þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
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94-1655526
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(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
|
3050 Bowers Avenue,
|
95052-8039
|
P.O. Box 58039
Santa Clara, California
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
þ
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Accelerated filer
¨
|
|
Non-accelerated filer
¨
|
Smaller reporting company
¨
|
|
|
(Do not check if a smaller reporting company)
|
|
|
Page
|
|
PART I. FINANCIAL INFORMATION
|
|
Item 1:
|
||
|
||
|
||
|
||
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||
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||
|
||
Item 2:
|
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Item 3:
|
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Item 4:
|
||
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PART II. OTHER INFORMATION
|
|
Item 1:
|
||
Item 1A:
|
||
Item 2:
|
||
Item 6:
|
||
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
April 29,
2012 |
|
May 1,
2011 |
|
April 29,
2012 |
|
May 1,
2011 |
||||||||
|
(Unaudited)
(In millions, except per share amounts) |
||||||||||||||
Net sales
|
$
|
2,541
|
|
|
$
|
2,862
|
|
|
$
|
4,730
|
|
|
$
|
5,549
|
|
Cost of products sold
|
1,530
|
|
|
1,673
|
|
|
2,933
|
|
|
3,224
|
|
||||
Gross margin
|
1,011
|
|
|
1,189
|
|
|
1,797
|
|
|
2,325
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research, development and engineering
|
321
|
|
|
297
|
|
|
625
|
|
|
567
|
|
||||
Selling, general and administrative
|
281
|
|
|
219
|
|
|
584
|
|
|
440
|
|
||||
Restructuring charges and asset impairments
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(33
|
)
|
||||
Total operating expenses
|
602
|
|
|
512
|
|
|
1,209
|
|
|
974
|
|
||||
Income from operations
|
409
|
|
|
677
|
|
|
588
|
|
|
1,351
|
|
||||
Impairment of strategic investments (Notes 3 and 4)
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Interest and other expenses
|
23
|
|
|
5
|
|
|
47
|
|
|
10
|
|
||||
Interest and other income, net
|
4
|
|
|
14
|
|
|
8
|
|
|
25
|
|
||||
Income before income taxes
|
387
|
|
|
686
|
|
|
546
|
|
|
1,366
|
|
||||
Provision for income taxes
|
98
|
|
|
197
|
|
|
140
|
|
|
371
|
|
||||
Net income
|
$
|
289
|
|
|
$
|
489
|
|
|
$
|
406
|
|
|
$
|
995
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
$
|
0.22
|
|
|
$
|
0.37
|
|
|
$
|
0.31
|
|
|
$
|
0.75
|
|
Weighted average number of shares:
|
|
|
|
|
|
|
|
||||||||
Basic
|
1,289
|
|
|
1,320
|
|
|
1,294
|
|
|
1,322
|
|
||||
Diluted
|
1,301
|
|
|
1,333
|
|
|
1,305
|
|
|
1,333
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
April 29,
2012 |
|
May 1,
2011 |
|
April 29,
2012 |
|
May 1,
2011 |
||||||||
|
(Unaudited)
(In millions) |
||||||||||||||
Net income
|
$
|
289
|
|
|
$
|
489
|
|
|
$
|
406
|
|
|
$
|
995
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
||||||||
Change in unrealized net gain on investments
|
2
|
|
|
(1
|
)
|
|
3
|
|
|
(2
|
)
|
||||
Change in unrealized net gain on derivative investments
|
—
|
|
|
3
|
|
|
—
|
|
|
2
|
|
||||
Change in defined benefit plan liability
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Change in cumulative translation adjustments
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Other comprehensive income (loss)
|
—
|
|
|
1
|
|
|
1
|
|
|
(1
|
)
|
||||
Comprehensive income
|
$
|
289
|
|
|
$
|
490
|
|
|
$
|
407
|
|
|
$
|
994
|
|
|
April 29,
2012 |
|
October 30,
2011 |
||||
|
(In millions)
|
||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents (Notes 3 and 4)
|
$
|
1,761
|
|
|
$
|
5,960
|
|
Short-term investments (Notes 3 and 4)
|
409
|
|
|
283
|
|
||
Accounts receivable, net (Note 6)
|
1,785
|
|
|
1,532
|
|
||
Inventories (Note 7)
|
1,594
|
|
|
1,701
|
|
||
Deferred income taxes, net
|
572
|
|
|
580
|
|
||
Other current assets
|
209
|
|
|
299
|
|
||
Total current assets
|
6,330
|
|
|
10,355
|
|
||
Long-term investments (Notes 3 and 4)
|
1,071
|
|
|
931
|
|
||
Property, plant and equipment, net (Note 7)
|
939
|
|
|
866
|
|
||
Goodwill (Notes 8 and 9)
|
3,939
|
|
|
1,335
|
|
||
Purchased technology and other intangible assets, net (Notes 8 and 9)
|
1,464
|
|
|
211
|
|
||
Deferred income taxes and other assets
|
134
|
|
|
163
|
|
||
Total assets
|
$
|
13,877
|
|
|
$
|
13,861
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
1
|
|
|
$
|
—
|
|
Accounts payable and accrued expenses (Note 7)
|
1,466
|
|
|
1,520
|
|
||
Customer deposits and deferred revenue (Note 7)
|
1,113
|
|
|
1,116
|
|
||
Income taxes payable
|
86
|
|
|
158
|
|
||
Total current liabilities
|
2,666
|
|
|
2,794
|
|
||
Long-term debt (Note 10)
|
1,946
|
|
|
1,947
|
|
||
Employee benefits and other liabilities
|
562
|
|
|
320
|
|
||
Total liabilities
|
5,174
|
|
|
5,061
|
|
||
Stockholders’ equity (Note 11):
|
|
|
|
||||
Common stock
|
13
|
|
|
13
|
|
||
Additional paid-in capital
|
5,730
|
|
|
5,616
|
|
||
Retained earnings
|
13,217
|
|
|
13,029
|
|
||
Treasury stock
|
(10,264
|
)
|
|
(9,864
|
)
|
||
Accumulated other comprehensive income
|
7
|
|
|
6
|
|
||
Total stockholders’ equity
|
8,703
|
|
|
8,800
|
|
||
Total liabilities and stockholders’ equity
|
$
|
13,877
|
|
|
$
|
13,861
|
|
*
|
Amounts as of April 29, 2012 are unaudited. Amounts as of October 30, 2011 are derived from the October 30, 2011 audited consolidated financial statements.
|
|
Common Stock
|
|
Additional
Paid-In Capital |
|
Retained
Earnings |
|
Treasury Stock
|
|
Accumulated
Other Comprehensive Income |
|
Total
|
||||||||||||||||||
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||
|
(Unaudited)
(In millions) |
||||||||||||||||||||||||||||
Balance at October 30, 2011
|
1,306
|
|
|
$
|
13
|
|
|
$
|
5,616
|
|
|
$
|
13,029
|
|
|
573
|
|
|
$
|
(9,864
|
)
|
|
$
|
6
|
|
|
$
|
8,800
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
406
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
406
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||
Dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(218
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(218
|
)
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
96
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96
|
|
||||||
Stock options assumed in connection with acquisition
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||||
Issuance under stock plans, net of tax detriment of $14 and other
|
10
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||||
Common stock repurchases
|
(34
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|
(400
|
)
|
|
—
|
|
|
(400
|
)
|
||||||
Balance at April 29, 2012
|
1,282
|
|
|
$
|
13
|
|
|
$
|
5,730
|
|
|
$
|
13,217
|
|
|
607
|
|
|
$
|
(10,264
|
)
|
|
$
|
7
|
|
|
$
|
8,703
|
|
|
Six Months Ended
|
||||||
|
April 29,
2012 |
|
May 1,
2011 |
||||
|
(Unaudited)
(In millions) |
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
406
|
|
|
$
|
995
|
|
Adjustments required to reconcile net income to cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
220
|
|
|
128
|
|
||
Net loss on dispositions and fixed asset retirements
|
3
|
|
|
1
|
|
||
Provision for bad debts
|
9
|
|
|
—
|
|
||
Restructuring charges and asset impairments
|
—
|
|
|
(33
|
)
|
||
Deferred income taxes
|
28
|
|
|
(17
|
)
|
||
Net recognized loss on investments
|
10
|
|
|
5
|
|
||
Impairment of strategic investments
|
3
|
|
|
—
|
|
||
Share-based compensation
|
96
|
|
|
72
|
|
||
Changes in operating assets and liabilities, net of amounts acquired:
|
|
|
|
||||
Accounts receivable
|
(67
|
)
|
|
(85
|
)
|
||
Inventories
|
357
|
|
|
(246
|
)
|
||
Prepaid income taxes
|
18
|
|
|
(110
|
)
|
||
Other current assets
|
114
|
|
|
20
|
|
||
Other assets
|
—
|
|
|
(2
|
)
|
||
Accounts payable and accrued expenses
|
(268
|
)
|
|
25
|
|
||
Customer deposits and deferred revenue
|
(55
|
)
|
|
432
|
|
||
Income taxes payable
|
(93
|
)
|
|
(64
|
)
|
||
Employee benefits and other liabilities
|
3
|
|
|
8
|
|
||
Cash provided by operating activities
|
784
|
|
|
1,129
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(76
|
)
|
|
(81
|
)
|
||
Cash paid for acquisition, net of cash acquired
|
(4,186
|
)
|
|
—
|
|
||
Proceeds from sale of facility
|
—
|
|
|
39
|
|
||
Proceeds from sales and maturities of investments
|
560
|
|
|
904
|
|
||
Purchases of investments
|
(714
|
)
|
|
(896
|
)
|
||
Cash used in investing activities
|
(4,416
|
)
|
|
(34
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Debt repayments
|
—
|
|
|
(1
|
)
|
||
Proceeds from common stock issuances
|
45
|
|
|
59
|
|
||
Common stock repurchases
|
(400
|
)
|
|
(268
|
)
|
||
Payment of dividends to stockholders
|
(208
|
)
|
|
(186
|
)
|
||
Cash used in financing activities
|
(563
|
)
|
|
(396
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(4
|
)
|
|
1
|
|
||
Increase (decrease) in cash and cash equivalents
|
(4,199
|
)
|
|
700
|
|
||
Cash and cash equivalents — beginning of period
|
5,960
|
|
|
1,858
|
|
||
Cash and cash equivalents — end of period
|
$
|
1,761
|
|
|
$
|
2,558
|
|
Supplemental cash flow information:
|
|
|
|
||||
Cash payments for income taxes
|
$
|
179
|
|
|
$
|
556
|
|
Cash refunds from income taxes
|
$
|
4
|
|
|
$
|
2
|
|
Cash payments for interest
|
$
|
48
|
|
|
$
|
7
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
April 29,
2012 |
|
May 1,
2011 |
|
April 29,
2012 |
|
May 1,
2011 |
||||||||
|
(In millions, except per share amounts)
|
||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
289
|
|
|
$
|
489
|
|
|
$
|
406
|
|
|
$
|
995
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
1,289
|
|
|
1,320
|
|
|
1,294
|
|
|
1,322
|
|
||||
Effect of dilutive stock options, restricted stock units and employee stock purchase plan shares
|
12
|
|
|
13
|
|
|
11
|
|
|
11
|
|
||||
Denominator for diluted earnings per share
|
1,301
|
|
|
1,333
|
|
|
1,305
|
|
|
1,333
|
|
||||
Basic and diluted earnings per share
|
$
|
0.22
|
|
|
$
|
0.37
|
|
|
$
|
0.31
|
|
|
$
|
0.75
|
|
Potentially dilutive securities
|
8
|
|
|
18
|
|
|
13
|
|
|
18
|
|
April 29, 2012
|
Cost
|
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Estimated
Fair Value |
||||||||
|
(In millions)
|
||||||||||||||
Cash
|
$
|
620
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
620
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
1,141
|
|
|
—
|
|
|
—
|
|
|
1,141
|
|
||||
Total Cash equivalents
|
1,141
|
|
|
—
|
|
|
—
|
|
|
1,141
|
|
||||
Total Cash and Cash equivalents
|
$
|
1,761
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,761
|
|
Short-term and long-term investments:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and agency securities
|
$
|
302
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
303
|
|
Non-U.S. government securities*
|
22
|
|
|
—
|
|
|
—
|
|
|
22
|
|
||||
Municipal securities
|
395
|
|
|
2
|
|
|
—
|
|
|
397
|
|
||||
Commercial paper, corporate bonds and medium-term notes
|
314
|
|
|
3
|
|
|
—
|
|
|
317
|
|
||||
Asset-backed and mortgage-backed securities
|
301
|
|
|
3
|
|
|
1
|
|
|
303
|
|
||||
Total fixed income securities
|
1,334
|
|
|
9
|
|
|
1
|
|
|
1,342
|
|
||||
Publicly traded equity securities
|
45
|
|
|
30
|
|
|
6
|
|
|
69
|
|
||||
Equity investments in privately-held companies
|
69
|
|
|
—
|
|
|
—
|
|
|
69
|
|
||||
Total short-term and long-term investments
|
$
|
1,448
|
|
|
$
|
39
|
|
|
$
|
7
|
|
|
$
|
1,480
|
|
Total Cash, Cash equivalents and Investments
|
$
|
3,209
|
|
|
$
|
39
|
|
|
$
|
7
|
|
|
$
|
3,241
|
|
*
|
Includes agency and corporate debt securities guaranteed by non-U.S. governments, which consist of Canada, Australia, and Germany.
