Document and Company Informatio
Document and Company Information (USD $) | |||
12 Months Ended
Oct. 25, 2009 | Nov. 20, 2009
| Apr. 26, 2009
| |
Document and Company Information [Abstract] | |||
Entity Registrant Name | APPLIED MATERIALS INC /DE | ||
Entity Central Index Key | 0000006951 | ||
Document Type | 10-K | ||
Document Period End Date | 2009-10-25 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --10-25 | ||
Entity Well Known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float (actual number) | $15,579,209,892 | ||
Entity Common Stock Shares Outstanding (actual number) | 1,341,259,033 |
Consolidated Statements of Oper
Consolidated Statements of Operations (USD $) | |||
In Thousands, except Per Share data | 12 Months Ended
Oct. 25, 2009 | 12 Months Ended
Oct. 26, 2008 | 12 Months Ended
Oct. 28, 2007 |
Net sales | $5,013,607 | $8,129,240 | $9,734,856 |
Cost of products sold | 3,582,802 | 4,686,412 | 5,242,413 |
Gross margin | 1,430,805 | 3,442,828 | 4,492,443 |
Operating expenses: | |||
Research, development and engineering | 934,115 | 1,104,122 | 1,142,073 |
General and administrative | 406,946 | 505,762 | 501,185 |
Marketing and selling | 327,572 | 459,402 | 451,258 |
Restructuring and asset impairments | 155,788 | 39,948 | 26,421 |
Gain on sale of facility | 0 | 21,837 | 0 |
Income (loss) from operations | (393,616) | 1,355,431 | 2,371,506 |
Pretax loss of equity-method investment | 34,983 | 35,527 | 29,371 |
Impairment of investments | 84,480 | 0 | 0 |
Interest expense | 21,304 | 20,506 | 38,631 |
Interest income | 48,580 | 109,320 | 136,149 |
Income (loss) before income taxes | (485,803) | 1,408,718 | 2,439,653 |
Provision (benefit) for income taxes | (180,476) | 447,972 | 729,457 |
Net income (loss) | ($305,327) | $960,746 | $1,710,196 |
Earnings (loss) per share: | |||
Basic | -0.23 | 0.71 | 1.22 |
Diluted | -0.23 | 0.7 | 1.2 |
Weighted average number of shares: | |||
Basic | 1,333,091 | 1,354,176 | 1,406,685 |
Diluted | 1,333,091 | 1,374,507 | 1,427,002 |
Consolidated Balance Sheets
Consolidated Balance Sheets (USD $) | ||
In Thousands | Oct. 25, 2009
| Oct. 26, 2008
|
Current assets: | ||
Cash and cash equivalents | $1,576,381 | $1,411,624 |
Short-term investments | 638,349 | 689,044 |
Accounts receivable, less allowance for doubtful accounts of $67,313 and $5,275 at 2009 and 2008, respectively | 1,041,495 | 1,691,027 |
Inventories | 1,627,457 | 1,987,017 |
Deferred income taxes, net | 356,336 | 388,807 |
Income taxes receivable | 184,760 | 125,605 |
Other current assets | 264,169 | 371,033 |
Total current assets | 5,688,947 | 6,664,157 |
Long-term investments | 1,052,165 | 1,367,056 |
Property, plant and equipment | 2,906,957 | 2,831,952 |
Less: accumulated depreciation and amortization | (1,816,524) | (1,737,752) |
Net property, plant and equipment | 1,090,433 | 1,094,200 |
Goodwill, net | 1,170,932 | 1,174,673 |
Purchased technology and other intangible assets, net | 306,416 | 388,429 |
Equity-method investment | 0 | 79,533 |
Deferred income taxes and other assets | 265,350 | 238,270 |
Total assets | 9,574,243 | 11,006,318 |
Current liabilities: | ||
Current portion of long-term debt | 1,240 | 1,068 |
Accounts payable and accrued expenses | 1,061,502 | 1,545,355 |
Customer deposits and deferred revenue | 864,280 | 1,225,735 |
Income taxes payable | 12,435 | 173,394 |
Total current liabilities | 1,939,457 | 2,945,552 |
Long-term debt | 200,654 | 201,576 |
Other liabilities | 339,524 | 310,232 |
Total liabilities | 2,479,635 | 3,457,360 |
Stockholders' equity: | ||
Preferred stock: $.01 par value per share; 1,000 shares authorized; no shares issued | 0 | 0 |
Common stock: $.01 par value per share; 2,500,000 shares authorized; 1,340,917 and 1,330,761 shares outstanding at 2009 and 2008, respectively | 13,409 | 13,308 |
Additional paid-in capital | 5,195,437 | 5,095,894 |
Retained earnings | 10,934,004 | 11,601,288 |
Treasury stock: 508,254 and 513,232 shares at 2009 and 2008, respectively, net | (9,046,562) | (9,134,962) |
Accumulated other comprehensive loss | (1,680) | (26,570) |
Total stockholders' equity | 7,094,608 | 7,548,958 |
Total liabilities and stockholders' equity | $9,574,243 | $11,006,318 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | ||
In Thousands | Oct. 25, 2009
| Oct. 26, 2008
|
