest Rate
|
|
Interest
Payment Dates
|
||
|
(In millions)
|
|
|
|
|
||
2.650% Senior Notes Due 2016
|
$
|
400
|
|
|
2.666%
|
|
June 15, December 15
|
4.300% Senior Notes Due 2021
|
750
|
|
|
4.326%
|
|
June 15, December 15
|
|
5.850% Senior Notes Due 2041
|
600
|
|
|
5.879%
|
|
June 15, December 15
|
|
|
$
|
1,750
|
|
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
Less Than
1 Year
|
|
1-3
Years
|
|
3-5
Years
|
|
More Than
5 Years
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Long-term debt obligations
|
$
|
1,950
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
600
|
|
|
$
|
1,350
|
|
Interest expense associated with long-term debt obligations
|
1,421
|
|
|
92
|
|
|
184
|
|
|
174
|
|
|
971
|
|
|||||
Operating lease obligations
|
89
|
|
|
31
|
|
|
32
|
|
|
18
|
|
|
8
|
|
|||||
Purchase obligations*
|
1,096
|
|
|
1,054
|
|
|
42
|
|
|
—
|
|
|
—
|
|
|||||
Other long-term liabilities
|
315
|
|
|
—
|
|
|
88
|
|
|
38
|
|
|
189
|
|
|||||
|
$
|
4,871
|
|
|
$
|
1,177
|
|
|
$
|
346
|
|
|
$
|
830
|
|
|
$
|
2,518
|
|
*
|
Represents Applied’s agreements to purchase goods and services consisting of Applied’s (a) outstanding purchase orders for goods and services; and (b) contractual requirements to make specified minimum payments even if Applied does not take delivery of the contracted goods.
|
|
|
Twelve Months Ended
|
||||||||||
|
|
October 28,
2012 |
|
October 30,
2011 |
|
October 31,
2010 |
||||||
|
|
(In millions, except percentages)
|
||||||||||
Non-GAAP Gross Margin
|
|
|
|
|
|
|
||||||
Reported gross margin (GAAP basis)
|
|
$
|
3,313
|
|
|
$
|
4,360
|
|
|
$
|
3,715
|
|
Certain items associated with acquisitions
1
|
|
253
|
|
|
37
|
|
|
73
|
|
|||
Non-GAAP gross margin
|
|
$
|
3,566
|
|
|
$
|
4,397
|
|
|
$
|
3,788
|
|
Non-GAAP gross margin percent (% of net sales)
|
|
40.9
|
%
|
|
41.8
|
%
|
|
39.7
|
%
|
|||
Non-GAAP Operating Income
|
|
|
|
|
|
|
||||||
Reported operating income (GAAP basis)
|
|
$
|
411
|
|
|
$
|
2,398
|
|
|
$
|
1,384
|
|
Certain items associated with acquisitions
1
|
|
298
|
|
|
51
|
|
|
91
|
|
|||
Acquisition integration and deal costs
|
|
81
|
|
|
19
|
|
|
10
|
|
|||
Impairment of goodwill
|
|
421
|
|
|
—
|
|
|
—
|
|
|||
Restructuring charges and asset impairments
2, 3, 4
|
|
168
|
|
|
(30
|
)
|
|
246
|
|
|||
Gain on sale of facilities, net
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|||
Non-GAAP operating income
|
|
$
|
1,379
|
|
|
$
|
2,411
|
|
|
$
|
1,731
|
|
Non-GAAP operating margin percent (% of net sales)
|
|
15.8
|
%
|
|
22.9
|
%
|
|
18.1
|
%
|
|||
Non-GAAP Net Income
|
|
|
|
|
|
|
||||||
Reported net income (GAAP basis)
|
|
$
|
109
|
|
|
$
|
1,926
|
|
|
$
|
938
|
|
Certain items associated with acquisitions
1
|
|
298
|
|
|
51
|
|
|
91
|
|
|||
Acquisition integration and deal costs
|
|
81
|
|
|
19
|
|
|
10
|
|
|||
Impairment of goodwill
|
|
421
|
|
|
—
|
|
|
—
|
|
|||
Restructuring charges and asset impairments
2, 3, 4
|
|
168
|
|
|
(30
|
)
|
|
246
|
|
|||
Impairment of strategic investments
|
|
17
|
|
|
3
|
|
|
13
|
|
|||
Gain on sale of facilities, net
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|||
Reinstatement of federal R&D tax credit
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|||
Resolution of audits of prior years’ income tax filings
|
|
(22
|
)
|
|
(203
|
)
|
|
—
|
|
|||
Income tax effect of non-GAAP adjustments
|
|
(112
|
)
|
|
(3
|
)
|
|
(117
|
)
|
|||
Non-GAAP net income
|
|
$
|
960
|
|
|
$
|
1,723
|
|
|
$
|
1,181
|
|
1
|
These items are incremental charges attributable to acquisitions, consisting of inventory fair value adjustments on products sold, and amortization of purchased intangible assets.
|
|
|
2
|
Results for the twelve months ended October 28, 2012 included severance and other charges of $106 million related to the restructuring program announced on October 3, 2012, restructuring and asset impairment charges of $48 million related to the restructuring program announced on May 10, 2012, and severance charges of $14 million related to the integration of Varian.
|
|
|
3
|
Results for the twelve months ended October 30, 2011 included favorable adjustments of $36 million related to a restructuring program announced on July 21, 2010, $19 million related to a restructuring program announced on November 11, 2009, and $5 million related to a restructuring program announced on November 12, 2008, partially offset by asset impairment charges of $30 million primarily related to certain fixed and intangible assets.
|
|
|
4
|
Results for the twelve months ended October 31, 2010 included asset impairment charges of $108 million and restructuring charges of $45 million related to a restructuring program announced on July 21, 2010, restructuring charges of $84 million associated with a restructuring program announced on November 11, 2009, and asset impairment charges of $9 million related to a facility held for sale.
|
|
|
Twelve Months Ended
|
||||||||||
|
|
October 28,
2012 |
|
October 30,
2011 |
|
October 31,
2010 |
||||||
|
|
(In millions, except per share amounts)
|
||||||||||
Non-GAAP Earnings Per Diluted Share
|
|
|
|
|
|
|
||||||
Reported earnings per diluted share (GAAP basis)
|
|
$
|
0.09
|
|
|
$
|
1.45
|
|
|
$
|
0.70
|
|
Certain items associated with acquisitions
|
|
0.19
|
|
|
0.03
|
|
|
0.05
|
|
|||
Acquisition integration and deal costs
|
|
0.05
|
|
|
0.01
|
|
|
0.01
|
|
|||
Impairment of goodwill
|
|
0.33
|
|
|
—
|
|
|
—
|
|
|||
Restructuring charges and asset impairments
|
|
0.10
|
|
|
(0.01
|
)
|
|
0.12
|
|
|||
Impairment of strategic investments
|
|
0.01
|
|
|
—
|
|
|
—
|
|
|||
Gain on sale of facilities, net
|
|
—
|
|
|
(0.02
|
)
|
|
—
|
|
|||
Reinstatement of federal R&D tax credit and resolution of audits of prior years’ income tax filings
|
|
(0.02
|
)
|
|
(0.16
|
)
|
|
—
|
|
|||
Non-GAAP earnings per diluted share
|
|
$
|
0.75
|
|
|
$
|
1.30
|
|
|
$
|
0.88
|
|
Weighted average number of diluted shares
|
|
1,277
|
|
|
1,330
|
|
|
1,349
|
|
|
|
Twelve Months Ended
|
||||||||||
|
|
October 28,
2012 |
|
October 30,
2011 |
|
October 31,
2010 |
||||||
|
|
(In millions, except percentages)
|
||||||||||
Non-GAAP SSG Operating Income
|
|
|
|
|
|
|
||||||
Reported operating income (GAAP basis)
|
|
$
|
1,243
|
|
|
$
|
1,764
|
|
|
$
|
1,892
|
|
Certain items associated with acquisitions
1
|
|
253
|
|
|
12
|
|
|
27
|
|
|||
Acquisition integration and deal costs
|
|
37
|
|
|
3
|
|
|
—
|
|
|||
Restructuring charges and asset impairments
2
|
|
4
|
|
|
—
|
|
|
—
|
|
|||
Non-GAAP operating income
|
|
$
|
1,537
|
|
|
$
|
1,779
|
|
|
$
|
1,919
|
|
Non-GAAP operating margin percent (% of net sales)
|
|
27.8
|
%
|
|
32.9
|
%
|
|
36.2
|
%
|
|||
Non-GAAP AGS Operating Income
|
|
|
|
|
|
|
||||||
Reported operating income (GAAP basis)
|
|
$
|
502
|
|
|
$
|
482
|
|
|
$
|
337
|
|
Certain items associated with acquisitions
1
|
|
13
|
|
|
7
|
|
|
11
|
|
|||
Restructuring charges and asset impairments
2, 3
|
|
15
|
|
|
24
|
|
|
—
|
|
|||
Non-GAAP operating income
|
|
$
|
530
|
|
|
$
|
513
|
|
|
$
|
348
|
|
Non-GAAP operating margin percent (% of net sales)
|
|
23.2
|
%
|
|
21.3
|
%
|
|
18.7
|
%
|
|||
Non-GAAP Display Operating Income
|
|
|
|
|
|
|
||||||
Reported operating income (GAAP basis)
|
|
$
|
25
|
|
|
$
|
147
|
|
|
$
|
267
|
|
Certain items associated with acquisitions
1
|
|
7
|
|
|
7
|
|
|
7
|
|
|||
Non-GAAP operating income
|
|
$
|
32
|
|
|
$
|
154
|
|
|
$
|
274
|
|
Non-GAAP operating margin percent (% of net sales)
|
|
6.8
|
%
|
|
22.0
|
%
|
|
30.5
|
%
|
|||
Non-GAAP EES Operating Income
|
|
|
|
|
|
|
||||||
Reported operating income (loss) (GAAP basis)
|
|
$
|
(668
|
)
|
|
$
|
453
|
|
|
$
|
(466
|
)
|
Certain items associated with acquisitions
1
|
|
25
|
|
|
25
|
|
|
46
|
|
|||
Impairment of goodwill
|
|
421
|
|
|
—
|
|
|
—
|
|
|||
Restructuring charges and asset impairments
2, 3, 4
|
|
38
|
|
|
(34
|
)
|
|
153
|
|
|||
Non-GAAP operating income (loss)
|
|
$
|
(184
|
)
|
|
$
|
444
|
|
|
$
|
(267
|
)
|
Non-GAAP operating margin percent (% of net sales)
|
|
(43.3
|
)%
|
|
22.3
|
%
|
|
(18.0
|
)%
|
1
|
These items are incremental charges attributable to acquisitions, consisting of inventory fair value adjustments on products sold, and amortization of purchased intangible assets.
|
|
|
2
|
Results for the twelve months ended October 28, 2012 included restructuring and asset impairment charges of $43 million related to the restructuring program announced on May 10, 2012 and severance charges of $14 million related to the integration of Varian.
|
|
|
3
|
Results for the twelve months ended October 30, 2011 included favorable adjustments of $36 million related to a restructuring program announced on July 21, 2010, partially offset by asset impairment charges of $26 million primarily related to certain fixed and intangible assets.
|
|
|
4
|
Results for the twelve months ended October 31, 2010 included asset impairment charges of $108 million and restructuring charges of $45 million related to a restructuring program announced on July 21, 2010.
|
Item 7A:
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 8:
|
Financial Statements and Supplementary Data
|
Item 9:
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A:
|
Controls and Procedures
|
Item 9B:
|
Other Information
|
Item 10:
|
Directors, Executive Officers and Corporate Governance
|
Item 11:
|
Executive Compensation
|
Item 12:
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Plan Category
|
(a)
Number of
Securities to be
Issued Upon Exercise
of Outstanding Options,
Warrants and
Rights(1)
|
|
|
(b)
Weighted Average
Exercise Price of
Outstanding Options,
Warrants and
Rights(2)
|
|
(c)
Number of Securities
Available for Future
Issuance Under Equity
Compensation Plans
(Excluding Securities
Reflected in
Column(a))
|
|
||||
|
|
|
|
|
|
|
|
||||
|
(In millions, except prices)
|
|
|||||||||
Equity compensation plans approved by security holders
|
50
|
|
|
|
$
|
10.67
|
|
|
220
|
|
(3)
|
Equity compensation plans not approved by security holders
|
6
|
|
(4)
|
|
$
|
10.19
|
|
|
16
|
|
(5)
|
Total
|
56
|
|
|
|
$
|
10.53
|
|
|
236
|
|
|
(1)
|
Includes only options and restricted stock units (also referred to as “performance shares” under the Applied Materials, Inc. Employee Stock Incentive Plan) outstanding under Applied’s equity compensation plans, as no stock warrants or other rights were outstanding as of October 28, 2012. On March 6, 2012, Applied's stockholders approved the amended and restated Employee Stock Incentive Plan, which included an increase of
125 million
shares of Applied common stock available for issuance under the plan and other amendments to the plan.
|
(2)
|
The weighted average exercise price calculation does not take into account any restricted stock units as they have a de minimis purchase price.
|
(3)
|
Includes 30 million shares of Applied common stock available for future issuance under the Applied Materials, Inc. Employees’ Stock Purchase Plan. Of these 30 million shares, 2 million are subject to purchase during the purchase period in effect as of October 28, 2012.