|
October 30, 2011
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
|
(In millions)
|
||||||||||||||
Cash
|
$
|
297
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
297
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
5,663
|
|
|
—
|
|
|
—
|
|
|
5,663
|
|
||||
Total Cash equivalents
|
5,663
|
|
|
—
|
|
|
—
|
|
|
5,663
|
|
||||
Total Cash and Cash equivalents
|
$
|
5,960
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,960
|
|
Short-term and long-term investments:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and agency securities
|
$
|
184
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
185
|
|
Non-U.S. government securities
|
40
|
|
|
—
|
|
|
—
|
|
|
40
|
|
||||
Municipal securities
|
371
|
|
|
2
|
|
|
—
|
|
|
373
|
|
||||
Commercial paper, corporate bonds and medium-term notes
|
216
|
|
|
3
|
|
|
1
|
|
|
218
|
|
||||
Asset-backed and mortgage-backed securities
|
307
|
|
|
3
|
|
|
1
|
|
|
309
|
|
||||
Total fixed income securities
|
1,118
|
|
|
9
|
|
|
2
|
|
|
1,125
|
|
||||
Publicly traded equity securities
|
8
|
|
|
19
|
|
|
—
|
|
|
27
|
|
||||
Equity investments in privately-held companies
|
62
|
|
|
—
|
|
|
—
|
|
|
62
|
|
||||
Total short-term and long-term investments
|
$
|
1,188
|
|
|
$
|
28
|
|
|
$
|
2
|
|
|
$
|
1,214
|
|
Total Cash, Cash equivalents and Investments
|
$
|
7,148
|
|
|
$
|
28
|
|
|
$
|
2
|
|
|
$
|
7,174
|
|
|
Cost
|
|
Estimated
Fair Value |
||||
|
(In millions)
|
||||||
Due in one year or less
|
$
|
365
|
|
|
$
|
365
|
|
Due after one through five years
|
667
|
|
|
672
|
|
||
Due after five years
|
1
|
|
|
2
|
|
||
No single maturity date**
|
415
|
|
|
441
|
|
||
|
$
|
1,448
|
|
|
$
|
1,480
|
|
**
|
Securities with no single maturity date include publicly-traded and privately-held equity securities, and asset-backed and mortgage-backed securities.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
April 29,
2012 |
|
May 1,
2011 |
|
April 29,
2012 |
|
May 1,
2011 |
|||||||||
(In millions)
|
|||||||||||||||
Gross realized gains
|
$
|
1
|
|
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
13
|
|
Gross realized losses
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
In Loss Position for
Less Than 12 Months |
|
Total
|
||||||||||||
Fair Value
|
|
Gross
Unrealized Losses |
|
Fair Value
|
|
Gross
Unrealized Losses |
|||||||||
|
(In millions)
|
||||||||||||||
Asset-backed and mortgage-backed securities
|
$
|
42
|
|
|
$
|
1
|
|
|
$
|
42
|
|
|
$
|
1
|
|
Publicly traded equity securities
|
$
|
19
|
|
|
$
|
6
|
|
|
$
|
19
|
|
|
$
|
6
|
|
Total
|
$
|
61
|
|
|
$
|
7
|
|
|
$
|
61
|
|
|
$
|
7
|
|
|
In Loss Position for
Less Than 12 Months |
|
Total
|
||||||||||||
Fair Value
|
|
Gross
Unrealized Losses |
|
Fair Value
|
|
Gross
Unrealized Losses |
|||||||||
|
(In millions)
|
||||||||||||||
Commercial paper, corporate bonds and medium-term notes
|
$
|
32
|
|
|
$
|
1
|
|
|
$
|
32
|
|
|
$
|
1
|
|
Asset-backed and mortgage-backed securities
|
77
|
|
|
1
|
|
|
77
|
|
|
1
|
|
||||
Total
|
$
|
109
|
|
|
$
|
2
|
|
|
$
|
109
|
|
|
$
|
2
|
|
•
|
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.
|
|
April 29, 2012
|
|
October 30, 2011
|
||||||||||||||||||||
Level 1
|
|
Level 2
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Total
|
|||||||||||||
(In millions)
|
|||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Money market funds
|
$
|
1,141
|
|
|
$
|
—
|
|
|
$
|
1,141
|
|
|
$
|
5,663
|
|
|
$
|
—
|
|
|
$
|
5,663
|
|
U.S. Treasury and agency securities
|
93
|
|
|
210
|
|
|
303
|
|
|
109
|
|
|
76
|
|
|
185
|
|
||||||
Non-U.S. government securities
|
—
|
|
|
22
|
|
|
22
|
|
|
—
|
|
|
40
|
|
|
40
|
|
||||||
Municipal securities
|
—
|
|
|
397
|
|
|
397
|
|
|
—
|
|
|
373
|
|
|
373
|
|
||||||
Commercial paper, corporate bonds and medium-term notes
|
—
|
|
|
317
|
|
|
317
|
|
|
—
|
|
|
218
|
|
|
218
|
|
||||||
Asset-backed and mortgage-backed securities
|
—
|
|
|
303
|
|
|
303
|
|
|
—
|
|
|
309
|
|
|
309
|
|
||||||
Publicly traded equity securities
|
69
|
|
|
—
|
|
|
69
|
|
|
27
|
|
|
—
|
|
|
27
|
|
||||||
Total
|
$
|
1,303
|
|
|
$
|
1,249
|
|
|
$
|
2,552
|
|
|
$
|
5,799
|
|
|
$
|
1,016
|
|
|
$
|
6,815
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deferred compensation
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
Three Months Ended April 29, 2012
|
|
Three Months Ended May 1, 2011
|
||||||||||||||||||||
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
|
|
$
|
6
|
|
|
$
|
4
|
|
|
$
|
(1
|
)
|
|
$
|
8
|
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
Foreign exchange contracts
|
General and administrative
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
(1
|
)
|
||||||
Total
|
|
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
(1
|
)
|
|
$
|
8
|
|
|
$
|
3
|
|
|
$
|
(2
|
)
|
|
|
|
Six Months Ended April 29, 2012
|
|
Six Months Ended May 1, 2011
|
||||||||||||||||||||
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
|
|
$
|
5
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
5
|
|
|
$
|
(3
|
)
|
Foreign exchange contracts
|
General and administrative
|
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
|
—
|
|
|
3
|
|
|
(1
|
)
|
||||||
Total
|
|
|
$
|
5
|
|
|
$
|
4
|
|
|
$
|
(1
|
)
|
|
$
|
12
|
|
|
$
|
8
|
|
|
$
|
(4
|
)
|
|
|
|
Amount of Gain or (Loss) Recognized in Income
|
||||||||||||||
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||||||
Location of Gain or
(Loss) Recognized in Income |
|
April 29, 2012
|
|
May 1, 2011
|
|
April 29, 2012
|
|
May 1, 2011
|
|||||||||
|
|
|
(In millions)
|
||||||||||||||
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
General and
administrative |
|
$
|
8
|
|
|
$
|
1
|
|
|
$
|
14
|
|
|
$
|
3
|
|
Total
|
|
|
$
|
8
|
|
|
$
|
1
|
|
|
$
|
14
|
|
|
$
|
3
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
April 29,
2012 |
|
May 1,
2011 |
|
April 29,
2012 |
|
May 1,
2011 |
|||||||||
|
(In millions)
|
||||||||||||||
Discounted letters of credit
|
$
|
—
|
|
|
$
|
50
|
|
|
$
|
—
|
|
|
$
|
173
|
|
Factored accounts receivable and discounted promissory notes
|
—
|
|
|
19
|
|
|
70
|
|
|
55
|
|
||||
Total
|
$
|
—
|
|
|
$
|
69
|
|
|
$
|
70
|
|
|
$
|
228
|
|
|
April 29,
2012 |
|
October 30,
2011 |
||||
|
(In millions)
|
||||||
Inventories
|
|
|
|
||||
Customer service spares
|
$
|
306
|
|
|
$
|
328
|
|
Raw materials
|
383
|
|
|
407
|
|
||
Work-in-process
|
338
|
|
|
336
|
|
||
Finished goods*
|
567
|
|
|
630
|
|
||
|
$
|
1,594
|
|
|
$
|
1,701
|
|
*
|
Included in finished goods inventory is
$186 million
at
April 29, 2012
, and
$224 million
at
October 30, 2011
, of newly-introduced systems at customer locations where the sales transaction did not meet Applied’s revenue recognition criteria as set forth in Note 1, Basis of Presentation. Finished goods inventory also includes
$195 million
and
$140 million
of evaluation inventory at
April 29, 2012
and
October 30, 2011
, respectively.