Current assets: | ||
Allowance for doubtful accounts receivable | $67,313 | $5,275 |
Stockholders' equity: | ||
Preferred stock, par value | 0.01 | 0.01 |
Preferred stock, shares authorized | 1,000 | 1,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | 0.01 | 0.01 |
Common stock, shares authorized | 2,500,000 | 2,500,000 |
Common stock, shares outstanding | 1,340,917 | 1,330,761 |
Treasury stock, shares | 508,254 | 513,232 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders Equity and Comprehensive Income (USD $) | ||||||
In Thousands | Common Stock
| Additional Paid-In Capital
| Treasury Stock
| Retained Earnings
| Accumulated Other Comprehensive Income (Loss)
| Total
|
Beginning balance, shares at Oct. 29, 2006 | 1,391,730 | |||||
Beginning balance at Oct. 29, 2006 | $13,917 | $3,678,202 | ($6,494,012) | $9,472,303 | ($19,010) | $6,651,400 |
Components of comprehensive income (loss): | ||||||
Net income (loss) | 1,710,196 | 1,710,196 | ||||
Change in unrealized net gain (loss) on investments | 21,887 | 21,887 | ||||
Change in unrealized net gain on derivative instruments | (5,728) | (5,728) | ||||
Change in minimum pension liability | 3,462 | 3,462 | ||||
Change in retiree medical benefit | (1,132) | (1,132) | ||||
Translation adjustments | 9,583 | 9,583 | ||||
Adjustment to initially apply authoritative guidance on defined benefit pension plans, net of tax of $959 | 2,291 | 2,291 | ||||
Dividends | (319,208) | (319,208) | ||||
Equity-based compensation | 161,196 | 161,196 | ||||
Issuance under stock plans, including tax benefits (detriment) of ($13,409), ($11,519), $48,870 for 2009, 2008 and 2007, respectively, and other | 544 | 819,434 | 99,481 | 919,459 | ||
Issuance under stock plans, including tax benefits (detriment) of ($13,409), ($11,519), $48,870 for 2009, 2008 and 2007, respectively, and other, shares | 54,391 | |||||
Treasury stock repurchases | (604) | (1,331,393) | (1,331,997) | |||
Treasury stock repurchases, shares | (60,410) | |||||
Ending balance at Oct. 28, 2007 | 13,857 | 4,658,832 | (7,725,924) | 10,863,291 | 11,353 | 7,821,409 |
Ending balance, shares at Oct. 28, 2007 | 1,385,711 | |||||
Components of comprehensive income (loss): | ||||||
Net income (loss) | 960,746 | 960,746 | ||||
Change in unrealized net gain (loss) on investments | (41,739) | (41,739) | ||||
Change in unrealized net gain on derivative instruments | 9,448 | 9,448 | ||||
Change in minimum pension liability | (7,440) | (7,440) | ||||
Change in retiree medical benefit | 1,866 | 1,866 | ||||
Translation adjustments | (58) | (58) | ||||
Cumulative effect of adoption of interpretative tax guidance on uncertainties in income taxes | 100,000 | 100,000 | ||||
Dividends | (322,749) | (322,749) | ||||
Equity-based compensation | 178,943 | 178,943 | ||||
Issuance under stock plans, including tax benefits (detriment) of ($13,409), ($11,519), $48,870 for 2009, 2008 and 2007, respectively, and other | 283 | 258,119 | 90,114 | 348,516 | ||
Issuance under stock plans, including tax benefits (detriment) of ($13,409), ($11,519), $48,870 for 2009, 2008 and 2007, respectively, and other, shares | 28,213 | |||||
Treasury stock repurchases | (832) | (1,499,152) | (1,499,984) | |||
Treasury stock repurchases, shares | (83,163) | |||||
Ending balance at Oct. 26, 2008 | 13,308 | 5,095,894 | (9,134,962) | 11,601,288 | (26,570) | 7,548,958 |
Ending balance, shares at Oct. 26, 2008 | 1,330,761 | |||||
Components of comprehensive income (loss): | ||||||
Net income (loss) | (305,327) | (305,327) | ||||
Change in unrealized net gain (loss) on investments | 44,956 | 44,956 | ||||
Change in unrealized net gain on derivative instruments | (7,729) | (7,729) | ||||
Change in minimum pension liability | (12,492) | (12,492) | ||||
Change in retiree medical benefit | (719) | (719) | ||||
Translation adjustments | 874 | 874 | ||||
Change in measurement date to apply authoritative guidance on defined benefit plans | (1,942) | (1,942) | ||||
Dividends | (320,117) | (320,117) | ||||
Equity-based compensation | 147,160 | 147,160 | ||||
Issuance under stock plans, including tax benefits (detriment) of ($13,409), ($11,519), $48,870 for 2009, 2008 and 2007, respectively, and other | 121 | (47,617) | 111,286 | (39,898) | 23,892 | |