|
(4)
|
Includes options to purchase 4 million shares of Applied common stock assumed through various mergers and acquisitions, after giving effect to the applicable exchange ratios. The assumed options had a weighted average exercise price of $6.66 per share. No further shares are available for issuance under the plans under which these assumed awards were granted.
|
(5)
|
Includes 16 million shares of Applied common stock available for future issuance under the Applied Materials, Inc. Stock Purchase Plan for Offshore Employees. Of these 16 million shares, 2 million are subject to purchase during the purchase period in effect as of October 28, 2012.
|
Item 13:
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14:
|
Principal Accounting Fees and Services
|
Item 15:
|
Exhibits and Financial Statements
|
|
|
Page
Number
|
(1)
|
Financial Statements:
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
(2)
|
Exhibits:
|
|
|
|
|
|
||
|
|
|
/
S
/ KPMG LLP
|
KPMG LLP
|
/s/ KPMG LLP
|
KPMG LLP
|
Fiscal Year
|
2012
|
|
2011
|
|
2010
|
||||||
|
(In millions, except per share amounts)
|
||||||||||
Net sales
|
$
|
8,719
|
|
|
$
|
10,517
|
|
|
$
|
9,549
|
|
Cost of products sold
|
5,406
|
|
|
6,157
|
|
|
5,834
|
|
|||
Gross margin
|
3,313
|
|
|
4,360
|
|
|
3,715
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research, development and engineering
|
1,237
|
|
|
1,118
|
|
|
1,143
|
|
|||
Selling, general and administrative
|
1,076
|
|
|
901
|
|
|
942
|
|
|||
Impairment of goodwill (Note 9)
|
421
|
|
|
—
|
|
|
—
|
|
|||
Restructuring charges and asset impairments (Note 11)
|
168
|
|
|
(30
|
)
|
|
246
|
|
|||
Gain on sale of facilities, net (Note 7)
|
—
|
|
|
(27
|
)
|
|
—
|
|
|||
Total operating expenses
|
2,902
|
|
|
1,962
|
|
|
2,331
|
|
|||
Income from operations
|
411
|
|
|
2,398
|
|
|
1,384
|
|
|||
Impairments of strategic investments (Notes 3 and 4)
|
17
|
|
|
3
|
|
|
13
|
|
|||
Interest and other expenses (Note 10)
|
95
|
|
|
59
|
|
|
21
|
|
|||
Interest and other income, net
|
17
|
|
|
42
|
|
|
37
|
|
|||
Income before income taxes
|
316
|
|
|
2,378
|
|
|
1,387
|
|
|||
Provision for income taxes
|
207
|
|
|
452
|
|
|
449
|
|
|||
Net income
|
$
|
109
|
|
|
$
|
1,926
|
|
|
$
|
938
|
|
Earnings per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.09
|
|
|
$
|
1.46
|
|
|
$
|
0.70
|
|
Diluted
|
$
|
0.09
|
|
|
$
|
1.45
|
|
|
$
|
0.70
|
|
Weighted average number of shares:
|
|
|
|
|
|
||||||
Basic
|
1,266
|
|
|
1,319
|
|
|
1,340
|
|
|||
Diluted
|
1,277
|
|
|
1,330
|
|
|
1,349
|
|
Fiscal Year
|
2012
|
|
2011
|
|
2010
|
||||||
|
(In millions)
|
||||||||||
Net income
|
$
|
109
|
|
|
$
|
1,926
|
|
|
$
|
938
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
||||||
Change in unrealized net gain (loss) on investments
|
(1
|
)
|
|
(8
|
)
|
|
4
|
|
|||
Change in unrealized net gain (loss) on derivative investments
|
1
|
|
|
(4
|
)
|
|
4
|
|
|||
Change in defined benefit plan liability (Notes 12 and 13)
|
(65
|
)
|
|
14
|
|
|
(6
|
)
|
|||
Change in cumulative translation adjustments
|
(2
|
)
|
|
2
|
|
|
2
|
|
|||
Other comprehensive income (loss), net of tax
|
(67
|
)
|
|
4
|
|
|
4
|
|
|||
Comprehensive income
|
$
|
42
|
|
|
$
|
1,930
|
|
|
$
|
942
|
|
|
October 28,
2012 |
|
October 30,
2011 |
||||
|
|
|
|
||||
|
(In millions, except per share amounts)
|
||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents (Notes 3 and 4)
|
$
|
1,392
|
|
|
$
|
5,960
|
|
Short-term investments (Notes 3 and 4)
|
545
|
|
|
283
|
|
||
Accounts receivable, net (Note 6)
|
1,220
|
|
|
1,532
|
|
||
Inventories (Note 7)
|
1,272
|
|
|
1,701
|
|
||
Deferred income taxes, net (Note 14)
|
369
|
|
|
580
|
|
||
Other current assets
|
304
|
|
|
299
|
|
||
Total current assets
|
5,102
|
|
|
10,355
|
|
||
Long-term investments (Notes 3 and 4)
|
1,055
|
|
|
931
|
|
||
Property, plant and equipment, net (Note 7)
|
910
|
|
|
866
|
|
||
Goodwill (Notes 8 and 9)
|
3,518
|
|
|
1,335
|
|
||
Purchased technology and other intangible assets, net (Notes 8 and 9)
|
1,355
|
|
|
211
|
|
||
Deferred income taxes and other assets (Note 14)
|
162
|
|
|
163
|
|
||
Total assets
|
$
|
12,102
|
|
|
$
|
13,861
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses (Note 7)
|
$
|
1,436
|
|
|
$
|
1,520
|
|
Customer deposits and deferred revenue (Note 7)
|
755
|
|
|
1,116
|
|
||
Income taxes payable (Note 14)
|
74
|
|
|
158
|
|
||
Total current liabilities
|
2,265
|
|
|
2,794
|
|
||
Long-term debt (Note 10)
|
1,946
|
|
|
1,947
|
|
||
Deferred income taxes and income taxes payable (Note 14)
|
341
|
|
|
104
|
|
||
Employee benefits and other liabilities (Note 13)
|
315
|
|
|
216
|
|
||
Total liabilities
|
4,867
|
|
|
5,061
|
|
||
Commitments and contingencies (Note 15)
|
|
|
|
||||
Stockholders’ equity (Note 12):
|
|
|
|
||||
Preferred stock: $.01 par value per share; 1 shares authorized; no shares issued
|
—
|
|
|
—
|
|
||
Common stock: $.01 par value per share; 2,500 shares authorized; 1,197 and 1,306 shares outstanding at 2012 and 2011, respectively
|
12
|
|
|
13
|
|
||
Additional paid-in capital
|
5,863
|
|
|
5,616
|
|
||
Retained earnings
|
12,700
|
|
|
13,029
|
|
||
Treasury stock: 699 and 573 shares at 2012 and 2011, respectively, net
|
(11,279
|
)
|
|
(9,864
|
)
|
||
Accumulated other comprehensive income (loss)
|
(61
|
)
|
|
6
|
|
||
Total stockholders’ equity
|
7,235
|
|
|
8,800
|
|
||
Total liabilities and stockholders’ equity
|
$
|
12,102
|
|
|
$
|
13,861
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Treasury Stock
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
|
||||||||||||||||||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
Shares
|
|
Amount
|
|
|
||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||
Balance at October 25, 2009
|
1,341
|
|
|
$
|
13
|
|
|
$
|
5,195
|
|
|
$
|
10,934
|
|
|
508
|
|
|
$
|
(9,046
|
)
|
|
$
|
(2
|
)
|
|
$
|
7,094
|
|
||||||||||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
938
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
938
|
|
||||||||||||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
||||||||||||||||||||||||||||
Dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(361
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(361
|
)
|
||||||||||||||||||||||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
126
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
126
|
|
||||||||||||||||||||||||||||
Issuance under stock plans, net of a tax detriment of $28 and other
|
16
|
|
|
—
|
|
|
85
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85
|
|
||||||||||||||||||||||||||||
Common stock repurchases
|
(29
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
(350
|
)
|
|
—
|
|
|
(350
|
)
|
||||||||||||||||||||||||||||
Balance at October 31, 2010
|
1,328
|
|
|
$
|
13
|
|
|
$
|
5,406
|
|
|
$
|
11,511
|
|
|
537
|
|
|
$
|
(9,396
|
)
|
|
$
|
2
|
|
|
$
|
7,536
|
|
||||||||||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,926
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,926
|
|
||||||||||||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
||||||||||||||||||||||||||||
Dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(408
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(408
|
)
|
||||||||||||||||||||||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
146
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
146
|
|
||||||||||||||||||||||||||||
Issuance under stock plans, net of a tax detriment of $5 and other
|
14
|
|
|
—
|
|
|
64
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
||||||||||||||||||||||||||||
Common stock repurchases
|
(36
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
(468
|
)
|
|
—
|
|
|
(468
|
)
|
||||||||||||||||||||||||||||
Balance at October 30, 2011
|
1,306
|
|
|
$
|
13
|
|
|
$
|
5,616
|
|
|
$
|
13,029
|
|
|
573
|
|
|
$
|
(9,864
|
)
|
|
$
|
6
|
|
|
$
|
8,800
|
|
||||||||||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
109
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
109
|
|
||||||||||||||||||||||||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(67
|
)
|
|
(67
|
)
|
||||||||||||||||||||||||||||
Dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(438
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(438
|
)
|
||||||||||||||||||||||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
182
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
182
|
|
||||||||||||||||||||||||||||
Stock options assumed in connection with acquisition
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||||||||||||||||||||||||||
Issuance under stock plans, net of a tax detriment of $12 and other
|
17
|
|
|
—
|
|
|
54
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54
|
|
||||||||||||||||||||||||||||
Common stock repurchases
|
(126
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
126
|
|
|
(1,415
|
)
|
|
—
|
|
|
(1,416
|
)
|
||||||||||||||||||||||||||||
Balance at October 28, 2012
|
1,197
|
|
|
$
|
12
|
|
|
$
|
5,863
|
|
|
$
|
12,700
|
|
|
699
|
|
|
$
|
(11,279
|
)
|
|
$
|
(61
|
)
|
|
$
|
7,235
|
|
Fiscal Year
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
109
|
|
|
$
|
1,926
|
|
|
$
|
938
|
|
Adjustments required to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
422
|
|
|
246
|
|
|
305
|
|
|||
Net loss (gain) on dispositions and fixed asset retirements
|
7
|
|
|
(13
|
)
|
|
20
|
|
|||
Provision for bad debts
|
14
|
|
|
5
|
|
|
17
|
|
|||
Impairment of goodwill
|
421
|
|
|
—
|
|
|
—
|
|
|||
Restructuring charges and asset impairments
|
168
|
|
|
(30
|
)
|
|
246
|
|
|||
Deferred income taxes
|
161
|
|
|
122
|
|
|
(186
|
)
|
|||
Net recognized loss on investments
|
23
|
|
|
19
|
|
|
20
|
|
|||
Impairments of strategic investments
|
17
|
|
|
3
|
|
|
13
|
|
|||
Share-based compensation
|
182
|
|
|
146
|
|
|
126
|
|
|||
Changes in operating assets and liabilities, net of amounts acquired:
|
|
|
|
|
|
||||||
Accounts receivable
|
493
|
|
|
292
|
|
|
(767
|
)
|
|||
Inventories
|
679
|
|
|
(163
|
)
|
|
145
|
|
|||