|
|
Useful Life
|
|
April 29,
2012 |
|
October 30,
2011 |
||||
|
(In years)
|
|
(In millions)
|
||||||
Property, Plant and Equipment, Net
|
|
|
|
|
|
||||
Land and improvements
|
|
|
$
|
169
|
|
|
$
|
163
|
|
Buildings and improvements
|
3-30
|
|
1,190
|
|
|
1,155
|
|
||
Demonstration and manufacturing equipment
|
3-5
|
|
753
|
|
|
686
|
|
||
Furniture, fixtures and other equipment
|
3-15
|
|
735
|
|
|
722
|
|
||
Construction in progress
|
|
|
31
|
|
|
12
|
|
||
Gross property, plant and equipment
|
|
|
2,878
|
|
|
2,738
|
|
||
Accumulated depreciation
|
|
|
(1,939
|
)
|
|
(1,872
|
)
|
||
|
|
|
$
|
939
|
|
|
$
|
866
|
|
|
April 29,
2012 |
|
October 30,
2011 |
||||
|
(In millions)
|
||||||
Accounts Payable and Accrued Expenses
|
|
|
|
||||
Accounts payable
|
$
|
507
|
|
|
$
|
484
|
|
Compensation and employee benefits
|
355
|
|
|
455
|
|
||
Warranty
|
152
|
|
|
168
|
|
||
Dividends payable
|
115
|
|
|
104
|
|
||
Other accrued taxes
|
70
|
|
|
81
|
|
||
Interest payable
|
30
|
|
|
31
|
|
||
Restructuring reserve
|
6
|
|
|
11
|
|
||
Other
|
231
|
|
|
186
|
|
||
|
$
|
1,466
|
|
|
$
|
1,520
|
|
|
April 29,
2012 |
|
October 30,
2011 |
||||
|
(In millions)
|
||||||
Customer Deposits and Deferred Revenue
|
|
|
|
||||
Customer deposits
|
$
|
191
|
|
|
$
|
249
|
|
Deferred revenue
|
922
|
|
|
867
|
|
||
|
$
|
1,113
|
|
|
$
|
1,116
|
|
Estimated Fair Values
|
Acquisition
2012 |
||
|
(In millions)
|
||
Cash and cash equivalents
|
$
|
632
|
|
Short-term investments
|
56
|
|
|
Accounts receivable, net
|
194
|
|
|
Inventories
|
250
|
|
|
Deferred income taxes and other current assets
|
66
|
|
|
Long-term investments
|
62
|
|
|
Property and equipment, net
|
104
|
|
|
Goodwill
|
2,604
|
|
|
Purchased intangible assets
|
1,365
|
|
|
Other assets
|
10
|
|
|
Total assets acquired
|
5,343
|
|
|
Accounts payable and accrued expenses
|
(134
|
)
|
|
Customer deposits and deferred revenue
|
(52
|
)
|
|
Income taxes payable
|
(60
|
)
|
|
Deferred income taxes
|
(211
|
)
|
|
Other liabilities
|
(25
|
)
|
|
Total liabilities assumed
|
(482
|
)
|
|
Purchase price allocated
|
$
|
4,861
|
|
|
Useful
Life |
|
Purchased
Intangible Assets 2012 |
||
|
(In years)
|
|
(In millions)
|
||
Developed technology
|
1-7
|
|
$
|
987
|
|
Customer relationships
|
15
|
|
150
|
|
|
In-process technology
|
|
|
142
|
|
|
Patents and trademarks
|
10
|
|
69
|
|
|
Backlog
|
1
|
|
7
|
|
|
Covenant not to compete
|
2
|
|
10
|
|
|
Total purchased intangible assets
|
|
|
$
|
1,365
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
April 29,
2012 |
|
May 1,
2011 |
|
April 29,
2012 |
|
May 1,
2011 |
||||||||
|
(In millions, except per share amounts)
|
||||||||||||||
Net sales
|
$
|
2,541
|
|
|
$
|
3,192
|
|
|
$
|
4,730
|
|
|
$
|
6,161
|
|
Net income
|
$
|
308
|
|
|
$
|
508
|
|
|
$
|
503
|
|
|
$
|
957
|
|
Basic and diluted earnings per share
|
$
|
0.24
|
|
|
$
|
0.38
|
|
|
$
|
0.39
|
|
|
$
|
0.72
|
|
|
April 29, 2012
|
|
October 30, 2011
|
||||||||||||||||||||
Goodwill
|
|
Other
Intangible Assets |
|
Total
|
|
Goodwill
|
|
Other
Intangible Assets |
|
Total
|
|||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Silicon Systems Group
|
$
|
2,151
|
|
|
$
|
142
|
|
|
$
|
2,293
|
|
|
$
|
381
|
|
|
$
|
—
|
|
|
$
|
381
|
|
Applied Global Services
|
1,027
|
|
|
—
|
|
|
1,027
|
|
|
193
|
|
|
—
|
|
|
193
|
|
||||||
Display
|
116
|
|
|
—
|
|
|
116
|
|
|
116
|
|
|
—
|
|
|
116
|
|
||||||
Energy and Environmental Solutions
|
645
|
|
|
—
|
|
|
645
|
|
|
645
|
|
|
—
|
|
|
645
|
|
||||||
Carrying amount
|
$
|
3,939
|
|
|
$
|
142
|
|
|
$
|
4,081
|
|
|
$
|
1,335
|
|
|
$
|
—
|
|
|
$
|
1,335
|
|
|
April 29, 2012
|
|
October 30, 2011
|
||||||||||||||||||||
Purchased
Technology |
|
Other
Intangible Assets |
|
Total
|
|
Purchased
Technology |
|
Other
Intangible Assets |
|
Total
|
|||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Gross carrying amount:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Silicon Systems Group
|
$
|
1,300
|
|
|
$
|
252
|
|
|
$
|
1,552
|
|
|
$
|
310
|
|
|
$
|
20
|
|
|
$
|
330
|
|
Applied Global Services
|
28
|
|
|
44
|
|
|
72
|
|
|
28
|
|
|
40
|
|
|
68
|
|
||||||
Display
|
110
|
|
|
33
|
|
|
143
|
|
|
110
|
|
|
33
|
|
|
143
|
|
||||||
Energy and Environmental Solutions
|
106
|
|
|
232
|
|
|
338
|
|
|
105
|
|
|
232
|
|
|
337
|
|
||||||
Gross carrying amount
|
$
|
1,544
|
|
|
$
|
561
|
|
|
$
|
2,105
|
|
|
$
|
553
|
|
|
$
|
325
|
|
|
$
|
878
|
|
Accumulated amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Silicon Systems Group
|
$
|
(334
|
)
|
|
$
|
(23
|
)
|
|
$
|
(357
|
)
|
|
$
|
(256
|
)
|
|
$
|
(8
|
)
|
|
$
|
(264
|
)
|
Applied Global Services
|
(21
|
)
|
|
(37
|
)
|
|
(58
|
)
|
|
(20
|
)
|
|
(31
|
)
|
|
(51
|
)
|
||||||
Display
|
(104
|
)
|
|
(26
|
)
|
|
(130
|
)
|
|
(102
|
)
|
|
(25
|
)
|
|
(127
|
)
|
||||||
Energy and Environmental Solutions
|
(54
|
)
|
|
(184
|
)
|
|
(238
|
)
|
|
(48
|
)
|
|
(177
|
)
|
|
(225
|
)
|
||||||
Accumulated amortization
|
$
|
(513
|
)
|
|
$
|
(270
|
)
|
|
$
|
(783
|
)
|
|
$
|
(426
|
)
|
|
$
|
(241
|
)
|
|
$
|
(667
|
)
|
Carrying amount
|
$
|
1,031
|
|
|
$
|
291
|
|
|
$
|
1,322
|
|
|
$
|
127
|
|
|
$
|
84
|
|
|
$
|
211
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
April 29,
2012 |
|
May 1,
2011 |
|
April 29,
2012 |
|
May 1,
2011 |
|||||||||
(In millions)
|
|||||||||||||||
Silicon Systems Group
|
$
|
45
|
|
|
$
|
3
|
|
|
$
|
93
|
|
|
$
|
7
|
|
Applied Global Services
|
2
|
|
|
2
|
|
|
7
|
|
|
4
|
|
||||
Display
|
2
|
|
|
2
|
|
|
3
|
|
|
4
|
|
||||
Energy and Environmental Solutions
|
6
|
|
|
6
|
|
|
13
|
|
|
12
|
|
||||
Total
|
$
|
55
|
|
|
$
|
13
|
|
|
$
|
116
|
|
|
$
|
27
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
April 29,
2012 |
|
May 1,
2011 |
|
April 29,
2012 |
|
May 1,
2011 |
|||||||||
(In millions)
|
|||||||||||||||
Cost of products sold
|
$
|
45
|
|
|
$
|
9
|
|
|
$
|
97
|
|
|
$
|
18
|
|
Research, development and engineering
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Selling, general and administrative
|
9
|
|
|
4
|
|
|
18
|
|
|
9
|
|
||||
Total amortization expense
|
$
|
55
|
|
|
$
|
13
|
|
|
$
|
116
|
|
|
$
|
27
|
|
|
Amortization Expense
|
||
|
(In millions)
|
||
2012
|
$
|
109
|
|
2013
|
209
|
|
|
2014
|
199
|
|
|
2015
|
183
|
|
|
2016
|
174
|
|
|
Thereafter
|
448
|
|
|
|
$
|
1,322
|
|
|
Principal Amount
|
|
|
|
|
|
|
||||||
Due Date
|
April 29, 2012
|
|
October 30, 2011
|
|
Stated
Interest Rate
|
|
Effective
Interest Rate
|
|
Interest Payment Dates
|
||||
|
(In millions)
|
|
|
|
|
|
|
||||||
June 15, 2016
|
$
|
400
|
|
|
$
|
400
|
|
|
2.650%
|
|
2.666%
|
|
June 15, December 15
|
October 15, 2017
|
200
|
|
|
200
|
|
|
7.125%
|
|
7.190%
|
|
April 15, October 15
|
||
June 15, 2021
|
750
|
|
|
750
|
|
|
4.300%
|
|
4.326%
|
|
June 15, December 15
|
||
June 15, 2041
|
600
|
|
|
600
|
|
|
5.850%
|
|
5.879%
|
|
June 15, December 15
|
||
Other debt
|
—
|
|
|
1
|
|
|
|
|
|
|
|
||
|
1,950
|
|
|
1,951
|
|
|
|
|
|
|
|
||
Total unamortized discount
|
(4
|
)
|
|
(4
|
)
|
|
|
|
|
|
|
||
Total long-term debt
|
$
|
1,946
|
|
|
$
|
1,947
|
|
|
|
|
|
|
|
|
April 29,
2012 |
|
October 30,
2011 |
||||
|
(In millions)
|
||||||
Pension liability
|
$
|
(25
|
)
|
|
$
|
(25
|
)
|
Unrealized gain on investments, net
|
20
|
|
|
17
|
|
||
Cumulative translation adjustments
|
12
|
|
|
14
|
|
||
|
$
|
7
|
|
|
$
|
6
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
April 29,
2012 |
|
May 1,
2011 |
|
April 29,
2012 |
|
May 1,
2011 |
||||||||
|
(In millions, except per share amounts)
|
||||||||||||||
Shares of common stock repurchased
|
16
|
|
|
8
|
|
|
34
|
|
|
19
|
|
||||
Cost of stock repurchased
|
$
|
200
|
|
|
$
|
118
|
|
|
$
|
400
|
|
|
$
|
268
|
|
Average price paid per share
|
$
|
12.33
|
|
|
$
|
15.54
|
|
|
$
|
11.60
|
|
|
$
|
14.48
|
|
Date Declared
|
Record Date
|
Payable Date
|
Amount per Share
|
Aggregate Amount
(In millions)
|
December 6, 2011
|
February 23, 2012
|
March 15, 2012
|
$0.08
|
$103
|
March 5, 2012
|
May 24, 2012
|
June 14, 2012
|
$0.09
|
$115
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
April 29,
2012 |
|
May 1,
2011 |
|
April 29,
2012 |
|
May 1,
2011 |
||||||||
|
(In millions)
|
||||||||||||||
Share-based compensation
|
$
|
43
|
|
|
$
|
38
|
|
|
$
|
96
|
|
|
$
|
72
|
|
Tax benefit recognized
|
$
|
12
|
|
|
$
|
11
|
|
|
$
|
27
|
|
|
$
|
21
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
April 29,
2012 |
|
May 1,
2011 |
|
April 29,
2012 |
|
May 1,
2011 |
||||||||
|
(In millions)
|
||||||||||||||
Cost of products sold
|
$
|
14
|
|
|
$
|
13
|
|
|
$
|
27
|
|
|
$
|
24
|
|
Research, development, and engineering
|
13
|
|
|
12
|
|
|
26
|
|
|
22
|
|
||||
Selling, general and administrative
|
16
|
|
|
13
|
|
|
43
|
|
|
26
|
|
||||
Total share-based compensation
|
$
|
43
|
|
|
$
|
38
|
|
|
$
|
96
|
|
|
$
|
72
|
|
|
Shares
|
|
Weighted
Average Exercise Price |
|||
|
(In millions, except per share amounts)
|
|||||
Outstanding at October 30, 2011
|
30
|
|
|
$
|
13.05
|
|
Assumed in Varian acquisition
|
5
|
|
|
$
|
4.85
|
|
Exercised
|
(2
|
)
|
|
$
|
6.72
|
|
Canceled and forfeited
|
(8
|
)
|
|
$
|
16.70
|
|
Outstanding at April 29, 2012
|
25
|
|
|
$
|
10.78
|
|
Exercisable at April 29, 2012
|
23
|
|
|
$
|
11.13
|
|
|
Shares
|
|
Weighted
Average Grant Date Fair Value |
|
Weighted
Average Remaining Contractual Term |
||||
|
(In millions, except per share amounts)
|
||||||||
Non-vested restricted stock units, restricted stock and performance units at October 30, 2011
|
28
|
|
|
$
|
12.64
|
|
|
2.8
|
Years
|
Granted
|
15
|
|
|
$
|
10.69
|
|
|
|
|
Vested
|
(7
|
)
|
|
$
|
12.86
|
|
|
|
|
Canceled
|
(1
|
)
|
|
$
|
12.89
|
|
|
|
|
Non-vested restricted stock units, restricted stock and performance units at April 29, 2012
|
35
|
|
|
$
|
11.76
|
|
|
2.9
|
Years
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
April 29,
2012 |
|
May 1,
2011 |
|
April 29,
2012 |
|
May 1,
2011 |
ESPP:
|
|
|
|
|
|
|
|
Dividend yield
|
2.94%
|
|
1.98%
|
|
2.94%
|
|
1.98%
|
Expected volatility
|
33%
|
|
27%
|
|
33%
|
|
27%
|
Risk-free interest rate
|
0.12%
|
|
0.17%
|
|
0.12%
|
|
0.17%
|
Expected life (in years)
|
0.5
|
|
0.5
|
|
0.5
|
|
0.5
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
April 29,
2012 |
|
May 1,
2011 |
|
April 29,
2012 |
|
May 1,
2011 |
|||||||||
(In millions)
|
|||||||||||||||
Service cost
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
8
|
|
|
$
|
8
|
|
Interest cost
|
3
|
|
|
3
|
|
|
7
|
|
|
7
|
|
||||
Expected return on plan assets
|
(3
|
)
|
|
(3
|
)
|
|
(6
|
)
|
|
(6
|
)
|
||||
Amortization of actuarial loss
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Net periodic benefit cost
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
10
|
|
|
$
|
10
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
April 29,
2012 |
|
May 1,
2011 |
|
April 29,
2012 |
|
May 1,
2011 |
|||||||||
(In millions)
|
|||||||||||||||
Beginning balance
|
$
|
161
|
|
|
$
|
173
|
|
|
$
|
168
|
|
|
$
|
155
|
|
Provisions for warranty
|
33
|
|
|
48
|
|
|
62
|
|
|
99
|
|
||||
Consumption of reserves
|
(42
|
)
|
|
(37
|
)
|
|
(78
|
)
|
|
(70
|
)
|
||||
Ending balance
|
$
|
152
|
|
|
$
|
184
|
|
|
$
|
152
|
|
|
$
|
184
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
Net Sales
|
|
Operating
Income (loss) |
|
Net Sales
|
|
Operating
Income (loss) |
||||||||
|
(In millions)
|
||||||||||||||
April 29, 2012:
|
|
|
|
|
|
|
|
||||||||
Silicon Systems Group
|
$
|
1,777
|
|
|
$
|
504
|
|
|
$
|
3,121
|
|
|
$
|
775
|
|
Applied Global Services
|
551
|
|
|
109
|
|
|
1,085
|
|
|
216
|
|
||||
Display
|
134
|
|
|
7
|
|
|
238
|
|
|
12
|
|
||||
Energy and Environmental Solutions
|
79
|
|
|
(63
|
)
|
|
286
|
|
|
(86
|
)
|
||||
Total Segment
|
$
|
2,541
|
|
|
$
|
557
|
|
|
$
|
4,730
|
|
|
$
|
917
|
|
May 1, 2011:
|
|
|
|
|
|
|
|
||||||||
Silicon Systems Group
|
$
|
1,453
|
|
|
$
|
491
|
|
|
$
|
2,950
|
|
|
$
|
1,034
|
|
Applied Global Services
|
614
|
|
|
91
|
|
|
1,181
|
|
|
176
|
|
||||
Display
|
158
|
|
|
31
|
|
|
305
|
|
|
58
|
|
||||
Energy and Environmental Solutions
|
637
|
|
|
170
|
|
|
1,113
|
|
|
313
|
|
||||
Total Segment
|
$
|
2,862
|
|
|
$
|
783
|
|
|
$
|
5,549
|
|
|
$
|
1,581
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
April 29,
2012 |
|
May 1,
2011 |
|
April 29,
2012 |
|
May 1,
2011 |
||||||||
|
(In millions)
|
||||||||||||||
Total segment operating income
|
$
|
557
|
|
|
$
|
783
|
|
|
$
|
917
|
|
|
$
|
1,581
|
|
Corporate and unallocated costs
|
(148
|
)
|
|
(126
|
)
|
|
(329
|
)
|
|
(251
|
)
|
||||
Restructuring and asset impairment benefit, net
|
—
|
|
|
20
|
|
|
—
|
|
|
21
|
|
||||
Income from operations
|
$
|
409
|
|
|
$
|
677
|
|
|
$
|
588
|
|
|
$
|
1,351
|
|
|
April 29, 2012
|
|
Samsung Electronics Co., Ltd .