Issuance under stock plans, including tax benefits (detriment) of ($13,409), ($11,519), $48,870 for 2009, 2008 and 2007, respectively, and other, shares | 12,098 | |||||
Treasury stock repurchases | (20) | (22,886) | (22,906) | |||
Treasury stock repurchases, shares | (1,942) | |||||
Ending balance at Oct. 25, 2009 | $13,409 | $5,195,437 | ($9,046,562) | $10,934,004 | ($1,680) | $7,094,608 |
Ending balance, shares at Oct. 25, 2009 | 1,340,917 |
1_Consolidated Statements of St
Consolidated Statements of Stockholders Equity and Comprehensive Income (Parenthetical) (USD $) | ||||||
In Thousands | Common Stock
| Additional Paid-In Capital
| Treasury Stock
| Retained Earnings
| Accumulated Other Comprehensive Income (Loss)
| Total
|
Tax effect on adjustment to initially apply SFAS 158 | $959 | $959 | ||||
Tax benefits (detriment) included in issuance under stock plans | 48,870 | 48,870 | 48,870 | 48,870 | ||
Tax benefits (detriment) included in issuance under stock plans | (11,519) | (11,519) | (11,519) | (11,519) | ||
Tax benefits (detriment) included in issuance under stock plans | ($13,409) | ($13,409) | ($13,409) | ($13,409) | ($13,409) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (USD $) | |||
In Thousands | 12 Months Ended
Oct. 25, 2009 | 12 Months Ended
Oct. 26, 2008 | 12 Months Ended
Oct. 28, 2007 |
Cash flows from operating activities: | |||
Net income (loss) | ($305,327) | $960,746 | $1,710,196 |
Adjustments required to reconcile net income (loss) to cash provided by operating activities: | |||
Depreciation and amortization | 291,203 | 320,051 | 268,334 |
Loss on fixed asset retirements | 24,017 | 6,826 | 21,401 |
Provision for bad debts | 62,539 | 2,456 | 858 |
Restructuring and asset impairments | 155,788 | 39,948 | 26,421 |
Acquired in-process research and development expense | 0 | 0 | 4,900 |
Pretax loss of equity-method investment | 34,983 | 35,527 | 29,371 |
Impairment of investments | 84,480 | 0 | 0 |
Net recognized loss on investments | 10,231 | 4,392 | 5,460 |
Deferred income taxes | 18,863 | (58,259) | 31,642 |
Excess tax benefits from equity-based compensation plans | 0 | (7,491) | (49,793) |
Equity-based compensation | 147,160 | 178,943 | 161,196 |
Changes in operating assets and liabilities, net of amounts acquired: | |||
Accounts receivable | 586,993 | 421,834 | 33,401 |
Inventories | 359,560 | (638,256) | 140,933 |
Other current assets | 94,740 | 94,247 | (164,289) |
Other assets | (6,530) | (394) | 3,359 |
Accounts payable and accrued expenses | (660,006) | (260,041) | (107,220) |
Customer deposits and deferred revenue | (361,455) | 622,645 | 94,747 |
Income taxes payable | (288,283) | 8,126 | (23,968) |
Other liabilities | 83,709 | (20,832) | 22,347 |
Cash provided by operating activities | 332,665 | 1,710,468 | 2,209,296 |
Cash flows from investing activities: | |||
Capital expenditures | (248,427) | (287,906) | (264,784) |
Cash paid for acquisitions, net of cash acquired | 0 | (235,324) | (599,653) |
Proceeds from sale of facility | 0 | 42,210 | 0 |
Proceeds from disposition of assets held for sale | 0 | 0 | 37,611 |
Proceeds from sales and maturities of investments | 1,317,365 | 5,939,509 | 3,053,640 |
Purchases of investments | (956,249) | (5,534,475) | (3,203,427) |
Cash provided by (used in) investing activities | 112,689 | (75,986) | (976,613) |
Cash flows used for financing activities: | |||
Short-term debt repayments | (750) | (2,117) | (99) |
Long-term debt repayments | 0 | 0 | (202,040) |
Proceeds from common stock issuances | 61,824 | 393,978 | 898,025 |
Common stock repurchases | (22,906) | (1,499,984) | (1,331,997) |
Excess tax benefit from equity-based compensation plans | 0 | 7,491 | 49,794 |
Payments of dividends to stockholders | (319,507) | (325,405) | (305,672) |
Cash used in financing activities | (281,339) | (1,426,037) | (891,989) |
Effect of exchange rate changes on cash and cash equivalents | 742 | 457 | 565 |
Increase in cash and cash equivalents | 164,757 | 208,902 | 341,259 |
Cash and cash equivalents - beginning of year | 1,411,624 | 1,202,722 | 861,463 |
Cash and cash equivalents - end of year | 1,576,381 | 1,411,624 | 1,202,722 |
Supplemental cash flow information: | |||
Cash payments for income taxes, net | 134,240 | 368,459 | 845,756 |
Cash payments for interest | $14,372 | $14,580 | $29,104 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | |
12 Months Ended
Oct. 25, 2009 USD / shares | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note1 Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of Applied Materials, Inc. and its subsidiaries (Applied or the Company) after elimination of intercompany balances and transactions. All references to a fiscal year apply to Applieds fiscal year which ends on the last Sunday in October. Fiscal 2009, 2008 and 2007 contained 52weeks each. Each fiscal quarter of 2009, 2008 and 2007 contained 13weeks. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. Prior year amounts for customer deposits and deferred revenue have been reclassified to conform to the current year presentation. During fiscal 2009, Applied implemented authoritative guidance and changed the measurement date for its defined and postretirement benefit plan assets and obligations from an interim date to Applieds fiscal year end. Accordingly, Applied recorded a $2million (after tax) adjustment to the fiscal 2009 beginning balance of retained earnings. Cash Equivalents All highly-liquid investments with a remaining maturity of three months or less at the time of purchase are considered to be cash equivalents. Cash equivalents consists primarily of investments in institutional money market funds. Investments All of Applieds investments are classified as available-for-sale at the respective balance sheet dates. Investments classified as available-for-sale are recorded at fair value based upon quoted market prices, and any temporary difference between the cost and fair value of an investment is presented as a separate component of accumulated other comprehensive income (loss). The specific identification method is used to determine the gains and losses on investments. Inventories Inventories are stated at the lower of cost or market, with cost determined on a first-in, first-out (FIFO) basis. Property, Plant and Equipment Property, plant and equipment is stated at cost. Depreciation is provided over the estimated useful lives of the assets using the straight-line method. Estimated useful lives for financial reporting purposes are as follows: buildings and improvements, 3 to 30years; demonstration and manufacturing equipment, 3 to 5years; software, 3 to 5years; and furniture, fixtures and other equipment, 3 to 15years. Land improvements are amortized over the shorter of 15years or the estimated useful life. Leasehold improvements are amortized over the shorter of five years or the lease term. Intangible Assets Goodwill and indefinite-lived assets are not amortized, but are reviewed for impairment annually during the fourth quarter of each fiscal year. Purchased technology and other intangible assets are presented at cost, net of accumulated amortization, and are amortized over their estimated useful lives |
Treasury Stock
Treasury Stock | |
12 Months Ended
Oct. 25, 2009 USD / shares | |
Treasury Stock [Abstract] | |
Treasury Stock | Note2 Treasury Stock Applied records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon reissuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid in capital. If Applied reissues treasury stock at an amount below its acquisition cost and additional paid in capital associated with prior treasury stock transactions is insufficient to cover the difference between the acquisition cost and the reissue price, this difference is recorded against retained earnings. During fiscal 2009, shares of treasury stock were issued in connection with Applieds ESPP at an aggregate value that was less than the treasury stocks acquisition price, resulting in $40million being recorded against retained earnings. |
Financial Instruments and Fair
Financial Instruments and Fair Value | |
12 Months Ended
Oct. 25, 2009 USD / shares | |
Financial Instruments and Fair Value [Abstract] | |