Other current assets
|
37
|
|
|
(23
|
)
|
|
179
|
|
|||
Other assets
|
9
|
|
|
(38
|
)
|
|
(7
|
)
|
|||
Accounts payable and accrued expenses
|
(435
|
)
|
|
(221
|
)
|
|
469
|
|
|||
Customer deposits and deferred revenue
|
(412
|
)
|
|
267
|
|
|
(23
|
)
|
|||
Income taxes payable
|
(34
|
)
|
|
(89
|
)
|
|
262
|
|
|||
Employee benefits and other liabilities
|
(10
|
)
|
|
(20
|
)
|
|
(34
|
)
|
|||
Cash provided by operating activities
|
1,851
|
|
|
2,429
|
|
|
1,723
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(162
|
)
|
|
(209
|
)
|
|
(169
|
)
|
|||
Cash paid for acquisitions, net of cash acquired
|
(4,190
|
)
|
|
—
|
|
|
(323
|
)
|
|||
Proceeds from sale of facilities and dispositions
|
—
|
|
|
130
|
|
|
—
|
|
|||
Proceeds from sales and maturities of investments
|
1,019
|
|
|
1,923
|
|
|
1,408
|
|
|||
Purchases of investments
|
(1,327
|
)
|
|
(1,137
|
)
|
|
(1,778
|
)
|
|||
Cash provided by (used in) investing activities
|
(4,660
|
)
|
|
707
|
|
|
(862
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Debt borrowings (repayments), net
|
(1
|
)
|
|
1,744
|
|
|
(6
|
)
|
|||
Payments of debt issuance costs
|
—
|
|
|
(14
|
)
|
|
—
|
|
|||
Proceeds from common stock issuances
|
97
|
|
|
95
|
|
|
129
|
|
|||
Common stock repurchases
|
(1,416
|
)
|
|
(468
|
)
|
|
(350
|
)
|
|||
Payments of dividends to stockholders
|
(434
|
)
|
|
(397
|
)
|
|
(349
|
)
|
|||
Cash provided by (used in) financing activities
|
(1,754
|
)
|
|
960
|
|
|
(576
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(5
|
)
|
|
6
|
|
|
(3
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
(4,568
|
)
|
|
4,102
|
|
|
282
|
|
|||
Cash and cash equivalents — beginning of year
|
5,960
|
|
|
1,858
|
|
|
1,576
|
|
|||
Cash and cash equivalents — end of year
|
$
|
1,392
|
|
|
$
|
5,960
|
|
|
$
|
1,858
|
|
Supplemental cash flow information:
|
|
|
|
|
|
||||||
Cash payments for income taxes
|
$
|
243
|
|
|
$
|
761
|
|
|
$
|
388
|
|
Cash refunds from income taxes
|
$
|
79
|
|
|
$
|
289
|
|
|
$
|
201
|
|
Cash payments for interest
|
$
|
94
|
|
|
$
|
14
|
|
|
$
|
14
|
|
Note 1
|
Summary of Significant Accounting Policies
|
Note 2
|
Earnings Per Share
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
|
|
|
|
||||||
|
(In millions, except per share amounts)
|
||||||||||
Numerator:
|
|
|
|
|
|
||||||
Net income
|
$
|
109
|
|
|
$
|
1,926
|
|
|
$
|
938
|
|
Denominator:
|
|
|
|
|
|
||||||
Weighted average common shares outstanding
|
1,266
|
|
|
1,319
|
|
|
1,340
|
|
|||
Effect of dilutive stock options, restricted stock units and employee stock purchase plan shares
|
11
|
|
|
11
|
|
|
9
|
|
|||
Denominator for diluted earnings per share
|
1,277
|
|
|
1,330
|
|
|
1,349
|
|
|||
Basic earnings per share
|
$
|
0.09
|
|
|
$
|
1.46
|
|
|
$
|
0.70
|
|
Diluted earnings per share
|
$
|
0.09
|
|
|
$
|
1.45
|
|
|
$
|
0.70
|
|
Potentially dilutive securities
|
9
|
|
|
16
|
|
|
34
|
|
Note 3
|
Cash, Cash Equivalents and Investments
|
October 28, 2012
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Cash
|
$
|
876
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
876
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
483
|
|
|
—
|
|
|
—
|
|
|
483
|
|
||||
Municipal securities
|
33
|
|
|
—
|
|
|
—
|
|
|
33
|
|
||||
Total Cash equivalents
|
516
|
|
|
—
|
|
|
—
|
|
|
516
|
|
||||
Total Cash and Cash equivalents
|
$
|
1,392
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,392
|
|
Short-term and long-term investments:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and agency securities
|
$
|
373
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
374
|
|
Non-U.S. government securities*
|
29
|
|
|
—
|
|
|
—
|
|
|
29
|
|
||||
Municipal securities
|
396
|
|
|
2
|
|
|
—
|
|
|
398
|
|
||||
Commercial paper, corporate bonds and medium-term notes
|
381
|
|
|
3
|
|
|
—
|
|
|
384
|
|
||||
Asset-backed and mortgage-backed securities
|
294
|
|
|
4
|
|
|
—
|
|
|
298
|
|
||||
Total fixed income securities
|
1,473
|
|
|
10
|
|
|
—
|
|
|
1,483
|
|
||||
Publicly traded equity securities
|
32
|
|
|
15
|
|
|
—
|
|
|
47
|
|
||||
Equity investments in privately-held companies
|
70
|
|
|
—
|
|
|
—
|
|
|
70
|
|
||||
Total short-term and long-term investments
|
$
|
1,575
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
1,600
|
|
Total Cash, Cash equivalents and Investments
|
$
|
2,967
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
2,992
|
|
October 30, 2011
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Cash
|
$
|
297
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
297
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
5,663
|
|
|
—
|
|
|
—
|
|
|
5,663
|
|
||||
Total Cash equivalents
|
5,663
|
|
|
—
|
|
|
—
|
|
|
5,663
|
|
||||
Total Cash and Cash equivalents
|
$
|
5,960
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,960
|
|
Short-term and long-term investments:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and agency securities
|
$
|
184
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
185
|
|
Non-U.S. government securities
|
40
|
|
|
—
|
|
|
—
|
|
|
40
|
|
||||
Municipal securities
|
371
|
|
|
2
|
|
|
—
|
|
|
373
|
|
||||
Commercial paper, corporate bonds and medium-term notes
|
216
|
|
|
3
|
|
|
1
|
|
|
218
|
|
||||
Asset-backed and mortgage-backed securities
|
307
|
|
|
3
|
|
|
1
|
|
|
309
|
|
||||
Total fixed income securities
|
1,118
|
|
|
9
|
|
|
2
|
|
|
1,125
|
|
||||
Publicly traded equity securities
|
8
|
|
|
19
|
|
|
—
|
|
|
27
|
|
||||
Equity investments in privately-held companies
|
62
|
|
|
—
|
|
|
—
|
|
|
62
|
|
||||
Total short-term and long-term investments
|
$
|
1,188
|
|
|
$
|
28
|
|
|
$
|
2
|
|
|
$
|
1,214
|
|
Total Cash, Cash equivalents and Investments
|
$
|
7,148
|
|
|
$
|
28
|
|
|
$
|
2
|
|
|
$
|
7,174
|
|
|
Cost
|
|
Estimated
Fair Value
|
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Due in one year or less
|
$
|
515
|
|
|
$
|
516
|
|
Due after one through five years
|
663
|
|
|
668
|
|
||
Due after five years
|
1
|
|
|
2
|
|
||
No single maturity date**
|
396
|
|
|
414
|
|
||
|
$
|
1,575
|
|
|
$
|
1,600
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Gross realized gains
|
$
|
3
|
|
|
$
|
20
|
|
|
$
|
6
|
|
Gross realized losses
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
2
|
|
|
In Loss Position for
Less Than 12 Months
|
|
Total
|
||||||||||||
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Commercial paper, corporate bonds and medium-term notes
|
$
|
32
|
|
|
$
|
1
|
|
|
$
|
32
|
|
|
$
|
1
|
|
Asset-backed and mortgaged-backed securities
|
77
|
|
|
1
|
|
|
77
|
|
|
1
|
|
||||
Total
|
$
|
109
|
|
|
$
|
2
|
|
|
$
|
109
|
|
|
$
|
2
|
|
Note 4
|
Fair Value Measurements
|
•
|
Level 1 — Quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
|
•
|
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
|
October 28, 2012
|
|
October 30, 2011
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Money market funds
|
$
|
483
|
|
|
$
|
—
|
|
|
$
|
483
|
|
|
$
|
5,663
|
|
|
$
|
—
|
|
|
$
|
5,663
|
|
U.S. Treasury and agency securities
|
128
|
|
|
246
|
|
|
374
|
|
|
109
|
|
|
76
|
|
|
185
|
|
||||||
Non-U.S. government securities
|
—
|
|
|
29
|
|
|
29
|
|
|
—
|
|
|
40
|
|
|
40
|
|
||||||
Municipal securities
|
—
|
|
|
431
|
|
|
431
|
|
|
—
|
|
|
373
|
|
|
373
|
|
||||||
Commercial paper, corporate bonds and medium-term notes
|
—
|
|
|
384
|
|
|
384
|
|
|
—
|
|
|
218
|
|
|
218
|
|
||||||
Asset-backed and mortgage-backed securities
|
—
|
|
|
298
|
|
|
298
|
|
|
—
|
|
|
309
|
|
|
309
|
|
||||||
Publicly traded equity securities
|
47
|
|
|
—
|
|
|
47
|
|
|
27
|
|
|
—
|
|
|
27
|
|
||||||
Total
|
$
|
658
|
|
|
$
|
1,388
|
|
|
$
|
2,046
|
|
|
$
|
5,799
|
|
|
$
|
1,016
|
|
|
$
|
6,815
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deferred compensation
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Note 5
|
Derivative Instruments and Hedging Activities
|
Note 6
|
Accounts Receivable, Net
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Discounted letters of credit
|
$
|
—
|
|
|
$
|
211
|
|
|
$
|
230
|
|
Factored accounts receivable and discounted promissory notes
|
93
|
|
|
80
|
|
|
157
|
|
|||
Total
|
$
|
93
|
|
|
$
|
291
|
|
|
$
|
387
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
(In millions)
|
||||||||||
Beginning balance
|
$
|
73
|
|
|
$
|
74
|
|
|
$
|
67
|
|
Provision
|
14
|
|
|
5
|
|
|
17
|
|
|||
Recoveries
|
—
|
|
|
(6
|
)
|
|
(10
|
)
|
|||
Ending balance
|
$
|
87
|
|
|
$
|
73
|
|
|
$
|
74
|
|
Note 7
|
Balance Sheet Detail
|
|
October 28,
2012 |
|
October 30,
2011 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Inventories
|
|
|
|
||||
Customer service spares
|
$
|
312
|
|
|
$
|
328
|
|
Raw materials
|
331
|
|
|
407
|
|
||
Work-in-process
|
234
|
|
|
336
|
|
||
Finished goods
|
395
|
|
|
630
|
|
||
|
$
|
1,272
|
|
|
$
|
1,701
|
|
|
Useful Life
|
|
October 28,
2012 |
|
October 30,
2011 |
||||
|
|
|
|
|
|
||||
|
(In years)
|
|
(In millions)
|
||||||
Property, Plant and Equipment, Net
|
|
|
|
||||||
Land and improvements
|
|
|
$
|
169
|
|
|
$
|
163
|
|
Buildings and improvements
|
3-30
|
|
1,196
|
|
|
1,155
|
|
||
Demonstration and manufacturing equipment
|
3-5
|
|
760
|
|
|
686
|
|
||
Furniture, fixtures and other equipment
|
3-15
|
|
734
|
|
|
722
|
|
||
Construction in progress
|
|
|
58
|
|
|
12
|
|
||
Gross property, plant and equipment
|
|
|
2,917
|
|
|
2,738
|
|
||
Accumulated depreciation
|
|
|
(2,007
|
)
|
|
(1,872
|
)
|
||
|
|
|
$
|
910
|
|
|
$
|
866
|
|
|
October 28,
2012 |
|
October 30,
2011 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Accounts Payable and Accrued Expenses
|
|
|
|
||||
Accounts payable
|
$
|
396
|
|
|
$
|
484
|
|
Compensation and employee benefits
|
426
|
|
|
455
|
|
||
Warranty
|
119
|
|
|
168
|
|
||
Dividends payable
|
108
|
|
|
104
|
|
||
Other accrued taxes
|
18
|
|
|
81
|
|
||
Interest payable
|
30
|
|
|
31
|
|
||
Restructuring reserve
|
133
|
|
|
11
|
|
||
Other
|
206
|
|
|
186
|
|
||
|
$
|
1,436
|
|
|
$
|
1,520
|
|
|
October 28,
2012 |
|