|
30
|
%
|
Taiwan Semiconductor Manufacturing Company Limited
|
13
|
%
|
|
Three Months Ended
|
|
Change
Q2 2012 over Q1 2012 |
|
Change
Q2 2012 over Q2 2011 |
||||||||||||||
April 29,
2012 |
|
January 29,
2012 |
|
May 1,
2011 |
|
||||||||||||||
|
(In millions, except per share amounts and percentages)
|
||||||||||||||||||
New orders
|
$
|
2,765
|
|
|
$
|
2,008
|
|
|
$
|
3,185
|
|
|
$
|
757
|
|
|
$
|
(420
|
)
|
Net sales
|
$
|
2,541
|
|
|
$
|
2,189
|
|
|
$
|
2,862
|
|
|
$
|
352
|
|
|
$
|
(321
|
)
|
Gross margin
|
$
|
1,011
|
|
|
$
|
786
|
|
|
$
|
1,189
|
|
|
$
|
225
|
|
|
$
|
(178
|
)
|
Gross margin percent
|
40
|
%
|
|
36
|
%
|
|
42
|
%
|
|
4 points
|
|
|
(2) points
|
|
|||||
Operating income
|
$
|
409
|
|
|
$
|
179
|
|
|
$
|
677
|
|
|
$
|
230
|
|
|
$
|
(268
|
)
|
Operating margin percent
|
16
|
%
|
|
8
|
%
|
|
24
|
%
|
|
8 points
|
|
|
(8) points
|
|
|||||
Net income
|
$
|
289
|
|
|
$
|
117
|
|
|
$
|
489
|
|
|
$
|
172
|
|
|
$
|
(200
|
)
|
Diluted earnings per share
|
$
|
0.22
|
|
|
$
|
0.09
|
|
|
$
|
0.37
|
|
|
$
|
0.13
|
|
|
$
|
(0.15
|
)
|
Non-GAAP Results
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross margin
|
$
|
1,070
|
|
|
$
|
890
|
|
|
$
|
1,198
|
|
|
$
|
180
|
|
|
$
|
(128
|
)
|
Gross margin percent
|
42
|
%
|
|
41
|
%
|
|
42
|
%
|
|
1 point
|
|
|
—
|
|
|||||
Operating income
|
$
|
490
|
|
|
$
|
344
|
|
|
$
|
685
|
|
|
$
|
146
|
|
|
$
|
(195
|
)
|
Operating margin percent
|
19
|
%
|
|
16
|
%
|
|
24
|
%
|
|
3 points
|
|
|
(5) points
|
|
|||||
Net income
|
$
|
349
|
|
|
$
|
240
|
|
|
$
|
501
|
|
|
$
|
109
|
|
|
$
|
(152
|
)
|
Diluted earnings per share
|
$
|
0.27
|
|
|
$
|
0.18
|
|
|
$
|
0.38
|
|
|
$
|
0.09
|
|
|
$
|
(0.11
|
)
|
|
Six Months Ended
|
|
Change
First Half 2012 over First Half 2011 |
||||||||
April 29,
2012 |
|
May 1,
2011 |
|
||||||||
|
(In millions, except per share amounts and percentages)
|
||||||||||
New orders
|
$
|
4,773
|
|
|
$
|
6,157
|
|
|
$
|
(1,384
|
)
|
Net sales
|
$
|
4,730
|
|
|
$
|
5,549
|
|
|
$
|
(819
|
)
|
Gross margin
|
$
|
1,797
|
|
|
$
|
2,325
|
|
|
$
|
(528
|
)
|
Gross margin percent
|
38
|
%
|
|
42
|
%
|
|
(4) points
|
|
|||
Operating income
|
$
|
588
|
|
|
$
|
1,351
|
|
|
$
|
(763
|
)
|
Operating margin percent
|
12
|
%
|
|
24
|
%
|
|
(12) points
|
|
|||
Net income
|
$
|
406
|
|
|
$
|
995
|
|
|
$
|
(589
|
)
|
Diluted earnings per share
|
$
|
0.31
|
|
|
$
|
0.75
|
|
|
$
|
(0.44
|
)
|
Non-GAAP Results
|
|
|
|
|
|
||||||
Gross margin
|
$
|
1,960
|
|
|
$
|
2,343
|
|
|
$
|
(383
|
)
|
Gross margin percent
|
41
|
%
|
|
42
|
%
|
|
(1) point
|
|
|||
Operating income
|
$
|
834
|
|
|
$
|
1,344
|
|
|
$
|
(510
|
)
|
Operating margin percent
|
18
|
%
|
|
24
|
%
|
|
(6) points
|
|
|||
Net income
|
$
|
589
|
|
|
$
|
985
|
|
|
$
|
(396
|
)
|
Diluted earnings per share
|
$
|
0.45
|
|
|
$
|
0.74
|
|
|
$
|
(0.29
|
)
|
|
Three Months Ended
|
|
Change
Q2 2012 over Q1 2012 |
|
Change
Q2 2012 over Q2 2011 |
|||||||||||||
|
April 29, 2012
|
|
January 29, 2012
|
|
May 1, 2011
|
|
|
|||||||||||
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|
||||||
|
(In millions, except percentages)
|
|
|
|
|
|||||||||||||
Korea
|
704
|
|
|
26
|
|
666
|
|
|
33
|
|
367
|
|
|
12
|
|
6%
|
|
92%
|
Taiwan
|
810
|
|
|
29
|
|
367
|
|
|
18
|
|
782
|
|
|
25
|
|
121%
|
|
4%
|
Japan
|
121
|
|
|
4
|
|
167
|
|
|
8
|
|
269
|
|
|
8
|
|
(28)%
|
|
(55)%
|
China
|
118
|
|
|
4
|
|
82
|
|
|
4
|
|
668
|
|
|
21
|
|
44%
|
|
(82)%
|
Southeast Asia
|
68
|
|
|
3
|
|
50
|
|
|
3
|
|
143
|
|
|
4
|
|
36%
|
|
(52)%
|
Asia Pacific
|
1,821
|
|
|
66
|
|
1,332
|
|
|
66
|
|
2,229
|
|
|
70
|
|
37%
|
|
(18)%
|
North America(*)
|
673
|
|
|
24
|
|
467
|
|
|
23
|
|
710
|
|
|
22
|
|
44%
|
|
(5)%
|
Europe
|
271
|
|
|
10
|
|
209
|
|
|
11
|
|
246
|
|
|
8
|
|
30%
|
|
10%
|
Total
|
2,765
|
|
|
100
|
|
2,008
|
|
|
100
|
|
3,185
|
|
|
100
|
|
38%
|
|
(13)%
|
(*)
|
Primarily the United States.
|
|
Six Months Ended
|
|
Change
First Half 2012 over First Half 2011 |
||||||||
|
April 29, 2012
|
|
May 1, 2011
|
|
|||||||
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|
|||
|
(In millions, except percentages)
|
||||||||||
Korea
|
1,370
|
|
|
29
|
|
593
|
|
|
10
|
|
131%
|
Taiwan
|
1,177
|
|
|
25
|
|
1,528
|
|
|
25
|
|
(23)%
|
Japan
|
288
|
|
|
6
|
|
456
|
|
|
7
|
|
(37)%
|
China
|
200
|
|
|
4
|
|
1,322
|
|
|
21
|
|
(85)%
|
Southeast Asia
|
118
|
|
|
2
|
|
278
|
|
|
4
|
|
(58)%
|
Asia Pacific
|
3,153
|
|
|
66
|
|
4,177
|
|
|
67
|
|
(25)%
|
North America(*)
|
1,140
|
|
|
24
|
|
1,389
|
|
|
23
|
|
(18)%
|
Europe
|
480
|
|
|
10
|
|
591
|
|
|
10
|
|
(19)%
|
Total
|
4,773
|
|
|
100
|
|
6,157
|
|
|
100
|
|
(22)%
|
(*)
|
Primarily the United States.
