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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(Do not check if a smaller reporting company)
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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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2014
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2013
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2012
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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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5,978
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66%
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$
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4,775
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64%
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$
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5,536
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64%
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Applied Global Services
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2,200
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24%
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2,023
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27%
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2,285
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26%
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|||
Display
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615
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7%
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538
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7%
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473
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5%
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|||
Energy and Environmental Solutions
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279
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3%
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173
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2%
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425
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5%
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|||
Total
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$
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9,072
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100%
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$
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7,509
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100%
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$
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8,719
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100%
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2014
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2013
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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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1,400
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48%
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$
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1,295
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55%
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Applied Global Services
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775
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27%
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591
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25%
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Display
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593
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20%
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361
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15%
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Energy and Environmental Solutions
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149
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5%
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125
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5%
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Total
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$
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2,917
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100%
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$
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2,372
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|
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100%
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2014
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2013
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2012
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||||||||||||
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(In millions, except percentages)
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Taiwan
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$
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2,702
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30%
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$
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2,640
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35%
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$
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2,411
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28%
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China
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1,608
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18%
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787
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11%
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783
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9%
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Korea
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965
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10%
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924
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12%
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1,897
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22%
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Japan
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817
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9%
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685
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9%
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704
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8%
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Southeast Asia
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356
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4%
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320
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4%
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312
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3%
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Asia Pacific
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6,448
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71%
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5,356
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71%
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6,107
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70%
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United States
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1,966
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22%
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1,473
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20%
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1,749
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20%
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Europe
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658
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7%
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680
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9%
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863
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10%
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Total
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$
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9,072
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100%
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$
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7,509
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100%
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$
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8,719
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100%
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2014
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2013
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2012
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Taiwan Semiconductor Manufacturing Company Limited
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21%
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27%
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16%
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Samsung Electronics Co., Ltd.
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12%
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13%
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20%
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Name of Individual
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Position
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Michael R. Splinter(1)
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Executive Chairman of the Board of Directors
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Gary E. Dickerson(2)
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President, Chief Executive Officer
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Randhir Thakur(3)
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Executive Vice President, General Manager, Silicon Systems
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Ginetto Addiego(4)
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Senior Vice President, Engineering
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Robert J. Halliday(5)
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Senior Vice President, Chief Financial Officer
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Thomas F. Larkins(6)
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Senior Vice President, General Counsel and Corporate Secretary
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Omkaram Nalamasu(7)
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Senior Vice President, Chief Technology Officer
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Ali Salehpour(8)
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Senior Vice President, General Manager, New Markets and Service Group
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Charles Read(9)
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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 64, has been Executive Chairman of the Board of Directors of Applied since September 2013 and Chairman of the Board of Directors since March 2009. Mr. Splinter served as Chief Executive Officer of Applied from April 2003 until September 2013, and also as President from April 2003 to June 2012. Prior to joining Applied, Mr. Splinter was an executive at Intel Corporation, a manufacturer of chips and computer, networking and communications products, where he 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 57, has been Chief Executive Officer and a member of the Board of Directors of Applied since September 2013. Mr. Dickerson was named President of Applied in June 2012, after joining Applied following its acquisition of Varian Semiconductor Equipment Associates, Inc. (Varian) in November 2011. Mr. Dickerson had served as Chief Executive Officer and a director of Varian since 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, including President and Chief Operating Officer. 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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Dr. Thakur, age 52, 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. He had served as Senior Vice President, General Manager, Thin Film Solar and Display, and Senior Vice President, General Manager, Strategic Operations since rejoining Applied in May 2008. Dr. Thakur 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. Dr. Thakur also serves on the board of directors of Marvell Technology Group Ltd.
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(4)
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Dr. Addiego, age 55, has been Senior Vice President, Engineering since rejoining Applied in March 2014. He previously was with Applied from 1996 to 2005, leading various product groups as well as global organizations, including Global Operations, Manufacturing, Foundation Engineering, and Information Technology. From March 2011 to March 2014, Dr. Addiego was President and Chief Operating Officer of Ultra Clean Technology Corp., a supplier of critical subsystems for the semiconductor capital equipment, medical device, energy, research, and flat panel industries. From February 2005 to March 2011, Dr. Addiego worked at Novellus Systems, Inc., a provider of advanced process equipment for the semiconductor industry, where he served as Executive Vice President and Chief Administrative Officer and Executive Vice President of Corporate Operations.
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(5)
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Mr. Halliday, age 60, has been Senior Vice President, Chief Financial Officer of Applied since February 2013. He previously served as a Group Vice President and General Manager in Applied’s Silicon Systems Group segment following the completion of Applied’s acquisition of Varian in November 2011. Mr. Halliday had served as Chief Financial Officer of Varian since 2001 and as an Executive Vice President of Varian since 2004. He was Varian's Treasurer from November 2002 to October 2006 and from February 2009 to February 2010.
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(6)
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Mr. Larkins, age 53, has been Senior Vice President, General Counsel and Corporate Secretary of Applied since November 2012. Previously, Mr. Larkins was employed by Honeywell International Inc., 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.
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(7)
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Dr. Nalamasu, age 56, has been Senior Vice President, Chief Technology Officer since June 2013, and had served as Group Vice President, Chief Technology Officer from January 2012 to June 2013, and as Corporate Vice President, Chief Technology Officer from January 2011 to January 2012. Upon joining Applied in June 2006 until January 2011, Dr. Nalamasu was an Appointed Vice President of Research and served as Deputy Chief Technology Officer and General Manager for the 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 Rensselaer, Dr. Nalamasu served in several leadership roles at Bell Laboratories.
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(8)
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Mr. Salehpour, age 53, has been Senior Vice President, General Manager, New Markets and Service Group since September 2013. He previously served as Group Vice President, General Manager Energy and Environmental Solutions and Display Business Groups, since joining Applied in November 2012. Prior to Applied, Mr. Salehpour worked at KLA-Tencor for 16 years, where he served as a Senior Vice President and General Manager.
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(9)
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Mr. Read, age 48, has been Corporate Vice President, Corporate Controller and Chief Accounting Officer of Applied since joining the Company in September 2013. Prior to Applied, Mr. Read worked at Brocade Communications Systems, Inc., a provider of semiconductor and software-based network solutions, since October 2002, where he most recently served as Vice President, Corporate Controller. Prior to Brocade, Mr. Read worked at KPMG LLP, an audit, tax and advisory firm, from 1996 to 2002.
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Item 1A:
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Risk Factors
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•
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the nature, timing and degree of visibility 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 foundry and other customers’ businesses and, in turn, on demand for Applied’s products;
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increasing capital requirements for building and operating new fabrication plants and customers’ ability to raise the necessary capital;
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differences in growth rates among the semiconductor, display and solar industries;
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the increasing importance of establishing, improving and maintaining strong relationships with customers;
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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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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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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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manufacturers’ ability to reconfigure and re-use fabrication systems;
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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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requirements for shorter cycle times for the development, manufacture and installation of manufacturing equipment;
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price and performance trends for semiconductor devices, displays and solar PVs, and the corresponding effect on demand for such products;
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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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the increasing role for and complexity of software in Applied products; and
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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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the increasing cost of research and development due to many factors, including: decreasing linewidths on a chip, the use of new materials, 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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the need to reduce product development time, despite the increasing difficulty of technical challenges;
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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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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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challenges in generating organic growth given semiconductor manufacturers’ levels of capital expenditures and the allocation of capital investment to market segments that Applied does not serve, such as lithography, or segments where Applied's products have lower relative market presence;
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the importance of increasing market positions in under-penetrated segments, such as etch and inspection;
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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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the increasing frequency and complexity of technology transitions and inflections, such as 3-D transistors and advanced interconnects, and Applied’s ability to timely and effectively anticipate and adapt to these changes;
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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 position, including challenges in securing development-tool-of-record (DTOR) and production-tool-of-record (PTOR) positions with customers;
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shifts in sourcing strategies by computer and electronics companies that impact the equipment requirements of Applied's foundry customers;
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the concentration of new wafer starts in Korea and Taiwan, where Applied’s service penetration and service-revenue-per-wafer-start have been lower than in other regions; and
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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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the timing and extent of an 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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the rate of transition to larger substrate sizes for 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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the 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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uncertainty with respect to future display technology end-use applications and growth drivers.
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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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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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the number of solar PV manufacturers and amount of global production capacity for solar PVs, primarily in China;
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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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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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challenges associated with marketing and selling manufacturing equipment and services to a diverse and diffuse customer base;
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the growth of market segments in which Applied does not participate, such as passivation and furnaces;
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the availability and condition of used solar equipment, which impacts demand for new equipment;
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complexities associated with government-affiliated entities as customers, for example in China;
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the financial condition of solar PV customers and their access to affordable financing and capital; and
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solar panel manufacturing overcapacity, which has led to weak industry operating performance and outlooks, deterioration of the solar equipment market, and a worsening of the financial condition of certain customers.
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identify and address technology inflections, market changes, new applications, customer requirements and end-use demand;
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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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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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maintain operating flexibility to enable different responses to different markets, customers and applications;
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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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focus on product development and sales and marketing strategies that address customers' high value problems and foster strong customer relationships;
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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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reduce the cost and improve the productivity of capital invested in R&D activities;
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accurately forecast demand, work with suppliers and meet production schedules for its products;
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improve its manufacturing processes and achieve cost efficiencies across product offerings;
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adapt to changes in value offered by companies in different parts of the supply chain;
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qualify products for evaluation and, in turn, volume manufacturing with its customers; and
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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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varying regional and geopolitical business conditions and demands;
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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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customer- or government-supported efforts to influence Applied to conduct more of its operations and sourcing in a particular country, such as Korea and China;
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variations among, and changes in, local, regional, national or international laws and regulations (including intellectual property, labor, tax, and import/export laws), as well as the interpretation and application of such laws and regulations;
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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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positions taken by governmental agencies regarding possible national commercial and/or security issues posed by international business operations;
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fluctuating raw material, commodity, energy and shipping costs or shipping delays;
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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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a more diverse workforce with different experience levels, cultures, customs, business practices and worker expectations;
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variations in the ability to develop relationships with local customers, suppliers and governments;
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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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the need to provide sufficient levels of technical support in different locations around the world;
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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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the need for an effective business continuity plan if a disaster or other event occurs that could disrupt business operations;
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the need to regularly reassess the size, capability and location of global infrastructure and make appropriate changes;
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cultural and language differences;
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difficulties and uncertainties associated with the entry into new countries;
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hiring and integration of an increasing number of new workers, including in countries such as India and China;
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the increasing need for the workforce to be more mobile and work in or travel to different regions;
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uncertainties with respect to economic growth rates in various countries; and
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uncertainties with respect to growth rates for the manufacture and sale of semiconductors, displays and solar PVs in the developing economies of certain countries.
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diversion of management’s attention from other operational matters;
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contractual restrictions on the conduct of Applied’s business during the pendency of a proposed transaction
;
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inability to complete proposed transactions as anticipated or at all and any ensuing obligation to pay a termination fee;
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the failure of acquired businesses to meet or exceed expected returns;
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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;
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ineffective integration of operations, systems, technologies, products or employees, which can impact the ability to realize anticipated synergies or other benefits;
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failure to commercialize purchased technologies;
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initial dependence on unfamiliar supply chains or relatively small supply partners;
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•
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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;
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•
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failure to attract, retain and motivate key employees;
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the potential impact of the announcement or consummation of a proposed transaction on relationships with third parties;
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potential changes in Applied’s credit rating, which could adversely impact the Company’s access to and cost of capital;
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•
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reductions in cash balances and/or increases in debt obligations to finance activities associated with a transaction, which reduce the availability of cash flow for general corporate or other purposes;
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•
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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;
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•
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challenges associated with managing new, more diverse and more widespread operations, projects and people;
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•
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inability to obtain and protect intellectual property rights in key technologies;
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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;
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•
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impairment of acquired intangible assets and goodwill as a result of changing business conditions, technological advancements or worse-than-expected performance of the segment;
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•
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the risk of litigation or claims associated with a proposed or completed transaction;
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•
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unknown, underestimated and/or undisclosed commitments or liabilities; and
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•
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the inappropriate scale of acquired entities’ critical resources or facilities for business needs.
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•
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the need to devote additional resources to develop new products for, and operate in, new markets;
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•
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the need to develop new sales and technical marketing strategies, cultivate relationships with new customers and meet different customer service requirements;
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•
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differing rates of profitability and growth among multiple businesses;
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•
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Applied’s ability to anticipate demand, capitalize on opportunities, and avoid or minimize risks;
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•
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the complexity of managing multiple businesses with variations in production planning, execution, supply chain management and logistics;
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•
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the adoption of new business models, business processes and systems;
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•
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Applied’s ability to rapidly expand or reduce its operations to meet increased or decreased demand, respectively, and the associated effect on working capital;
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•
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the need to attract, motivate and retain employees with skills and expertise in these new areas;
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•
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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;
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•
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new or different competitors with potentially more financial or other resources, industry experience and/or established customer relationships;
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•
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entry into new industries and countries, with differing levels of government involvement, laws and regulations, and business, employment and safety practices;
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•
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third parties’ intellectual property rights; and
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•
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the need to comply with, or work to establish, industry standards and practices.
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•
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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.
|
Item 1B:
|
Unresolved Staff Comments
|
Item 2:
|
Properties
|
Location
|
Type
|
Principal Use
|
Square
Footage
|
|
Ownership
|
|
Santa Clara, CA
|
Office, Plant & Warehouse
|
Headquarters; Marketing; Manufacturing; Distribution; Research, Development,
Engineering; Customer Support |
1,358,000
164,000
|
|
|
Owned
Leased
|
Austin, TX
|
Office, Plant & Warehouse
|
Manufacturing
|
1,676,000
145,000
|
|
|
Owned
Leased
|
Rehovot, Israel
|
Office, Plant & Warehouse
|
Manufacturing; Research,
Development, Engineering;
Customer Support
|
381,000
5,400
|
|
|
Owned
Leased
|
Singapore
|
Office, Plant & Warehouse
|
Manufacturing and
Customer Support
|
408,000
11,000
|
|
|
Owned
Leased
|
Gloucester, MA
|
Office, Plant & Warehouse
|
Manufacturing; Research,
Development, Engineering;
Customer Support
|
315,000
125,000
|
|
|
Owned
Leased
|
Tainan, Taiwan
|
Office, Plant & Warehouse
|
Manufacturing and
Customer Support
|
320,000
|
|
|
Owned
|
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 2014
|
|
|
|
||||
First quarter
|
$
|
18.01
|
|
|
$
|
16.50
|
|
Second quarter
|
$
|
20.84
|
|
|
$
|
16.72
|
|
Third quarter
|
$
|
23.27
|
|
|
$
|
18.67
|
|
Fourth quarter
|
$
|
23.11
|
|
|
$
|
18.92
|
|
Fiscal 2013
|
|
|
|
||||
First quarter
|
$
|
12.83
|
|
|
$
|
10.15
|
|
Second quarter
|
$
|
14.15
|
|
|
$
|
12.80
|
|
Third quarter
|
$
|
16.69
|
|
|
$
|
14.40
|
|
Fourth quarter
|
$
|
18.10
|
|
|
$
|
14.97
|
|
|
10/25/2009
|
|
10/31/2010
|
|
10/30/2011
|
|
10/28/2012
|
|
10/27/2013
|
|
10/26/2014
|
||||||
Applied Materials
|
100.00
|
|
|
97.43
|
|
|
101.85
|
|
|
88.54
|
|
|
151.43
|
|
|
183.29
|
|
S&P 500 Index
|
100.00
|
|
|
116.52
|
|
|
125.94
|
|
|
145.09
|
|
|
184.52
|
|
|
216.39
|
|
RDG Semiconductor Composite Index
|
100.00
|
|
|
121.00
|
|
|
132.42
|
|
|
124.95
|
|
|
163.20
|
|
|
207.93
|
|
Item 6:
|
Selected Financial Data
|
Fiscal Year(1)
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except percentages and per share amounts)
|
||||||||||||||||||
New orders
|
$
|
9,648
|
|
|
$
|
8,466
|
|
|
$
|
8,037
|
|
|
$
|
10,142
|
|
|
$
|
10,249
|
|
Net sales
|
$
|
9,072
|
|
|
$
|
7,509
|
|
|
$
|
8,719
|
|
|
$
|
10,517
|
|
|
$
|
9,549
|
|
Gross margin
|
$
|
3,843
|
|
|
$
|
2,991
|
|
|
$
|
3,313
|
|
|
$
|
4,360
|
|
|
$
|
3,715
|
|
(% of net sales)
|
42.4
|
|
|
39.8
|
|
|
38.0
|
|
|
41.5
|
|
|
38.9
|
|
|||||
Research, development and engineering
|
$
|
1,428
|
|
|
$
|
1,320
|
|
|
$
|
1,237
|
|
|
$
|
1,118
|
|
|
$
|
1,143
|
|
Operating income
|
$
|
1,520
|
|
|
$
|
432
|
|
|
$
|
411
|
|
|
$
|
2,398
|
|
|
$
|
1,384
|
|
(% of net sales)
|
16.8
|
|
|
5.8
|
|
|
4.7
|
|
|
22.8
|
|
|
14.5
|
|
|||||
Income before income taxes
|
$
|
1,448
|
|
|
$
|
350
|
|
|
$
|
316
|
|
|
$
|
2,378
|
|
|
$
|
1,387
|
|
Net income
(2)
|
$
|
1,072
|
|
|
$
|
256
|
|
|
$
|
109
|
|
|
$
|
1,926
|
|
|
$
|
938
|
|
Earnings per diluted share
(2)
|
$
|
0.87
|
|
|
$
|
0.21
|
|
|
$
|
0.09
|
|
|
$
|
1.45
|
|
|
$
|
0.70
|
|
Long-term debt
|
$
|
1,947
|
|
|
$
|
1,946
|
|
|
$
|
1,946
|
|
|
$
|
1,947
|
|
|
$
|
204
|
|
Cash dividends declared per common share
|
$
|
0.40
|
|
|
$
|
0.39
|
|
|
$
|
0.35
|
|
|
$
|
0.31
|
|
|
$
|
0.27
|
|
Total assets
|
$
|
13,174
|
|
|
$
|
12,043
|
|
|
$
|
12,102
|
|
|
$
|
13,861
|
|
|
$
|
10,943
|
|
(1)
|
Each fiscal year ended on the last Sunday in October. Fiscal 2014, 2013, 2012 and 2011 each contained 52 weeks, while fiscal 2010 contained 53 weeks.