October 30,
2011 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Customer Deposits and Deferred Revenue
|
|
|
|
||||
Customer deposits
|
$
|
143
|
|
|
$
|
249
|
|
Deferred revenue
|
612
|
|
|
867
|
|
||
|
$
|
755
|
|
|
$
|
1,116
|
|
Note 8
|
Business Combinations
|
|
Acquisition
2012
|
||
Estimated Fair Values
|
(In millions)
|
||
Cash and cash equivalents
|
$
|
632
|
|
Short-term investments
|
56
|
|
|
Accounts receivable, net
|
194
|
|
|
Inventories
|
250
|
|
|
Deferred income taxes and other current assets
|
66
|
|
|
Long-term investments
|
62
|
|
|
Property and equipment, net
|
104
|
|
|
Goodwill
|
2,604
|
|
|
Purchased intangible assets
|
1,365
|
|
|
Other assets
|
10
|
|
|
Total assets acquired
|
5,343
|
|
|
Accounts payable and accrued expenses
|
(134
|
)
|
|
Customer deposits and deferred revenue
|
(52
|
)
|
|
Income taxes payable
|
(60
|
)
|
|
Deferred income taxes
|
(211
|
)
|
|
Other liabilities
|
(25
|
)
|
|
Total liabilities assumed
|
(482
|
)
|
|
Purchase price allocated
|
$
|
4,861
|
|
|
Useful
Life
|
|
Purchased
Intangible Assets
2012
|
||
|
(In years)
|
|
(In millions)
|
||
Developed technology
|
1 - 7
|
|
$
|
987
|
|
Customer relationships
|
15
|
|
150
|
|
|
In-process technology
|
|
|
142
|
|
|
Patents and trademarks
|
10
|
|
69
|
|
|
Backlog
|
1
|
|
7
|
|
|
Covenant not to compete
|
2
|
|
10
|
|
|
Total purchased intangible assets
|
|
|
$
|
1,365
|
|
|
2012
|
|
2011
|
||||
|
(In millions, except per share amounts)
|
||||||
Net sales
|
$
|
8,719
|
|
|
$
|
11,734
|
|
Net income
|
$
|
167
|
|
|
$
|
1,862
|
|
Basic earnings per share
|
$
|
0.13
|
|
|
$
|
1.41
|
|
Diluted earnings per share
|
$
|
0.13
|
|
|
$
|
1.40
|
|
Estimated Fair Values
|
Acquisitions
2010
|
||
|
(In millions)
|
||
Fair value of net tangible assets acquired
|
$
|
117
|
|
Goodwill
|
165
|
|
|
Purchased intangible assets
|
93
|
|
|
Purchase price allocated
|
$
|
375
|
|
Note 9
|
Goodwill, Purchased Technology and Other Intangible Assets
|
|
October 28,
2012 |
|
October 30,
2011 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Purchased technology, net
|
$
|
945
|
|
|
$
|
127
|
|
Intangible assets - finite-lived, net
|
268
|
|
|
84
|
|
||
Intangible assets - indefinite-lived
|
142
|
|
|
—
|
|
||
Total
|
$
|
1,355
|
|
|
$
|
211
|
|
|
October 28, 2012
|
|
October 30, 2011
|
||||||||||||||||||||
|
Goodwill
|
|
Other
Intangible
Assets
|
|
Total
|
|
Goodwill
|
|
Other
Intangible
Assets
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Silicon Systems Group
|
$
|
2,151
|
|
|
$
|
142
|
|
|
$
|
2,293
|
|
|
$
|
381
|
|
|
$
|
—
|
|
|
$
|
381
|
|
Applied Global Services
|
1,027
|
|
|
—
|
|
|
1,027
|
|
|
193
|
|
|
—
|
|
|
193
|
|
||||||
Display
|
116
|
|
|
—
|
|
|
116
|
|
|
116
|
|
|
—
|
|
|
116
|
|
||||||
Energy and Environmental Solutions
|
224
|
|
|
—
|
|
|
224
|
|
|
645
|
|
|
—
|
|
|
645
|
|
||||||
Carrying amount
|
$
|
3,518
|
|
|
$
|
142
|
|
|
$
|
3,660
|
|
|
$
|
1,335
|
|
|
$
|
—
|
|
|
$
|
1,335
|
|
|
October 28, 2012
|
|
October 30, 2011
|
||||||||||||||||||||
|
Purchased
Technology
|
|
Other
Intangible
Assets
|
|
Total
|
|
Purchased
Technology
|
|
Other
Intangible
Assets
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Gross carrying amount:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Silicon Systems Group
|
$
|
1,300
|
|
|
$
|
252
|
|
|
$
|
1,552
|
|
|
$
|
310
|
|
|
$
|
20
|
|
|
$
|
330
|
|
Applied Global Services
|
28
|
|
|
44
|
|
|
72
|
|
|
28
|
|
|
40
|
|
|
68
|
|
||||||
Display
|
110
|
|
|
33
|
|
|
143
|
|
|
110
|
|
|
33
|
|
|
143
|
|
||||||
Energy and Environmental Solutions
|
105
|
|
|
232
|
|
|
337
|
|
|
105
|
|
|
232
|
|
|
337
|
|
||||||
Gross carrying amount
|
$
|
1,543
|
|
|
$
|
561
|
|
|
$
|
2,104
|
|
|
$
|
553
|
|
|
$
|
325
|
|
|
$
|
878
|
|
Accumulated amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Silicon Systems Group
|
$
|
(411
|
)
|
|
$
|
(36
|
)
|
|
$
|
(447
|
)
|
|
$
|
(256
|
)
|
|
$
|
(8
|
)
|
|
$
|
(264
|
)
|
Applied Global Services
|
(22
|
)
|
|
(39
|
)
|
|
(61
|
)
|
|
(20
|
)
|
|
(31
|
)
|
|
(51
|
)
|
||||||
Display
|
(106
|
)
|
|
(27
|
)
|
|
(133
|
)
|
|
(102
|
)
|
|
(25
|
)
|
|
(127
|
)
|
||||||
Energy and Environmental Solutions
|
(59
|
)
|
|
(191
|
)
|
|
(250
|
)
|
|
(48
|
)
|
|
(177
|
)
|
|
(225
|
)
|
||||||
Accumulated amortization
|
$
|
(598
|
)
|
|
$
|
(293
|
)
|
|
$
|
(891
|
)
|
|
$
|
(426
|
)
|
|
$
|
(241
|
)
|
|
$
|
(667
|
)
|
Carrying amount
|
$
|
945
|
|
|
$
|
268
|
|
|
$
|
1,213
|
|
|
$
|
127
|
|
|
$
|
84
|
|
|
$
|
211
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Silicon Systems Group
|
$
|
183
|
|
|
$
|
13
|
|
|
$
|
21
|
|
Applied Global Services
|
9
|
|
|
7
|
|
|
9
|
|
|||
Display
|
7
|
|
|
8
|
|
|
8
|
|
|||
Energy and Environmental Solutions
|
25
|
|
|
24
|
|
|
44
|
|
|||
Total
|
$
|
224
|
|
|
$
|
52
|
|
|
$
|
82
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Cost of products sold
|
$
|
185
|
|
|
$
|
36
|
|
|
$
|
63
|
|
Research, development and engineering
|
1
|
|
|
—
|
|
|
1
|
|
|||
Selling, general and administrative
|
38
|
|
|
16
|
|
|
18
|
|
|||
Total
|
$
|
224
|
|
|
$
|
52
|
|
|
$
|
82
|
|
|
Amortization
Expense
|
||
|
(In millions)
|
||
2013
|
214
|
|
|
2014
|
198
|
|
|
2015
|
184
|
|
|
2016
|
175
|
|
|
2017
|
171
|
|
|
Thereafter
|
271
|
|
|
Total
|
$
|
1,213
|
|
Note 10
|
Borrowing Facilities and Long-Term Debt
|
|
Principal Amount
|
|
|
|
|
||||||
|
October 28,
2012 |
|
October 30,
2011 |
|
Effective
Interest Rate
|
|
Interest
Pay Dates
|
||||
|
(In millions)
|
|
|
|
|
||||||
2.650% Senior Notes Due 2016
|
$
|
400
|
|
|
$
|
400
|
|
|
2.666%
|
|
June 15, December 15
|
7.125% Senior Notes Due 2017
|
200
|
|
|
200
|
|
|
7.190%
|
|
April 15, October 15
|
||
4.300% Senior Notes Due 2021
|
750
|
|
|
750
|
|
|
4.326%
|
|
June 15, December 15
|
||
5.850% Senior Notes Due 2041
|
600
|
|
|
600
|
|
|
5.879%
|
|
June 15, December 15
|
||
Other debt
|
—
|
|
|
1
|
|
|
|
|
|
||
|
1,950
|
|
|
1,951
|
|
|
|
|
|
||
Total unamortized discount
|
(4
|
)
|
|
(4
|
)
|
|
|
|
|
||
Total long-term debt
|
$
|
1,946
|
|
|
$
|
1,947
|
|
|
|
|
|
Note 11
|
Restructuring Charges and Asset Impairments
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
2012 Global Restructuring Plan
|
|
|
|
|
|
||||||
Severance and other employee-related costs
|
$
|
106
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2012 EES Restructuring Plan
|
|
|
|
|
|
||||||
Severance and other employee-related costs
|
27
|
|
|
—
|
|
|
—
|
|
|||
Contract cancellation and other costs
|
1
|
|
|
—
|
|
|
—
|
|
|||
Asset impairments
|
20
|
|
|
—
|
|
|
—
|
|
|||
2010 EES Restructuring Plan
|
|
|
|
|
|
||||||
Severance and other employee-related costs
|
—
|
|
|
(36
|
)
|
|
45
|
|
|||
Asset impairments
|
—
|
|
|
—
|
|
|
108
|
|
|||
2010 Global Restructuring Plan
|
|
|
|
|
|
||||||
Severance and other employee-related costs
|
—
|
|
|
(19
|
)
|
|
84
|
|
|||
Others
|
|
|
|
|
|
||||||
Severance and other employee-related costs
|
14
|
|
|
(5
|
)
|
|
—
|
|
|||
Non-Restructuring Related
|
|
|
|
|
|
||||||
Asset impairments
|
—
|
|
|
30
|
|
|
9
|
|
|||
|
$
|
168
|
|
|
$
|
(30
|
)
|
|
$
|
246
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Silicon Systems Group
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Applied Global Services
|
15
|
|
|
24
|
|
|
—
|
|
|||
Energy and Environmental Solutions
|
38
|
|
|
(33
|
)
|
|
153
|
|
|||
Corporate Unallocated
|
111
|
|
|
(21
|
)
|
|
93
|
|
|||
Total
|
$
|
168
|
|
|
$
|
(30
|
)
|
|
$
|
246
|
|
|
2012 Global Restructuring Plan
|
|
2012 EES Restructuring Plan
|
|
2010 EES Restructuring Plan
|
|
2010 Global Restructuring Plan
|
|
Others
|
|
|
||||||||||||||||||||
|
Severance and Other Employee-Related Costs
|
|
Severance and Other Employee-Related Costs
|
|
Contract Cancellation and Other Costs
|
|
Severance and Other Employee-Related Costs
|
|
Severance and Other Employee-Related Costs
|
|
Severance and Other Employee-Related Costs
|
|
Contract Cancellation and Other Costs
|
|
Total
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Balance, October 25, 2009
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26
|
|
|
$
|
5
|
|
|
$
|
31
|
|
Provision for restructuring reserves
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|
104
|
|
|
—
|
|
|
—
|
|
|
149
|
|
||||||||
Consumption of reserves
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(33
|
)
|
|
(20
|
)
|
|
—
|
|
|
(56
|
)
|
||||||||
Adjustment of restructuring reserves
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
||||||||
Balance, October 31, 2010
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
42
|
|
|
$
|
51
|
|
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
104
|
|
Consumption of reserves
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(27
|
)
|
|
(1
|
)
|
|
—
|
|
|
(33
|
)
|
||||||||
Adjustment of restructuring reserves
|
—
|
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
|
(19
|
)
|
|
(5
|
)
|
|
—
|
|
|
(60
|
)
|
||||||||
Balance, October 30, 2011
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
11
|
|
Provision for restructuring reserves
|
106
|
|
|
27
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
148
|
|
||||||||
Consumption of reserves
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(1
|
)
|
|
(5
|
)
|
|
(9
|
)
|
|
—
|
|
|
(26
|
)
|
||||||||
Balance, October 28, 2012
|
$
|
106
|
|
|
16
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
133
|
|
Note 12
|
Stockholders’ Equity, Comprehensive Income and Share-Based Compensation
|
|
October 28,
2012 |
|
October 30,
2011 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Unrealized gain (loss) on investments, net
|
$
|
16
|
|
|
$
|
17
|
|
Unrealized gain (loss) on derivative instruments qualifying as cash flow hedges
|
1
|
|
|
—
|
|
||
Pension liability
|
(90
|
)
|
|
(25
|
)
|
||
Cumulative translation adjustments
|
12
|
|
|
14
|
|
||
|
$
|
(61
|
)
|
|
$
|
6
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
|
|
|
|
||||||
|
(In millions, except per share amounts)
|
||||||||||
Shares of common stock repurchased