|
|
Three Months Ended
|
|
Change
Q2 2012 over Q1 2012 |
|
Change
Q2 2012 over Q2 2011 |
|||||||||||||
|
April 29, 2012
|
|
January 29, 2012
|
|
May 1, 2011
|
|
|
|||||||||||
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|
||||||
|
(In millions, except percentages)
|
|
|
|
|
|||||||||||||
Silicon Systems Group
|
1,969
|
|
|
71
|
|
1,418
|
|
|
70
|
|
1,715
|
|
|
54
|
|
39%
|
|
15%
|
Applied Global Services
|
650
|
|
|
24
|
|
517
|
|
|
26
|
|
603
|
|
|
19
|
|
26%
|
|
8%
|
Display
|
84
|
|
|
3
|
|
40
|
|
|
2
|
|
255
|
|
|
8
|
|
110%
|
|
(67)%
|
Energy and Environmental Solutions
|
62
|
|
|
2
|
|
33
|
|
|
2
|
|
612
|
|
|
19
|
|
88%
|
|
(90)%
|
Total
|
2,765
|
|
|
100
|
|
2,008
|
|
|
100
|
|
3,185
|
|
|
100
|
|
38%
|
|
(13)%
|
|
Six Months Ended
|
|
Change
First Half 2012
over
First Half 2011
|
||||||||
|
April 29, 2012
|
|
May 1, 2011
|
|
|||||||
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|
|||
|
(In millions, except percentages)
|
||||||||||
Silicon Systems Group
|
3,387
|
|
|
71
|
|
3,325
|
|
|
54
|
|
2%
|
Applied Global Services
|
1,167
|
|
|
24
|
|
1,155
|
|
|
19
|
|
1%
|
Display
|
124
|
|
|
3
|
|
397
|
|
|
6
|
|
(69)%
|
Energy and Environmental Solutions
|
95
|
|
|
2
|
|
1,280
|
|
|
21
|
|
(93)%
|
Total
|
4,773
|
|
|
100
|
|
6,157
|
|
|
100
|
|
(22)%
|
|
April 29, 2012
|
|
January 29, 2012
|
|
October 30, 2011
|
|
Change
Q2 2012 over Q1 2012 |
|
Change
Q2 2012 over Q4 2011 |
|||||||||
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|
||||||
|
(In millions, except percentages)
|
|||||||||||||||||
Silicon Systems Group
|
1,220
|
|
|
51
|
|
1,044
|
|
|
48
|
|
913
|
|
|
38
|
|
17%
|
|
34%
|
Applied Global Services
|
703
|
|
|
30
|
|
649
|
|
|
30
|
|
662
|
|
|
28
|
|
8%
|
|
6%
|
Display
|
291
|
|
|
12
|
|
267
|
|
|
12
|
|
337
|
|
|
14
|
|
9%
|
|
(14)%
|
Energy and Environmental Solutions
|
158
|
|
|
7
|
|
202
|
|
|
10
|
|
480
|
|
|
20
|
|
(22)%
|
|
(67)%
|
Total
|
2,372
|
|
|
100
|
|
2,162
|
|
|
100
|
|
2,392
|
|
|
100
|
|
10%
|
|
(1)%
|
|
Three Months Ended
|
|
Change
Q2 2012 over Q1 2012 |
|
Change
Q2 2012 over Q2 2011 |
|||||||||||||
|
April 29, 2012
|
|
January 29, 2012
|
|
May 1, 2011
|
|
|
|||||||||||
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|
||||||
|
(In millions, except percentages)
|
|||||||||||||||||
Korea
|
750
|
|
|
30
|
|
628
|
|
|
29
|
|
299
|
|
|
10
|
|
19%
|
|
151%
|
Taiwan
|
654
|
|
|
26
|
|
489
|
|
|
22
|
|
650
|
|
|
23
|
|
34%
|
|
1%
|
Japan
|
169
|
|
|
7
|
|
217
|
|
|
10
|
|
208
|
|
|
7
|
|
(22)%
|
|
(19)%
|
China
|
157
|
|
|
6
|
|
180
|
|
|
8
|
|
741
|
|
|
26
|
|
(13)%
|
|
(79)%
|
Southeast Asia
|
64
|
|
|
2
|
|
79
|
|
|
4
|
|
185
|
|
|
7
|
|
(19)%
|
|
(65)%
|
Asia Pacific
|
1,794
|
|
|
71
|
|
1,593
|
|
|
73
|
|
2,083
|
|
|
73
|
|
13%
|
|
(14)%
|
North America(*)
|
518
|
|
|
20
|
|
417
|
|
|
19
|
|
467
|
|
|
16
|
|
24%
|
|
11%
|
Europe
|
229
|
|
|
9
|
|
179
|
|
|
8
|
|
312
|
|
|
11
|
|
28%
|
|
(27)%
|
Total
|
2,541
|
|
|
100
|
|
2,189
|
|
|
100
|
|
2,862
|
|
|
100
|
|
16%
|
|
(11)%
|
|
Six Months Ended
|
|
Change
First Half 2012 over First Half 2011 |
||||||||
|
April 29, 2012
|
|
May 1, 2011
|
|
|||||||
|
$
|
|
%
|
|
$
|
|
%
|
|
|||
|
(In millions, except percentages)
|
||||||||||
Korea
|
1,378
|
|
|
29
|
|
468
|
|
|
8
|
|
194%
|
Taiwan
|
1,143
|
|
|
24
|
|
1,286
|
|
|
23
|
|
(11)%
|
Japan
|
386
|
|
|
8
|
|
374
|
|
|
7
|
|
3%
|
China
|
337
|
|
|
7
|
|
1,415
|
|
|
26
|
|
(76)%
|
Southeast Asia
|
143
|
|
|
3
|
|
339
|
|
|
6
|
|
(58)%
|
Asia Pacific
|
3,387
|
|
|
71
|
|
3,882
|
|
|
70
|
|
(13)%
|
North America(*)
|
935
|
|
|
20
|
|
1,077
|
|
|
19
|
|
(13)%
|
Europe
|
408
|
|
|
9
|
|
590
|
|
|
11
|
|
(31)%
|
Total
|
4,730
|
|
|
100
|
|
5,549
|
|
|
100
|
|
(15)%
|
(*)
|
Primarily the United States.
|
|
Three Months Ended
|
|
Change
Q2 2012 over Q1 2012 |
|
Change
Q2 2012 over Q2 2011 |
|||||||||||||
|
April 29, 2012
|
|
January 29, 2012
|
|
May 1, 2011
|
|
|
|||||||||||
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|
||||||
|
(In millions, except percentages)
|
|||||||||||||||||
Silicon Systems Group
|
1,777
|
|
|
70
|
|
1,344
|
|
|
61
|
|
1,453
|
|
|
51
|
|
32%
|
|
22%
|
Applied Global Services
|
551
|
|
|
22
|
|
534
|
|
|
24
|
|
614
|
|
|
21
|
|
3%
|
|
(10)%
|
Display
|
134
|
|
|
5
|
|
104
|
|
|
5
|
|
158
|
|
|
6
|
|
29%
|
|
(15)%
|
Energy and Environmental Solutions
|
79
|
|
|
3
|
|
207
|
|
|
10
|
|
637
|
|
|
22
|
|
(62)%
|
|
(88)%
|
Total
|
2,541
|
|
|
100
|
|
2,189
|
|
|
100
|
|
2,862
|
|
|
100
|
|
16%
|
|
(11)%
|
|
Six Months Ended
|
|
Change
First Half 2012 over First Half 2011 |
||||||||
|
April 29, 2012
|
|
May 1, 2011
|
|
|||||||
|
$
|
|
%
|
|
$
|
|
%
|
|
|||
|
(In millions, except percentages)
|
||||||||||
Silicon Systems Group
|
3,121
|
|
|
66
|
|
2,950
|
|
|
53
|
|
6%
|
Applied Global Services
|
1,085
|
|
|
23
|
|
1,181
|
|
|
21
|
|
(8)%
|
Display
|
238
|
|
|
5
|
|
305
|
|
|
6
|
|
(22)%
|
Energy and Environmental Solutions
|
286
|
|
|
6
|
|
1,113
|
|
|
20
|
|
(74)%
|
Total
|
4,730
|
|
|
100
|
|
5,549
|
|
|
100
|
|
(15)%
|
|
Three Months Ended
|
|
Change
Q2 2012 over Q1 2012 |
|
Change
Q2 2012 over Q2 2011 |
|
Six Months Ended
|
|
Change
First Half 2012 over First Half 2011 |
|||||||||||||||||||
|
April 29,
2012 |
|
January 29,
2012 |
|
May 1,
2011 |
|
|
April 29, 2012
|
|
May 1, 2011
|
|
|||||||||||||||||
|
(In millions, except percentages)
|
|||||||||||||||||||||||||||
Gross margin
|
$
|
1,011
|
|
|
$
|
786
|
|
|
$
|
1,189
|
|
|
$225
|
|
$(178)
|
|
$
|
1,797
|
|
|
$
|
2,325
|
|
|
$(528)
|
|||
Gross margin
(% of net sales)
|
40
|
%
|
|
36
|
%
|
|
42
|
%
|
|
4 points
|
|
|
(2) points
|
|
|
38
|
%
|
|
42
|
%
|
|
(4) points
|
|
|||||
Non-GAAP Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gross margin
|
$
|
1,070
|
|
|
$
|
890
|
|
|
$
|
1,198
|
|
|
$180
|
|
$(128)
|
|
$
|
1,960
|
|
|
$
|
2,343
|
|
|
$(383)
|
|||
Gross margin
(% of net sales)
|
42
|
%
|
|
41
|
%
|
|
42
|
%
|
|
1 point
|
|
|
—
|
|
|
41
|
%
|
|
42
|
%
|
|
(1) point
|
|
|
Three Months Ended
|
|
Change
Q2 2012 over Q1 2012 |
|
Change
Q2 2012 over Q2 2011 |
|
Six Months Ended
|
|
Change
First Half 2012 over First Half 2011 |
||||||||||||||||||||||
|
April 29,
2012 |
|
January 29,
2012 |
|
May 1,
2011 |
|
|
April 29, 2012
|
|
May 1, 2011
|
|
||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Research, development and engineering
|
$
|
321
|
|
|
$
|
304
|
|
|
$
|
297
|
|
|
$
|
17
|
|
|
$
|
24
|
|
|
$
|
625
|
|
|
$
|
567
|
|
|
$
|
58
|
|
|
Three Months Ended
|
|
Change
Q2 2012 over Q1 2012 |
|
Change
Q2 2012 over Q2 2011 |
|
Six Months Ended
|
|
Change
First Half 2012 over First Half 2011 |
||||||||||||||||||||||
|
April 29,
2012 |
|
January 29,
2012 |
|
May 1,
2011 |
|
|
April 29, 2012
|
|
May 1, 2011
|
|
||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Marketing, selling, general and administrative
|
$
|
281
|
|
|
$
|
303
|
|
|
$
|
219
|
|
|
$
|
(22
|
)
|
|
$
|
62
|
|
|
$
|
584
|
|
|
$
|
440
|
|
|
$
|
144
|
|
|
Three Months Ended
|
|
Change
Q2 2012 over Q1 2012 |
|
Change
Q2 2012 over Q2 2011 |
|
Six Months Ended
|
|
Change
First Half 2012 over First Half 2011 |
||||||||||||||||||||||
|
April 29,
2012 |
|
January 29,
2012 |
|
May 1,
2011 |
|
|
April 29, 2012
|
|
May 1, 2011
|
|
||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Restructuring charges and asset impairments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
(33
|
)
|
|
$
|
33
|
|
|
Three Months Ended
|
|
Change
Q2 2012 over Q1 2012 |
|
Change
Q2 2012 over Q2 2011 |
|
Six Months Ended
|
|
Change
First Half 2012 over First Half 2011 |
||||||||||||||||||||||
|
April 29,
2012 |
|
January 29,
2012 |
|
May 1,
2011 |
|
|
April 29, 2012
|
|
May 1, 2011
|
|
||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Interest and other expenses
|
$
|
23
|
|
|
$
|
24
|
|
|
$
|
5
|
|
|
$
|
(1
|
)
|
|
$
|
18
|
|
|
$
|
47
|
|
|
$
|
10
|
|
|
$
|
37
|
|
|
Three Months Ended
|
|
Change
Q2 2012 over Q1 2012 |
|
Change
Q2 2012 over Q2 2011 |
|
Six Months Ended
|
|
Change
First Half 2012 over First Half 2011 |
||||||||||||||||||||||
|
April 29,
2012 |
|
January 29,
2012 |
|
May 1,
2011 |
|
|
April 29, 2012
|
|
May 1, 2011
|
|
||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Interest and other income, net
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
(10
|
)
|
|
$
|
8
|
|
|
$
|
25
|
|
|
$
|
(17
|
)
|
|
Three Months Ended
|
|
Change
Q2 2012 over Q1 2012 |
|
Change
Q2 2012 over Q2 2011 |
|
Six Months Ended
|
|
Change
First Half 2012 over First Half 2011 |
|||||||||||||||||||||
|
April 29,
2012 |
|
January 29,
2012 |
|
May 1,
2011 |
|
|
April 29,
2012 |
|
May 1,
2011 |
|
|||||||||||||||||||
|
(In millions, except percentages
|
|||||||||||||||||||||||||||||
Provision for income taxes
|
$
|
98
|
|
|
$
|
42
|
|
|
$
|
197
|
|
|
$
|
56
|
|
|
$
|
(99
|
)
|
|
$
|
140
|
|
|
$
|
371
|
|
|
$(231)
|
|
Effective income tax rate
|
25.3
|
%
|
|
26.4
|
%
|
|
28.7
|
%
|
|
(1.1) points
|
|
|
(3.4) points
|
|
|
25.6
|
%
|
|
27.2
|
%
|
|
(1.6) points
|
|
|
Three Months Ended
|
|
Change
Q2 2012 over Q1 2012 |
|
Change
Q2 2012 over Q2 2011 |
||||||||||||||||||
|
April 29,
2012 |
|
January 29,
2012 |
|
May 1,
2011 |
|
|
||||||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||
New orders
|
$
|
1,969
|
|
|
$
|
1,418
|
|
|
$
|
1,715
|
|
|
$
|
551
|
|
|
39%
|
|
$
|
254
|
|
|
15%
|
Net sales
|
1,777
|
|
|
1,344
|
|
|
1,453
|
|
|
433
|
|
|
32%
|
|
324
|
|
|
22%
|
|||||
Operating income
|
504
|
|
|
271
|
|
|
491
|
|
|
233
|
|
|
86%
|
|
13
|
|
|
3%
|
|||||
Operating margin
|
28
|
%
|
|
20
|
%
|
|
34
|
%
|
|
|
|
8 points
|
|
|
|
(6) points
|
|||||||
Non-GAAP Results
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating income
|
574
|
|
|
386
|
|
|
493
|
|
|
188
|
|
|
49%
|
|
81
|
|
|
16%
|
|||||
Operating margin
|
32
|
%
|
|
29
|
%
|
|
34
|
%
|
|
|
|
3 points
|
|
|
|
(2) points
|
|
Six Months Ended
|
|
Change
First Half 2012 over First Half 2011 |