Financial Instruments and Fair Value | Note3 Financial Instruments and Fair Value Investments Investments by security type at October25, 2009 were as follows: Gross Gross Unrealized Unrealized Estimated Cost Gains Losses Fair Value (In thousands) U.S. Treasury and agency securities $ 653,627 $ 8,013 $ 170 $ 661,470 Obligations of states and political subdivisions 419,640 7,597 427,237 U.S. commercial paper, corporate bonds and medium-term notes 382,550 5,676 281 387,945 Other debt securities 103,193 1,430 391 104,232 Total fixed income securities 1,559,010 22,716 842 1,580,884 Publicly traded equity securities 9,572 9,439 19,011 Equity investments in privately-held companies 90,619 90,619 Total $ 1,659,201 $ 32,155 $ 842 $ 1,690,514 Investments by security type at October26, 2008 were as follows: Gross Gross Unrealized Unrealized Estimated Cost Gains Losses Fair Value (In thousands) U.S. Treasury and agency securities $ 583,979 $ 5,839 $ 1,257 $ 588,561 Obligations of states and political subdivisions 749,225 1,993 2,824 748,394 U.S. commercial paper, corporate bonds and medium-term notes 382,054 141 14,903 367,292 Other debt securities 255,777 535 11,507 244,805 Bank certificate of deposit 342 2 340 Total fixed income securities 1,971,377 8,508 30,493 1,949,392 Publicly traded equity securities 29,165 17,205 11,960 Equity investments in privately-held companies 94,748 94,748 Total $ 2,095,290 $ 8,508 $ 47,698 $ 2,056,100 Cash and cash equivalents included investments in debt and other securities of $228million at October25, 2009 and $224million at October26, 2008. Other debt securities consist primarily of investment grade asset-backed and mortgage-backed securities. Contractual maturities of investments at October25, 2009 were as follows: Estimated Cost Fair Value (In thousands) Due in one year or less $ |
Balance Sheet Detail
Balance Sheet Detail | |
12 Months Ended
Oct. 25, 2009 USD / shares | |
Balance Sheet Detail [Abstract] | |
Balance Sheet Detail | Note4 Balance Sheet Detail 2009 2008 (In thousands) Inventories Customer service spares $ 263,688 $ 526,825 Raw materials 351,824 381,457 Work-in-process 667,484 665,123 Finished goods* 344,461 413,612 $ 1,627,457 $ 1,987,017 Property, Plant and Equipment, Net Land and improvements $ 228,057 $ 226,906 Buildings and improvements 1,164,384 1,158,097 Demonstration and manufacturing equipment 654,779 695,172 Furniture, fixtures and other equipment 713,505 580,691 Construction in progress 146,232 171,086 Gross property, plant and equipment 2,906,957 2,831,952 Accumulated depreciation (1,816,524 ) (1,737,752 ) $ 1,090,433 $ 1,094,200 Accounts Payable and Accrued Expenses Accounts payable $ 477,148 $ 588,255 Compensation and employee benefits 134,949 370,409 Warranty 117,537 142,846 Dividends payable 80,455 79,846 Other accrued taxes 36,954 121,620 Restructuring reserve 31,581 20,447 Other 182,878 221,932 $ 1,061,502 $ 1,545,355 Customer Deposits and Deferred Revenue Customer deposits $ 564,412 $ 797,440 Deferred revenue 299,868 428,295 $ 864,280 $ 1,225,735 * Included in finished goods inventory is $133million at October25, 2009 and $165million at October26, 2008 of newly- introduced systems at customer locations where the sales transaction did not meet Applieds revenue recognition criteria, as set forth in Note1. |
Goodwill, Purchased Technology
Goodwill, Purchased Technology and Other Intangible Assets | |
12 Months Ended
Oct. 25, 2009 USD / shares | |
Goodwill, Purchased Technology and Other Intangible Assets [Abstract] | |
Goodwill, Purchased Technology and Other Intangible Assets | Note5 Goodwill, Purchased Technology and Other Intangible Assets Goodwill and Purchased Intangible Assets Goodwill and purchased intangible assets with indefinite useful lives are not amortized, but are reviewed for impairment annually during the fourth quarter of each fiscal year and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. For goodwill, Applied performs a two-step impairment test. In the first step, Applied compares the estimated fair value of each reporting unit to its carrying value. Applieds reporting units are consistent with the reportable segments identified in Note12, based on the manner in which Applied operates its business and the nature of those operations. Applied determines the fair value of each of its reporting units based on a weighting of income and market approaches. Under the income approach, Applied calculates the fair value of a reporting unit based on the present value of estimated future cash flows. Under the market approach, Applied estimates the fair value based on market multiples of revenue or earnings for comparable companies. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired and no further testing is performed. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then Applied would perform the second step of the impairment test in order to determine the implied fair value of the reporting units goodwill. Applied would then allocate the fair value of the reporting unit to all of the assets and liabilities of that unit, as if Applied had acquired the reporting unit in a business combination, with the fair value of the reporting unit being the purchase price. The excess of the purchase price over the carrying amounts assigned to assets and liabilities representing the implied fair value of goodwill. If Applied determined that the carrying value of a reporting units goodwill exceeded its implied fair value, Applied would record an impairment loss equal to the difference. Applied conducted these impairment tests in the fourth quarter of fiscal 2009, and the results of these tests indicated that Applieds goodwill and purchased intangible assets with indefinite useful lives were not impaired. Applieds methodology for allocating the purchase price relating to purchase acquisitions is determined through established and generally accepted valuation techniques. Goodwill is measured as the excess of the cost of the acquisition over the sum of the amounts assigned to tangible and identifiable intangible assets acquired less liabilities assumed. Applied assigns assets acquired (including goodwill) and liabilities assumed to a reporting unit as of the date of acquisition. Typically, acquisitions relate to a single reporting unit and thus do not require the allocation of goodwill to multiple reporting units. If the products obtained in an acquisition are assigned to multiple reporting units, the goodwill is distributed to the respective reporting units as part of the purchase pric |
Borrowing Facilities
Borrowing Facilities | |
12 Months Ended
Oct. 25, 2009 USD / shares | |
Borrowing Facilities [Abstract] | |
Borrowing Facilities | Note6 Borrowing Facilities Applied has credit facilities for unsecured borrowings in various currencies of up to $1.2billion, of which $1.0billion is comprised of a 5-year revolving credit agreement with a group of banks that is scheduled to expire in January 2012. This agreement provides for borrowings in United States dollars at interest rates keyed to one of the two rates selected by Applied for each advance and includes financial and other covenants with which Applied was in compliance at October25, 2009. In May 2009, Applied amended certain terms of this credit agreement, including (i)replacing the funded-debt-to-adjusted-earnings ratio financial covenant with a minimum liquidity covenant and a funded-debt-to-total-capital ratio covenant and (ii)increasing the facility fee and applicable interest rate margins on advances. Remaining credit facilities in the amount of approximately $165million are with Japanese banks. Applieds ability to borrow under these facilities is subject to bank approval at the time of the borrowing request, and any advances will be at rates indexed to the banks prime reference rate denominated in Japanese yen. No amounts were outstanding under any of the above credit facilities at October25, 2009. |
Long-Term Debt
Long-Term Debt | |
12 Months Ended
Oct. 25, 2009 USD / shares | |
Long-Term Debt [Abstract] | |
Long-Term Debt | Note7 Long-Term Debt Long-term debt outstanding at the end of the fiscal year was as follows: Fiscal Year 2009 2008 (In thousands) Japanese debt, 3.00%, maturing through 2011 $ 1,894 $ 2,644 7.125% unsecured senior notes due 2017, interest payable April 15 and October 15 200,000 200,000 201,894 202,644 Current portion (1,240 ) (1,068 ) $ 200,654 $ 201,576 Applied has debt agreements that contain financial and other covenants. These covenants require Applied to maintain certain minimum financial ratios. At October25, 2009, Applied was in compliance with all such covenants. Aggregate debt maturities at October25, 2009 were: $1million in fiscal 2010, $1million in fiscal 2011, and $200million thereafter. |
Restructuring and Asset Impairm
Restructuring and Asset Impairments | |
12 Months Ended
Oct. 25, 2009 USD / shares | |
Restructuring and Asset Impairments [Abstract] | |