|
126
|
|
|
36
|
|
|
29
|
|
|||
Cost of stock repurchased
|
$
|
1,416
|
|
|
$
|
468
|
|
|
$
|
350
|
|
Average price paid per share
|
$
|
11.22
|
|
|
$
|
12.88
|
|
|
$
|
12.15
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Share-based compensation
|
$
|
182
|
|
|
$
|
146
|
|
|
$
|
126
|
|
Tax benefit recognized
|
$
|
52
|
|
|
$
|
42
|
|
|
$
|
38
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Cost of products sold
|
$
|
54
|
|
|
$
|
48
|
|
|
$
|
32
|
|
Research, development, and engineering
|
54
|
|
|
46
|
|
|
43
|
|
|||
Selling, general and administrative
|
74
|
|
|
52
|
|
|
51
|
|
|||
Total
|
$
|
182
|
|
|
$
|
146
|
|
|
$
|
126
|
|
|
2012
|
|
Stock Options:
|
|
|
Dividend yield
|
2.6
|
%
|
Expected volatility
|
38.7
|
%
|
Risk-free interest rate
|
0.52
|
%
|
Expected life (in years)
|
3.3
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
(In millions)
|
||||||||||
Aggregate intrinsic value of outstanding stock options
|
$
|
43
|
|
|
$
|
58
|
|
|
$
|
73
|
|
Total intrinsic value of stock options exercised
|
$
|
21
|
|
|
$
|
23
|
|
|
$
|
15
|
|
Total fair value of stock options vested
|
$
|
41
|
|
|
$
|
17
|
|
|
$
|
21
|
|
Cash received from stock option exercises
|
$
|
33
|
|
|
$
|
41
|
|
|
$
|
78
|
|
Actual tax benefit realized from options exercised
|
$
|
7
|
|
|
$
|
11
|
|
|
$
|
4
|
|
|
2012
|
|
2011
|
|
2010
|
|||||||||||||||
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
(In millions, except per share amounts)
|
|||||||||||||||||||
Outstanding, beginning of year
|
30
|
|
|
$
|
13.05
|
|
|
51
|
|
|
$
|
15.04
|
|
|
73
|
|
|
$
|
14.72
|
|
Assumed in Varian acquisition
|
5
|
|
|
$
|
4.85
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Exercised
|
(4
|
)
|
|
$
|
7.30
|
|
|
(5
|
)
|
|
$
|
9.21
|
|
|
(7
|
)
|
|
$
|
10.88
|
|
Canceled and forfeited
|
(10
|
)
|
|
$
|
16.76
|
|
|
(16
|
)
|
|
$
|
20.28
|
|
|
(15
|
)
|
|
$
|
15.64
|
|
Outstanding, end of year
|
21
|
|
|
$
|
10.53
|
|
|
30
|
|
|
$
|
13.05
|
|
|
51
|
|
|
$
|
15.04
|
|
Exercisable, end of year
|
20
|
|
|
$
|
10.71
|
|
|
24
|
|
|
$
|
14.23
|
|
|
37
|
|
|
$
|
17.39
|
|
|
Options Outstanding
|
|
Options Exercisable
|
|||||||||||||||||||||
Range of
Exercise Prices
|
Number of
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Life
|
|
Aggregate
Intrinsic
Value
|
|
Number of
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Aggregate
Intrinsic
Value
|
|||||||||||
|
(In millions)
|
|
|
|
(In years)
|
|
(In millions)
|
|
(In millions)
|
|
|
|
(In millions)
|
|||||||||||
$3.09 — $9.99
|
15
|
|
|
$
|
7.68
|
|
|
1.80
|
|
|
$
|
43
|
|
|
14
|
|
|
$
|
7.80
|
|
|
$
|
40
|
|
$10.00 — $19.99
|
6
|
|
|
$
|
17.11
|
|
|
0.57
|
|
|
—
|
|
|
6
|
|
|
$
|
17.11
|
|
|
—
|
|
||
|
21
|
|
|
$
|
10.53
|
|
|
1.43
|
|
|
$
|
43
|
|
|
20
|
|
|
$
|
10.71
|
|
|
$
|
40
|
|
Options exercisable and expected to become exercisable
|
21
|
|
|
$
|
10.53
|
|
|
1.43
|
|
|
$
|
43
|
|
|
|
|
|
|
|
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Weighted
Average
Remaining
Contractual Term
|
|
Aggregate
Intrinsic
Value
|
|||||
|
|
|
|
|
|
|
|
|||||
|
(In millions, except per share amounts)
|
|||||||||||
Non-vested restricted stock units, restricted stock, performance shares and performance units at October 25, 2009
|
12
|
|
|
$
|
16.16
|
|
|
2.4 Years
|
|
$
|
157
|
|
Granted
|
13
|
|
|
$
|
12.36
|
|
|
|
|
|
||
Vested
|
(5
|
)
|
|
$
|
17.13
|
|
|
|
|
|
||
Canceled
|
(2
|
)
|
|
$
|
15.41
|
|
|
|
|
|
||
Non-vested restricted stock units, restricted stock, performance shares and performance units at October 31, 2010
|
18
|
|
|
$
|
13.33
|
|
|
2.8 Years
|
|
$
|
227
|
|
Granted
|
17
|
|
|
$
|
12.62
|
|
|
|
|
|
||
Vested
|
(5
|
)
|
|
$
|
14.64
|
|
|
|
|
|
||
Canceled
|
(2
|
)
|
|
$
|
13.11
|
|
|
|
|
|
||
Non-vested restricted stock units, restricted stock, performance shares and performance units at October 30, 2011
|
28
|
|
|
$
|
12.64
|
|
|
2.8 Years
|
|
$
|
345
|
|
Granted
|
19
|
|
|
$
|
10.61
|
|
|
|
|
|
||
Vested
|
(9
|
)
|
|
$
|
12.87
|
|
|
|
|
|
||
Canceled
|
(2
|
)
|
|
$
|
12.26
|
|
|
|
|
|
||
Non-vested restricted stock units, restricted stock, performance shares and performance units at October 28, 2012
|
36
|
|
|
$
|
11.53
|
|
|
2.6 Years
|
|
$
|
376
|
|
Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest
|
34
|
|
|
$
|
11.81
|
|
|
2.3 Years
|
|
$
|
357
|
|
|
2012
|
|
2011
|
|
2010
|
|||
ESPP:
|
|
|
|
|
|
|||
Dividend yield
|
3.01
|
%
|
|
2.53
|
%
|
|
2.44
|
%
|
Expected volatility
|
29.6
|
%
|
|
31.1
|
%
|
|
33.3
|
%
|
Risk-free interest rate
|
0.13
|
%
|
|
0.09
|
%
|
|
0.19
|
%
|
Expected life (in years)
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
Note 13
|
Employee Benefit Plans
|
|
2012
|
|
2011
|
||||
|
|
|
|
||||
|
(In millions, except percentages)
|
||||||
Change in projected benefit obligation
|
|
|
|
||||
Beginning projected benefit obligation
|
$
|
303
|
|
|
$
|
309
|
|
Service cost
|
16
|
|
|
15
|
|
||
Interest cost
|
14
|
|
|
14
|
|
||
Plan participants’ contributions
|
1
|
|
|
1
|
|
||
Actuarial (gain) loss
|
96
|
|
|
(26
|
)
|
||
Curtailments, settlements and special termination benefits
|
(3
|
)
|
|
(9
|
)
|
||
Foreign currency exchange rate changes
|
(4
|
)
|
|
5
|
|
||
Benefits paid
|
(7
|
)
|
|
(8
|
)
|
||
Plan amendments and business combinations
|
18
|
|
|
2
|
|
||
Ending projected benefit obligation
|
$
|
434
|
|
|
$
|
303
|
|
Ending accumulated benefit obligation
|
$
|
395
|
|
|
$
|
273
|
|
Range of assumptions to determine benefit obligations
|
|
|
|
||||
Discount rate
|
1.3% - 4.7%
|
|
|
1.7% - 6.5%
|
|
||
Rate of compensation increase
|
2.0% - 8.0%
|
|
|
2.0% - 5.0%
|
|
||
Change in plan assets
|
|
|
|
||||
Beginning fair value of plan assets
|
$
|
183
|
|
|
$
|
162
|
|
Return on plan assets
|
14
|
|
|
3
|
|
||
Employer contributions
|
31
|
|
|
26
|
|
||
Plan participants’ contributions
|
1
|
|
|
1
|
|
||
Foreign currency exchange rate changes
|
(4
|
)
|
|
2
|
|
||
Divestitures, settlements and business combinations
|
(4
|
)
|
|
(3
|
)
|
||
Benefits paid
|
(7
|
)
|
|
(8
|
)
|
||
Ending fair value of plan assets
|
$
|
214
|
|
|
$
|
183
|
|
Funded status
|
$
|
(220
|
)
|
|
$
|
(120
|
)
|
Amounts recognized in the consolidated balance sheets
|
|
|
|
||||
Noncurrent asset
|
$
|
5
|
|
|
$
|
13
|
|
Current liability
|
(4
|
)
|
|
(3
|
)
|
||
Noncurrent liability
|
(221
|
)
|
|
(130
|
)
|
||
Total
|
$
|
(220
|
)
|
|
$
|
(120
|
)
|
Estimated amortization from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year
|
|
|
|
||||
Actuarial loss
|
$
|
6
|
|
|
$
|
1
|
|
Prior service cost (credit)
|
(1
|
)
|
|
—
|
|
||
Total
|
$
|
5
|
|
|
$
|
1
|
|
Amounts recognized in accumulated other comprehensive loss
|
|
|
|
||||
Net actuarial loss
|
$
|
117
|
|
|
$
|
27
|
|
Prior service cost (credit)
|
(3
|
)
|
|
(4
|
)
|
||
Total
|
$
|
114
|
|
|
$
|
23
|
|
Plans with projected benefit obligations in excess of plan assets
|
|
|
|
||||
Projected benefit obligation
|
$
|
428
|
|
|
$
|
259
|
|
Fair value of plan assets
|
$
|
202
|
|
|
$
|
126
|
|
Plans with accumulated benefit obligations in excess of plan assets
|
|
|
|
||||
Accumulated benefit obligation
|
$
|
389
|
|
|
$
|
225
|
|
Fair value of plan assets
|
$
|
202
|
|
|
$
|
116
|
|
|
2012
|
|
2011
|
||
Plan assets — allocation
|
|
|
|
||
Equity securities
|
37
|
%
|
|
37
|
%
|
Debt securities
|
33
|
%
|
|
28
|
%
|
Insurance contracts
|
23
|
%
|
|
26
|
%
|
Commingled funds
|
5
|
%
|
|
5
|
%
|
Cash
|
2
|
%
|
|
4
|
%
|
|
October 28, 2012
|
|
October 30, 2011
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Equity securities
|
$
|
79
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
79
|
|
|
$
|
67
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
67
|
|
Debt securities
|
70
|
|
|
—
|
|
|
—
|
|
|
70
|
|
|
51
|
|
|
—
|
|
|
—
|
|
|
51
|
|
||||||||
Insurance contracts
|
—
|
|
|
—
|
|
|
49
|
|
|
49
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|
48
|
|
||||||||
Commingled funds
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||||||
Cash
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||||||
Total
|
$
|
153
|
|
|
$
|
12
|
|
|
$
|
49
|
|
|
$
|
214
|
|
|
$
|
125
|
|
|
$
|
10
|
|
|
$
|
48
|
|
|
$
|
183
|
|
|
2012
|
|
2011
|
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Balance, beginning of year
|
$
|
48
|
|
|
$
|
44
|
|
Actual return on plan assets:
|
|
|
|
||||
Relating to assets still held at reporting date
|
1
|
|
|
1
|
|
||
Purchases, sales, settlements, net
|
3
|
|
|
2
|
|
||
Currency impact
|
(3
|
)
|
|
1
|
|
||
Balance, end of year
|
$
|
49
|
|
|
$
|
48
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
|
|
|
|
||||||
|
(In millions, except percentages)
|
||||||||||
Components of net periodic benefit cost
|
|
|
|
|
|
||||||
Service cost
|
$
|
16
|
|
|
$
|
15
|
|
|
$
|
13
|
|
Interest cost
|
14
|
|
|
14
|
|
|
13
|
|
|||
Expected return on plan assets
|
(11
|
)
|
|
(11
|
)
|
|
(7
|
)
|
|||
Amortization of actuarial loss and prior service credit
|
—
|
|
|
2
|
|
|
1
|
|
|||
Settlement and curtailment loss (gain)
|
6
|
|
|
(2
|
)
|
|
1
|
|
|||
Net periodic benefit cost
|
$
|
25
|
|
|
$
|
18
|
|
|
$
|
21
|
|
Weighted average assumptions
|
|
|
|
|
|
||||||
Discount rate
|
4.53
|
%
|
|
4.33
|
%
|
|
4.76
|
%
|
|||
Expected long-term return on assets
|
5.91
|
%
|
|
6.39
|
%
|
|
6.92
|
%
|
|||
Rate of compensation increase
|
3.09
|
%
|
|
3.42
|
%
|
|
3.30
|
%
|
|
Benefit Payments
|
||
|
(In millions)
|
||
2013
|
$
|
12
|
|
2014
|
13
|
|
|
2015
|
14
|
|
|
2016
|
14
|
|
|
2017
|
15
|
|
|
2018-2022
|
87
|
|
|
|
$
|
155
|
|
Note 14
|
Income Taxes
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
U.S.
|
$
|
381
|
|
|
$
|
1,257
|
|
|
$
|
787
|
|
Foreign
|
(65
|
)
|
|
1,121
|
|
|
600
|
|
|||
|
$
|
316
|
|
|
$
|
2,378
|
|
|
$
|
1,387
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
U.S.
|
$
|
74
|
|
|
$
|
290
|
|
|
$
|
463
|
|
Foreign
|
75
|
|
|
206
|
|
|
134
|
|
|||
State
|
8
|
|
|
5
|
|
|
34
|
|
|||
|
157
|
|
|
501
|
|
|
631
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
U.S.