||||||||||
|
April 29,
2012 |
|
May 1,
2011 |
|
|||||||||
|
(In millions, except percentages)
|
||||||||||||
New orders
|
$
|
3,387
|
|
|
$
|
3,325
|
|
|
$
|
62
|
|
|
2%
|
Net sales
|
3,121
|
|
|
2,950
|
|
|
171
|
|
|
6%
|
|||
Operating income
|
775
|
|
|
1,034
|
|
|
(259
|
)
|
|
(25)%
|
|||
Operating margin
|
25
|
%
|
|
35
|
%
|
|
|
|
(10) points
|
||||
Non-GAAP Results
|
|
|
|
|
|
|
|
||||||
Operating income
|
960
|
|
|
1,039
|
|
|
(79
|
)
|
|
(8)%
|
|||
Operating margin
|
31
|
%
|
|
35
|
%
|
|
|
|
(4) points
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||||
|
April 29,
2012 |
|
January 29,
2012 |
|
May 1,
2011 |
|
April 29,
2012 |
|
May 1,
2011 |
|||||
Foundry
|
72
|
%
|
|
57
|
%
|
|
47
|
%
|
|
66
|
%
|
|
51
|
%
|
Memory
|
16
|
%
|
|
29
|
%
|
|
28
|
%
|
|
22
|
%
|
|
25
|
%
|
Logic and other
|
12
|
%
|
|
14
|
%
|
|
25
|
%
|
|
12
|
%
|
|
24
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Three Months Ended
|
|
Change
Q2 2012 over Q1 2012 |
|
Change
Q2 2012 over Q2 2011 |
|||||||||||||
|
April 29, 2012
|
|
January 29, 2012
|
|
May 1, 2011
|
|
|
|||||||||||
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|
||||||
|
(In millions, except percentages)
|
|||||||||||||||||
Korea
|
650
|
|
|
37
|
|
552
|
|
|
41
|
|
210
|
|
|
14
|
|
18%
|
|
210%
|
Taiwan
|
473
|
|
|
27
|
|
275
|
|
|
20
|
|
453
|
|
|
31
|
|
72%
|
|
4%
|
|
Six Months Ended
|
|
Change
First Half 2012 over First Half 2011 |
||||||||
|
April 29, 2012
|
|
May 1, 2011
|
|
|||||||
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|
|||
|
(In millions, except percentages)
|
||||||||||
Korea
|
1,203
|
|
|
39
|
|
328
|
|
|
11
|
|
267%
|
Taiwan
|
748
|
|
|
24
|
|
866
|
|
|
29
|
|
(14)%
|
|
Three Months Ended
|
|
Change
Q2 2012 over Q1 2012 |
|
Change
Q2 2012 over Q2 2011 |
||||||||||||||||||
|
April 29,
2012 |
|
January 29,
2012 |
|
May 1,
2011 |
|
|
||||||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||
New orders
|
$
|
650
|
|
|
$
|
517
|
|
|
$
|
603
|
|
|
$
|
133
|
|
|
26%
|
|
$
|
47
|
|
|
8%
|
Net sales
|
551
|
|
|
534
|
|
|
614
|
|
|
17
|
|
|
3%
|
|
(63
|
)
|
|
(10)%
|
|||||
Operating income
|
109
|
|
|
107
|
|
|
91
|
|
|
2
|
|
|
2%
|
|
18
|
|
|
20%
|
|||||
Operating margin
|
20
|
%
|
|
20
|
%
|
|
15
|
%
|
|
|
|
—
|
|
|
|
5 points
|
|||||||
Non-GAAP Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income
|
111
|
|
|
113
|
|
|
117
|
|
|
(2
|
)
|
|
(2)%
|
|
(6
|
)
|
|
(5)%
|
|||||
Operating margin
|
20
|
%
|
|
21
|
%
|
|
19
|
%
|
|
|
|
(1) point
|
|
|
|
1 point
|
|
Six Months Ended
|
|
Change
First Half 2012 over First Half 2011 |
||||||||||
|
April 29,
2012 |
|
May 1,
2011 |
|
|||||||||
|
(In millions, except percentages)
|
||||||||||||
New orders
|
$
|
1,167
|
|
|
$
|
1,155
|
|
|
$
|
12
|
|
|
1%
|
Net sales
|
1,085
|
|
|
1,181
|
|
|
(96
|
)
|
|
(8)%
|
|||
Operating income
|
216
|
|
|
176
|
|
|
40
|
|
|
23%
|
|||
Operating margin
|
20
|
%
|
|
15
|
%
|
|
|
|
5 points
|
||||
Non-GAAP Results
|
|
|
|
|
|
|
|
||||||
Operating income
|
224
|
|
|
204
|
|
|
20
|
|
|
10%
|
|||
Operating margin
|
21
|
%
|
|
17
|
%
|
|
|
|
4 points
|
|
Three Months Ended
|
|
Change
Q2 2012 over Q1 2012 |
|
Change
Q2 2012 over Q2 2011 |
||||||||||||||||||
|
April 29,
2012 |
|
January 29,
2012 |
|
May 1,
2011 |
|
|
||||||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||
New orders
|
$
|
84
|
|
|
$
|
40
|
|
|
$
|
255
|
|
|
$
|
44
|
|
|
110%
|
|
$
|
(171
|
)
|
|
(67)%
|
Net sales
|
134
|
|
|
104
|
|
|
158
|
|
|
30
|
|
|
29%
|
|
(24
|
)
|
|
(15)%
|
|||||
Operating income
|
7
|
|
|
5
|
|
|
31
|
|
|
2
|
|
|
40%
|
|
(24
|
)
|
|
(77)%
|
|||||
Operating margin
|
5
|
%
|
|
5
|
%
|
|
20
|
%
|
|
|
|
—
|
|
|
|
(15) points
|
|||||||
Non-GAAP Results
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating income
|
9
|
|
|
7
|
|
|
33
|
|
|
2
|
|
|
29%
|
|
(24
|
)
|
|
(73)%
|
|||||
Operating margin
|
7
|
%
|
|
7
|
%
|
|
21
|
%
|
|
|
|
—
|
|
|
|
(14) points
|
|
Six Months Ended
|
|
Change
First Half 2012 over First Half 2011 |
||||||||||
|
April 29,
2012 |
|
May 1,
2011 |
|
|||||||||
|
(In millions, except percentages)
|
||||||||||||
New orders
|
$
|
124
|
|
|
$
|
397
|
|
|
$
|
(273
|
)
|
|
(69)%
|
Net sales
|
238
|
|
|
305
|
|
|
(67
|
)
|
|
(22)%
|
|||
Operating income
|
12
|
|
|
58
|
|
|
(46
|
)
|
|
(79)%
|
|||
Operating margin
|
5
|
%
|
|
19
|
%
|
|
|
|
(14) points
|
||||
Non-GAAP Results
|
|
|
|
|
|
|
|
||||||
Operating income
|
16
|
|
|
62
|
|
|
(46
|
)
|
|
(74)%
|
|||
Operating margin
|
7
|
%
|
|
20
|
%
|
|
|
|
(13) points
|
|
Three Months Ended
|
|
Change
Q2 2012 over Q1 2012 |
|
Change
Q2 2012 over Q2 2011 |
|||||||||||||
|
April 29, 2012
|
|
January 29, 2012
|
|
May 1, 2011
|
|
|
|||||||||||
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|
||||||
|
(In millions, except percentages)
|
|||||||||||||||||
Taiwan
|
92
|
|
|
69
|
|
45
|
|
|
43
|
|
18
|
|
|
11
|
|
104%
|
|
411%
|
China
|
1
|
|
|
1
|
|
18
|
|
|
17
|
|
82
|
|
|
52
|
|
(94)%
|
|
(99)%
|
|
Six Months Ended
|
|
Change
First Half 2012 over First Half 2011 |
||||||||
|
April 29, 2012
|
|
May 1, 2011
|
|
|||||||
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|
|||
|
(In millions, except percentages)
|
||||||||||
Taiwan
|
137
|
|
|
58
|
|
99
|
|
|
32
|
|
38%
|
China
|
20
|
|
|
8
|
|
143
|
|
|
47
|
|
(86)%
|
|
Three Months Ended
|
|
Change
Q2 2012 over Q1 2012 |
|
Change
Q2 2012 over Q2 2011 |
||||||||||||||||||
|
April 29,
2012 |
|
January 29, 2012
|
|
May 1,
2011 |
|
|
||||||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||
New orders
|
$
|
62
|
|
|
$
|
33
|
|
|
$
|
612
|
|
|
$
|
29
|
|
|
88%
|
|
$
|
(550
|
)
|
|
(90)%
|
Net sales
|
79
|
|
|
207
|
|
|
637
|
|
|
(128
|
)
|
|
(62)%
|
|
(558
|
)
|
|
(88)%
|
|||||
Operating income (loss)
|
(63
|
)
|
|
(23
|
)
|
|
170
|
|
|
(40
|
)
|
|
174%
|
|
(233
|
)
|
|
(137)%
|
|||||
Operating margin
|
(80
|
)%
|
|
(11
|
)%
|
|
27
|
%
|
|
|
|
(69) points
|
|
|
|
(107) points
|
|||||||
Non-GAAP Results
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating income (loss)
|
(57
|
)
|
|
(17
|
)
|
|
168
|
|
|
(40
|
)
|
|
235%
|
|
(225
|
)
|
|
(134)%
|
|||||
Operating margin
|
(72
|
)%
|
|
(8
|
)%
|
|
26
|
%
|
|
|
|
(64) points
|
|
|
|
(98) points
|
|
Six Months Ended
|
|
Change
First Half 2012 over First Half 2011 |
||||||||||
|
April 29,
2012 |
|
May 1,
2011 |
|
|||||||||
|
(In millions, except percentages)
|
||||||||||||
New orders
|
$
|
95
|
|
|
$
|
1,280
|
|
|
$
|
(1,185
|
)
|
|
(93)%
|
Net sales
|
286
|
|
|
1,113
|
|
|
(827
|
)
|
|
(74)%
|
|||
Operating income (loss)
|
(86
|
)
|
|
313
|
|
|
(399
|
)
|
|
(127)%
|
|||
Operating margin
|
(30
|
)%
|
|
28
|
%
|
|
|
|
(58) points
|
||||
Non-GAAP Results
|
|
|
|
|
|
|
|
||||||
Operating income (loss)
|
(74
|
)
|
|
289
|
|
|
(363
|
)
|
|
(126)%
|
|||
Operating margin
|
(26
|
)%
|
|
26
|
%
|
|
|
|
(52) points
|
|
Three Months Ended
|
|
Change
Q2 2012 over Q1 2012 |
|
Change
Q2 2012 over Q2 2011 |
|||||||||||||
|
April 29, 2012
|
|
January 29, 2012
|
|
May 1, 2011
|
|
|
|||||||||||
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|
||||||
|
(In millions, except percentages)
|
|||||||||||||||||
Taiwan
|
7
|
|
|
9
|
|
92
|
|
|
44
|
|
86
|
|
|
14
|
|
(92)%
|
|
(92)%
|
China
|
42
|
|
|
53
|
|
85
|
|
|
41
|
|
487
|
|
|
76
|
|
(51)%
|
|
(91)%
|
|
Six Months Ended
|
|
Change
First Half 2012 over First Half 2011 |
||||||||
|
April 29, 2012
|
|
May 1, 2011
|
|
|||||||
|
($)
|
|
(%)
|
|
($)
|
|
(%)
|
|
|||
|
(In millions, except percentages)
|
||||||||||
Taiwan
|
98
|
|
|
34
|
|
130
|
|
|
12
|
|
(25)%
|
China
|
127
|
|
|
44
|
|
876
|
|
|
79
|
|
(86)%
|
|
April 29,
2012 |
|
October 30,
2011 |
||||
|
(In millions)
|
||||||
Cash and cash equivalents
|
$
|
1,761
|
|
|
$
|
5,960
|
|
Short-term investments
|
409
|
|
|
283
|
|
||
Long-term investments
|
1,071
|
|
|
931
|
|
||
Total cash, cash-equivalents and investments
|
$
|
3,241
|
|
|
$
|
7,174
|
|
|
April 29,
2012 |
|
May 1,
2011 |
||||
|
(In millions)
|
||||||
Cash provided by operating activities
|
$
|
784
|
|
|
$
|
1,129
|
|
Cash used in investing activities
|
$
|
(4,416
|
)
|
|
$
|
(34
|
)
|
Cash used in financing activities
|
$
|
(563
|
)
|
|
$
|
(396
|
)
|
Date Declared
|
Record Date
|
Payable Date
|
Amount per Share
|
Aggregate Amount
(In millions)
|
December 6, 2011
|
February 23, 2012
|
March 15, 2012
|
$0.08
|
$103
|
March 5, 2012
|
May 24, 2012
|
June 14, 2012
|
$0.09
|
$115
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||
(In millions, except per share amounts and percentages)
|
April 29,
2012 |
|
January 29,
2012 |
|
May 1,
2011 |
|
April 29,
2012 |
|
May 1,
2011 |
||||||||||
Non-GAAP Gross Margin
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported gross margin (GAAP basis)
|
$
|
1,011
|
|
|
$
|
786
|
|
|
$
|
1,189
|
|
|
$
|
1,797
|
|
|
$
|
2,325
|
|
Certain items associated with acquisitions
1
|
59
|
|
|
104
|
|
|
9
|
|
|
163
|
|
|
18
|
|
|||||
Non-GAAP gross margin
|
$
|
1,070
|
|
|
$
|
890
|
|
|
$
|
1,198
|
|
|
$
|
1,960
|
|
|
$
|
2,343
|
|
Non-GAAP gross margin percent (% of net sales)
|
42
|
%
|
|
41
|
%
|
|
42
|
%
|
|
41
|
%
|
|
42
|
%
|
|||||
Non-GAAP Operating Income
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported operating income (GAAP basis)
|
$
|
409
|
|
|
$
|
179
|
|
|
$
|
677
|
|
|
$
|
588
|
|
|
$
|
1,351
|
|
Certain items associated with acquisitions
1
|
80
|
|
|
142
|
|
|
12
|
|
|
222
|
|
|
25
|
|
|||||
Varian deal cost
|
1
|
|
|
23
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|||||
Restructuring charges and asset impairments
2, 3
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(33
|
)
|
|||||
Loss on sale of facility
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Non-GAAP operating income
|
$
|
490
|
|
|
$
|
344
|
|
|
$
|
685
|
|
|
$
|
834
|
|
|
$
|
1,344
|
|
Non-GAAP operating margin percent (% of net sales)
|
19
|
%
|
|
16
|
%
|
|
24
|
%
|
|
18
|
%
|
|
24
|
%
|
|||||