|
(2)
|
Fiscal 2014 amount differs from the unaudited consolidated financial statements included in Applied’s press release issued on November 13, 2014, reflecting an increase to provision for income taxes of $34 million and a decrease to earnings per diluted share of $0.03. This adjustment is not considered material and does not affect Applied’s previously announced Non-GAAP Adjusted Results.
|
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 of announced or completed business combinations and acquisitions
|
•
|
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 and Estimates:
a discussion of critical accounting policies that require the exercise of judgments and estimates
|
•
|
Non-GAAP Adjusted Results:
a presentation of results reconciling GAAP to non-GAAP adjusted measures
|
|
|
|
|
|
|
|
Change
|
||||||||||||
Fiscal Year
|
2014
|
|
2013
|
|
2012
|
|
2014 over 2013
|
|
2013 over 2012
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except per share amounts and percentages)
|
||||||||||||||||||
New orders
|
$
|
9,648
|
|
|
$
|
8,466
|
|
|
$
|
8,037
|
|
|
$
|
1,182
|
|
|
$
|
429
|
|
Net sales
|
$
|
9,072
|
|
|
$
|
7,509
|
|
|
$
|
8,719
|
|
|
$
|
1,563
|
|
|
$
|
(1,210
|
)
|
Gross margin
|
$
|
3,843
|
|
|
$
|
2,991
|
|
|
$
|
3,313
|
|
|
$
|
852
|
|
|
$
|
(322
|
)
|
Gross margin percent
|
42.4
|
%
|
|
39.8
|
%
|
|
38.0
|
%
|
|
2.6 points
|
|
1.8 points
|
|||||||
Operating income
|
$
|
1,520
|
|
|
$
|
432
|
|
|
$
|
411
|
|
|
$
|
1,088
|
|
|
$
|
21
|
|
Operating margin
|
16.8
|
%
|
|
5.8
|
%
|
|
4.7
|
%
|
|
11.0 points
|
|
1.1 points
|
|||||||
Net income
(1)
|
$
|
1,072
|
|
|
$
|
256
|
|
|
$
|
109
|
|
|
$
|
816
|
|
|
$
|
147
|
|
Earnings per diluted share
(1)
|
$
|
0.87
|
|
|
$
|
0.21
|
|
|
$
|
0.09
|
|
|
$
|
0.66
|
|
|
$
|
0.12
|
|
Non-GAAP Adjusted Results
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-GAAP adjusted gross margin
|
$
|
4,002
|
|
|
$
|
3,160
|
|
|
$
|
3,566
|
|
|
$
|
842
|
|
|
$
|
(406
|
)
|
Non-GAAP adjusted gross margin percent
|
44.1
|
%
|
|
42.1
|
%
|
|
40.9
|
%
|
|
2.0 points
|
|
1.2 points
|
|||||||
Non-GAAP adjusted operating income
|
$
|
1,781
|
|
|
$
|
1,032
|
|
|
$
|
1,379
|
|
|
$
|
749
|
|
|
$
|
(347
|
)
|
Non-GAAP adjusted operating margin percent
|
19.6
|
%
|
|
13.7
|
%
|
|
15.8
|
%
|
|
5.9 points
|
|
(2.1) points
|
|||||||
Non-GAAP adjusted net income
|
$
|
1,314
|
|
|
$
|
718
|
|
|
$
|
960
|
|
|
$
|
596
|
|
|
$
|
(242
|
)
|
Non-GAAP adjusted earnings per diluted share
|
$
|
1.07
|
|
|
$
|
0.59
|
|
|
$
|
0.75
|
|
|
$
|
0.48
|
|
|
$
|
(0.16
|
)
|
(1)
|
Fiscal 2014 amount differs from the unaudited consolidated financial statements included in Applied’s press release issued on November 13, 2014, reflecting an increase to provision for income taxes of $34 million and a decrease to earnings per diluted share of $0.03. This adjustment is not considered material and does not affect Applied’s previously announced Non-GAAP Adjusted Results.
|
|
2014
|
|
Change
2014 over 2013 |
|
2013
|
|
Change
2013 over 2012 |
|
2012
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
(In millions, except percentages)
|
||||||||||||||||||||
Silicon Systems Group
|
$
|
6,132
|
|
|
64%
|
|
11%
|
|
$
|
5,507
|
|
|
65%
|
|
4%
|
|
$
|
5,294
|
|
|
66%
|
Applied Global Services
|
2,433
|
|
|
25%
|
|
16%
|
|
2,090
|
|
|
25%
|
|
(8)%
|
|
2,274
|
|
|
28%
|
|||
Display
|
845
|
|
|
9%
|
|
20%
|
|
703
|
|
|
8%
|
|
157%
|
|
274
|
|
|
4%
|
|||
Energy and Environmental Solutions
|
238
|
|
|
2%
|
|
43%
|
|
166
|
|
|
2%
|
|
(15)%
|
|
195
|
|
|
2%
|
|||
Total
|
$
|
9,648
|
|
|
100%
|
|
14%
|
|
$
|
8,466
|
|
|
100%
|
|
5%
|
|
$
|
8,037
|
|
|
100%
|
|
2014
|
|
Change
2014 over 2013 |
|
2013
|
|
Change
2013 over 2012 |
|
2012
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
(In millions, except percentages)
|
||||||||||||||||||||
Taiwan
|
$
|
2,740
|
|
|
28%
|
|
(5)%
|
|
$
|
2,885
|
|
|
34%
|
|
34%
|
|
$
|
2,155
|
|
|
27%
|
China
|
1,517
|
|
|
16%
|
|
13%
|
|
1,339
|
|
|
16%
|
|
232%
|
|
403
|
|
|
5%
|
|||
Korea
|
1,086
|
|
|
11%
|
|
19%
|
|
915
|
|
|
11%
|
|
(49)%
|
|
1,784
|
|
|
22%
|
|||
Japan
|
1,031
|
|
|
11%
|
|
25%
|
|
822
|
|
|
10%
|
|
37%
|
|
600
|
|
|
7%
|
|||
Southeast Asia
|
412
|
|
|
4%
|
|
17%
|
|
351
|
|
|
4%
|
|
24%
|
|
283
|
|
|
4%
|
|||
Asia Pacific
|
6,786
|
|
|
70%
|
|
8%
|
|
6,312
|
|
|
75%
|
|
21%
|
|
5,225
|
|
|
65%
|
|||
United States
|
2,200
|
|
|
23%
|
|
55%
|
|
1,419
|
|
|
17%
|
|
(29)%
|
|
1,995
|
|
|
25%
|
|||
Europe
|
662
|
|
|
7%
|
|
(10)%
|
|
735
|
|
|
8%
|
|
(10)%
|
|
817
|
|
|
10%
|
|||
Total
|
$
|
9,648
|
|
|
100%
|
|
14%
|
|
$
|
8,466
|
|
|
100%
|
|
5%
|
|
$
|
8,037
|
|
|
100%
|
|
2014
|
|
2013
|
||||
|
(In millions)
|
||||||
Beginning balance
|
$
|
2,372
|
|
|
$
|
1,606
|
|
New orders
|
9,648
|
|
|
8,466
|
|
||
Net sales
|
(9,072
|
)
|
|
(7,509
|
)
|
||
Net adjustments
|
(31
|
)
|
|
(191
|
)
|
||
Ending balance
|
$
|
2,917
|
|
|
$
|
2,372
|
|
|
2014
|
|
Change
2014 over 2013 |
|
2013
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||
|
(In millions, except percentages)
|
||||||||||||
Silicon Systems Group
|
$
|
1,400
|
|
|
48%
|
|
8%
|
|
$
|
1,295
|
|
|
55%
|
Applied Global Services
|
775
|
|
|
27%
|
|
31%
|
|
591
|
|
|
25%
|
||
Display
|
593
|
|
|
20%
|
|
64%
|
|
361
|
|
|
15%
|
||
Energy and Environmental Solutions
|
149
|
|
|
5%
|
|
19%
|
|
125
|
|
|
5%
|
||
Total
|
$
|
2,917
|
|
|
100%
|
|
23%
|
|
$
|
2,372
|
|
|
100%
|
|
2014
|
|
Change
2014 over 2013 |
|
2013
|
|
Change
2013 over 2012 |
|
2012
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
(In millions, except percentages)
|
||||||||||||||||||||
Silicon Systems Group
|
$
|
5,978
|
|
|
66%
|
|
25%
|
|
$
|
4,775
|
|
|
64%
|
|
(14)%
|
|
$
|
5,536
|
|
|
64%
|
Applied Global Services
|
2,200
|
|
|
24%
|
|
9%
|
|
2,023
|
|
|
27%
|
|
(11)%
|
|
2,285
|
|
|
26%
|
|||
Display
|
615
|
|
|
7%
|
|
14%
|
|
538
|
|
|
7%
|
|
14%
|
|
473
|
|
|
5%
|
|||
Energy and Environmental Solutions
|
279
|
|
|
3%
|
|
61%
|
|
173
|
|
|
2%
|
|
(59)%
|
|
425
|
|
|
5%
|
|||
Total
|
$
|
9,072
|
|
|
100%
|
|
21%
|
|
$
|
7,509
|
|
|
100%
|
|
(14)%
|
|
$
|
8,719
|
|
|
100%
|
|
2014
|
|
Change
2014 over 2013 |
|
2013
|
|
Change
2013 over 2012 |
|
2012
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
(In millions, except percentages)
|
||||||||||||||||||||
Taiwan
|
$
|
2,702
|
|
|
30%
|
|
2%
|
|
$
|
2,640
|
|
|
35%
|
|
9%
|
|
$
|
2,411
|
|
|
28%
|
China
|
1,608
|
|
|
18%
|
|
104%
|
|
787
|
|
|
11%
|
|
1%
|
|
783
|
|
|
9%
|
|||
Korea
|
965
|
|
|
10%
|
|
4%
|
|
924
|
|
|
12%
|
|
(51)%
|
|
1,897
|
|
|
22%
|
|||
Japan
|
817
|
|
|
9%
|
|
19%
|
|
685
|
|
|
9%
|
|
(3)%
|
|
704
|
|
|
8%
|
|||
Southeast Asia
|
356
|
|
|
4%
|
|
11%
|
|
320
|
|
|
4%
|
|
3%
|
|
312
|
|
|
3%
|
|||
Asia Pacific
|
6,448
|
|
|
71%
|
|
20%
|
|
5,356
|
|
|
71%
|
|
(12)%
|
|
6,107
|
|
|
70%
|
|||
United States
|
1,966
|
|
|
22%
|
|
33%
|
|
1,473
|
|
|
20%
|
|
(16)%
|
|
1,749
|
|
|
20%
|
|||
Europe
|
658
|
|
|
7%
|
|
(3)%
|
|
680
|
|
|
9%
|
|
(21)%
|
|
863
|
|
|
10%
|
|||
Total
|
$
|
9,072
|
|
|
100%
|
|
21%
|
|
$
|
7,509
|
|
|
100%
|
|
(14)%
|
|
$
|
8,719
|
|
|
100%
|
|
|
|
|
|
|
|
Change
|
||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2014 over 2013
|
|
2013 over 2012
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||
Gross margin
|
$
|
3,843
|
|
|
$
|
2,991
|
|
|
$
|
3,313
|
|
|
$
|
852
|
|
|
$
|
(322
|
)
|
Gross margin (% of net sales)
|
42.4
|
%
|
|
39.8
|
%
|
|
38.0
|
%
|
|
2.6 points
|
|
1.8 points
|
|||||||
Non-GAAP Adjusted Results
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-GAAP adjusted gross margin
|
$
|
4,002
|
|
|
$
|
3,160
|
|
|
$
|
3,566
|
|
|
$
|
842
|
|
|
$
|
(406
|
)
|
Non-GAAP adjusted gross margin (% of net sales)
|
44.1
|
%
|
|
42.1
|
%
|
|
40.9
|
%
|
|
2.0 points
|
|
1.2 points
|
|
|
|
|
|
|
|
Change
|
||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2014 over 2013
|
|
2013 over 2012
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Research, development and engineering
|
$
|
1,428
|
|
|
$
|
1,320
|
|
|
$
|
1,237
|
|
|
$
|
108
|
|
|
$
|
83
|
|
|
|
|
|
|
|
|
Change
|
||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2014 over 2013
|
|
2013 over 2012
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Marketing and selling
|
$
|
423
|
|
|
$
|
433
|
|
|
$
|
481
|
|
|
$
|
(10
|
)
|
|
$
|
(48
|
)
|
|
|
|
|
|
|
|
Change
|
||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2014 over 2013
|
|
2013 over 2012
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions)
|
||||||||||||||||||
General and administrative
|
$
|
467
|
|
|
$
|
465
|
|
|
$
|
595
|
|
|
$
|
2
|
|
|
$
|
(130
|
)
|
|
|
|
|
|
|
|
Change
|
||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2014 over 2013
|
|
2013 over 2012
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Restructuring and asset impairments, net
|
$
|
5
|
|
|
$
|
63
|
|
|
$
|
168
|
|
|
$
|
(58
|
)
|
|
$
|
(105
|
)
|
|
|
|
|
|
|
|
Change
|
||||||||||||
2014
|
|
2013
|
|
2012
|
2014 over 2013
|
|
2013 over 2012
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Interest expense
|
$
|
95
|
|
|
$
|
95
|
|
|
$
|
95
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest and other income, net
|
$
|
23
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
13
|
|
|
|
|
|
|
|
|
Change
|
||||||||||||
2014
|
|
2013
|
|
2012
|
|
2014 over 2013
|
|
2013 over 2012
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||
Provision for income taxes
|
$
|
376
|
|
|
$
|
94
|
|
|
$
|
207
|
|
|
$
|
282
|
|
|
$
|
(113
|
)
|
Effective income tax rate
|
26.0
|
%
|
|
26.9
|
%
|
|
65.5
|
%
|
|
(0.9) point
|
|
(38.6) points
|
|
|
|
|
|
|
|
Change
|
||||||||||||||||
2014
|
|
2013
|
|
2012
|
2014 over 2013
|
|
2013 over 2012
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except percentages and ratios)
|
||||||||||||||||||||||
New orders
|
$
|
6,132
|
|
|
$
|
5,507
|
|
|
$
|
5,294
|
|
|
$
|
625
|
|
|
11%
|
|
$
|
213
|
|
|
4%
|
Net sales
|
5,978
|
|
|
4,775
|
|
|
5,536
|
|
|
1,203
|
|
|
25%
|
|
(761
|
)
|
|
(14)%
|
|||||
Book to bill ratio
|
1.0
|
|
|
1.2
|
|
|
1.0
|
|
|
|
|
|
|
|
|
|
|||||||
Operating income
|
1,391
|
|
|
876
|
|
|
1,243
|
|
|
515
|
|
|
59%
|
|
(367
|
)
|
|
(30)%
|
|||||
Operating margin
|
23.3
|
%
|
|
18.3
|
%
|
|
22.5
|
%
|
|
|
|
5.0 points
|
|
|
|
(4.2) points
|
|||||||
Non-GAAP Adjusted Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-GAAP adjusted operating income
|
$
|
1,565
|
|
|
$
|
1,050
|
|
|
$
|
1,537
|
|
|
515
|
|
|
49%
|
|
(487
|
)
|
|
(32)%
|
||
Non-GAAP adjusted operating margin
|
26.2
|
%
|
|
22.0
|
%
|
|
27.8
|
%
|
|
|
|
4.2 points
|
|
|
|
(5.8) points
|
|
|
|
|
|
|
|
Change
|
||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
2014 over 2013
|
|
2013 over 2012
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||
Taiwan
|
$
|
2,186
|
|
|
$
|
2,171
|
|
|
$
|
1,744
|
|
|
$
|
15
|
|
|
1%
|
|
$
|
427
|
|
|
24%
|
|
|
|
|
|
|
|
Change
|
|||||||||||||||||
2014
|
|
2013
|
|
2012
|
2014 over 2013
|
|
2013 over 2012
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
(In millions, except percentages and ratios)
|
|||||||||||||||||||||||
New orders
|
$
|
2,433
|
|
|
$
|
2,090
|
|
|
$
|
2,274
|
|
|
$
|
343
|
|
|
16%
|
|
$
|
(184
|
)
|
|
(8
|
)%
|
Net sales
|
2,200
|
|
|
2,023
|
|
|
2,285
|
|
|
177
|
|
|
9%
|
|
(262
|
)
|
|
(11
|
)%
|
|||||
Book to bill ratio
|
1.1
|
|
|
1.0
|
|
|
1.0
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income
|
573
|
|
|
436
|
|
|
502
|
|
|
137
|
|
|
31%
|
|
(66
|
)
|
|
(13
|
)%
|
|||||
Operating margin
|
26.0
|
%
|
|
21.6
|
%
|
|
22.0
|
%
|
|
|
|
4.4 points
|
|
|
|
(0.4) point
|
||||||||
Non-GAAP Adjusted Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Non-GAAP adjusted operating income
|
576
|
|
|
443
|
|
|
530
|
|
|
133
|
|
|
30%
|
|
(87
|
)
|
|
(16
|
)%
|
|||||
Non-GAAP adjusted operating margin
|
26.2
|
%
|
|
21.9
|
%
|
|
23.2
|
%
|
|
|
|
4.3 points
|
|
|
|
(1.3) points
|
|
|
|
|
|
|
|
Change
|
||||||||||||||||
2014
|
|
2013
|
|
2012
|
2014 over 2013
|
|