|
52
|
|
|
(95
|
)
|
|
(160
|
)
|
|||
Foreign
|
(4
|
)
|
|
(23
|
)
|
|
4
|
|
|||
State
|
2
|
|
|
69
|
|
|
(26
|
)
|
|||
|
50
|
|
|
(49
|
)
|
|
(182
|
)
|
|||
|
$
|
207
|
|
|
$
|
452
|
|
|
$
|
449
|
|
|
2012
|
|
2011
|
|
2010
|
|||
Tax provision at U.S. statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Favorable resolutions from audits of prior years’ income tax filings
|
(6.0
|
)
|
|
(6.9
|
)
|
|
—
|
|
Effect of foreign operations taxed at various rates
|
(8.5
|
)
|
|
(8.1
|
)
|
|
(3.0
|
)
|
State income taxes, net of federal benefit
|
2.0
|
|
|
1.6
|
|
|
0.9
|
|
Research and other tax credits
|
(1.0
|
)
|
|
(1.2
|
)
|
|
(0.3
|
)
|
Production benefit
|
(8.0
|
)
|
|
(0.8
|
)
|
|
(1.2
|
)
|
Goodwill impairment
|
47.0
|
|
|
—
|
|
|
—
|
|
Share-based compensation
|
4.0
|
|
|
0.4
|
|
|
0.6
|
|
Other
|
1.0
|
|
|
(1.0
|
)
|
|
0.4
|
|
|
65.5
|
%
|
|
19.0
|
%
|
|
32.4
|
%
|
|
October 28,
2012 |
|
October 30,
2011 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Deferred tax assets:
|
|
|
|
||||
Inventory reserves and basis difference
|
$
|
119
|
|
|
$
|
214
|
|
Installation and warranty reserves
|
27
|
|
|
31
|
|
||
Foreign tax credits on undistributed foreign earnings
|
—
|
|
|
112
|
|
||
Accrued liabilities
|
224
|
|
|
250
|
|
||
Restructuring reserves
|
23
|
|
|
4
|
|
||
Deferred revenue
|
36
|
|
|
53
|
|
||
Capital loss carryforward
|
—
|
|
|
4
|
|
||
Tax credits and net operating losses
|
111
|
|
|
39
|
|
||
Deferred compensation
|
41
|
|
|
21
|
|
||
Share-based compensation
|
51
|
|
|
49
|
|
||
Intangibles
|
12
|
|
|
10
|
|
||
Gross deferred tax assets
|
644
|
|
|
787
|
|
||
Valuation allowance
|
(46
|
)
|
|
(13
|
)
|
||
Total deferred tax assets
|
598
|
|
|
774
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Depreciation
|
(71
|
)
|
|
(61
|
)
|
||
Purchased technology
|
(190
|
)
|
|
(86
|
)
|
||
Undistributed foreign earnings
|
(93
|
)
|
|
—
|
|
||
Other
|
(25
|
)
|
|
(44
|
)
|
||
Total gross deferred tax liabilities
|
(379
|
)
|
|
(191
|
)
|
||
Net deferred tax assets
|
$
|
219
|
|
|
$
|
583
|
|
|
October 28,
2012 |
|
October 30,
2011 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Current deferred tax asset
|
$
|
369
|
|
|
$
|
580
|
|
Non-current deferred tax asset
|
51
|
|
|
78
|
|
||
Current deferred tax liability
|
(1
|
)
|
|
(1
|
)
|
||
Non-current deferred tax liability
|
(200
|
)
|
|
(74
|
)
|
||
|
$
|
219
|
|
|
$
|
583
|
|
|
2012
|
|
2011
|
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Beginning balance of gross unrecognized tax benefits
|
$
|
59
|
|
|
$
|
328
|
|
Uncertainties arising from the acquisition of Varian
|
76
|
|
|
—
|
|
||
Settlements with tax authorities
|
(16
|
)
|
|
(314
|
)
|
||
Increases in tax positions for current years
|
46
|
|
|
45
|
|
||
Increases in tax positions for prior years
|
53
|
|
|
—
|
|
||
Decreases in tax positions for prior years
|
(37
|
)
|
|
—
|
|
||
Ending balance of gross unrecognized tax benefits
|
$
|
181
|
|
|
$
|
59
|
|
Note 15
|
Warranty, Guarantees and Contingencies
|
|
Lease Payments
|
||
|
(In millions)
|
||
2013
|
$
|
31
|
|
2014
|
20
|
|
|
2015
|
12
|
|
|
2016
|
10
|
|
|
2017
|
8
|
|
|
Thereafter
|
8
|
|
|
|
$
|
89
|
|
|
2012
|
|
2011
|
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Beginning balance
|
$
|
168
|
|
|
$
|
155
|
|
Provisions for warranty
|
107
|
|
|
170
|
|
||
Consumption of reserves
|
(156
|
)
|
|
(157
|
)
|
||
Ending balance
|
$
|
119
|
|
|
$
|
168
|
|
Note 16
|
Industry Segment Operations
|
|
Net Sales
|
|
Operating
Income (Loss)
|
|
Depreciation/
Amortization
|
|
Capital
Expenditures
|
|
Segment
Assets
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions)
|
||||||||||||||||||
2012:
|
|
|
|
|
|
|
|
|
|
||||||||||
Silicon Systems Group
|
$
|
5,536
|
|
|
$
|
1,243
|
|
|
$
|
256
|
|
|
$
|
71
|
|
|
$
|
5,106
|
|
Applied Global Services
|
2,285
|
|
|
502
|
|
|
17
|
|
|
8
|
|
|
2,035
|
|
|||||
Display
|
473
|
|
|
25
|
|
|
8
|
|
|
1
|
|
|
278
|
|
|||||
Energy and Environmental Solutions
|
425
|
|
|
(668
|
)
|
|
38
|
|
|
6
|
|
|
513
|
|
|||||
Total Segment
|
$
|
8,719
|
|
|
$
|
1,102
|
|
|
$
|
319
|
|
|
$
|
86
|
|
|
$
|
7,932
|
|
2011:
|
|
|
|
|
|
|
|
|
|
||||||||||
Silicon Systems Group
|
$
|
5,415
|
|
|
$
|
1,764
|
|
|
$
|
52
|
|
|
$
|
59
|
|
|
$
|
2,036
|
|
Applied Global Services
|
2,413
|
|
|
482
|
|
|
13
|
|
|
7
|
|
|
1,337
|
|
|||||
Display
|
699
|
|
|
147
|
|
|
7
|
|
|
31
|
|
|
459
|
|
|||||
Energy and Environmental Solutions
|
1,990
|
|
|
453
|
|
|
34
|
|
|
16
|
|
|
1,438
|
|
|||||
Total Segment
|
$
|
10,517
|
|
|
$
|
2,846
|
|
|
$
|
106
|
|
|
$
|
113
|
|
|
$
|
5,270
|
|
2010:
|
|
|
|
|
|
|
|
|
|
||||||||||
Silicon Systems Group
|
$
|
5,304
|
|
|
$
|
1,892
|
|
|
$
|
66
|
|
|
$
|
39
|
|
|
$
|
2,317
|
|
Applied Global Services
|
1,865
|
|
|
337
|
|
|
25
|
|
|
5
|
|
|
1,285
|
|
|||||
Display
|
899
|
|
|
267
|
|
|
8
|
|
|
5
|
|
|
419
|
|
|||||
Energy and Environmental Solutions
|
1,481
|
|
|
(466
|
)
|
|
57
|
|
|
41
|
|
|
1,402
|
|
|||||
Total Segment
|
$
|
9,549
|
|
|
$
|
2,030
|
|
|
$
|
156
|
|
|
$
|
90
|
|
|
$
|
5,423
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Total segment operating income
|
$
|
1,102
|
|
|
$
|
2,846
|
|
|
$
|
2,030
|
|
Corporate and unallocated costs
|
(580
|
)
|
|
(496
|
)
|
|
(553
|
)
|
|||
Restructuring charges and asset impairments
|
(111
|
)
|
|
21
|
|
|
(93
|
)
|
|||
Gain on sale of facility
|
—
|
|
|
27
|
|
|
—
|
|
|||
Income from operations
|
$
|
411
|
|
|
$
|
2,398
|
|
|
$
|
1,384
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Total segment depreciation and amortization
|
$
|
319
|
|
|
$
|
106
|
|
|
$
|
156
|
|
Depreciation on shared facilities and information technology assets
|
103
|
|
|
140
|
|
|
149
|
|
|||
Consolidated depreciation and amortization
|
$
|
422
|
|
|
$
|
246
|
|
|
$
|
305
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Total segment capital expenditures
|
$
|
86
|
|
|
$
|
113
|
|
|
$
|
90
|
|
Shared facilities and information technology assets
|
76
|
|
|
96
|
|
|
79
|
|
|||
Consolidated capital expenditures
|
$
|
162
|
|
|
$
|
209
|
|
|
$
|
169
|
|
|
October 28,
2012 |
|
October 30,
2011 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Total segment assets
|
$
|
7,932
|
|
|
$
|
5,270
|
|
Cash and investments
|
2,992
|
|
|
7,174
|
|
||
Allowance for bad debts
|
(87
|
)
|
|
(73
|
)
|
||
Deferred income taxes
|
420
|
|
|
658
|
|
||
Other current assets
|
98
|
|
|
90
|
|
||
Common property, plant and equipment
|
588
|
|
|
620
|
|
||
Other assets
|
159
|
|
|
122
|
|
||
Consolidated total assets
|
$
|
12,102
|
|
|
$
|
13,861
|
|
|
Net Sales
|
|
Long-lived
Assets
|
||||
|
|
|
|
||||
|
(In millions)
|
||||||
2012:
|
|
|
|
||||
United States
|
$
|
1,749
|
|
|
$
|
666
|
|
China
|
783
|
|
|
74
|
|
||
Taiwan
|
2,411
|
|
|
36
|
|
||
Korea
|
1,897
|
|
|
9
|
|
||
Europe
|
863
|
|
|
110
|
|
||
Japan
|
704
|
|
|
6
|
|
||
Southeast Asia
|
312
|
|
|
87
|
|
||
Total outside United States
|
6,970
|
|
|
322
|
|
||
Consolidated total
|
$
|
8,719
|
|
|
$
|
988
|
|
2011:
|
|
|
|
||||
United States
|
$
|
1,963
|
|
|
$
|
623
|
|
China
|
2,574
|
|
|
81
|
|
||
Taiwan
|
2,093
|
|
|
33
|
|
||
Korea
|
1,263
|
|
|
8
|
|
||
Europe
|
1,120
|
|
|
128
|
|
||
Japan
|
912
|
|
|
7
|
|
||
Southeast Asia
|
592
|
|
|
71
|
|
||
Total outside United States
|
8,554
|
|
|
328
|
|
||
Consolidated total
|
$
|
10,517
|
|
|
$
|
951
|
|
2010:
|
|
|
|
||||
United States
|
$
|
1,147
|
|
|
$
|
715
|
|
China
|
1,557
|
|
|
78
|
|
||
Taiwan
|
2,750
|
|
|
32
|
|
||
Korea
|
1,768
|
|
|
5
|
|
||
Europe
|
981
|
|
|
95
|
|
||
Japan
|
768
|
|
|
5
|
|
||
Southeast Asia
|
578
|
|
|
65
|
|
||
Total outside United States
|
8,402
|
|
|
280
|
|
||
Consolidated total
|
$
|
9,549
|
|
|
$
|
995
|
|
|
2012
|
|
2011
|
|
2010
|
|||
Samsung Electronics Co., Ltd.
|
20
|
%
|
|
12
|
%
|
|
14
|
%
|
Taiwan Semiconductor Manufacturing Company Limited
|
16
|
%
|
|
10
|
%
|
|
11
|
%
|
Intel Corporation
|
*
|
|
|
10
|
%
|
|
*
|
|
*
|
Less than 10%.
|
Note 17
|
Unaudited Quarterly Consolidated Financial Data
|
|
Fiscal Quarter
|
|
|
||||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Fiscal Year
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except per share amounts)
|
||||||||||||||||||
2012:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
2,189
|
|
|
$
|
2,541
|
|
|
$
|
2,343
|
|
|
$
|
1,646
|
|
|
$
|
8,719
|
|
Gross margin
|
$
|
786
|
|
|
$
|
1,011
|
|
|
$
|
930
|
|
|
$
|
586
|
|
|
$
|
3,313
|
|
Net income (loss)
|
$
|
117
|
|
|
$
|
289
|
|
|
$
|
218
|
|
|
$
|
(515
|
)
|
|
$
|
109
|
|
Earnings (loss) per diluted share
|
$
|
0.09
|
|
|
$
|
0.22
|
|
|
$
|
0.17
|
|
|
$
|
(0.42
|
)
|
|
$
|
0.09
|
|
2011:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
2,686
|
|
|
$
|
2,862
|
|
|
$
|
2,787
|
|
|
$
|
2,182
|
|
|
$
|
10,517
|
|
Gross margin
|
$
|
1,136
|
|
|
$
|
1,189
|
|
|
$
|
1,184
|
|
|
$
|
852
|
|
|
$
|
4,360
|
|
Net income
|
$
|
506
|
|
|
$
|
489
|
|
|
$
|
476
|
|
|
$
|
456
|
|
|
$
|
1,926
|
|
Earnings per diluted share
|
$
|
0.38
|
|
|
$
|
0.37
|
|
|
$
|
0.36
|
|
|
$
|
0.34
|
|
|
$
|
1.45
|
|
|
|
Incorporated by Reference
|
|||
Exhibit No.
|
Description
|
Form
|
File No.
|
Exhibit No.
|
Filing Date
|
3.1
|
Certificate of Incorporation of Applied Materials, Inc., as amended and restated through March 10, 2009
|
10-Q
|
000-06920
|
3.1
|
6/3/2009
|
3.2
|
Certificate of Designation, Preferences and Rights of the Terms of the Series A Junior Participating Preferred Stock dated as of July 9, 1999
|
10-Q
|
000-06920
|
3(i)(a)
|
9/14/1999
|
3.3
|
Bylaws of Applied Materials, Inc., amended and restated to December 6, 2011
|
8-K
|
000-06920
|
3.1
|
12/7/2011
|
4.1
|
Form of Indenture (including form of debt security) between Applied Materials, Inc. and Harris Trust Company of California, as Trustee
|
8-K
|
000-06920
|
4.1
|
8/17/1994
|
4.2
|
Indenture, dated June 8, 2011, by and between Applied Materials, Inc. and U.S. Bank National Association, as Trustee
|
8-K
|
000-06920
|
4.1
|
6/10/2011
|
4.3
|
First Supplemental Indenture, dated June 8, 2011, by and between Applied Materials, Inc. and U.S. Bank National Association, as Trustee
|
8-K
|
000-06920
|
4.2
|
6/10/2011
|
10.1*
|
Applied Materials, Inc. Executive Deferred Compensation Plan, as amended and restated on April 1, 1995
|
10-Q
|
000-06920
|
10.24
|
6/7/1995
|
10.2*
|
Amendment No. 1 to the Applied Materials, Inc. Executive Deferred Compensation Plan
|
10-Q
|
000-06920
|
10.1
|
9/9/1998
|
10.3*
|
Amendment No. 2 to the Applied Materials, Inc. Executive Deferred Compensation Plan
|
10-Q
|
000-06920
|
10.2
|
9/9/1998
|
10.4
|
Form of Indemnification Agreement between Applied Materials, Inc. and Non-Employee Directors
|
10-K
|
000-06920
|
10.44
|
1/31/2000
|
10.5
|
Form of Indemnification Agreement between Applied Materials, Inc. and certain of its officers
|
10-K
|
000-06920
|
10.46
|
1/31/2000
|
10.6*
|
Applied Materials, Inc. 2000 Global Equity Incentive Plan, amended and restated to April 16, 2002
|
10-K
|
000-06920
|
10.31
|
1/23/2003
|
10.7
|
Applied Materials, Inc. Profit Sharing Scheme (Ireland)
|
S-8
|
333-45011
|
4.1
|
1/27/1998
|
10.8*
|
Term Sheet for employment of Michael R. Splinter, as amended and restated December 8, 2008
|
10-Q
|
000-06920
|
10.57
|
3/3/2009
|
10.9*
|
Applied Materials, Inc. Nonemployee Director Share Purchase Plan
|
10-Q
|
000-06920
|
10.42
|
5/31/2005
|
10.10*
|
Election Form to Receive Shares in lieu of Retainer and/or Meeting Fees for use under the Applied Materials, Inc. Nonemployee Director Share Purchase Plan
|
10-Q
|
000-06920
|
10.43
|
5/31/2005
|
10.11*
|
Applied Materials, Inc. amended and restated Relocation Policy
|
8-K
|
000-06920
|
10.46
|
10/31/2005
|
10.12*
|
Amendment No. 3 to the Applied Materials, Inc. Executive Deferred Compensation Plan
|
10-K
|
000-06920
|
10.46
|
12/14/2005
|
10.13*
|
Amendment No. 4 to the Applied Materials, Inc. Executive Deferred Compensation Plan
|
10-K
|
000-06920
|
10.47
|
12/14/2005
|
10.14*
|
Form of Non-Qualified Stock Option Grant Agreement for use under the Applied Materials Employee Stock Incentive Plan, as amended
|
10-Q
|
000-06920
|
10.53
|
8/31/2006
|
10.15*
|
Form of Non-Qualified Stock Option Grant Agreement for use under the Applied Materials, Inc. 2000 Global Equity Incentive Plan, as amended
|
10-Q
|
000-06920
|
10.54
|
8/31/2006
|
10.16*
|
Applied Materials, Inc. Employee Financial Assistance Plan, amended and restated as of December 18, 2008
|
10-Q
|
000-06920
|
10.58
|
3/3/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
|||
Exhibit No.