Restructuring and Asset Impairments | Note8 Restructuring and Asset Impairments During the first quarter of fiscal 2009, Applied announced a restructuring program to reduce its global workforce by approximately 1,800 positions. During the second quarter of fiscal 2009, Applied expanded the scope of the restructuring program by approximately 200 positions. During fiscal 2009, Applied recognized restructuring and asset impairment charges of $156million, primarily consisting of $143million in restructuring charges associated with this program and $15million in asset impairments. The restructuring charges consisted of employee-related costs to reduce the Companys workforce through a combination of attrition, voluntary separation and other workforce reduction programs. During fiscal 2008, Applied recognized restructuring charges of $40million, of which $29million was associated with a global cost reduction plan announced in fiscal 2008, and $11million with a plan announced in fiscal 2007. During fiscal 2007, Applied recognized restructuring and asset impairment charges of $26million. The fiscal 2007 charge consisted of $21million in restructuring charges and $9million in asset impairments, associated with the decision to cease development of beamline implant products, offset by adjustment to restructuring reserves. Changes in restructuring reserves related to severance under the restructuring program announced in the first quarter of fiscal 2009 were as follows: Severance (In thousands) Provision for restructuring reserves $ 144,901 Consumption of reserves (116,471 ) Adjustment of restructuring reserves (2,190 ) Balance, October25, 2009 $ 26,240 Changes in restructuring reserves for fiscal 2009, 2008, and 2007 related to other restructuring plans and facilities realignment programs initiated in prior periods were as follows: Severance Facilities Total (In thousands) Balance, October29, 2006 $ $ 24,731 $ 24,731 Provision for restructuring reserves 19,992 1,105 21,097 Consumption of reserves (10,902 ) (8,653 ) (19,555 ) Adjustment of restructuring reserves (3,732 ) (3,732 ) Foreign currency changes 649 3 652 Balance, October28, 2007 9,739 13,454 23,193 Provision for restructuring reserves 38,670 11,399 50,069 Consumption of reserves (32,174 ) (8,428 ) (40,602 ) Adjustment of restructuring reserves (9,733 ) (9,733 ) Foreign currency changes (800 ) (1,680 ) (2,480 ) Balance, October26, 2008 5,702 14,745 20,447 Provision for restructuring reserves 114 114 Consumption of reserves (4,794 ) |
Stockholders' Equity
Stockholders' Equity | |
10/27/2008 - 10/25/2009
USD / shares | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | Note9 Stockholders Equity Accumulated Other Comprehensive Loss See the Consolidated Statements of Stockholders Equity for the components of comprehensive income (loss). Components of accumulated other comprehensive loss, on an after-tax basis where applicable, were as follows: Fiscal Year 2009 2008 (In thousands) Pension liability $ (32,164 ) $ (19,672 ) Retiree medical benefits 15 734 Unrealized gain (loss) on investments, net 19,972 (24,984 ) Unrealized gain on derivative instruments qualifying as cash flow hedges 310 8,039 Cumulative translation adjustments 10,187 9,313 $ (1,680 ) $ (26,570 ) For further details on derivative instruments, see Note3 of the Notes to Consolidated Condensed Financial Statements. Stock Repurchase Program On September15, 2006, Applieds Board of Directors approved a stock repurchase program for up to $5.0billion in repurchases over the three years ending in September 2009. Under this authorization, Applied implemented a systematic stock repurchase program and also made supplemental repurchases of its common stock from time to time in the open market, depending on market conditions, stock price and other factors, for a total of $2.7billion. In November 2008, Applied announced that it was suspending stock repurchases in light of uncertain global economic and market conditions. In fiscal 2009, prior to such suspension, Applied repurchased 1,942,000shares of its common stock at an average price of $11.80 per share for a total cash outlay of $23million. In fiscal 2008, Applied repurchased 83,163,000shares of its common stock at an average price of $18.04 per share for a total cash outlay of $1.5billion. In fiscal 2007, Applied repurchased 60,561,000shares of its common stock at an average price of $19.81 per share for a total cash