2013 over 2012
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except percentages and ratios)
|
||||||||||||||||||||||
New orders
|
$
|
845
|
|
|
$
|
703
|
|
|
$
|
274
|
|
|
$
|
142
|
|
|
20%
|
|
$
|
429
|
|
|
157%
|
Net sales
|
615
|
|
|
538
|
|
|
473
|
|
|
77
|
|
|
14%
|
|
65
|
|
|
14%
|
|||||
Book to bill ratio
|
1.4
|
|
|
1.3
|
|
|
0.6
|
|
|
|
|
|
|
|
|
|
|||||||
Operating income
|
129
|
|
|
74
|
|
|
25
|
|
|
55
|
|
|
74%
|
|
49
|
|
|
196%
|
|||||
Operating margin
|
21.0
|
%
|
|
13.8
|
%
|
|
5.3
|
%
|
|
|
|
7.2 points
|
|
|
|
8.5 points
|
|||||||
Non-GAAP Adjusted Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-GAAP adjusted operating income
|
$
|
131
|
|
|
$
|
80
|
|
|
$
|
32
|
|
|
51
|
|
|
64%
|
|
48
|
|
|
150%
|
||
Non-GAAP adjusted operating margin
|
21.3
|
%
|
|
14.9
|
%
|
|
6.8
|
%
|
|
|
|
6.4 points
|
|
|
|
8.1 points
|
|
|
|
|
|
|
|
Change
|
||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
2014 over 2013
|
|
2013 over 2012
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||
Taiwan
|
$
|
22
|
|
|
$
|
50
|
|
|
$
|
179
|
|
|
$
|
(28
|
)
|
|
(56)%
|
|
$
|
(129
|
)
|
|
(72)%
|
China
|
$
|
491
|
|
|
$
|
260
|
|
|
$
|
133
|
|
|
$
|
231
|
|
|
89%
|
|
$
|
127
|
|
|
95%
|
Korea
|
$
|
99
|
|
|
$
|
175
|
|
|
$
|
88
|
|
|
$
|
(76
|
)
|
|
(43)%
|
|
$
|
87
|
|
|
99%
|
|
|
|
|
|
|
|
Change
|
||||||||||||||||
2014
|
|
2013
|
|
2012
|
2014 over 2013
|
|
2013 over 2012
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except percentages and ratios)
|
||||||||||||||||||||||
New orders
|
$
|
238
|
|
|
$
|
166
|
|
|
$
|
195
|
|
|
$
|
72
|
|
|
43%
|
|
$
|
(29
|
)
|
|
(15)%
|
Net sales
|
279
|
|
|
173
|
|
|
425
|
|
|
106
|
|
|
61%
|
|
(252
|
)
|
|
(59)%
|
|||||
Book to bill ratio
|
0.9
|
|
|
1.0
|
|
|
0.5
|
|
|
|
|
|
|
|
|
|
|||||||
Operating income (loss)
|
15
|
|
|
(433
|
)
|
|
(668
|
)
|
|
448
|
|
|
103%
|
|
235
|
|
|
35%
|
|||||
Operating margin
|
5.4
|
%
|
|
(250.3
|
)%
|
|
(157.2
|
)%
|
|
|
|
255.7 points
|
|
|
|
(93.1) points
|
|||||||
Non-GAAP Adjusted Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-GAAP adjusted operating income (loss)
|
21
|
|
|
(115
|
)
|
|
(184
|
)
|
|
136
|
|
|
118%
|
|
69
|
|
|
38%
|
|||||
Non-GAAP adjusted operating margin
|
7.5
|
%
|
|
(66.5
|
)%
|
|
(43.3
|
)%
|
|
|
|
74.0 points
|
|
|
|
(23.2) points
|
|
|
|
|
|
|
|
Change
|
||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
2014 over 2013
|
|
2013 over 2012
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||||
China
|
$
|
173
|
|
|
$
|
100
|
|
|
$
|
210
|
|
|
$
|
73
|
|
|
73
|
%
|
|
$
|
(110
|
)
|
|
(52
|
)%
|
|
October 26,
2014 |
|
October 27,
2013 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Cash and cash equivalents
|
$
|
3,002
|
|
|
$
|
1,711
|
|
Short-term investments
|
160
|
|
|
180
|
|
||
Long-term investments
|
935
|
|
|
1,005
|
|
||
Total cash, cash-equivalents and investments
|
$
|
4,097
|
|
|
$
|
2,896
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Cash provided by operating activities
|
$
|
1,800
|
|
|
$
|
623
|
|
|
$
|
1,851
|
|
Cash provided by (used in) investing activities
|
$
|
(161
|
)
|
|
$
|
215
|
|
|
$
|
(4,660
|
)
|
Cash used in financing activities
|
$
|
(348
|
)
|
|
$
|
(519
|
)
|
|
$
|
(1,754
|
)
|
|
2014
|
|
2013
|
|
2012
|
|
|
|
|
|
|
Days sales outstanding
|
67
|
|
75
|
|
67
|
Days inventory outstanding
|
109
|
|
108
|
|
109
|
Days payable outstanding
|
43
|
|
44
|
|
34
|
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
|
7.125% Senior Notes Due 2017
|
200
|
|
|
7.190%
|
|
April 15, October 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
|
|
|
$
|
1,950
|
|
|
|
|
|
|
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
|
1,238
|
|
|
92
|
|
|
174
|
|
|
135
|
|
|
837
|
|
|||||
Operating lease obligations
|
70
|
|
|
28
|
|
|
28
|
|
|
9
|
|
|
5
|
|
|||||
Purchase obligations
1
|
1,565
|
|
|
1,527
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|||||
Other long-term liabilities
2
|
254
|
|
|
—
|
|
|
55
|
|
|
30
|
|
|
169
|
|
|||||
|
$
|
5,077
|
|
|
$
|
1,647
|
|
|
$
|
895
|
|
|
$
|
174
|
|
|
$
|
2,361
|
|
1
|
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.
|
2
|
Other long-term liabilities do not include noncurrent income taxes payable, noncurrent deferred income taxes payable and certain tax-related liabilities due to the uncertainty in the timing of future payments.
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
(In millions, except percentages)
|
||||||||||
Non-GAAP Adjusted Gross Margin
|
|
|
|
|
|
|
||||||
Reported gross margin - GAAP basis
|
|
$
|
3,843
|
|
|
$
|
2,991
|
|
|
$
|
3,313
|
|
Certain items associated with acquisitions
1
|
|
158
|
|
|
166
|
|
|
253
|
|
|||
Acquisition integration costs
|
|
1
|
|
|
3
|
|
|
—
|
|
|||
Non-GAAP adjusted gross margin
|
|
$
|
4,002
|
|
|
$
|
3,160
|
|
|
$
|
3,566
|
|
Non-GAAP adjusted gross margin percent (% of net sales)
|
|
44.1
|
%
|
|
42.1
|
%
|
|
40.9
|
%
|
|||
Non-GAAP Adjusted Operating Income
|
|
|
|
|
|
|
||||||
Reported operating income - GAAP basis
|
|
$
|
1,520
|
|
|
$
|
432
|
|
|
$
|
411
|
|
Impairment of goodwill and intangible assets
|
|
—
|
|
|
278
|
|
|
421
|
|
|||
Certain items associated with acquisitions
1
|
|
183
|
|
|
201
|
|
|
298
|
|
|||
Acquisition integration costs
|
|
34
|
|
|
38
|
|
|
81
|
|
|||
Loss (gain) on derivative associated with announced business combination, net
|
|
(30
|
)
|
|
7
|
|
|
—
|
|
|||
Certain items associated with announced business combination
4
|
|
73
|
|
|
17
|
|
|
—
|
|
|||
Restructuring charges and asset impairments
2, 3
|
|
5
|
|
|
63
|
|
|
168
|
|
|||
Gain on sale of facility
|
|
(4
|
)
|
|
(4
|
)
|
|
—
|
|
|||
Non-GAAP adjusted operating income
|
|
$
|
1,781
|
|
|
$
|
1,032
|
|
|
$
|
1,379
|
|
Non-GAAP adjusted operating margin percent (% of net sales)
|
|
19.6
|
%
|
|
13.7
|
%
|
|
15.8
|
%
|
|||
Non-GAAP Adjusted Net Income
|
|
|
|
|
|
|
||||||
Reported net income - GAAP basis
5
|
|
$
|
1,072
|
|
|
$
|
256
|
|
|
$
|
109
|
|
Impairment of goodwill and intangible assets
|
|
—
|
|
|
278
|
|
|
421
|
|
|||
Certain items associated with acquisitions
1
|
|
183
|
|
|
201
|
|
|
298
|
|
|||
Acquisition integration costs
|
|
34
|
|
|
38
|
|
|
81
|
|
|||
Loss (gain) on derivative associated with announced business combination, net
|
|
(30
|
)
|
|
7
|
|
|
—
|
|
|||
Certain items associated with announced business combination
4
|
|
73
|
|
|
17
|
|
|
—
|
|
|||
Restructuring charges and asset impairments
2, 3
|
|
5
|
|
|
63
|
|
|
168
|
|
|||
Impairment (gain on sale) of strategic investments, net
|
|
(9
|
)
|
|
1
|
|
|
17
|
|
|||
Gain on sale of facility
|
|
(4
|
)
|
|
(4
|
)
|
|
—
|
|
|||
Reinstatement of federal R&D tax credit
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|||
Resolution of prior years’ income tax filings and other tax items
5
|
|
28
|
|
|
(24
|
)
|
|
(22
|
)
|
|||
Income tax effect of non-GAAP adjustments
|
|
(38
|
)
|
|
(102
|
)
|
|
(112
|
)
|
|||
Non-GAAP adjusted net income
|
|
$
|
1,314
|
|
|
$
|
718
|
|
|
$
|
960
|
|
1
|
These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets.
|
|
|
2
|
Results for the twelve months ended October 27, 2013 included $39 million of employee-related costs, net, related to the restructuring program announced on October 3, 2012, and restructuring and asset impairment charges of $26 million related to the restructuring program announced on May 10, 2012, partially offset by a favorable adjustment of $2 million related to other restructuring plans.
|
|
|
3
|
Results for the twelve months ended October 28, 2012 included employee-related costs 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.
|
|
|
4
|
These items are incremental charges related to the announced business combination agreement with Tokyo Electron Limited, consisting of acquisition-related and integration planning costs.
|
|
|
5
|
Fiscal 2014 amount differs from the unaudited consolidated financial statements included in Applied’s press release issued on
November 13, 2014, reflecting an increase to provision for income taxes of $34 million. This adjustment is not considered material and does not affect Applied’s previously announced Non-GAAP Adjusted Results.
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
(In millions, except per share amounts)
|
||||||||||
Non-GAAP Adjusted Earnings Per Diluted Share
|
|
|
|
|
|
|
||||||
Reported earnings per diluted share - GAAP basis
1
|
|
$
|
0.87
|
|
|
$
|
0.21
|
|
|
$
|
0.09
|
|
Impairment of goodwill and intangible assets
|
|
—
|
|
|
0.21
|
|
|
0.33
|
|
|||
Certain items associated with acquisitions
|
|
0.13
|
|
|
0.14
|
|
|
0.19
|
|
|||
Acquisition integration costs
|
|
0.02
|
|
|
0.02
|
|
|
0.05
|
|
|||
Gain on derivative associated with announced business combination, net
|
|
(0.02
|
)
|
|
—
|
|
|
—
|
|
|||
Certain items associated with announced business combination
|
|
0.05
|
|
|
0.01
|
|
|
—
|
|
|||
Restructuring charges and asset impairments
|
|
—
|
|
|
0.03
|
|
|
0.10
|
|
|||
Impairment of strategic investments, net
|
|
—
|
|
|
—
|
|
|
0.01
|
|
|||
Reinstatement of federal R&D tax credit and resolution of prior years’ income tax filings and other tax items
1
|
|
0.02
|
|
|
(0.03
|
)
|
|
(0.02
|
)
|
|||
Non-GAAP adjusted earnings per diluted share
|
|
$
|
1.07
|
|
|
$
|
0.59
|
|
|
$
|
0.75
|
|
Weighted average number of diluted shares
|
|
1,231
|
|
|
1,219
|
|
|
1,277
|
|
1
|
Fiscal 2014 amount differs from the unaudited consolidated financial statements included in Applied’s press release issued on
November 13, 2014, reflecting an increase to provision for income taxes of $34 million and a decrease to earnings per diluted share of $0.03. This adjustment is not considered material and does not affect Applied’s previously announced Non-GAAP Adjusted Results.
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
(In millions, except percentages)
|
||||||||||
SSG Non-GAAP Adjusted Operating Income
|
|
|
|
|
|
|
||||||
Reported operating income - GAAP basis
|
|
$
|
1,391
|
|
|
$
|
876
|
|
|
$
|
1,243
|
|
Certain items associated with acquisitions
1
|
|
172
|
|
|
175
|
|
|
253
|
|
|||
Acquisition integration costs
|
|
2
|
|
|
(2
|
)
|
|
37
|
|
|||
Restructuring charges and asset impairments
2
|
|
—
|
|
|
1
|
|
|
4
|
|
|||
Non-GAAP adjusted operating income
|
|
$
|
1,565
|
|
|
$
|
1,050
|
|
|
$
|
1,537
|
|
Non-GAAP adjusted operating margin percent (% of net sales)
|
|
26.2
|
%
|
|
22.0
|
%
|
|
27.8
|
%
|
|||
AGS Non-GAAP Adjusted Operating Income
|
|
|
|
|
|
|
||||||
Reported operating income - GAAP basis
|
|
$
|
573
|
|
|
$
|
436
|
|
|
$
|
502
|
|
Certain items associated with acquisitions
1
|
|
3
|
|
|
5
|
|
|
13
|
|
|||
Restructuring charges and asset impairments
2, 3
|
|
—
|
|
|
2
|
|
|
15
|
|
|||
Non-GAAP adjusted operating income
|
|
$
|
576
|
|
|
$
|
443
|
|
|
$
|
530
|
|
Non-GAAP adjusted operating margin percent (% of net sales)
|
|
26.2
|
%
|
|
21.9
|
%
|
|
23.2
|
%
|
|||
Display Non-GAAP Adjusted Operating Income
|
|
|
|
|
|
|
||||||
Reported operating income - GAAP basis
|
|
$
|
129
|
|
|
$
|
74
|
|
|
$
|
25
|
|
Certain items associated with acquisitions
1
|
|
2
|
|
|
6
|
|
|
7
|
|
|||
Non-GAAP adjusted operating income
|
|
$
|
131
|
|
|
$
|
80
|
|
|
$
|
32
|
|
Non-GAAP adjusted operating margin percent (% of net sales)
|
|
21.3
|
%
|
|
14.9
|
%
|
|
6.8
|
%
|
|||
EES Non-GAAP Adjusted Operating Income (Loss)
|
|
|
|
|
|
|
||||||
Reported operating income (loss) - GAAP basis
|
|
$
|
15
|
|
|
$
|
(433
|
)
|
|
$
|
(668
|
)
|
Certain items associated with acquisitions
1
|
|
6
|
|
|
15
|
|
|
25
|
|
|||
Impairment of goodwill and intangible assets
|
|
—
|
|
|
278
|
|
|
421
|
|
|||
Restructuring charges and asset impairments
2, 3
|
|
—
|
|
|
25
|
|
|
38
|
|
|||
Non-GAAP adjusted operating income (loss)
|
|
$
|
21
|
|
|
$
|
(115
|
)
|
|
$
|
(184
|
)
|
Non-GAAP adjusted operating margin percent (% of net sales)
|
|
7.5
|
%
|
|
(66.5
|
)%
|
|
(43.3
|
)%
|
1
|
These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets.