Non-GAAP Net Income
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported net income (GAAP basis)
|
$
|
289
|
|
|
$
|
117
|
|
|
$
|
489
|
|
|
$
|
406
|
|
|
$
|
995
|
|
Certain items associated with acquisitions
1
|
80
|
|
|
142
|
|
|
12
|
|
|
222
|
|
|
25
|
|
|||||
Varian deal cost
|
1
|
|
|
23
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|||||
Restructuring charges and asset impairments
2, 3
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(33
|
)
|
|||||
Impairment of strategic investments
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|||||
Loss on sale of facility
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Reinstatement of federal R&D tax credit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|||||
Resolution of audits of prior years’ income tax filings
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|||||
Income tax effect of non-GAAP adjustments
|
(17
|
)
|
|
(42
|
)
|
|
4
|
|
|
(59
|
)
|
|
10
|
|
|||||
Non-GAAP net income
|
$
|
349
|
|
|
$
|
240
|
|
|
$
|
501
|
|
|
$
|
589
|
|
|
$
|
985
|
|
Non-GAAP Earnings Per Diluted Share
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported earnings per diluted share (GAAP basis)
|
$
|
0.22
|
|
|
$
|
0.09
|
|
|
$
|
0.37
|
|
|
$
|
0.31
|
|
|
$
|
0.75
|
|
Certain items associated with acquisitions
|
0.05
|
|
|
0.08
|
|
|
0.01
|
|
|
0.13
|
|
|
0.01
|
|
|||||
Varian deal cost
|
—
|
|
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
|||||
Restructuring charges and asset impairments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|||||
Reinstatement of federal R&D tax credit and resolution of audits of prior years’ income tax filings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|||||
Non-GAAP earnings per diluted share
|
$
|
0.27
|
|
|
$
|
0.18
|
|
|
$
|
0.38
|
|
|
$
|
0.45
|
|
|
$
|
0.74
|
|
Weighted average number of diluted shares
|
1,301
|
|
|
1,310
|
|
|
1,333
|
|
|
1,305
|
|
|
1,333
|
|
1
|
These items are incremental charges attributable to acquisitions, consisting of inventory fair value adjustments on products sold, amortization of purchased intangible assets, shared-based compensation associated with accelerated vesting and other integration costs.
|
|
|
2
|
Results for the three months ended May 1, 2011 included favorable adjustments of $8 million related to a restructuring program announced on July 21, 2010, $19 million related to a restructuring program announced on November 11, 2009, and $1 million related to a restructuring program announced on November 12, 2008, offset by asset impairment charges of $24 million related to certain intangible assets.
|
|
|
3
|
Results for the six months ended May 1, 2011 included favorable adjustments of $36 million related to a restructuring program announced on July 21, 2010, $19 million related to a restructuring program announced on November 11, 2009, and $5 million related to a restructuring program announced on November 12, 2008, offset by asset impairment charges of $27 million primarily related to certain intangible assets.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||
(In millions, except percentages)
|
April 29,
2012 |
|
January 29,
2012 |
|
May 1,
2011 |
|
April 29,
2012 |
|
May 1,
2011 |
||||||||||
Non-GAAP SSG Operating Income
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported operating income (GAAP basis)
|
$
|
504
|
|
|
$
|
271
|
|
|
$
|
491
|
|
|
$
|
775
|
|
|
$
|
1,034
|
|
Certain items associated with acquisitions
1
|
70
|
|
|
115
|
|
|
2
|
|
|
185
|
|
|
5
|
|
|||||
Non-GAAP operating income
|
$
|
574
|
|
|
$
|
386
|
|
|
$
|
493
|
|
|
$
|
960
|
|
|
$
|
1,039
|
|
Non-GAAP operating margin percent (% of net sales)
|
32
|
%
|
|
29
|
%
|
|
34
|
%
|
|
31
|
%
|
|
35
|
%
|
|||||
Non-GAAP AGS Operating Income
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported operating income (GAAP basis)
|
$
|
109
|
|
|
$
|
107
|
|
|
$
|
91
|
|
|
$
|
216
|
|
|
$
|
176
|
|
Certain items associated with acquisitions
1
|
2
|
|
|
6
|
|
|
2
|
|
|
8
|
|
|
4
|
|
|||||
Restructuring charges and asset impairments
2, 3
|
—
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
24
|
|
|||||
Non-GAAP operating income
|
$
|
111
|
|
|
$
|
113
|
|
|
$
|
117
|
|
|
$
|
224
|
|
|
$
|
204
|
|
Non-GAAP operating margin percent (% of net sales)
|
20
|
%
|
|
21
|
%
|
|
19
|
%
|
|
21
|
%
|
|
17
|
%
|
|||||
Non-GAAP Display Operating Income
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported operating income (GAAP basis)
|
$
|
7
|
|
|
$
|
5
|
|
|
$
|
31
|
|
|
$
|
12
|
|
|
$
|
58
|
|
Certain items associated with acquisitions
1
|
2
|
|
|
2
|
|
|
2
|
|
|
4
|
|
|
4
|
|
|||||
Non-GAAP operating income
|
$
|
9
|
|
|
$
|
7
|
|
|
$
|
33
|
|
|
$
|
16
|
|
|
$
|
62
|
|
Non-GAAP operating margin percent (% of net sales)
|
7
|
%
|
|
7
|
%
|
|
21
|
%
|
|
7
|
%
|
|
20
|
%
|
|||||
Non-GAAP EES Operating Income (Loss)
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported operating income (loss) (GAAP basis)
|
$
|
(63
|
)
|
|
$
|
(23
|
)
|
|
$
|
170
|
|
|
$
|
(86
|
)
|
|
$
|
313
|
|
Certain items associated with acquisitions
1
|
6
|
|
|
6
|
|
|
6
|
|
|
12
|
|
|
12
|
|
|||||
Restructuring charges and asset impairments
2, 3
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(36
|
)
|
|||||
Non-GAAP operating income (loss)
|
$
|
(57
|
)
|
|
$
|
(17
|
)
|
|
$
|
168
|
|
|
$
|
(74
|
)
|
|
$
|
289
|
|
Non-GAAP operating margin percent (% of net sales)
|
(72
|
)%
|
|
(8
|
)%
|
|
26
|
%
|
|
(26
|
)%
|
|
26
|
%
|
1
|
These items are incremental charges attributable to acquisitions, consisting of inventory fair value adjustments on products sold, amortization of purchased intangible assets, shared-based compensation associated with accelerated vesting and other integration costs.
|
|
|
2
|
Results for the three months ended May 1, 2011 included favorable adjustments of $8 million related to a restructuring program announced on July 21, 2010 and asset impairment charges of $24 million related certain intangible assets.
|
|
|
3
|
Results for the six months ended May 1, 2011 included favorable adjustments of $36 million related to a restructuring program announced on July 21, 2010 and asset impairment charges of $24 million primarily related to certain intangible assets.
|
•
|
increasing capital requirements for building and operating new fabrication plants and customers’ ability to raise the necessary capital, particularly when financial market conditions are difficult;
|
•
|
differences in growth rates among the semiconductor, display and solar industries;
|
•
|
the increasing importance of establishing, improving and maintaining strong relationships with customers;
|
•
|
changes in end demand for electronic products over time and the effect of these changes on customers’ businesses and, in turn, on demand for Applied’s products;
|
•
|
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;
|
•
|
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;
|
•
|
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;
|
•
|
the increasing importance of, and difficulties in, developing products with sufficient differentiation to influence customers’ purchasing decisions;
|
•
|
requirements for shorter cycle times for the development, manufacture and installation of manufacturing equipment;
|
•
|
price and performance trends for semiconductor devices, LCDs and solar PVs, and the corresponding effect on demand for such products;
|
•
|
the increasing importance of the availability of spare parts to maximize the time that customers’ systems are available for production;
|
•
|
the increasing role for and complexity of software in Applied products; and
|
•
|
the increasing focus on reducing energy usage and improving the environmental impact and sustainability associated with manufacturing operations.
|
•
|
the increasing cost of research and development due to many factors, including: decreasing linewidths on a chip; the use of new materials such as cobalt and yttrium; new and more complex device structures; more applications and process steps; increasing chip design costs; and the increasing cost and complexity of integrated manufacturing processes;
|
•
|
the cost, technical complexity and timing of a proposed industry transition from 300mm to 450mm wafers, and the resulting effect on demand for manufacturing equipment and services;
|
•
|
the need to reduce product development time, despite the increasing difficulty of technical challenges;
|
•
|
the growing number of types and varieties of semiconductors and number of applications across multiple substrate sizes;
|
•
|
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;
|
•
|
challenges in generating organic growth given semiconductor manufacturers’ decreasing capital expenditures as a percentage of revenue, and their increasing capital investment in market segments that Applied does not serve, such as lithography, or segments where Applied's products have lower relative market share;
|
•
|
the importance of increasing market positions in under-penetrated segments, such as etch and inspection;
|
•
|
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;
|
•
|
the increasing frequency and complexity of technology transitions and inflections, such as ALD, 3-D transistors, advanced interconnect, wafer-level packaging, and extreme ultraviolet lithography (EUV);
|
•
|
shorter cycle times between customers’ order placement and product shipment, which may lead to inventory write-offs and manufacturing inefficiencies that decrease gross margin;
|
•
|
competitive factors that make it difficult to enhance market position;
|
•
|
the concentration of new wafer starts in Korea, where Applied’s service penetration and service-revenue-per-wafer-start have been lower than in other regions; and
|
•
|
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.