|
Description
|
Form
|
File No.
|
Exhibit No.
|
Filing Date
|
10.17*
|
Form of Non-Qualified Stock Option Grant Agreement for use under the Applied Materials, Inc. Employee Stock Incentive Plan, as amended
|
10-Q
|
000-06920
|
10.45
|
5/30/2007
|
10.18*
|
Form of Non-Qualified Stock Option Grant Agreement for use under the Applied Materials, Inc. 2000 Global Equity Incentive Plan, as amended
|
10-Q
|
000-06920
|
10.46
|
5/30/2007
|
10.19*
|
Applied Materials, Inc. amended and restated 2005 Executive Deferred Compensation Plan
|
8-K
|
000-06920
|
10.49
|
7/13/2007
|
10.20*
|
Form of Performance Shares Agreement for use under the Applied Materials, Inc. Employee Stock Incentive Plan, as amended
|
10-K
|
000-06920
|
10.48
|
12/14/2007
|
10.21*
|
Form of Performance Shares Agreement for Nonemployee Directors for use under the Applied Materials, Inc. Employee Stock Incentive Plan, as amended
|
10-K
|
000-06920
|
10.49
|
12/14/2007
|
10.22*
|
Form of Non-Qualified Stock Option Grant Agreement for use under the Applied Materials, Inc. Employee Stock Incentive Plan, as amended
|
10-K
|
000-06920
|
10.50
|
12/14/2007
|
10.23*
|
Form of Restricted Stock Agreement for use under the Applied Materials, Inc. Employee Stock Incentive Plan, as amended
|
10-K
|
000-06920
|
10.51
|
12/14/2007
|
10.24*
|
Form of Non-Qualified Stock Option Grant Agreement for use under the Applied Materials, Inc. 2000 Global Equity Incentive Plan, as amended
|
10-K
|
000-06920
|
10.52
|
12/14/2007
|
10.25*
|
Form of Restricted Stock Agreement for use under the Applied Materials, Inc. Employee Stock Incentive Plan, as amended
|
10-Q
|
000-06920
|
10.57
|
8/29/2008
|
10.26
|
Deed of Amendment to Applied Materials Profit Sharing Scheme, dated February 7, 2006, to amend Clause 20 of the Trust Deed thereunder
|
10-K
|
000-06920
|
10.48
|
12/12/2008
|
10.27
|
Deed of Amendment to Applied Materials Profit Sharing Scheme, dated February 7, 2006, to amend the definition of Eligible Employee in the First Schedule to the Trust Deed thereunder.
|
10-K
|
000-06920
|
10.49
|
12/12/2008
|
10.28*
|
Amendment No. 5 to the Applied Materials, Inc. Executive Deferred Compensation Plan
|
10-K
|
000-06920
|
10.50
|
12/12/2008
|
10.29*
|
Amendment No. 6 to the Applied Materials, Inc. Executive Deferred Compensation Plan
|
10-Q
|
000-06920
|
10.59
|
3/3/2009
|
10.30*
|
Amendment No. 1 to the Applied Materials, Inc. 2005 Executive Deferred Compensation Plan
|
10-K
|
000-06920
|
10.51
|
12/12/2008
|
10.31*
|
Amendment No. 2 to the Applied Materials, Inc. 2005 Executive Deferred Compensation Plan
|
10-Q
|
000-06920
|
10.60
|
3/3/2009
|
10.32*
|
Form of Performance Shares Agreement for use under the Applied Materials, Inc. Employee Stock Incentive Plan, as amended
|
10-K
|
000-06920
|
10.56
|
12/12/2008
|
10.33*
|
Form of Performance Shares Agreement for Nonemployee Directors for use under the Applied Materials, Inc. Employee Stock Incentive Plan, as amended
|
10-Q
|
000-06920
|
10.61
|
3/3/2009
|
10.34*
|
Form of Non-Qualified Stock Option Agreement for Employees for use under the Applied Materials, Inc. Employee Stock Incentive Plan, as amended
|
10-Q
|
000-06920
|
10.63
|
3/3/2009
|
10.35*
|
Form of Non-Qualified Stock Option Agreement for use under the Applied Materials, Inc. 2000 Global Equity Incentive Plan, as amended
|
10-Q
|
000-06920
|
10.64
|
3/3/2009
|
10.36*
|
Amendment No. 7 to the Applied Materials, Inc. Executive Deferred Compensation Plan
|
10-Q
|
000-06920
|
10.67
|
6/9/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
|||
Exhibit No.
|
Description
|
Form
|
File No.
|
Exhibit No.
|
Filing Date
|
10.37*
|
Amendment No. 3 to the Applied Materials, Inc. 2005 Executive Deferred Compensation Plan
|
10-Q
|
000-06920
|
10.68
|
6/9/2010
|
10.38*
|
Form of Performance Share Agreement for use under the Applied Materials, Inc. Employee Stock Incentive Plan, as amended
|
10-Q
|
000-06920
|
10.71
|
6/9/2010
|
10.39*
|
Form of Restricted Stock Agreement for use under the Applied Materials, Inc. Employee Stock Incentive Plan, as amended
|
10-Q
|
000-06920
|
10.72
|
6/9/2010
|
10.40*
|
Applied Materials, Inc. Applied Incentive Plan, amended and restated effective August 13, 2010
|
10-K
|
000-06920
|
10.59
|
12/10/2010
|
10.41*
|
Amendment No. 8 to the Applied Materials, Inc. Executive Deferred Compensation Plan
|
10-Q
|
000-06920
|
10.60
|
2/28/2011
|
10.42*
|
Amendment No. 4 to the Applied Materials, Inc. 2005 Executive Deferred Compensation Plan
|
10-Q
|
000-06920
|
10.61
|
2/28/2011
|
10.43
|
Settlement Agreement between Applied Materials, Inc. and Samsung Electronics Co., Ltd. dated November 1, 2010 (Confidential treatment has been granted for the redacted portions of the agreement)
|
10-Q/A
|
000-06920
|
10.62
|
5/19/2011
|
10.44
|
Credit Agreement, dated as of May 25, 2011, among Applied Materials, Inc., JPMorgan Chase Bank, N.A., as administrative agent, and other lenders named therein
|
10-Q/A
|
000-06920
|
10.64
|
11/18/2011
|
10.45*
|
Form of Performance Unit Agreement for use under the Applied Materials, Inc. Employee Stock Incentive Plan, as amended
|
10-Q
|
000-06920
|
10.1
|
2/27/2012
|
10.46*
|
Applied Materials, Inc. Employee Stock Incentive Plan, amended and restated effective March 6, 2012
|
8-K
|
000-06920
|
10.1
|
3/9/2012
|
10.47*
|
Applied Materials, Inc. Senior Executive Bonus Plan, amended and restated effective March 6, 2012
|
8-K
|
000-06920
|
10.2
|
3/9/2012
|
10.48*
|
Form of Restricted Stock Unit Agreement for use under the amended and restated Applied Materials, Inc. Employee Stock Incentive Plan
|
10-Q
|
000-06920
|
10.3
|
5/24/2012
|
10.49*
|
Form of Restricted Stock Unit Agreement for Nonemployee Directors for use under the amended and restated Applied Materials, Inc. Employee Stock Incentive Plan
|
10-Q
|
000-06920
|
10.4
|
5/24/2012
|
10.50*
|
Form of Performance Shares Agreement for use under the amended and restated Applied Materials, Inc. Employee Stock Incentive Plan
|
10-Q
|
000-06920
|
10.5
|
5/24/2012
|
10.51
|
Amendment No. 1 and Extension Agreement, dated as of May 25, 2012, to Credit Agreement, dated as of May 25, 2011, among Applied Materials, Inc., JPMorgan Chase Bank, N.A. as administrative agent, and other lenders named therein
|
8-K
|
000-06920
|
10.1
|
5/30/2012
|
10.52*
|
Offer Letter, dated June 14, 2012, between Applied Materials, Inc. and Gary E. Dickerson
|
10-Q
|
000-06920
|
10.2
|
8/23/2012
|
10.53*
|
Form of Restricted Stock Agreement for use under the amended and restated Applied Materials, Inc. Employee Stock Incentive Plan
|
10-Q
|
000-06920
|
10.3
|
8/23/2012
|
10.54*
|
Applied Materials, Inc. Employees' Stock Purchase Plan, amended and restated effective October 28, 2012†
|
|
|
|
|
10.55*
|
Applied Materials, Inc. Stock Purchase Plan for Offshore Employees, amended and restated effective October 28, 2012†
|
|
|
|
|
21
|
Subsidiaries of Applied Materials, Inc. †
|
|
|
|
|
23
|
Consent of Independent Registered Public Accounting Firm, KPMG LLP†
|
|
|
|
|
24
|
Power of Attorney†
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
|||
Exhibit No.
|
Description
|
Form
|
File No.
|
Exhibit No.
|
Filing Date
|
31.1
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002†
|
|
|
|
|
31.2
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002†
|
|
|
|
|
32.1
|
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002‡
|
|
|
|
|
32.2
|
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002‡
|
|
|
|
|
101.INS
|
XBRL Instance Document‡
|
|
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document‡
|
|
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document‡
|
|
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document‡
|
|
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document‡
|
|
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document‡
|
|
|
|
|
*
|
Indicates a management contract or compensatory plan or arrangement, as required by Item 15(a)3.
|
†
|
Filed herewith.
|
‡
|
Furnished herewith.
|
APPLIED MATERIALS, INC.
|
|
|
|
By:
|
/
S
/ MICHAEL R. SPLINTER
|
|
Michael R. Splinter
|
|
Chief Executive Officer
|
|
Title
|
Date
|
/
S
/ MICHAEL R. SPLINTER
|
Chief Executive Officer (Principal
Executive Officer)
|
December 5, 2012
|
Michael R. Splinter
|
|
|
/
S
/ GEORGE S. DAVIS
|
Executive Vice President, Chief
Financial Officer
(Principal Financial Officer)
|
December 5, 2012
|
George S. Davis
|
|
|
/
S
/ THOMAS S. TIMKO
|
Corporate Vice President, Corporate
Controller and Chief Accounting
Officer (Principal Accounting Officer)
|
December 5, 2012
|
Thomas S. Timko
|
|
|
Directors:
|
|
|
*
|
|
|
Michael R. Splinter
|
Chairman of the Board
|
December 5, 2012
|
*
|
|
|
Aart J. de Geus
|
Director
|
December 5, 2012
|
*
|
|
|
Stephen R. Forrest
|
Director
|
December 5, 2012
|
*
|
|
|
Thomas J. Iannotti
|
Director
|
December 5, 2012
|
*
|
|
|
Susan M. James
|
Director
|
December 5, 2012
|
*
|
|
|
Alexander A. Karsner
|
Director
|
December 5, 2012
|
*
|
|
|
Gerhard H. Parker
|
Director
|
December 5, 2012
|
*
|
|
|
Dennis D. Powell
|
Director
|
December 5, 2012
|
*
|
|
|
Willem P. Roelandts
|
Director
|
December 5, 2012
|
*
|
|
|
James E. Rogers
|
Director
|
December 5, 2012
|
*
|
|
|
Robert H. Swan
|
Director
|
December 5, 2012
|
* By
|
/s/ MICHAEL R. SPLINTER
|
|
Michael R. Splinter
|
|
Attorney-in-Fact**
|
**
|
By authority of the power of attorney filed herewith.
|
LEGAL ENTITY NAME
|
|
|
|
PLACE OF INCORPORATION
|
|
|
|
|
|
Applied Materials Japan, Inc.