|
|
|
2
|
Results for the twelve months ended October 27, 2013 included restructuring and asset impairment charges of $26 million related to the restructuring program announced on May 10, 2012 and severance charges of $2 million related to the integration of Varian.
|
|
|
3
|
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.
|
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
|
34
|
|
|
|
$
|
15.06
|
|
|
167
|
|
(3)
|
Equity compensation plans not approved by security holders
|
1
|
|
(4)
|
|
$
|
5.85
|
|
|
11
|
|
(5)
|
Total
|
35
|
|
|
|
$
|
10.87
|
|
|
178
|
|
|
(1)
|
Includes only options, restricted stock units performance shares and performance units outstanding under Applied’s equity compensation plans, as no stock warrants or other rights were outstanding as of
October 26, 2014
.
|
(2)
|
The weighted average exercise price calculation does not take into account any restricted stock units, and performance shares or performance units as they have a de minimis purchase price.
|
(3)
|
Includes 23 million shares of Applied common stock available for future issuance under the Applied Materials, Inc. Employees’ Stock Purchase Plan. Of these 23 million shares, 1 million are subject to purchase during the purchase period in effect as of
October 26, 2014
.
|
(4)
|
Includes options to purchase 1 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 $5.85 per share. No further shares are available for issuance under the plans under which these assumed awards were granted.
|
(5)
|
Includes 11 million shares of Applied common stock available for future issuance under the Applied Materials, Inc. Stock Purchase Plan for Offshore Employees. Of these 11 million shares, 1 million are subject to purchase during the purchase period in effect as of
October 26, 2014
.
|
Item 13:
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14:
|
Principal Accounting Fees and Services
|
Item 15:
|
Exhibits, Financial Statement Schedules
|
|
|
Page
Number
|
(1)
|
Financial Statements:
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
(2)
|
Exhibits:
|
|
|
|
|
|
||
|
|
|
/
S
/ KPMG LLP
|
KPMG LLP
|
/s/ KPMG LLP
|
KPMG LLP
|
Fiscal Year
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions, except per share amounts)
|
||||||||||
Net sales
|
$
|
9,072
|
|
|
$
|
7,509
|
|
|
$
|
8,719
|
|
Cost of products sold
|
5,229
|
|
|
4,518
|
|
|
5,406
|
|
|||
Gross margin
|
3,843
|
|
|
2,991
|
|
|
3,313
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research, development and engineering
|
1,428
|
|
|
1,320
|
|
|
1,237
|
|
|||
Marketing and selling
|
423
|
|
|
433
|
|
|
481
|
|
|||
General and administrative
|
467
|
|
|
465
|
|
|
595
|
|
|||
Impairment of goodwill and intangible assets
|
—
|
|
|
278
|
|
|
421
|
|
|||
Restructuring charges and asset impairments
|
5
|
|
|
63
|
|
|
168
|
|
|||
Total operating expenses
|
2,323
|
|
|
2,559
|
|
|
2,902
|
|
|||
Income from operations
|
1,520
|
|
|
432
|
|
|
411
|
|
|||
Interest expense
|
95
|
|
|
95
|
|
|
95
|
|
|||
Interest and other income, net
|
23
|
|
|
13
|
|
|
—
|
|
|||
Income before income taxes
|
1,448
|
|
|
350
|
|
|
316
|
|
|||
Provision for income taxes
|
376
|
|
|
94
|
|
|
207
|
|
|||
Net income
|
$
|
1,072
|
|
|
$
|
256
|
|
|
$
|
109
|
|
Earnings per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.88
|
|
|
$
|
0.21
|
|
|
$
|
0.09
|
|
Diluted
|
$
|
0.87
|
|
|
$
|
0.21
|
|
|
$
|
0.09
|
|
Weighted average number of shares:
|
|
|
|
|
|
||||||
Basic
|
1,215
|
|
|
1,202
|
|
|
1,266
|
|
|||
Diluted
|
1,231
|
|
|
1,219
|
|
|
1,277
|
|
Fiscal Year
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Net income
|
$
|
1,072
|
|
|
$
|
256
|
|
|
$
|
109
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Change in unrealized net gain on investments
|
(1
|
)
|
|
9
|
|
|
(1
|
)
|
|||
Change in unrealized net gain on derivative investments
|
(2
|
)
|
|
1
|
|
|
1
|
|
|||
Change in defined and postretirement benefit plans
|
(33
|
)
|
|
18
|
|
|
(65
|
)
|
|||
Change in cumulative translation adjustments
|
(2
|
)
|
|
(5
|
)
|
|
(2
|
)
|
|||
Other comprehensive income (loss), net of tax
|
(38
|
)
|
|
23
|
|
|
(67
|
)
|
|||
Comprehensive income
|
$
|
1,034
|
|
|
$
|
279
|
|
|
$
|
42
|
|
|
October 26,
2014 |
|
October 27,
2013 |
||||
|
|
|
|
||||
|
(In millions, except per share amounts)
|
||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
3,002
|
|
|
$
|
1,711
|
|
Short-term investments
|
160
|
|
|
180
|
|
||
Accounts receivable, net
|
1,670
|
|
|
1,633
|
|
||
Inventories
|
1,567
|
|
|
1,413
|
|
||
Other current assets
|
568
|
|
|
705
|
|
||
Total current assets
|
6,967
|
|
|
5,642
|
|
||
Long-term investments
|
935
|
|
|
1,005
|
|
||
Property, plant and equipment, net
|
861
|
|
|
850
|
|
||
Goodwill
|
3,304
|
|
|
3,294
|
|
||
Purchased technology and other intangible assets, net
|
951
|
|
|
1,103
|
|
||
Deferred income taxes and other assets
|
156
|
|
|
149
|
|
||
Total assets
|
$
|
13,174
|
|
|
$
|
12,043
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
1,883
|
|
|
$
|
1,649
|
|
Customer deposits and deferred revenue
|
940
|
|
|
794
|
|
||
Total current liabilities
|
2,823
|
|
|
2,443
|
|
||
Long-term debt
|
1,947
|
|
|
1,946
|
|
||
Other liabilities
|
536
|
|
|
566
|
|
||
Total liabilities
|
5,306
|
|
|
4,955
|
|
||
Commitments and contingencies (Note 15)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock: $.01 par value per share; 1 shares authorized; no shares issued
|
—
|
|
|
—
|
|
||
Common stock: $.01 par value per share; 2,500 shares authorized; 1,221 and 1,204 shares outstanding at 2014 and 2013, respectively
|
12
|
|
|
12
|
|
||
Additional paid-in capital
|
6,384
|
|
|
6,151
|
|
||
Retained earnings
|
13,072
|
|
|
12,487
|
|
||
Treasury stock: 717 shares at 2014 and 2013, net
|
(11,524
|
)
|
|
(11,524
|
)
|
||
Accumulated other comprehensive loss
|
(76
|
)
|
|
(38
|
)
|
||
Total stockholders’ equity
|
7,868
|
|
|
7,088
|
|
||
Total liabilities and stockholders’ equity
|
$
|
13,174
|
|
|
$
|
12,043
|
|
|
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 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
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
256
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
256
|
|
||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
23
|
|
||||||
Dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(469
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(469
|
)
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
162
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
162
|
|
||||||
Issuance under stock plans, net of a tax benefit of $14 and other
|
25
|
|
|
—
|
|
|
126
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
126
|
|
||||||
Common stock repurchases
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
(245
|
)
|
|
—
|
|
|
(245
|
)
|
||||||
Balance at October 27, 2013
|
1,204
|
|
|
$
|
12
|
|
|
$
|
6,151
|
|
|
$
|
12,487
|
|
|
717
|
|
|
$
|
(11,524
|
)
|
|
$
|
(38
|
)
|
|
$
|
7,088
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,072
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,072
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38
|
)
|
|
(38
|
)
|
||||||
Dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(487
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(487
|
)
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
177
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
177
|
|
||||||
Issuance under stock plans, net of a tax benefit of $27 and other
|
17
|
|
|
—
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56
|
|
||||||
Balance at October 26, 2014
|
1,221
|
|
|
$
|
12
|
|
|
$
|
6,384
|
|
|
$
|
13,072
|
|
|
717
|
|
|
$
|
(11,524
|
)
|
|
$
|
(76
|
)
|
|
$
|
7,868
|
|
Fiscal Year
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
1,072
|
|
|
$
|
256
|
|
|
$
|
109
|
|
Adjustments required to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
375
|
|
|
410
|
|
|
422
|
|
|||
Impairment of goodwill and intangible assets
|
—
|
|
|
278
|
|
|
421
|
|
|||
Restructuring charges and asset impairments
|
5
|
|
|
63
|
|
|
168
|
|
|||
Unrealized loss on derivative associated with announced business combination
|
21
|
|
|
7
|
|
|
—
|
|
|||
Deferred income taxes and other
|
36
|
|
|
(91
|
)
|
|
222
|
|
|||
Share-based compensation
|
177
|
|
|
162
|
|
|
182
|
|
|||
Changes in operating assets and liabilities, net of amounts acquired:
|
|
|
|
|
|
||||||
Accounts receivable
|
(21
|
)
|
|
(404
|
)
|
|
493
|
|
|||
Inventories
|
(154
|
)
|
|
(141
|
)
|
|
679
|
|
|||
Other assets
|
5
|
|
|
(70
|
)
|
|
46
|
|
|||
Accounts payable and accrued expenses
|
79
|
|
|
21
|
|
|
(435
|
)
|
|||
Customer deposits and deferred revenue
|
146
|
|
|
39
|
|
|
(412
|
)
|
|||
Income taxes payable
|
142
|
|
|
57
|
|
|
(34
|
)
|
|||
Other liabilities
|
(83
|
)
|
|
36
|
|
|
(10
|
)
|
|||
Cash provided by operating activities
|
1,800
|
|
|
623
|
|
|
1,851
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(241
|
)
|
|
(197
|
)
|
|
(162
|
)
|
|||
Cash paid for acquisitions, net of cash acquired
|
(12
|
)
|
|
(1
|
)
|
|
(4,190
|
)
|
|||
Proceeds from sale of facilities
|
25
|
|
|
7
|
|
|
—
|
|
|||
Proceeds from sales and maturities of investments
|
878
|
|
|
1,013
|
|
|
1,019
|
|
|||
Purchases of investments
|
(811
|
)
|
|
(607
|
)
|
|
(1,327
|
)
|
|||
Cash provided by (used in) investing activities
|
(161
|
)
|
|
215
|
|
|
(4,660
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from common stock issuances and others, net
|
137
|
|
|
182
|
|
|
96
|
|
|||
Common stock repurchases
|
—
|
|
|
(245
|
)
|
|
(1,416
|
)
|
|||
Payments of dividends to stockholders
|
(485
|
)
|
|
(456
|
)
|
|
(434
|
)
|
|||
Cash used in financing activities
|
(348
|
)
|
|
(519
|
)
|
|
(1,754
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
1,291
|
|
|
319
|
|
|
(4,568
|
)
|
|||
Cash and cash equivalents — beginning of year
|
1,711
|
|
|
1,392
|
|
|
5,960
|
|
|||
Cash and cash equivalents — end of year
|
$
|
3,002
|
|
|
$
|
1,711
|
|
|
$
|
1,392
|
|
Supplemental cash flow information:
|
|
|
|
|
|
||||||
Cash payments for income taxes
|
$
|
195
|
|
|
$
|
196
|
|
|
$
|
243
|
|
Cash refunds from income taxes
|
$
|
111
|
|
|
$
|
102
|
|
|
$
|
79
|
|
Cash payments for interest
|
$
|
92
|
|
|
$
|
92
|
|
|
$
|
94
|
|
Note 1
|
Summary of Significant Accounting Policies
|
Note 2
|
Earnings Per Share
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
|
(In millions, except per share amounts)
|
||||||||||
Numerator:
|
|
|
|
|
|
||||||
Net income
|
$
|
1,072
|
|
|
$
|
256
|
|
|
$
|
109
|
|
Denominator:
|
|
|
|
|
|
||||||
Weighted average common shares outstanding
|
1,215
|
|
|
1,202
|
|
|
1,266
|
|
|||
Effect of dilutive stock options, restricted stock units and employee stock purchase plan shares
|
16
|
|
|
17
|
|
|
11
|
|
|||
Denominator for diluted earnings per share
|
1,231
|
|
|
1,219
|
|
|
1,277
|
|
|||
Basic earnings per share
|
$
|
0.88
|
|
|
$
|
0.21
|
|
|
$
|
0.09
|
|
Diluted earnings per share
|
$
|
0.87
|
|
|
$
|
0.21
|
|
|
$
|
0.09
|
|
Potentially dilutive securities
|
1
|
|
|
2
|
|
|
9
|
|
Note 3
|
Cash, Cash Equivalents and Investments
|
October 26, 2014
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Cash
|
$
|
508
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
508
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
2,494
|
|
|
—
|
|
|
—
|
|
|
2,494
|
|
||||
Total Cash equivalents
|
2,494
|
|
|
—
|
|
|
—
|
|
|
2,494
|
|
||||
Total Cash and Cash equivalents
|
$
|
3,002
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,002
|
|
Short-term and long-term investments:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and agency securities
|
$
|
62
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
62
|
|
Non-U.S. government securities*
|
14
|
|
|
—
|
|
|
—
|
|
|
14
|
|
||||
Municipal securities
|
391
|
|
|
2
|
|
|
—
|
|
|
393
|
|
||||
Commercial paper, corporate bonds and medium-term notes
|
223
|
|
|
1
|
|
|
—
|
|
|
224
|
|
||||
Asset-backed and mortgage-backed securities
|
287
|
|
|
1
|
|
|
2
|
|
|
286
|
|
||||
Total fixed income securities
|
977
|
|
|
4
|
|
|
2
|
|
|
979
|
|
||||
Publicly traded equity securities