|
•
|
the need to continually decrease the cost-per-watt of electricity produced by solar PV products to at or below grid parity by, among other things, reducing operating costs and increasing throughputs for solar PV manufacturing, and improving the conversion efficiency of solar PVs;
|
•
|
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;
|
•
|
the number of solar PV manufacturers and increasing global production capacity for solar PVs, primarily in China;
|
•
|
the filing of regulatory unfair trade proceedings against solar PVs from China, where most of Applied’s solar equipment sales are concentrated, which could result in the assessment of duties on solar cells and modules imported from China or other outcomes;
|
•
|
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;
|
•
|
challenges associated with marketing and selling manufacturing equipment and services to a diverse and diffuse customer base;
|
•
|
the growth of market segments in which Applied does not participate, such as passivation and furnaces;
|
•
|
the increasing number of government-affiliated entities in China that are becoming customers;
|
•
|
the cost of polysilicon and other materials; and
|
•
|
the financial condition of solar PV customers and their access to affordable financing and capital.
|
•
|
the planned expansion of manufacturing facilities in China by Chinese display manufacturers and manufacturers from other countries, and the ability of non-Chinese manufacturers to obtain government approvals on a timely basis;
|
•
|
the slowing rate of transition to larger substrate sizes for LCD TVs and the resulting effect on capital intensity in the industry and on Applied’s product differentiation, gross margin and return on investment;
|
•
|
the increasing importance of new types of display technologies, such as low temperature polysilicon (LTPS), organic light-emitting diode (OLED) and metal oxide, and new touch panel films, such as anti-reflective and anti-fingerprint; and
|
•
|
uncertainty with respect to future LCD technology end-use applications and growth drivers.
|
•
|
identify and address technology inflections, market changes, new applications, customer requirements and end-use demand;
|
•
|
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;
|
•
|
appropriately price and achieve market acceptance of its products;
|
•
|
differentiate its products from those of competitors and any disruptive technologies, and meet customers’ performance specifications;
|
•
|
maintain operating flexibility to enable different responses to different markets, customers and applications;
|
•
|
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;
|
•
|
focus on sales and marketing strategies that foster strong customer relationships;
|
•
|
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;
|
•
|
reduce the cost and improve the productivity of capital invested in R&D activities;
|
•
|
accurately forecast demand, work with suppliers and meet production schedules for its products;
|
•
|
improve its manufacturing processes and achieve cost efficiencies across product offerings;
|
•
|
adapt to changes in value offered by companies in different parts of the supply chain;
|
•
|
qualify products for evaluation and, in turn, volume manufacturing with its customers; and
|
•
|
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.
|
•
|
the need to devote additional resources to develop new products for, and operate in, new markets;
|
•
|
the need to develop new sales and marketing strategies and cultivate relationships with new customers;
|
•
|
differing rates of profitability and growth among multiple businesses;
|
•
|
Applied’s ability to anticipate demand, capitalize on opportunities, and avoid or minimize risks;
|
•
|
the complexity of managing multiple businesses with variations in production planning, execution, supply chain management and logistics;
|
•
|
the adoption of new business models;
|
•
|
the need to undertake activities to grow demand for end-products;
|
•
|
the need to develop and successfully implement adequate new business processes and systems;
|
•
|
Applied’s ability to rapidly expand or reduce its operations to meet increased or decreased demand, respectively, and the associated effect on working capital;
|
•
|
new materials, processes and technologies;
|
•
|
the need to attract, motivate and retain employees with skills and expertise in these new areas;
|
•
|
new and more diverse customers and suppliers, including some with limited operating histories, uncertain and/or limited funding, evolving business models and/or locations in regions where Applied does not have, or has limited, operations;
|
•
|
different customer service requirements;
|
•
|
new or different competitors with potentially more financial or other resources, industry experience and/or established customer relationships;
|
•
|
entry into new industries and countries, with differing levels of government involvement, laws and regulations, and business, employment and safety practices;
|
•
|
third parties’ intellectual property rights; and
|
•
|
the need to comply with, or work to establish, industry standards and practices.
|
•
|
varying regional and geopolitical business conditions and demands;
|
•
|
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;
|
•
|
customer- or government-supported efforts to influence Applied to conduct more of its operations in a particular country, such as Korea and China;
|
•
|
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;
|
•
|
global trade issues, including those related to the interpretation and application of import and export licenses, as well as international trade disputes;
|
•
|
positions taken by governmental agencies regarding possible national commercial and/or security issues posed by international business operations;
|
•
|
fluctuating raw material, commodity and energy costs;
|
•
|
challenges associated with managing more geographically diverse operations and projects, which requires an effective organizational structure and appropriate business processes, procedures and controls;
|
•
|
a more diverse workforce with different experience levels, cultures, customs, business practices and worker expectations;
|
•
|
variations in the ability to develop relationships with local customers, suppliers and governments;
|
•
|
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;
|
•
|
the need to provide sufficient levels of technical support in different locations around the world;
|
•
|
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;
|
•
|
reliance on various information systems, data centers and software applications to conduct many aspects of the Company’s business, which may be vulnerable to cyberattacks by third parties or breached due to employee error, misuse or other causes that could result in business disruptions, loss of confidential information, or other adverse consequences in the event that Applied’s firewalls and security processes and practices are ineffective;
|
•
|
the need for an effective business continuity plan if a disaster or other event occurs that could disrupt business operations;
|
•
|
the need to regularly reassess the size, capability and location of the Company’s global infrastructure and make appropriate changes;
|
•
|
cultural and language differences;
|
•
|
shipping costs or delays;
|
•
|
the need to continually improve the Company’s operating cost structure;
|
•
|
difficulties and uncertainties associated with the entry into new countries;
|
•
|
hiring and integration of an increasing number of new workers, including in countries such as India and China;
|
•
|
the increasing need for the workforce to be more mobile and work in or travel to different regions;
|
•
|
uncertainties with respect to economic growth rates in various countries; and
|
•
|
uncertainties with respect to growth rates for the manufacture and sales of semiconductors, LCDs and solar PVs in the developing economies of certain countries.
|
•
|
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 (such as earthquakes, floods or storms, regional economic downturns, pandemics, social unrest, political instability, terrorism, or acts of war).
|
•
|
diversion of management’s attention from other operational matters;
|
•
|
inability to complete acquisitions as anticipated or at all;
|
•
|
requirements imposed by government regulators in connection with their review of a transaction, which may include, among other things, divestitures and/or restrictions on the conduct of Applied’s existing business or the acquired business;
|
•
|
ineffective integration of operations, systems, technologies, products or employees of an acquired business;
|
•
|
inability to realize anticipated synergies or other benefits;
|
•
|
failure to commercialize purchased technologies;
|
•
|
initial dependence on unfamiliar supply chains or relatively small supply partners;
|
•
|
inability to capitalize on characteristics of new markets that may be significantly different from Applied’s existing markets and where competitors may have stronger market positions and customer relationships;
|
•
|
failure to attract, retain and motivate key employees from the acquired business;
|
•
|
reductions in cash balances and/or increases in debt obligations to finance the acquisition, which reduce the availability of cash flow for general corporate or other purposes;
|
•
|
exposure to new operational risks, rules, regulations, worker expectations, customs and practices to the extent acquired businesses are located in regions where Applied has not historically conducted business;
|
•
|
challenges associated with managing new, more diverse and more widespread operations, projects and people;
|
•
|
inability to obtain and protect intellectual property rights in key technologies;
|
•
|
inadequacy or ineffectiveness of an acquired company’s internal financial controls, disclosure controls and procedures, and/or environmental, health and safety, anti-corruption, human resource, or other policies or practices;
|
•
|
impairment of acquired intangible assets and goodwill as a result of changing business conditions, technological advancements or worse-than-expected performance of the segment;
|
•
|
the risk of litigation or claims associated with a proposed or completed transaction;
|
•
|
unknown, underestimated and/or undisclosed commitments or liabilities; and
|
•
|
the inappropriate scale of acquired entities’ critical resources or facilities for business needs.
|
Period
|
Total Number of
Shares Purchased
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Program*
|
|
Maximum Dollar
Value of Shares
That May Yet be
Purchased Under
the Program*
|
||||||
|
( In millions, except per share amounts)
|
||||||||||||
Month #1
|
|
|
|
|
|
|
|
||||||
(January 30, 2012 to February 26, 2012)
|
1.7
|
|
|
$
|
12.79
|
|
|
1.7
|
|
|
$
|
960
|
|
Month #2
|
|
|
|
|
|
|
|
||||||
(February 27, 2012 to March 25, 2012)
|
6.3
|
|
|
$
|
12.48
|
|
|
6.3
|
|
|
$
|
2,946
|
|
Month #3
|
|
|
|
|
|
|
|
||||||
(March 26, 2012 to April 29, 2012)
|
8.2
|
|
|
$
|
12.12
|
|
|
8.2
|
|
|
$
|
2,846
|
|
Total
|
16.2
|
|
|
$
|
12.33
|
|
|
16.2
|
|
|
|
*
|
On March 8, 2010, the Board of Directors approved a stock repurchase program for up to $2.0 billion in repurchases over the three year period ending March 2013. On March 5, 2012, the Board of Directors approved a new stock repurchase program authorizing up to $3.0 billion in repurchases over the next three years, ending March 2015. The stock repurchase program that began in 2010 terminated concurrent with the start of the new stock repurchase program.
|
†
|
Filed herewith.
|
‡
|
Furnished herewith.
|
APPLIED MATERIALS, INC.
|
|
|
|
By:
|
/s/ GEORGE S. DAVIS
|
|
George S. Davis
Executive Vice President,
Chief Financial Officer
(Principal Financial Officer)
|
By:
|
/s/ THOMAS S. TIMKO
|
|
Thomas S. Timko
Corporate Vice President,
Corporate Controller
and Chief Accounting Officer
(Principal Accounting Officer)
|
Number of Restricted Stock Units:
|
[MAX_SHARES]
|
Vesting of Restricted Stock Units
:
|
Please refer to the UBS One Source website for the vesting schedule related to this grant of Restricted Stock Units (click on the specific grant under the tab labeled “Grants/Awards/Units.”).*
|
•
|
Your participation in the Plan and this Award are subject to the rules and regulations set forth by SAFE;
|
•
|
All cash proceeds related to the grant, vesting, and exercise of any Award granted to you by the Company and from the sale of Shares received by you under any Award granted to you by the Company must be transferred to you through a SAFE- approved foreign exchange bank account (“SAFE Account”) established by the Company;
|
•
|
The Shares received under the Award will be deposited into an account set up for you with the designated broker for the Plan and may not be transferred from that account to any other bank
,
brokerage, or share-holding account.
|
•
|
Within 30 days of your Termination of Service, all of the Shares held in your account with the designated broker must be sold either by you or by the designated broker and the proceeds from the sale of those Shares will be transferred to you through the SAFE Account.
|
Number of Restricted Stock Units:
|
[MAX_SHARES]
|
Vesting of Restricted Stock Units
:
|
One-Hundred percent (100%) of the Restricted Stock Units subject to the Award will vest on March 1, 2013 or, if earlier, on the date immediately before the date of the Annual Meeting of Stockholders of the Company that next follows the Grant Date.
*
|
Number of Performance Shares:
|
[MAX_SHARES]
|
Vesting of Performance Shares
:
|
[
VESTING SCHEDULE and/or PERFORMANCE VESTING CONDITIONS
.]*
|
•
|
Your participation in the Plan and this Award are subject to the rules and regulations set forth by SAFE;
|
•
|
All cash proceeds related to the grant, vesting, and exercise of any Award granted to you by the Company and from the sale of Shares received by you under any Award granted to you by the Company must be transferred to you through a SAFE- approved foreign exchange bank account (“SAFE Account”) established by the Company;
|
•
|
The Shares received under the Award will be deposited into an account set up for you with the designated broker for the Plan and may not be transferred from that account to any other bank
,
brokerage, or share-holding account.
|
•
|
Within 30 days of your Termination of Service, all of the Shares held in your account with the designated broker must be sold either by you or by the designated broker and the proceeds from the sale of those Shares will be transferred to you through the SAFE Account.
|
/s/ Michael R. Splinter
|
Michael R. Splinter
President and Chief Executive Officer
|
/s/ George S. Davis
|
George S. Davis
Executive Vice President, Chief Financial Officer
|
/s/ Michael R. Splinter
|
Michael R. Splinter
President and Chief Executive Officer
|
/s/ George S. Davis
|
George S. Davis
Executive Vice President, Chief Financial Officer
|