|
|
|
|
Japan
|
Applied Materials (Holdings)
|
|
(1)
|
|
California
|
Applied Materials Asia-Pacific, LLC
|
|
(2)
|
|
Delaware
|
Applied Materials Israel, Ltd.
|
|
(3)
|
|
Israel
|
Applied Materials SPV1, Inc.
|
|
(4)
|
|
Delaware
|
AKT, Inc.
|
|
(5)
|
|
Japan
|
Etec Systems, Inc.
|
|
|
|
Nevada
|
AKT Japan, LLC
|
|
|
|
Delaware
|
Applied Materials India Private Limited
|
|
|
|
India
|
Metron Technology, Inc.
|
|
(6)
|
|
Delaware
|
Applied Ventures, LLC
|
|
|
|
Delaware
|
1325949 Ontario Inc.
|
|
(7)
|
|
Canada
|
AFCO GP, LLC
|
|
|
|
Colorado
|
Applied Films Taiwan Co., Ltd.
|
|
|
|
Taiwan
|
AFCO C.V.
|
|
(a)
|
|
The Netherlands
|
PT Applied Materials Indonesia
|
|
|
|
Indonesia
|
Semitool, Inc.
|
|
(8)
|
|
Montana
|
TF Solar Manufacturing LLC
|
|
|
|
Delaware
|
Varian Semiconductor Equipment Associates, Inc.
|
|
(9)
|
|
Delaware
|
Varian Japan Holdings, LLC
|
|
(b)
|
|
Delaware
|
|
|
|
|
|
(1) Applied Materials (Holdings) owns the following subsidiary:
|
|
|
|
|
Applied Materials UK Limited
|
|
|
|
California
|
|
|
|
|
|
(2) Applied Materials Asia-Pacific, LLC owns the following subsidiaries:
|
|
|
|
|
Applied Materials Korea, Ltd.
|
|
|
|
Korea
|
Applied Materials Taiwan, Ltd.
|
|
|
|
Taiwan
|
Applied Materials China, Ltd.
|
|
(c)
|
|
Hong Kong
|
AMAT (Thailand) Limited
|
|
|
|
Thailand
|
Applied Materials (Shanghai) Co., Ltd.
|
|
|
|
P.R. China
|
Applied Materials (China) Holdings, Ltd.
|
|
(d)
|
|
P.R. China
|
|
|
|
|
|
LEGAL ENTITY NAME
|
|
|
|
PLACE OF INCORPORATION
|
|
|
|
|
|
(3) Applied Materials Israel, Ltd. owns the following subsidiary:
|
|
|
|
|
Integrated Circuit Testing GmbH
|
|
|
|
Germany
|
|
|
|
|
|
(4) Applied Materials SPV1, Inc. owns the following subsidiary:
|
|
|
|
|
Applied Materials SPV2, Inc.
|
|
(e)
|
|
Delaware
|
|
|
|
|
|
(5) AKT, Inc. owns the following subsidiary:
|
|
|
|
|
AKT America, Inc.
|
|
|
|
California
|
|
|
|
|
|
(6) Metron Technology, Inc. owns the following subsidiaries:
|
|
|
|
|
Metron Technology (Europa) Ltd.
|
|
|
|
United Kingdom
|
Metron Technology (Asia) Ltd.
|
|
|
|
Hong Kong
|
Metron Technology Distribution Corporation
|
|
|
|
Nevada
|
|
|
|
|
|
(7) 1325949 Ontario Inc. owns the following subsidiary:
|
|
|
|
|
Applied Materials Canada, Inc.
|
|
|
|
Canada
|
|
|
|
|
|
(8) Semitool, Inc. owns the following subsidiaries:
|
|
|
|
|
Semitool Europe Ltd.
|
|
|
|
United Kingdom
|
Semitool (Asia) Pte Ltd.
|
|
|
|
Singapore
|
Semitool Korea, Inc.
|
|
|
|
South Korea
|
Semitool Semiconductor Equipment Technology (Shanghai) Co., Ltd.
|
|
|
|
PRC
|
Semitool (Taiwan) Inc.
|
|
|
|
Nevada
|
Semitool Italia SRL
|
|
|
|
Italy
|
Semitool Schweiz GmbH
|
|
|
|
Switzerland
|
|
|
|
|
|
(9) Varian Semiconductor Equipment Associates, Inc., owns
the following subsidiaries:
|
|
|
|
|
4 Stanley Tucker Drive LLC
|
|
|
|
Delaware
|
Applied Materials 2 LLC
|
|
|
|
Delaware
|
Applied Materials 2 LLC Luxembourg S.C.S.
|
|
(g)
|
|
Luxembourg
|
|
|
|
|
|
(a) AFCO C.V. owns the following subsidiaries:
|
|
|
|
|
Applied Materials Deutschland Holding GmbH
|
|
(f)
|
|
Germany
|
Applied Materials 1 LLC
|
|
|
|
Delaware
|
Applied Materials 1 LLC Luxembourg S.C.S.
|
|
(g)
|
|
Luxembourg
|
Applied Materials Netherlands B.V.
|
|
(h)
|
|
The Netherlands
|
|
|
|
|
|
LEGAL ENTITY NAME
|
|
|
|
PLACE OF INCORPORATION
|
|
|
|
|
|
(b) Varian Japan Holdings, LLC owns the following
subsidiary:
|
|
|
|
|
Varian Semiconductor Equipment K.K.
|
|
|
|
Japan
|
|
|
|
|
|
(c) Applied Materials China, Ltd. owns the following subsidiaries:
|
|
|
|
|
Applied Materials China (Tianjin) Co., Ltd.
|
|
|
|
P.R. China
|
Applied Materials (China), Inc.
|
|
|
|
P.R. China
|
|
|
|
|
|
(d) Applied Materials (China) Holdings, Ltd., owns the following subsidiary:
|
|
|
|
|
Applied Materials (Xi’an), Ltd.
|
|
|
|
P.R. China
|
|
|
|
|
|
(e) Applied Materials SPV2, Inc. owns the following 50-50 joint venture:
|
|
|
|
|
eLith LLC
|
|
|
|
Delaware
|
|
|
|
|
|
(f) Applied Materials Deutschland Holding GmbH owns the following subsidiaries:
|
|
|
|
|
Applied Materials Verwaltung GmbH
|
|
|
|
Germany
|
Applied Materials GmbH & Co., KG
|
|
|
|
Germany
|
|
|
|
|
|
(g) Applied Materials 1 LLC Luxembourg S.C.S. and Applied Materials 2 LLC Luxembourg S.C.S. each partially own the following subsidiary:
|
|
|
|
|
i
Applied Materials 2 LLC Luxembourg S.C.S. 3 S.C.S
|
|
(i)
|
|
Luxembourg
|
|
|
|
|
|
(h) Applied Materials Netherlands B.V., owns the following
subsidiary:
|
|
|
|
|
Applied Materials Italia S.r.l.
|
|
(j)
|
|
Italy
|
Applied Materials GmbH
|
|
|
|
Germany
|
Applied Materials France SARL
|
|
|
|
France
|
Applied Materials Ireland Ltd.
|
|
|
|
Ireland
|
Applied Materials Belgium N.V.
|
|
|
|
Belgium
|
Applied Materials Spain S.L.
|
|
|
|
Spain
|
|
|
|
|
|
(i) Applied Materials 2 Luxembourg S.C.S. 3 S.C.S. owns the
following subsidiaries:
|
|
|
|
|
Applied Materials Europe BV
|
|
(k)
|
|
The Netherlands
|
Applied Materials Luxembourg S.à r.l.
|
|
(l)
|
|
Luxembourg
|
Varian Semiconductor Equipment Associates Overseas Holdings, Ltd.
|
|
(m)
|
|
Cayman Islands
|
|
|
|
|
|
(j) Applied Materials Italia S.r.l. owns the following
subsidiary:
|
|
|
|
|
Baccini GmbH
|
|
|
|
Germany
|
LEGAL ENTITY NAME
|
|
|
|
PLACE OF INCORPORATION
|
|
|
|
|
|
(k) Applied Materials Europe BV owns the following subsidiary:
|
|
|
|
|
Applied Materials Switzerland Sàrl
|
|
(n)
|
|
Switzerland
|
|
|
|
|
|
(l) Applied Materials Luxembourg S.à r.l. owns the following
subsidiary:
|
|
|
|
|
Applied Materials South East Asia Pte. Ltd.
|
|
(o)
|
|
Singapore
|
|
|
|
|
|
(m) Varian Semiconductor Equipment Associates Overseas Holdings, Ltd., owns the following subsidiary:
|
|
|
|
|
Varian Semiconductor Equipment Associates (Gibraltar), Ltd.
|
|
(p)
|
|
Gibraltar
|
|
|
|
|
|
(n) Applied Materials Switzerland Sàrl owns the following subsidiary:
|
|
|
|
|
HCT Shaping Systems Service (Beijing) Co., Ltd.
|
|
|
|
PRC
|
|
|
|
|
|
(o) Applied Materials South East Asia Pte. Ltd. owns the following subsidiaries:
|
|
|
|
|
Applied Materials (AMSEA) Sdn Bhd
|
|
|
|
Malaysia
|
Applied Materials Singapore Technology Pte. Ltd.
|
|
|
|
Singapore
|
Semitool (Philippines) Inc.
|
|
|
|
Nevada
|
|
|
|
|
|
(p) Varian Semiconductor Equipment Associates (Gibraltar), Ltd. owns the following subsidiary:
|
|
|
|
|
Varian Semiconductor Equipment Associates Luxembourg S.à r.l.
|
|
(q)
|
|
Luxembourg
|
|
|
|
|
|
LEGAL ENTITY NAME
|
|
|
|
PLACE OF INCORPORATION
|
|
|
|
|
|
(q) Varian Semiconductor Equipment Associates Luxembourg S.à r.l., owns the following subsidiaries:
|
|
|
|
|
Varian Semiconductor Equipment Associates Pacific LLC
|
|
|
|
Delaware
|
Varian Korea, Ltd.
|
|
|
|
South Korea
|
Varian Semiconductor Equipment Associates PacRim Pte. Ltd.
|
|
|
|
Singapore
|
Varian Semiconductor Equipment Associates (HK) Limited
|
|
|
|
Hong Kong
|
Altin Ltd.
|
|
(r)
|
|
Hong Kong
|
Varian Semiconductor Equipment Associates GmbH
|
|
(s)
|
|
Switzerland
|
Varian Semiconductor Equipment Associates GesmbH
|
|
|
|
Austria
|
Varian Semiconductor Equipment Associates S.A.S.
|
|
|
|
France
|
Varian Semiconductor Equipment Associates GmbH
|
|
|
|
Germany
|
Varian Semiconductor Equipment Associates International, LLC
|
|
|
|
Delaware
|
Varian Semiconductor Equipment Associates Italia S.r.l.
|
|
|
|
Italy
|
Varian Semiconductor Equipment Associates UK Limited
|
|
|
|
United Kingdom
|
|
|
|
|
|
(r) Altin Ltd., owns the following subsidiary:
|
|
|
|
|
Varian Precision Instruments Maintenance (Shanghai) Co., Ltd.
|
|
|
|
PRC
|
|
|
|
|
|
(s) Varian Semiconductor Equipment Associates GmbH (Swiss Entity), owns the following subsidiaries:
|
|
|
|
|
Varian Semiconductor Management GmbH
|
|
|
|
Switzerland
|
Varian Semiconductor Equipment Associates Europe B.V.
|
|
|
|
The Netherlands
|
/s/ KPMG LLP
|
KPMG LLP
|
/s/ Aart J. de Geus
|
|
/s/ Dennis D. Powell
|
Aart J. de Geus
|
|
Dennis D. Powell
|
Director
|
|
Director
|
|
|
|
/s/ Stephen R. Forrest
|
|
/s/ Willem P. Roelandts
|
Stephen R. Forrest
|
|
Willem P. Roelandts
|
Director
|
|
Director
|
|
|
|
/s/ Thomas J. Iannotti
|
|
/s/ James E. Rogers
|
Thomas J. Iannotti
|
|
James E. Rogers
|
Director
|
|
Director
|
|
|
|
/s/ Susan M. James
|
|
/s/ Michael R. Splinter
|
Susan M. James
|
|
Michael R. Splinter
|
Director
|
|
Chairman of the Board
|
|
|
|
/s/ Alexander A. Karsner
|
|
/s/ Robert H. Swan
|
Alexander A. Karsner
|
|
Robert H. Swan
|
Director
|
|
Director
|
|
|
|
/s/ Gerhard H. Parker
|
|
|
Gerhard H. Parker
|
|
|
Director
|
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of Applied Materials, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ MICHAEL R. SPLINTER
|
Michael R. Splinter
|
Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of Applied Materials, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ GEORGE S. DAVIS
|
George S. Davis
|
Executive Vice President, Chief Financial Officer
|
1.
|
this Form 10-K for the fiscal year ended October 28, 2012 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
the information contained in this Form 10-K for the fiscal year ended October 28, 2012 fairly presents, in all material respects, the financial condition and results of operations of Applied Materials, Inc. for the periods presented therein.
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/s/ MICHAEL R. SPLINTER
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Michael R. Splinter
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Chief Executive Officer
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1.
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this Form 10-K for the fiscal year ended October 28, 2012 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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2.
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the information contained in this Form 10-K for the fiscal year ended October 28, 2012 fairly presents, in all material respects, the financial condition and results of operations of Applied Materials, Inc. for the periods presented therein.
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/s/ GEORGE S. DAVIS
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George S. Davis
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Executive Vice President, Chief Financial Officer
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