|
19
|
|
|
31
|
|
|
—
|
|
|
50
|
|
||||
Equity investments in privately-held companies
|
66
|
|
|
—
|
|
|
—
|
|
|
66
|
|
||||
Total short-term and long-term investments
|
$
|
1,062
|
|
|
$
|
35
|
|
|
$
|
2
|
|
|
$
|
1,095
|
|
Total Cash, Cash equivalents and Investments
|
$
|
4,064
|
|
|
$
|
35
|
|
|
$
|
2
|
|
|
$
|
4,097
|
|
October 27, 2013
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Cash
|
$
|
611
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
611
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
1,095
|
|
|
—
|
|
|
—
|
|
|
1,095
|
|
||||
Municipal securities
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Total Cash equivalents
|
1,100
|
|
|
—
|
|
|
—
|
|
|
1,100
|
|
||||
Total Cash and Cash equivalents
|
$
|
1,711
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,711
|
|
Short-term and long-term investments:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and agency securities
|
$
|
170
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
170
|
|
Non-U.S. government securities
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||
Municipal securities
|
379
|
|
|
2
|
|
|
—
|
|
|
381
|
|
||||
Commercial paper, corporate bonds and medium-term notes
|
218
|
|
|
2
|
|
|
1
|
|
|
219
|
|
||||
Asset-backed and mortgage-backed securities
|
268
|
|
|
2
|
|
|
2
|
|
|
268
|
|
||||
Total fixed income securities
|
1,046
|
|
|
6
|
|
|
3
|
|
|
1,049
|
|
||||
Publicly traded equity securities
|
27
|
|
|
33
|
|
|
—
|
|
|
60
|
|
||||
Equity investments in privately-held companies
|
76
|
|
|
—
|
|
|
—
|
|
|
76
|
|
||||
Total short-term and long-term investments
|
$
|
1,149
|
|
|
$
|
39
|
|
|
$
|
3
|
|
|
$
|
1,185
|
|
Total Cash, Cash equivalents and Investments
|
$
|
2,860
|
|
|
$
|
39
|
|
|
$
|
3
|
|
|
$
|
2,896
|
|
|
Cost
|
|
Estimated
Fair Value
|
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Due in one year or less
|
$
|
151
|
|
|
$
|
151
|
|
Due after one through five years
|
539
|
|
|
542
|
|
||
No single maturity date**
|
372
|
|
|
402
|
|
||
|
$
|
1,062
|
|
|
$
|
1,095
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Gross realized gains
|
$
|
27
|
|
|
$
|
7
|
|
|
$
|
3
|
|
Gross realized losses
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
3
|
|
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 26, 2014
|
|
October 27, 2013
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Money market funds
|
$
|
2,494
|
|
|
$
|
—
|
|
|
$
|
2,494
|
|
|
$
|
1,095
|
|
|
$
|
—
|
|
|
$
|
1,095
|
|
U.S. Treasury and agency securities
|
43
|
|
|
19
|
|
|
62
|
|
|
66
|
|
|
104
|
|
|
170
|
|
||||||
Non-U.S. government securities
|
—
|
|
|
14
|
|
|
14
|
|
|
—
|
|
|
11
|
|
|
11
|
|
||||||
Municipal securities
|
—
|
|
|
393
|
|
|
393
|
|
|
—
|
|
|
386
|
|
|
386
|
|
||||||
Commercial paper, corporate bonds and medium-term notes
|
—
|
|
|
224
|
|
|
224
|
|
|
—
|
|
|
219
|
|
|
219
|
|
||||||
Asset-backed and mortgage-backed securities
|
—
|
|
|
286
|
|
|
286
|
|
|
—
|
|
|
268
|
|
|
268
|
|
||||||
Publicly traded equity securities
|
50
|
|
|
—
|
|
|
50
|
|
|
60
|
|
|
—
|
|
|
60
|
|
||||||
Foreign exchange derivative assets
|
—
|
|
|
52
|
|
|
52
|
|
|
—
|
|
|
20
|
|
|
20
|
|
||||||
Total
|
$
|
2,587
|
|
|
$
|
988
|
|
|
$
|
3,575
|
|
|
$
|
1,221
|
|
|
$
|
1,008
|
|
|
$
|
2,229
|
|
Note 5
|
Derivative Instruments and Hedging Activities
|
|
|
|
2014
|
|
2013
|
||||||||||||||||||||
Effective Portion
|
|
Ineffective Portion and Amount
Excluded from Effectiveness Testing |
|
Effective Portion
|
|
Ineffective Portion and Amount
Excluded from Effectiveness Testing |
|||||||||||||||||||
|
Location of Gain or
(Loss) Reclassified from AOCI into Income |
|
Gain or
(Loss) Recognized in AOCI |
|
Gain or (Loss)
Reclassified from AOCI into Income |
|
Gain or (Loss)
Recognized in Income |
|
Gain or
(Loss) Recognized in AOCI |
|
Gain or (Loss)
Reclassified from AOCI into Income |
|
Gain or (Loss)
Recognized in Income |
||||||||||||
|
|
|
(In millions)
|
||||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts
|
Cost of products sold
|
|
$
|
7
|
|
|
$
|
8
|
|
|
$
|
(2
|
)
|
|
$
|
29
|
|
|
$
|
21
|
|
|
$
|
(3
|
)
|
Foreign exchange contracts
|
General and administrative
|
|
—
|
|
|
1
|
|
|
(2
|
)
|
|
—
|
|
|
7
|
|
|
(1
|
)
|
||||||
Total
|
|
|
$
|
7
|
|
|
$
|
9
|
|
|
$
|
(4
|
)
|
|
$
|
29
|
|
|
$
|
28
|
|
|
$
|
(4
|
)
|
|
|
|
Amount of Gain or (Loss)
Recognized in Income
|
||||||
Location of Gain or
(Loss) Recognized in Income |
|
2014
|
|
2013
|
|||||
|
|
|
(In millions)
|
||||||
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
|
||||
Foreign exchange contracts
|
General and
administrative |
|
$
|
49
|
|
|
$
|
19
|
|
Total
|
|
|
$
|
49
|
|
|
$
|
19
|
|
Note 6
|
Accounts Receivable, Net
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Discounted letters of credit
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Factored accounts receivable and discounted promissory notes
|
45
|
|
|
—
|
|
|
93
|
|
|||
Total
|
$
|
74
|
|
|
$
|
—
|
|
|
$
|
93
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Beginning balance
|
$
|
74
|
|
|
$
|
87
|
|
|
$
|
73
|
|
Provision
|
—
|
|
|
—
|
|
|
14
|
|
|||
Deductions
1
|
(16
|
)
|
|
(13
|
)
|
|
—
|
|
|||
Ending balance
|
$
|
58
|
|
|
$
|
74
|
|
|
$
|
87
|
|
Note 7
|
Balance Sheet Detail
|
|
October 26,
2014 |
|
October 27,
2013 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Inventories
|
|
|
|
||||
Customer service spares
|
$
|
316
|
|
|
$
|
283
|
|
Raw materials
|
405
|
|
|
361
|
|
||
Work-in-process
|
316
|
|
|
292
|
|
||
Finished goods
|
530
|
|
|
477
|
|
||
|
$
|
1,567
|
|
|
$
|
1,413
|
|
|
October 26,
2014 |
|
October 27,
2013 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Other Current Assets
|
|
|
|
||||
Deferred income taxes, net
|
$
|
232
|
|
|
$
|
323
|
|
Prepaid expenses
|
172
|
|
|
135
|
|
||
Prepaid income taxes and income taxes receivable
|
79
|
|
|
178
|
|
||
Other
|
85
|
|
|
69
|
|
||
|
$
|
568
|
|
|
$
|
705
|
|
|
Useful Life
|
|
October 26,
2014 |
|
October 27,
2013 |
||||
|
|
|
|
|
|
||||
|
(In years)
|
|
(In millions)
|
||||||
Property, Plant and Equipment, Net
|
|
|
|
||||||
Land and improvements
|
|
|
$
|
156
|
|
|
$
|
167
|
|
Buildings and improvements
|
3-30
|
|
1,227
|
|
|
1,217
|
|
||
Demonstration and manufacturing equipment
|
3-5
|
|
829
|
|
|
792
|
|
||
Furniture, fixtures and other equipment
|
3-15
|
|
575
|
|
|
589
|
|
||
Construction in progress
|
|
|
61
|
|
|
52
|
|
||
Gross property, plant and equipment
|
|
|
2,848
|
|
|
2,817
|
|
||
Accumulated depreciation
|
|
|
(1,987
|
)
|
|
(1,967
|
)
|
||
|
|
|
$
|
861
|
|
|
$
|
850
|
|
|
October 26,
2014 |
|
October 27,
2013 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Accounts Payable and Accrued Expenses
|
|
|
|
||||
Accounts payable
|
$
|
613
|
|
|
$
|
582
|
|
Compensation and employee benefits
|
524
|
|
|
417
|
|
||
Warranty
|
113
|
|
|
102
|
|
||
Income taxes payable
|
142
|
|
|
73
|
|
||
Dividends payable
|
122
|
|
|
121
|
|
||
Other accrued taxes
|
51
|
|
|
41
|
|
||
Interest payable
|
30
|
|
|
30
|
|
||
Restructuring reserve
|
9
|
|
|
39
|
|
||
Other
|
279
|
|
|
244
|
|
||
|
$
|
1,883
|
|
|
$
|
1,649
|
|
|
October 26,
2014 |
|
October 27,
2013 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Customer Deposits and Deferred Revenue
|
|
|
|
||||
Customer deposits
|
$
|
286
|
|
|
$
|
175
|
|
Deferred revenue
|
654
|
|
|
619
|
|
||
|
$
|
940
|
|
|
$
|
794
|
|
|
October 26,
2014 |
|
October 27,
2013 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Other Liabilities
|
|
|
|
||||
Deferred income taxes
|
$
|
32
|
|
|
$
|
71
|
|
Income taxes payable
|
225
|
|
|
174
|
|
||
Defined and postretirement benefit plans
|
208
|
|
|
193
|
|
||
Other
|
71
|
|
|
128
|
|
||
|
$
|
536
|
|
|
$
|
566
|
|
Note 8
|
Business Combinations
|
|
Estimated Fair Values
|
||
|
(In millions)
|
||
Fair value of net tangible assets acquired
|
$
|
892
|
|
Goodwill
|
2,604
|
|
|
Purchased intangible assets
|
1,365
|
|
|
Purchase price allocated
|
$
|
4,861
|
|
|
Useful
Life
|
|
Purchased
Intangible Assets
|
||
|
(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
|
|
Note 9
|
Goodwill, Purchased Technology and Other Intangible Assets
|
|
October 26, 2014
|
|
October 27, 2013
|
||||||||||||||||||||
|
Goodwill
|
|
Other
Intangible
Assets
|
|
Total
|
|
Goodwill
|
|
Other
Intangible
Assets
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Silicon Systems Group
|
$
|
2,151
|
|
|
$
|
103
|
|
|
$
|
2,254
|
|
|
$
|
2,151
|
|
|
$
|
142
|
|
|
$
|
2,293
|
|
Applied Global Services
|
1,027
|
|
|
6
|
|
|
1,033
|
|
|
1,027
|
|
|
—
|
|
|
1,027
|
|
||||||
Display
|
126
|
|
|
18
|
|
|
144
|
|
|
116
|
|
|
—
|
|
|
116
|
|
||||||
Carrying amount
|
$
|
3,304
|
|
|
$
|
127
|
|
|
$
|
3,431
|
|
|
$
|
3,294
|
|
|
$
|
142
|
|
|
$
|
3,436
|
|
|
October 26,
2014 |
|
October 27,
2013 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Purchased technology, net
|
$
|
636
|
|
|
$
|
748
|
|
Intangible assets - finite-lived, net
|
188
|
|
|
213
|
|
||
Intangible assets - indefinite-lived
|
127
|
|
|
142
|
|
||
Total
|
$
|
951
|
|
|
$
|
1,103
|
|
|
October 26, 2014
|
|
October 27, 2013
|
||||||||||||||||||||
|
Purchased
Technology
|
|
Other
Intangible
Assets
|
|
Total
|
|
Purchased
Technology
|
|
Other
Intangible
Assets
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Gross carrying amount:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Silicon Systems Group
|
$
|
1,346
|
|
|
$
|
252
|
|
|
$
|
1,598
|
|
|
$
|
1,301
|
|
|
$
|
252
|
|
|
$
|
1,553
|
|
Applied Global Services
|
28
|
|
|
44
|
|
|
72
|
|
|
28
|
|
|
44
|
|
|
72
|
|
||||||
Display
|
110
|
|
|
33
|
|
|
143
|
|
|
110
|
|
|
33
|
|
|
143
|
|
||||||
Energy and Environmental Solutions
|
5
|
|
|
17
|
|
|
22
|
|
|
5
|
|
|
15
|
|
|
20
|
|
||||||
Gross carrying amount
|
$
|
1,489
|
|
|
$
|
346
|
|
|
$
|
1,835
|
|
|
$
|
1,444
|
|
|
$
|
344
|
|
|
$
|
1,788
|
|
Accumulated amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Silicon Systems Group
|
$
|
(716
|
)
|
|
$
|
(77
|
)
|
|
$
|
(793
|
)
|
|
$
|
(562
|
)
|
|
$
|
(58
|
)
|
|
$
|
(620
|
)
|
Applied Global Services
|
(24
|
)
|
|
(44
|
)
|
|
(68
|
)
|
|
(23
|
)
|
|
(42
|
)
|
|
(65
|
)
|
||||||
Display
|
(110
|
)
|
|
(31
|
)
|
|
(141
|
)
|
|
(110
|
)
|
|
(29
|
)
|
|
(139
|
)
|
||||||
Energy and Environmental Solutions
|
(3
|
)
|
|
(6
|
)
|
|
(9
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(3
|
)
|
||||||
Accumulated amortization
|
$
|
(853
|
)
|
|
$
|
(158
|
)
|
|
$
|
(1,011
|
)
|
|
$
|
(696
|
)
|
|
$
|
(131
|
)
|
|
$
|
(827
|
)
|
Carrying amount
|
$
|
636
|
|
|
$
|
188
|
|
|
$
|
824
|
|
|
$
|
748
|
|
|
$
|
213
|
|
|
$
|
961
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Silicon Systems Group
|
$
|
173
|
|
|
$
|
172
|
|
|
$
|
183
|
|
Applied Global Services
|
3
|
|
|
5
|
|
|
9
|
|
|||
Display
|
2
|
|
|
6
|
|
|
7
|
|
|||
Energy and Environmental Solutions
|
6
|
|
|
16
|
|
|
25
|
|
|||
Total
|
$
|
184
|
|
|
$
|
199
|
|
|
$
|
224
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Cost of products sold
|
$
|
159
|
|
|
$
|
166
|
|
|
$
|
185
|
|
Research, development and engineering
|
1
|
|
|
1
|
|
|
1
|
|
|||
Marketing and selling
|
21
|
|
|
26
|
|
|
30
|
|
|||
General and administrative
|
3
|
|
|
6
|
|
|
8
|
|
|||
Total
|
$
|
184
|
|
|
$
|
199
|
|
|
$
|
224
|
|
|
Amortization
Expense
|
||
|
(In millions)
|
||
2015
|
182
|
|
|
2016
|
175
|
|
|
2017
|
171
|
|
|
2018
|
170
|
|
|
2019
|
30
|
|
|
Thereafter
|
96
|
|
|
Total
|
$
|
824
|
|
Note 10
|
Borrowing Facilities and Long-Term Debt
|
|
Principal Amount
|
|
|
|
|
||||||
|
October 26,
2014 |
|
October 27,
2013 |
|
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
|
||
|
1,950
|
|
|
1,950
|
|
|
|
|
|
||
Total unamortized discount
|
(3
|
)
|
|
(4
|
)
|
|
|
|
|
||
Total long-term debt
|
$
|
1,947
|
|
|
$
|
1,946
|
|
|
|
|
|
Note 11
|
Restructuring Charges and Asset Impairments
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
2012 Global Restructuring Plan
|
|
|
|
|
|
||||||
Severance and other employee-related costs
|
$
|
5
|
|
|
$
|
39
|
|
|
$
|
106
|
|
2012 EES Restructuring Plan
|
|
|
|
|
|
||||||
Severance and other employee-related costs
|
—
|
|
|
8
|
|
|
27
|
|
|||
Contract cancellation and other costs
|
—
|
|
|
6
|
|
|
1
|
|
|||
Asset impairments
|
—
|
|
|
12
|
|
|
20
|
|
|||
Others
|
|
|
|
|
|
||||||
Severance and other employee-related costs
|
—
|
|
|
2
|
|
|
14
|
|
|||
Contract cancellation and other costs
|
—
|
|
|
(4
|
)
|
|
—
|
|
|||
|
$
|
5
|
|
|
$
|
63
|
|
|
$
|
168
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Silicon Systems Group
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
4
|
|
Applied Global Services
|
—
|
|
|
2
|
|
|
15
|
|
|||
Energy and Environmental Solutions
|
—
|
|
|
25
|
|
|
38
|
|
|||
Corporate Unallocated
|
5
|
|
|
35
|
|
|
111
|
|
|||
Total
|
$
|
5
|
|
|
$
|
63
|
|
|
$
|
168
|
|
|
2012 Global Restructuring Plan
|
|
2012 EES 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
|
|
Contract Cancellation and Other Costs
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Balance, October 30, 2011
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
11
|
|
Provision for restructuring reserves
|
106
|
|
|
27
|
|
|
1
|
|
|
14
|
|
|
—
|
|
|
148
|
|
||||||
Consumption of reserves
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(26
|
)
|
||||||
Balance, October 28, 2012
|
$
|
106
|
|
|
$
|
16
|
|
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
133
|
|
Provision for restructuring reserves
|
35
|
|
|
7
|
|
|
8
|
|
|
2
|
|
|
—
|
|
|
52
|
|
||||||
Consumption of reserves
|
(111
|
)
|
|
(18
|
)
|
|
(2
|
)
|
|
(5
|
)
|
|
—
|
|
|
(136
|
)
|
||||||
Adjustment of restructuring reserves
|
(4
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(4
|
)
|
|
(10
|
)
|
||||||
Balance, October 27, 2013
|
$
|
26
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
39
|
|
Provision for restructuring reserves
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||||
Consumption of reserves
|
(27
|
)
|
|
(5
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|
(35
|
)
|
||||||
Adjustment of restructuring reserves
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||
Balance, October 26, 2014
|
$
|
4
|
|
|
—
|
|
|
4
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
9
|
|
Note 12
|
Stockholders’ Equity, Comprehensive Income and Share-Based Compensation
|
|
Unrealized Gain on Investments, Net
|
|
Unrealized Gain on Derivative Instruments Qualifying as Cash Flow Hedges
|
|
Defined and Postretirement Benefit Plans
|
|
Cumulative Translation Adjustments
|
|
Total
|
||||||||||
|
(in millions)
|
|
|
||||||||||||||||
Balance at October 27, 2013
|
$
|
25
|
|
|
$
|
2
|
|
|
$
|
(72
|
)
|
|
$
|
7
|
|
|
$
|
(38
|
)
|
Other comprehensive income (loss) before reclassifications
|
8
|
|
|
4
|
|
|
(36
|
)
|
|
(2
|
)
|
|
(26
|
)
|
|||||
Amounts reclassified out of AOCI
|
(9
|
)
|
|
(6
|
)
|
|
3
|
|
|
—
|
|
|
(12
|
)
|
|||||
Other comprehensive loss, net of tax
|
(1
|
)
|
|
(2
|
)
|
|
(33
|
)
|
|
(2
|
)
|
|
(38
|
)
|
|||||
Balance at October 26, 2014
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
(105
|
)
|
|
$
|
5
|
|
|
$
|
(76
|
)
|
|
2013
|
|
2012
|
||||
|
|
|
|
||||
|
(In millions, except per share amounts)
|
||||||
Shares of common stock repurchased
|
18
|
|
|
126
|
|
||
Cost of stock repurchased
|
$
|
245
|
|
|
$
|
1,416
|
|
Average price paid per share
|
$
|
13.60
|
|
|
$
|
11.22
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Share-based compensation
|
$
|
177
|
|
|
$
|
162
|
|
|
$
|
182
|
|
Tax benefit recognized
|
$
|
50
|
|
|
$
|
45
|
|
|
$
|
52
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Cost of products sold
|
$
|
53
|
|
|
$
|
50
|
|
|
$
|
54
|
|
Research, development, and engineering
|
66
|
|
|
53
|
|
|
54
|
|
|||
Marketing and selling
|
23
|
|
|
20
|
|
|
22
|
|
|||
General and administrative
|
35
|
|
|
34
|
|
|
52
|
|
|||
Restructuring charge
|
—
|
|
|
5
|
|
|
—
|
|
|||
Total
|
$
|
177
|
|
|
$
|
162
|
|
|
$
|
182
|
|
|
2013
|
|
2012
|
||
Stock Options:
|
|
|
|
||
Dividend yield
|
2.7
|
%
|
|
2.6
|
%
|
Expected volatility
|
29.5
|
%
|
|
38.7
|
%
|
Risk-free interest rate
|
1.44
|
%
|
|
0.52
|
%
|
Expected life (in years)
|
4.5
|
|
|
3.3
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Aggregate intrinsic value of outstanding stock options
|
$
|
19
|
|
|
$
|
49
|
|
|
$
|
43
|
|
Total intrinsic value of stock options exercised
|
$
|
39
|
|
|
$
|
63
|
|
|
$
|
21
|
|
Total fair value of stock options vested
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
41
|
|
Cash received from stock option exercises
|
$
|
29
|
|
|
$
|
88
|
|
|
$
|
33
|
|
Actual tax benefit realized from options exercised
|
$
|
12
|
|
|
$
|
19
|
|
|
$
|
7
|
|
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||
|
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
|
6
|
|
|
$
|
9.12
|
|
|
21
|
|
|
$
|
10.53
|
|
|
30
|
|
|
$
|
13.05
|
|
Granted and assumed in Varian acquisition
|
—
|
|
|
$
|
—
|
|
|
1
|
|
|
$
|
15.06
|
|
|
5
|
|
|
$
|
4.85
|
|
Exercised
|
(4
|
)
|
|
$
|
7.85
|
|
|
(11
|
)
|
|
$
|
8.16
|
|
|
(4
|
)
|
|
$
|
7.30
|
|
Canceled and forfeited
|
—
|
|
|
$
|
—
|
|
|
(5
|
)
|
|
$
|
17.62
|
|
|
(10
|
)
|
|
$
|
16.76
|
|
Outstanding, end of year
|
2
|
|
|
$
|
10.87
|
|
|
6
|
|
|
$
|
9.12
|
|
|
21
|
|
|
$
|
10.53
|
|
Exercisable, end of year
|
1
|
|
|
$
|
7.97
|
|
|
5
|
|
|
$
|
7.90
|
|
|
20
|
|
|
$
|
10.71
|
|
|
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)
|
||||||||||
$3.36 — $9.99
|
1
|
|
|
$
|
5.31
|
|
|
1.81
|
|
$
|
12
|
|
|
1
|
|
|
$
|
5.30
|
|
|
$
|
12
|
|
$10.00 — $15.06
|
1
|
|
|
$
|
14.96
|
|
|
5.59
|
|
7
|
|
|
—
|
|
|
$
|
14.71
|
|
|
2
|
|
||
|
2
|
|
|
$
|
10.87
|
|
|
3.99
|
|
$
|
19
|
|
|
1
|
|
|
$
|
7.97
|
|
|
$
|
14
|
|
Options exercisable and expected to become exercisable
|
2
|
|
|
$
|
10.87
|
|
|
3.99
|
|
$
|
19
|
|
|
|
|
|
|
|
|
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 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
|
|
Granted
|
19
|
|
|
$
|
10.55
|
|
|
|
|
|
||
Vested
|
(11
|
)
|
|
$
|
11.44
|
|
|
|
|
|
||
Canceled
|
(6
|
)
|
|
$
|
11.28
|
|
|
|
|
|
||
Non-vested restricted stock units, restricted stock, performance shares and performance units at October 27, 2013
|
38
|
|
|
$
|
11.11
|
|
|
2.4 years
|
|
$
|
662
|
|
Granted
|
11
|
|
|
$
|
16.58
|
|
|
|
|
|
||
Vested
|
(13
|
)
|
|
$
|
11.13
|
|
|
|
|
|
||
Canceled
|
(3
|
)
|
|
$
|
11.72
|
|
|
|
|
|
||
Non-vested restricted stock units, restricted stock, performance shares and performance units at October 26, 2014
|
33
|
|
|
$
|
12.59
|
|
|
2.3 years
|
|
$
|
698
|
|
Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest
|
30
|
|
|
$
|
12.47
|
|
|
2.1 years
|
|
$
|
630
|
|
|
2014
|
|
2013
|
|
2012
|
|||
ESPP:
|
|
|
|
|
|
|||
Dividend yield
|
1.96
|
%
|
|
2.80
|
%
|
|
3.01
|
%
|
Expected volatility
|
26.3
|
%
|
|
24.8
|
%
|
|
29.6
|
%
|
Risk-free interest rate
|
0.06
|
%
|
|
0.09
|
%
|
|
0.13
|
%
|
Expected life (in years)
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
Note 13
|
Employee Benefit Plans
|
|
2014
|
|
2013
|
||||
|
|
|
|
||||
|
(In millions, except percentages)
|
||||||
Change in projected benefit obligation
|
|
|
|
||||
Beginning projected benefit obligation
|
$
|
445
|
|
|
$
|
434
|
|
Service cost
|
17
|
|
|
20
|
|
||
Interest cost
|
17
|
|
|
15
|
|
||
Plan participants’ contributions
|
1
|
|
|
1
|
|
||
Actuarial (gain) loss
|
62
|
|
|
(16
|
)
|
||
Curtailments, settlements and special termination benefits
|
(26
|
)
|
|
(8
|
)
|
||
Foreign currency exchange rate changes
|
(22
|
)
|
|
10
|
|
||
Benefits paid
|
(12
|
)
|
|
(10
|
)
|
||
Plan amendments and business combinations
|
(3
|
)
|
|
(1
|
)
|
||
Ending projected benefit obligation
|
$
|
479
|
|
|
$
|
445
|
|
Ending accumulated benefit obligation
|
$
|
446
|
|
|
$
|
409
|
|
Range of assumptions to determine benefit obligations
|
|
|
|
||||
Discount rate
|
1.0% - 4.4%
|
|
|
1.1% - 4.5%
|
|
||
Rate of compensation increase
|
2.0% - 4.0%
|
|
|
2.0% - 4.7%
|
|
||
Change in plan assets
|
|
|
|
||||
Beginning fair value of plan assets
|
$
|
248
|
|
|
$
|
214
|
|
Return on plan assets
|
20
|
|
|
18
|
|
||
Employer contributions
|
48
|
|
|
24
|
|
||
Plan participants’ contributions
|
1
|
|
|
1
|
|
||
Foreign currency exchange rate changes
|
(11
|
)
|
|
8
|
|
||
Divestitures, settlements and business combinations
|
(26
|
)
|
|
(7
|
)
|
||
Benefits paid
|
(12
|
)
|
|
(10
|
)
|
||
Ending fair value of plan assets
|
$
|
268
|
|
|
$
|
248
|
|
Funded status
|
$
|
(211
|
)
|
|
$
|
(197
|
)
|
Amounts recognized in the consolidated balance sheets
|
|
|
|
||||
Noncurrent asset
|
$
|
17
|
|
|
$
|
9
|
|
Current liability
|
(3
|
)
|
|
(4
|
)
|
||
Noncurrent liability
|
(225
|
)
|
|
(202
|
)
|
||
Total
|
$
|
(211
|
)
|
|
$
|
(197
|
)
|
Estimated amortization from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year
|
|
|
|
||||
Actuarial loss
|
$
|
6
|
|
|
$
|
4
|
|
Prior service cost (credit)
|
—
|
|
|
—
|
|
||
Total
|
$
|
6
|
|
|
$
|
4
|
|
Amounts recognized in accumulated other comprehensive loss
|
|
|
|
||||
Net actuarial loss
|
$
|
134
|
|
|
$
|
91
|
|
Prior service cost (credit)
|
(1
|
)
|
|
2
|
|
||
Total
|
$
|
133
|
|
|
$
|
93
|
|
Plans with projected benefit obligations in excess of plan assets
|
|
|
|
||||
Projected benefit obligation
|
$
|
326
|
|
|
$
|
438
|
|
Fair value of plan assets
|
$
|
98
|
|
|
$
|
233
|
|
Plans with accumulated benefit obligations in excess of plan assets
|
|
|
|
||||
Accumulated benefit obligation
|
$
|
297
|
|
|
$
|
269
|
|
Fair value of plan assets
|
$
|
98
|
|
|
$
|
99
|
|
|
2014
|
|
2013
|
||
Plan assets — allocation
|
|
|
|
||
Equity securities
|
39
|
%
|
|
37
|
%
|
Debt securities
|
38
|
%
|
|
36
|
%
|
Insurance contracts
|
15
|
%
|
|
19
|
%
|
Other investments
|
5
|
%
|
|
5
|
%
|
Cash
|
3
|
%
|
|
3
|
%
|
|
October 26, 2014
|
|
October 27, 2013
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Equity securities
|
$
|
38
|
|
|
$
|
66
|
|
|
$
|
—
|
|
|
$
|
104
|
|
|
$
|
27
|
|
|
$
|
65
|
|
|
$
|
—
|
|
|
$
|
92
|
|
Debt securities
|
8
|
|
|
94
|
|
|
—
|
|
|
102
|
|
|
6
|
|
|
84
|
|
|
—
|
|
|
90
|
|
||||||||
Insurance contracts
|
—
|
|
|
—
|
|
|
41
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
47
|
|
||||||||
Other investments
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||||||
Cash
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||||||
Total
|
$
|
55
|
|
|
$
|
172
|
|
|
$
|
41
|
|
|
$
|
268
|
|
|
$
|
40
|
|
|
$
|
161
|
|
|
$
|
47
|
|
|
$
|
248
|
|
|
2014
|
|
2013
|
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Balance, beginning of year
|
$
|
47
|
|
|
$
|
49
|
|
Actual return on plan assets:
|
|
|
|
||||
Relating to assets still held at reporting date
|
—
|
|
|
(1
|
)
|
||
Purchases, sales, settlements, net
|
(2
|
)
|
|
(4
|
)
|
||
Currency impact
|
(4
|
)
|
|
3
|
|
||
Balance, end of year
|
$
|
41
|
|
|
$
|
47
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
|
(In millions, except percentages)
|
||||||||||
Components of net periodic benefit cost
|
|
|
|
|
|
||||||
Service cost
|
$
|
17
|
|
|
$
|
20
|
|
|
$
|
16
|
|
Interest cost
|
17
|
|
|
15
|
|
|
14
|
|
|||
Expected return on plan assets
|
(14
|
)
|
|
(12
|
)
|
|
(11
|
)
|
|||
Amortization of actuarial loss and prior service credit
|
4
|
|
|
6
|
|
|
—
|
|
|||
Settlement and curtailment loss
|
3
|
|
|
—
|
|
|
6
|
|
|||
Net periodic benefit cost
|
$
|
27
|
|
|
$
|
29
|
|
|
$
|
25
|
|
Weighted average assumptions
|
|
|
|
|
|
||||||
Discount rate
|
3.68
|
%
|
|
3.46
|
%
|
|
4.53
|
%
|
|||
Expected long-term return on assets
|
5.64
|
%
|
|
5.38
|
%
|
|
5.91
|
%
|
|||
Rate of compensation increase
|
3.29
|
%
|
|
3.07
|
%
|
|
3.09
|
%
|
|
Benefit Payments
|
||
|
(In millions)
|
||
2015
|
$
|
12
|
|
2016
|
13
|
|
|
2017
|
13
|
|
|
2018
|
14
|
|
|
2019
|
14
|
|
|
2020-2024
|
81
|
|
|
|
$
|
147
|
|
Note 14
|
Income Taxes
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
U.S.
|
$
|
612
|
|
|
$
|
194
|
|
|
$
|
381
|
|
Foreign
|
836
|
|
|
156
|
|
|
(65
|
)
|
|||
|
$
|
1,448
|
|
|
$
|
350
|
|
|
$
|
316
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
U.S.
|
$
|
270
|
|
|
$
|
3
|
|
|
$
|
74
|
|
Foreign
|
97
|
|
|
72
|
|
|
75
|
|
|||
State
|
27
|
|
|
2
|
|
|
8
|
|
|||
|
394
|
|
|
77
|
|
|
157
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
U.S.
|
(9
|
)
|
|
34
|
|
|
52
|
|
|||
Foreign
|
(3
|
)
|
|
(19
|
)
|
|
(4
|
)
|
|||
State
|
(6
|
)
|
|
2
|
|
|
2
|
|
|||
|
(18
|
)
|
|
17
|
|
|
50
|
|
|||
|
$
|
376
|
|
|
$
|
94
|
|
|
$
|
207
|
|
|
2014
|
|
2013
|
|
2012
|
|||
Tax provision at U.S. statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Resolutions from prior years’ income tax filings
|
2.0
|
|
|
(4.7
|
)
|
|
(6.0
|
)
|
Effect of foreign operations taxed at various rates
|
(10.9
|
)
|
|
(21.1
|
)
|
|
(8.5
|
)
|
State income taxes, net of federal benefit
|
1.0
|
|
|
0.8
|
|
|
2.0
|
|
Research and other tax credits
|
(0.3
|
)
|
|
(5.4
|
)
|
|
(1.0
|
)
|
Production benefit
|
(1.3
|
)
|
|
(1.0
|
)
|
|
(8.0
|
)
|
Acquisition costs
|
0.8
|
|
|
—
|
|
|
—
|
|
Goodwill impairment
|
—
|
|
|
22.5
|
|
|
47.0
|
|
Share-based compensation
|
0.4
|
|
|
2.2
|
|
|
4.0
|
|
Other
|
(0.7
|
)
|
|
(1.4
|
)
|
|
1.0
|
|
|
26.0
|
%
|
|
26.9
|
%
|
|
65.5
|
%
|
|
October 26,
2014 |
|
October 27,
2013 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Deferred tax assets:
|
|
|
|
||||
Allowance for doubtful accounts
|
$
|
26
|
|
|
$
|
27
|
|
Inventory reserves and basis difference
|
128
|
|
|
134
|
|
||
Installation and warranty reserves
|
18
|
|
|
14
|
|
||
Accrued liabilities
|
123
|
|
|
138
|
|
||
Deferred revenue
|
32
|
|
|
27
|
|
||
Tax credits and net operating losses
|
160
|
|
|
182
|
|
||
Deferred compensation
|
44
|
|
|
33
|
|
||
Share-based compensation
|
57
|
|
|
60
|
|
||
Fixed assets
|
16
|
|
|
(34
|
)
|
||
Other
|
27
|
|
|
13
|
|
||
Gross deferred tax assets
|
631
|
|
|
594
|
|
||
Valuation allowance
|
(173
|
)
|
|
(116
|
)
|
||
Total deferred tax assets
|
458
|
|
|
478
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Intangible assets
|
(92
|
)
|
|
(82
|
)
|
||
Undistributed foreign earnings
|
(87
|
)
|
|
(75
|
)
|
||
Foreign exchange
|
(12
|
)
|
|
(18
|
)
|
||
Total gross deferred tax liabilities
|
(191
|
)
|
|
(175
|
)
|
||
Net deferred tax assets
|
$
|
267
|
|
|
$
|
303
|
|
|
October 26,
2014 |
|
October 27,
2013 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Current deferred tax asset
|
$
|
232
|
|
|
$
|
323
|
|
Non-current deferred tax asset
|
67
|
|
|
53
|
|
||
Current deferred tax liability
|
—
|
|
|
(2
|
)
|
||
Non-current deferred tax liability
|
(32
|
)
|
|
(71
|
)
|
||
|
$
|
267
|
|
|
$
|
303
|
|
|
2014
|
|
2013
|
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Beginning balance of gross unrecognized tax benefits
|
$
|
194
|
|
|
$
|
174
|
|
Settlements with tax authorities
|
(143
|
)
|
|
(15
|
)
|
||
Lapses of statutes of limitation
|
(2
|
)
|
|
(15
|
)
|
||
Increases in tax positions for current year
|
52
|
|
|
48
|
|
||
Increases in tax positions for prior years
|
42
|
|
|
2
|
|
||
Decreases in tax positions for prior years
|
(9
|
)
|
|
—
|
|
||
Ending balance of gross unrecognized tax benefits
|
$
|
134
|
|
|
$
|
194
|
|
Note 15
|
Warranty, Guarantees, Commitments and Contingencies
|
|
Lease Payments
|
||
|
(In millions)
|
||
2015
|
$
|
28
|
|
2016
|
18
|
|
|
2017
|
10
|
|
|
2018
|
6
|
|
|
2019
|
3
|
|
|
Thereafter
|
5
|
|
|
|
$
|
70
|
|
|
2014
|
|
2013
|
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Beginning balance
|
$
|
102
|
|
|
$
|
119
|
|
Provisions for warranty
|
115
|
|
|
103
|
|
||
Consumption of reserves
|
(104
|
)
|
|
(120
|
)
|
||
Ending balance
|
$
|
113
|
|
|
$
|
102
|
|
Note 16
|
Industry Segment Operations
|
|
Net Sales
|
|
Operating
Income (Loss)
|
|
Depreciation/
Amortization
|
|
Capital
Expenditures
|
|
Segment
Assets
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions)
|
||||||||||||||||||
2014:
|
|
|
|
|
|
|
|
|
|
||||||||||
Silicon Systems Group
|
$
|
5,978
|
|
|
$
|
1,391
|
|
|
$
|
268
|
|
|
$
|
134
|
|
|
$
|
5,508
|
|
Applied Global Services
|
2,200
|
|
|
573
|
|
|
11
|
|
|
7
|
|
|
2,042
|
|
|||||
Display
|
615
|
|
|
129
|
|
|
5
|
|
|
4
|
|
|
423
|
|
|||||
Energy and Environmental Solutions
|
279
|
|
|
15
|
|
|
9
|
|
|
1
|
|
|
173
|
|
|||||
Total Segment
|
$
|
9,072
|
|
|
$
|
2,108
|
|
|
$
|
293
|
|
|
$
|
146
|
|
|
$
|
8,146
|
|
2013:
|
|
|
|
|
|
|
|
|
|
||||||||||
Silicon Systems Group
|
$
|
4,775
|
|
|
$
|
876
|
|
|
$
|
260
|
|
|
$
|
118
|
|
|
$
|
5,525
|
|
Applied Global Services
|
2,023
|
|
|
436
|
|
|
13
|
|
|
7
|
|
|
1,958
|
|
|||||
Display
|
538
|
|
|
74
|
|
|
8
|
|
|
6
|
|
|
293
|
|
|||||
Energy and Environmental Solutions
|
173
|
|
|
(433
|
)
|
|
22
|
|
|
1
|
|
|
183
|
|
|||||
Total Segment
|
$
|
7,509
|
|
|
$
|
953
|
|
|
$
|
303
|
|
|
$
|
132
|
|
|
$
|
7,959
|
|
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
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Total segment operating income
|
$
|
2,108
|
|
|
$
|
953
|
|
|
$
|
1,102
|
|
Corporate and unallocated costs
|
(540
|
)
|
|
(462
|
)
|
|
(580
|
)
|
|||
Restructuring charges and asset impairments
|
(5
|
)
|
|
(35
|
)
|
|
(111
|
)
|
|||
Certain items associated with announced business combination
|
(73
|
)
|
|
(17
|
)
|
|
—
|
|
|||
Gain (loss) on derivative associated with announced business combination
|
30
|
|
|
(7
|
)
|
|
—
|
|
|||
Income from operations
|
$
|
1,520
|
|
|
$
|
432
|
|
|
$
|
411
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Total segment depreciation and amortization
|
$
|
293
|
|
|
$
|
303
|
|
|
$
|
319
|
|
Depreciation on shared facilities and information technology assets
|
82
|
|
|
107
|
|
|
103
|
|
|||
Consolidated depreciation and amortization
|
$
|
375
|
|
|
$
|
410
|
|
|
$
|
422
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Total segment capital expenditures
|
$
|
146
|
|
|
$
|
132
|
|
|
$
|
86
|
|
Shared facilities and information technology assets
|
95
|
|
|
65
|
|
|
76
|
|
|||
Consolidated capital expenditures
|
$
|
241
|
|
|
$
|
197
|
|
|
$
|
162
|
|
|
October 26,
2014 |
|
October 27,
2013 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Total segment assets
|
$
|
8,146
|
|
|
$
|
7,959
|
|
Cash and investments
|
4,060
|
|
|
2,896
|
|
||
Allowance for bad debts
|
(58
|
)
|
|
(74
|
)
|
||
Deferred income taxes
|
299
|
|
|
376
|
|
||
Other current assets
|
147
|
|
|
203
|
|
||
Common property, plant and equipment
|
522
|
|
|
541
|
|
||
Other assets
|
58
|
|
|
142
|
|
||
Consolidated total assets
|
$
|
13,174
|
|
|
$
|
12,043
|
|
|
Net Sales
|
|
Long-lived
Assets
|
||||
|
|
|
|
||||
|
(In millions)
|
||||||
2014:
|
|
|
|
||||
United States
|
$
|
1,966
|
|
|
$
|
636
|
|
Taiwan
|
2,702
|
|
|
34
|
|
||
China
|
1,608
|
|
|
61
|
|
||
Korea
|
965
|
|
|
12
|
|
||
Japan
|
817
|
|
|
5
|
|
||
Europe
|
658
|
|
|
99
|
|
||
Southeast Asia
|
356
|
|
|
77
|
|
||
Total outside United States
|
7,106
|
|
|
288
|
|
||
Consolidated total
|
$
|
9,072
|
|
|
$
|
924
|
|
2013:
|
|
|
|
||||
United States
|
$
|
1,473
|
|
|
$
|
620
|
|
Taiwan
|
2,640
|
|
|
37
|
|
||
China
|
787
|
|
|
65
|
|
||
Korea
|
924
|
|
|
8
|
|
||
Japan
|
685
|
|
|
4
|
|
||
Europe
|
680
|
|
|
99
|
|
||
Southeast Asia
|
320
|
|
|
81
|
|
||
Total outside United States
|
6,036
|
|
|
294
|
|
||
Consolidated total
|
$
|
7,509
|
|
|
$
|
914
|
|
2012:
|
|
|
|
||||
United States
|
$
|
1,749
|
|
|
$
|
666
|
|
Taiwan
|
2,411
|
|
|
36
|
|
||
China
|
783
|
|
|
74
|
|
||
Korea
|
1,897
|
|
|
9
|
|
||
Japan
|
704
|
|
|
6
|
|
||
Europe
|
863
|
|
|
110
|
|
||
Southeast Asia
|
312
|
|
|
87
|
|
||
Total outside United States
|
6,970
|
|
|
322
|
|
||
Consolidated total
|
$
|
8,719
|
|
|
$
|
988
|
|
|
2014
|
|
2013
|
|
2012
|
|||
Taiwan Semiconductor Manufacturing Company Limited
|
21
|
%
|
|
27
|
%
|
|
16
|
%
|
Samsung Electronics Co., Ltd.
|
12
|
%
|
|
13
|
%
|
|
20
|
%
|
Note 17
|
Unaudited Quarterly Consolidated Financial Data
|
|
Fiscal Quarter
|
|
|
||||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Fiscal Year
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except per share amounts)
|
||||||||||||||||||
2014:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
2,190
|
|
|
$
|
2,353
|
|
|
$
|
2,265
|
|
|
$
|
2,264
|
|
|
$
|
9,072
|
|
Gross margin
|
$
|
891
|
|
|
$
|
1,001
|
|
|
$
|
992
|
|
|
$
|
959
|
|
|
$
|
3,843
|
|
Net income
|
$
|
253
|
|
|
$
|
262
|
|
|
$
|
301
|
|
|
$
|
256
|
|
|
$
|
1,072
|
|
Earnings per diluted share
|
$
|
0.21
|
|
|
$
|
0.21
|
|
|
$
|
0.24
|
|
|
$
|
0.21
|
|
|
$
|
0.87
|
|
2013:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
1,573
|
|
|
$
|
1,973
|
|
|
$
|
1,975
|
|
|
$
|
1,988
|
|
|
$
|
7,509
|
|
Gross margin
|
$
|
582
|
|
|
$
|
808
|
|
|
$
|
806
|
|
|
$
|
795
|
|
|
$
|
2,991
|
|
Net income (loss)
|
$
|
34
|
|
|
$
|
(129
|
)
|
|
$
|
168
|
|
|
$
|
183
|
|
|
$
|
256
|
|
Earnings (loss) per diluted share
|
$
|
0.03
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.14
|
|
|
$
|
0.15
|
|
|
$
|
0.21
|
|
|
|
Incorporated by Reference
|
|||
Exhibit No.
|
Description
|
Form
|
File No.
|
Exhibit No.
|
Filing Date
|
2.1**
|
Business Combination Agreement, dated as of September 24, 2013, between Applied Materials, Inc. and Tokyo Electron Limited
|
8-K
|
000-06920
|
2.1
|
9/24/2013
|
2.2**
|
Amendment No.1 to Business Combination Agreement, dated as of February 14, 2014, by and among Applied Materials, Inc., Tokyo Electron Limited and TEL-Applied Holdings B.V.
|
8-K
|
000-06920
|
2.1
|
2/18/2014
|
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. Profit Sharing Scheme (Ireland)
|
S-8
|
333-45011
|
4.1
|
1/27/1998
|
10.7*
|
Applied Materials, Inc. amended and restated Relocation Policy
|
8-K
|
000-06920
|
10.46
|
10/31/2005
|
10.8*
|
Amendment No. 3 to the Applied Materials, Inc. Executive Deferred Compensation Plan
|
10-K
|
000-06920
|
10.46
|
12/14/2005
|
10.9*
|
Amendment No. 4 to the Applied Materials, Inc. Executive Deferred Compensation Plan
|
10-K
|
000-06920
|
10.47
|
12/14/2005
|
10.10*
|
Applied Materials Inc. Employee Financial Assistance Plan, amended and restated as of December 18, 2008
|
10-Q
|
000-06920
|
10.58
|
3/3/2009
|
10.11*
|
Form of Non-Qualified Stock Option Grant Agreement for use under the Applied Materials Employee Stock Incentive Plan, as amended
|
10-Q
|
000-06920
|
10.45
|
5/30/2007
|
10.12*
|
Applied Materials, Inc. amended and restated 2005 Executive Deferred Compensation Plan
|
8-K
|
000-06920
|
10.49
|
7/13/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
|||
Exhibit No.
|
Description
|
Form
|
File No.
|
Exhibit No.
|
Filing Date
|
10.13*
|
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
|
10.14*
|
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
|
10.15
|
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
|
10.16
|
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
|
10.17*
|
Amendment No. 5 to the Applied Materials, Inc. Executive Deferred Compensation Plan
|
10-K
|
000-06920
|
10.50
|
12/12/2008
|
10.18*
|
Amendment No. 6 to the Applied Materials, Inc. Executive Deferred Compensation Plan
|
10-Q
|
000-06920
|
10.59
|
3/3/2009
|
10.19*
|
Amendment No. 1 to the Applied Materials, Inc. 2005 Executive Deferred Compensation Plan
|
10-K
|
000-06920
|
10.51
|
12/12/2008
|
10.20*
|
Amendment No. 2 to the Applied Materials, Inc. 2005 Executive Deferred Compensation Plan
|
10-Q
|
000-06920
|
10.60
|
3/3/2009
|
10.21*
|
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
|
10.22*
|
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
|
10.23*
|
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
|
10.24*
|
Amendment No. 7 to the Applied Materials, Inc. Executive Deferred Compensation Plan
|
10-Q
|
000-06920
|
10.67
|
6/9/2010
|
10.25*
|
Amendment No. 3 to the Applied Materials, Inc. 2005 Executive Deferred Compensation Plan
|
10-Q
|
000-06920
|
10.68
|
6/9/2010
|
10.26*
|
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
|
10.27*
|
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
|
10.28*
|
Amendment No. 8 to the Applied Materials, Inc. Executive Deferred Compensation Plan
|
10-Q
|
000-06920
|
10.60
|
2/28/2011
|
10.29*
|
Amendment No. 4 to the Applied Materials, Inc. 2005 Executive Deferred Compensation Plan
|
10-Q
|
000-06920
|
10.61
|
2/28/2011
|
10.30
|
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
|
10.31*
|
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
|
10.32*
|
Applied Materials, Inc. Employee Stock Incentive Plan, amended and restated effective March 6, 2012
|
8-K
|
000-06920
|
10.1
|
3/9/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
|||
Exhibit No.
|
Description
|
Form
|
File No.
|
Exhibit No.
|
Filing Date
|
10.33*
|
Applied Materials, Inc. Senior Executive Bonus Plan, amended and restated effective March 6, 2012
|
8-K
|
000-06920
|
10.2
|
3/9/2012
|
10.34*
|
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
|
10.35*
|
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
|
10.36*
|
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
|
10.37
|
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
|
10.38*
|
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
|
10.39*
|
Applied Materials, Inc. Employees' Stock Purchase Plan, amended and restated effective October 28, 2012
|
10-K
|
000-06920
|
10.54
|
12/5/2012
|
10.40*
|
Applied Materials, Inc. Stock Purchase Plan for Offshore Employees, amended and restated effective October 28, 2012
|
10-K
|
000-06920
|
10.55
|
12/5/2012
|
10.41
|
Extension Agreement, dated as of May 25, 2013, to Credit Agreement, dated as of May 25, 2011, as amended, among Applied Materials, Inc., JPMorgan Chase Bank, N.A. as administrative agent and the lenders parties thereto
|
8-K
|
000-06920
|
10.1
|
5/28/2013
|
10.42*
|
Offer Letter, dated August 14, 2013, between Applied Materials, Inc. and Gary E. Dickerson
|
10-Q
|
000-06920
|
10.2
|
8/22/2013
|
10.43*
|
Offer Letter, dated August 15, 2013, between Applied Materials, Inc. and Michael R. Splinter
|
10-Q
|
000-06920
|
10.3
|
8/22/2013
|
10.44*
|
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
|
10.4
|
8/22/2013
|
10.45*
|
Offer Letter, dated May 3, 2011, between Applied Materials, Inc. and Robert J. Halliday
|
10-K
|
000-06920
|
10.52
|
12/4/2013
|
10.46*
|
Form of Retention Bonus and Equity Award Amendment Agreement entered into between Applied Materials, Inc. and certain officers identified in the attached schedule
|
10-K
|
000-06920
|
10.53
|
12/4/2013
|
10.47*
|
Retention and Equity Award Amendment Agreement, dated December 20, 2013, between Applied Materials, Inc. and Michael R. Splinter
|
10-Q
|
000-06920
|
10.1
|
2/20/2014
|
10.48*
|
Form of Performance Unit Agreement for use under the Applied Materials, Inc. Employee Stock Incentive Plan, as amended
|
10-Q
|
000-06920
|
10.2
|
2/20/2014
|
10.49*
|
Form of Letter of Understanding for Long-Term Assignment†
|
|
|
|
|
10.50*
|
Applied Materials, Inc. Applied Incentive Plan, amended and restated effective October 28, 2013†
|
|
|
|
|
10.51*
|
Amendment No. 5 to the Applied Materials, Inc. 2005 Executive Deferred Compensation Plan†
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
|||
Exhibit No.
|
Description
|
Form
|
File No.
|
Exhibit No.
|
Filing Date
|
21
|
Subsidiaries of Applied Materials, Inc. †
|
|
|
|
|
23
|
Consent of Independent Registered Public Accounting Firm, KPMG LLP†
|
|
|
|
|
24
|
Power of Attorney†
|
|
|
|
|
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.
|
**
|
Schedules and certain exhibits to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Applied hereby undertakes to furnish supplementally copies of any of the omitted schedules and exhibits upon request by the Securities and Exchange Commission.
|
†
|
Filed herewith.
|
‡
|
Furnished herewith.
|
APPLIED MATERIALS, INC.
|
|
|
|
By:
|
/
S
/ GARY E. DICKERSON
|
|
Gary E. Dickerson
|
|
President, Chief Executive Officer
|
|
Title
|
Date
|
/
S
/ GARY E. DICKERSON
|
President, Chief Executive Officer (Principal
Executive Officer)
|
December 17, 2014
|
Gary E. Dickerson
|
|
|
/
S
/ ROBERT J. HALLIDAY
|
Senior Vice President, Chief
Financial Officer
(Principal Financial Officer)
|
December 17, 2014
|
Robert J. Halliday
|
|
|
/
S
/ CHARLES W. READ
|
Corporate Vice President, Corporate
Controller and Chief Accounting
Officer (Principal Accounting Officer)
|
December 17, 2014
|
Charles W. Read
|
|
|
Directors:
|
|
|
*
|
|
|
Michael R. Splinter
|
Executive Chairman of the Board
|
December 17, 2014
|
*
|
|
|
Aart J. de Geus
|
Director
|
December 17, 2014
|
*
|
|
|
Gary E. Dickerson
|
Director
|
December 17, 2014
|
*
|
|
|
Stephen R. Forrest
|
Director
|
December 17, 2014
|
*
|
|
|
Thomas J. Iannotti
|
Director
|
December 17, 2014
|
*
|
|
|
Susan M. James
|
Director
|
December 17, 2014
|
*
|
|
|
Alexander A. Karsner
|
Director
|
December 17, 2014
|
*
|
|
|
Gerhard H. Parker
|
Director
|
December 17, 2014
|
*
|
|
|
Dennis D. Powell
|
Director
|
December 17, 2014
|
*
|
|
|
Willem P. Roelandts
|
Director
|
December 17, 2014
|
*
|
|
|
James E. Rogers
|
Director
|
December 17, 2014
|
*
|
|
|
Robert H. Swan
|
Director
|
December 17, 2014
|
* By
|
/s/ GARY E. DICKERSON
|
|
Gary E. Dickerson
|
|
Attorney-in-Fact**
|
**
|
By authority of the power of attorney filed herewith.
|
1.
|
Your base salary will be paid out of your home location. Payments will be based upon home country payroll practices (e.g. monthly, bi-weekly, etc.).
|
2.
|
You will be offered the Corporate Insurance/Benefits Package plan which currently includes expatriate benefits for certain medical, dental, prescription drug, and vision coverage through
[Z]
. Any Company-sponsored medical, dental, prescription drug, vision and/or EAP benefits you currently have will end once the Corporate Insurance/Benefits Package plan goes into effect. Attached is a document that outlines the corporate insurance/benefits package benefits.
|
3.
|
The Company will provide a Cost of Living Allowance (“COLA”) based on the cost difference between certain basic goods and services in the home location and the host location. The amount of your COLA payment is determined using data received by an external consultant. This amount will be reviewed on a quarterly basis and revised if necessary, based on changes in salary, market conditions or family size. Your COLA amount is currently calculated at
[Home country currency]
per month and will be adjusted at the start of your assignment based on current cost of living tables at that time.
|
4.
|
The Company will provide a tax equalization benefit (the “Tax Equalization Benefit”) through a partnering tax professional, in accordance with the guidelines in the Company’s Global Tax Equalization Policy, as it may be amended from time to time (the “Tax Equalization Policy”). This Tax Equalization Benefit will include a reconciliation of your income taxes in both your home and host countries as well as reimbursement for gross-up tax calculations related to eligible expenses you incur due to the assignment that must be included in your income for tax purposes. You will be tax equalized to your home country tax rate, and a hypothetical tax will be deducted from your pay. Please read the enclosed Tax Equalization Policy and sign and return the acknowledgement with this letter to
[Y]
. You are not required to remain employed with the Company or one of its subsidiaries or affiliates to receive the Tax Equalization Benefit except to the extent, if any, required by the Tax Equalization Policy.
|
5.
|
The Company will pay you a one-time relocation allowance of
[$X]
at the beginning of the assignment. This allowance will be paid through your home country payroll.
|
6.
|
The Company will provide [
you OR you and your spouse
] with one
[X-night]
host country visit. Expenses to be reimbursed for this trip include round-trip airfare, lodging, meals
|
7.
|
The Company will provide you with home finding assistance for
[X days]
through an outside destination service provider to assist you in locating adequate housing, schools and area orientation.
|
8.
|
The Company will provide you and your spouse with language lessons, up to
[X hours, and up to a maximum of $X per person]
. Language lessons for children are not reimbursed, as children will typically receive language education as part of their school curriculum.
|
9.
|
The Company will assist in and will reimburse you for the cost of obtaining the documentation required for you to work and your accompanying dependents (as defined in the Company’s International Assignment Policy in effect as of the effective date of the LOU (the “IAP”)) to live in [
Location of Assignment
]. This includes assistance with and reimbursement for visas, residence permits, passports, etc. The Company does not intend for permanent residency to be obtained and does not support any costs for you or your dependents as a result of permanent residency.
|
10.
|
The Company will provide reimbursement for any required medical examinations and/or immunizations for you and your accompanying dependents which are not currently covered under your home country medical plan.
|
11.
|
The Company will provide you and your accompanying spouse, if applicable, with a one-day cultural orientation class which will teach you about living and working in the Host Country.
|
12.
|
The Company does not ship or store personal automobiles. However, it will reimburse you for a loss incurred as a result of the sale or lease cancellation on your personal automobile, up to
[$X]
per car, with a two car limit. You must provide support documentation to obtain this benefit.
|
13.
|
The Company will provide one-way, economy (or business class for the assignee, if authorized) airfare for you and your approved accompanying dependents to the host location. This travel must be booked through Corporate Travel according to the Company’s current travel guidelines. At the same time, you must notify
[Y]
about this travel.
|
14.
|
The Company will pay for a one-time air and sea shipment of your personal belongings to the host location or a surface shipment (via land) depending on the geographic location of your home and host locations. There is a limit on this reimbursement, and the total amount reimbursed will be subject to container size limit stated in the IAP. Reimbursement will be for a shipment pick up from a single location and delivered to another single location. Reimbursement will include normal customs and import duties, as well as insurance for replacement valuation. If you are not able to immediately occupy your ultimate residence in the host country, the Company will also reimburse up to
[X days]
|
15.
|
The Company will also reimburse you for expenses associated with shipping up to two household pets, with a cap on reimbursement of
[$X]
total.
|
16.
|
The Company may provide temporary living arrangements for a combined maximum of
[X]
days between the home and host location. Expenses related to such temporary accommodations will be paid directly by Applied Materials whenever possible. While in temporary living, you will receive a meal per diem based upon the current Company travel policy.
|
17.
|
In locations where the international bank account is not available and you choose to use the home country bank or local bank in the host country, the Company will reimburse the cost of two funds transfers per month.
|
18.
|
The Company will provide furnished housing for the duration of the assignment. Your budget for housing is based on furnished housing at the host location to accommodate your family size and is determined by third party cost of living tables. You will also receive a utility allowance based on data tables provided by an external consultant.
|
19.
|
The Company will reimburse
[tuition and other pre-approved education expenses] [application fees]
for your dependent children attending primary or secondary school in the host country. The Company works closely with you and consultants to determine the most appropriate primary or secondary school options for your children. If you and the Company are unable to agree on a schooling option and you elect to send your children to a primary or secondary school other than one approved by the Company, you will be reimbursed for an amount equal to the tuition of the school deemed most appropriate by the Company.
|
20.
|
The Company will reimburse you for eligible integration expenses related to assisting your spouse in assimilating into the new community, up to a maximum reimbursement of
[$X]
(e.g. career assistance, membership fees to local clubs/organizations, etc.).
|
21.
|
[The Company will provide you with a company-leased vehicle for the duration of the assignment. The Corporate Travel Department will make arrangements for this vehicle.] OR [Because X is considered a “no-drive” country, you will be provided [a transport
|
22.
|
After you have completed 12 months of your assignment, the Company will pay for one round-trip flight each year for you and accompanying dependents to travel home to [
Home Country
], based on the Company’s current travel policy. You must have at least six (6) months of your assignment remaining to be eligible for this reimbursement. If you prefer, the Company will pay for a spouse who has remained in the home country to travel to your host location, so long as you have completed 12 months of your assignment and have at least six (6) months remaining.
|
23.
|
The Company will provide assistance in the case of the following emergency situations while on assignment:
|
a.
|
death of an immediate family member (as defined in the IAP),
|
b.
|
emergency medical care,
|
c.
|
death of the assignee or accompanying dependent, and/or
|
d.
|
evacuation.
|
|
|
|
Sending Line Manager – Signature
|
|
Date
|
|
|
|
Accepted by:
|
|
|
|
|
|
(Assignee’s Name) – Signature
|
|
Date
|
cc:
|
Global Mobility Manager
|
•
|
The Plan is based on a shared responsibility (coinsurance) between you and Applied Materials.
|
•
|
The medical benefits provide for
[X%]
payment of reasonable and customary (R&C) charges until you have reached a personal out of pocket limitation of
[$X]
for individual and
[$X]
for family, then the medical benefits provide for 100% reimbursement of R&C charges.
|
•
|
The dental benefits are payable at either: (Class I) 100%, (Class II) 80% or (Class III) 50%, depending on the type of class/care required. The calendar year maximum for Class I, II, III combined is
[$X]
.
|
•
|
Within the United States,
[Z]
offers in-network discounts. To take advantage of these discounts, you must ensure your physician is a member of the
[Z]
Preferred Care Network. You can find out which physicians participate in the
[Z]
Preferred Care Network via the member website: www.
[Z]
.com/cieb. This will allow you and your covered dependents to take advantage of the pre-negotiated discount arrangements.
|
•
|
If you are inbound to the United States, you must contact
[Z]
within 24 hours if you or a covered dependent is admitted to a hospital within the United States.
|
•
|
If your spouse and/or other covered dependents elect to remain in the home country, their benefits will also transfer to the
[Z]
plan.
|
1.
|
ESTABLISHMENT AND PURPOSE
|
2.
|
DEFINITIONS
|
4.
|
PAYMENT OF AWARDS
|
5.
|
ADMINISTRATION
|
6.
|
GENERAL PROVISIONS
|
Date: October 16, 2014
|
APPLIED MATERIALS, INC.
|
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
|
AKT Japan, LLC
|
|
|
|
Delaware
|
Applied Materials India Private Limited
|
|
|
|
India
|
Metron Technology, Inc.
|
|
(6)
|
|
Delaware
|
Applied Ventures, LLC
|
|
|
|
Delaware
|
Applied Materials Canada, Inc.
|
|
|
|
Canada
|
AFCO GP, LLC
|
|
|
|
Colorado
|
Applied Films Taiwan Co., Ltd.
|
|
|
|
Taiwan
|
AFCO C.V.
|
|
(7)
|
|
The Netherlands
|
PT Applied Materials Indonesia
|
|
|
|
Indonesia
|
Semitool, Inc.
|
|
(8)
|
|
Montana
|
Varian Semiconductor Equipment Associates, Inc.
|
|
(9)
|
|
Delaware
|
Applied Materials Holdings S.à r.l.
|
|
(10)
|
|
Luxembourg
|
Eteris U.S. Inc.
|
|
|
|
Delaware
|
PineBrook Imaging, Inc.
|
|
|
|
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.
|
|
(a)
|
|
Hong Kong
|
AMAT (Thailand) Limited
|
|
|
|
Thailand
|
Applied Materials (Shanghai) Co., Ltd.
|
|
|
|
P.R. China
|
Applied Materials (China) Holdings, Ltd.
|
|
(b)
|
|
P.R. China
|
|
|
|
|
|
LEGAL ENTITY NAME
|
|
|
|
PLACE OF INCORPORATION
|
|
|
|
|
|
(3) Applied Materials Israel, Ltd. owns the following subsidiary:
|
|
|
|
|
ICT Integrated Circuit Testing GmbH
|
|
|
|
Germany
|
|
|
|
|
|
(4) Applied Materials SPV1, Inc. owns the following subsidiary:
|
|
|
|
|
Applied Materials SPV2, Inc.
|
|
(c)
|
|
Delaware
|
|
|
|
|
|
(5) AKT, Inc. owns the following subsidiary:
|
|
|
|
|
AKT America, Inc.
|
|
|
|
California
|
|
|
|
|
|
(6) Metron Technology, Inc. owns the following subsidiary:
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Metron Technology Distribution Corporation
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Nevada
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(7) AFCO C.V. owns the following subsidiaries:
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Applied Materials Deutschland Holding GmbH
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(d)
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Germany
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Applied Materials 1 LLC
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Delaware
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Applied Materials 1 LLC Luxembourg S.C.S.
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(e)
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Luxembourg
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Applied Materials Netherlands B.V.
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(f)
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The Netherlands
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(8) Semitool, Inc. owns the following subsidiary:
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Semitool Semiconductor Equipment Technology (Shanghai) Co., Ltd.
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P.R. China
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(9) Varian Semiconductor Equipment Associates, Inc., owns
the following subsidiaries:
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Applied Materials 2 LLC
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Delaware
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Applied Materials 2 LLC Luxembourg S.C.S.
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(e)
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Luxembourg
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(10) Applied Materials Holdings S.à r.l. owns the following subsidiaries:
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Applied Materials U.S. Holdings LLC
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(p)
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Delaware
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Applied Materials Luxembourg 2 S.à.r.l.
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Luxembourg
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(a) Applied Materials China, Ltd. owns the following subsidiaries:
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Applied Materials China (Tianjin) Co., Ltd.
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P.R. China
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Applied Materials (China), Inc.
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P.R. China
|
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LEGAL ENTITY NAME
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PLACE OF INCORPORATION
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(b) Applied Materials (China) Holdings, Ltd. owns the following subsidiary:
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Applied Materials (Xi’an), Ltd.
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P.R. China
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(c) Applied Materials SPV2, Inc. owns the following 50-50 joint venture:
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eLith LLC
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Delaware
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(d) Applied Materials Deutschland Holding GmbH owns the following subsidiaries:
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Applied Materials Verwaltung GmbH
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Germany
|
Applied Materials GmbH & Co., KG
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(o)
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Germany
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(e) Applied Materials 1 LLC Luxembourg S.C.S. and Applied Materials 2 LLC Luxembourg S.C.S. each partially own the following subsidiary:
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i
Applied Materials 2 LLC Luxembourg S.C.S. 3 S.C.S
|
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(g)
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Luxembourg
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(f) Applied Materials Netherlands B.V. owns the following
subsidiaries:
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Applied Materials Italia S.r.l.
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Italy
|
Applied Materials GmbH
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Germany
|
Applied Materials France
|
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France
|
Applied Materials Ireland Ltd.
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Ireland
|
Applied Materials Belgium N.V.
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Belgium
|
Applied Materials Spain S.L.
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Spain
|
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(g) Applied Materials 2 LLC Luxembourg S.C.S. 3 S.C.S. owns the following subsidiaries:
|
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Applied Materials Luxembourg S.à r.l.
|
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(h)
|
|
Luxembourg
|
Varian Semiconductor Equipment Associates Overseas Holdings, Ltd.
|
|
(j)
|
|
Cayman Islands
|
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|
|
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|
LEGAL ENTITY NAME
|
|
|
|
PLACE OF INCORPORATION
|
|
|
|
|
|
(h) Applied Materials Luxembourg S.à r.l. owns the following
subsidiaries:
|
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|
|
|
Applied Materials Europe BV
|
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(i)
|
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The Netherlands
|
Applied Materials South East Asia Pte. Ltd.
|
|
(l)
|
|
Singapore
|
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.
|
|
(m)
|
|
Hong Kong
|
Varian Semiconductor Equipment Associates GmbH
|
|
(n)
|
|
Switzerland
|
Varian Semiconductor Equipment Associates International, LLC
|
|
|
|
Delaware
|
|
|
|
|
|
(i) Applied Materials Europe BV owns the following subsidiary:
|
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|
|
|
Applied Materials Switzerland Sàrl
|
|
(k)
|
|
Switzerland
|
|
|
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|
|
(j) Varian Semiconductor Equipment Associates Overseas Holdings, Ltd. owns the following subsidiary:
|
|
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|
|
Varian Semiconductor Equipment Associates (Gibraltar), Ltd.
|
|
|
|
Gibraltar
|
|
|
|
|
|
(k) Applied Materials Switzerland Sàrl owns the following subsidiary:
|
|
|
|
|
Saimai Shaping Systems Service (Beijing) Co., Ltd.
|
|
|
|
P.R. China
|
|
|
|
|
|
(l) Applied Materials South East Asia Pte. Ltd. owns the following subsidiaries:
|
|
|
|
|
Applied Materials (AMSEA) Sdn Bhd
|
|
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|
Malaysia
|
Applied Materials Singapore Technology Pte. Ltd.
|
|
|
|
Singapore
|
Semitool (Philippines) Inc.
|
|
|
|
Nevada
|
|
|
|
|
|
(m) Altin Ltd. owns the following subsidiary:
|
|
|
|
|
Varian Precision Instruments Maintenance (Shanghai) Co., Ltd.
|
|
|
|
P.R. China
|
|
|
|
|
|
(n) Varian Semiconductor Equipment Associates GmbH owns the following subsidiary:
|
|
|
|
|
Varian Semiconductor Management GmbH
|
|
|
|
Switzerland
|
|
|
|
|
|
LEGAL ENTITY NAME
|
|
|
|
PLACE OF INCORPORATION
|
|
|
|
|
|
(o) Applied Materials GmbH & Co., KG owns the following subsidiary:
|
|
|
|
|
Applied Materials WEB Coating GmbH
|
|
|
|
Germany
|
|
|
|
|
|
(p) Applied Materials U.S. Holdings LLC owns
the following subsidiary:
|
|
|
|
|
Applied Materials Merger LLC
|
|
|
|
Delaware
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
|
|
|
|
|
/s/ KPMG LLP
|
KPMG LLP
|
/s/ Aart J. de Geus
|
|
/s/ Gerhard H. Parker
|
Aart J. de Geus
|
|
Gerhard H. Parker
|
Director
|
|
Director
|
|
|
|
|
|
/s/ Dennis D. Powell
|
Gary E. Dickerson
|
|
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
|
|
Executive Chairman
|
|
|
|
/s/ Alexander A. Karsner
|
|
/s/ Robert H. Swan
|
Alexander A. Karsner
|
|
Robert H. Swan
|
Director
|
|
Director
|
/s/ GARY E. DICKERSON
|
Gary E. Dickerson
|
President, Chief Executive Officer
|
/s/ ROBERT J. HALLIDAY
|
Robert J. Halliday
|
Senior Vice President, Chief Financial Officer
|
/s/ GARY E. DICKERSON
|
Gary E. Dickerson
|
President, Chief Executive Officer
|
/s/ ROBERT J. HALLIDAY
|
Robert J. Halliday
|
Senior Vice President, Chief Financial Officer
|