outlay of $1.3billion. Dividends During fiscal 2009, Applieds Board of Directors declared four quarterly cash dividends in the amount of $0.06 per share each quarter. The fourth quarterly cash dividend declared in fiscal 2009 was paid on December3, 2009 to stockholders of record as of November12, 2009. During fiscal 2008, Applieds Board of Directors declared four quarterly cash dividends in the amount of $0.06 per share each. During fiscal 2007, Applieds Board of Directors declared one quarterly cash dividend in the amount of $0.05 per share and three quarterly cash dividends in the amount of $0.06 per share each. Dividends declared during fiscal 2009, 2008 and 2007 amounted to $320million, $325million and $306million, respectively. Applied currently anticipates that it will continue to pay cash dividends on a quarterly basis in the future, although the declaration of any future cash dividend is at the discretion of the Board of Directors and will depend on Applieds financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that cash divid |
Employee Benefit Plans
Employee Benefit Plans | |
12 Months Ended
Oct. 25, 2009 USD / shares | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans | Note10 Employee Benefit Plans Stock Options Applied grants options to purchase shares of its common stock to employees and consultants, at future dates, at the fair market value on the date of grant. Most options are scheduled to vest over four years, and expire no later than seven years from the grant date. There were 151,809,000shares available for grant at October25, 2009, 167,289,000shares available for grant at October26, 2008, and 156,322,624shares available for grant at October28, 2007. Stock option activity was as follows: 2009 2008 2007 Weighted Weighted Weighted Average Average Average Exercise Exercise Exercise Shares Price Shares Price Shares Price (In thousands, except per share amounts) Outstanding, beginning of year 60,757 $ 17.71 94,901 $ 17.81 163,214 $ 18.83 Granted and assumed 24,514 $ 8.58 7 $ 19.38 311 $ 17.98 Exercised (797 ) $ 11.44 (19,004 ) $ 17.27 (46,885 ) $ 17.86 Canceled (11,373 ) $ 17.73 (15,147 ) $ 18.86 (21,739 ) $ 25.29 Outstanding, end of year 73,101 $ 14.72 60,757 $ 17.71 94,901 $ 17.81 Exercisable, end of year 49,727 $ 17.53 57,671 $ 17.73 83,178 $ 17.84 The following table summarizes information with respect to options outstanding and exercisable at October25, 2009: Options Outstanding Options Exercisable Weighted Weighted Average Weighted Average Remaining Aggregate Average Aggregate Range of Number of Exercise Contractual Intrinsic Number of Exercise Intrinsic Exercise Prices Shares Price Life Value Shares Price Value (In thousands) (In years) (In thousands) (In thousands) (In thousands) $0.01 $9.99 23,171 $ 8.58 4.33 $ 101,311 241 $ 8.27 $ 1,125 $10.00 $19.99 35,123 $ 15.72 1.82 7,573 34,679 $ 15.71 7,516 $20.00 $29.99 14,798 $ 21.93 1.14 14,798 $ 21.93 $30.00 $59.99 9 |
Income Taxes
Income Taxes | |
12 Months Ended
Oct. 25, 2009 USD / shares | |
Income Taxes [Abstract] | |
Income Taxes | Note11 Income Taxes The components of income (loss) from operations before income taxes were as follows: Fiscal Year 2009 2008 2007 (In thousands) U.S. $ (555,456 ) $ 1,021,961 $ 2,047,318 Foreign 69,653 386,757 392,335 $ (485,803 ) $ 1,408,718 $ 2,439,653 The components of the provision (benefit) for income taxes were as follows: Fiscal Year 2009 2008 2007 (In thousands) Current: U.S. $ (196,643 ) $ 248,308 $ 590,289 Foreign 22,858 182,803 99,472 State (36,683 ) 5,314 8,054 (210,468 ) 436,425 697,815 Deferred: U.S. 25,351 61,469 (17,314 ) Foreign 10,347 (43,505 ) 16,888 State (5,706 ) (6,417 ) 32,068 29,992 11,547 31,642 $ (180,476 ) $ 447,972 $ 729,457 A reconciliation between the statutory U.S.federal income tax rate of 35percent and Applieds actual effective income tax rate is as follows: Fiscal Year 2009 2008 2007 Tax provision at U.S. statutory rate (35 )% 35.0 % 35.0 % Favorable resolutions from audits of prior years income tax filings (2.9 ) (1.0 ) Effect of foreign operations taxed at various rates (1.0 ) (2.0 ) State income taxes, net of federal benefit (3.9 ) 0.7 1.1 Research and other tax credits (2.0 ) (1.1 ) (0.6 ) Export sales/production benefit (2.0 ) (1.3 ) Equity method investment loss/impairment 5.7 0.9 0.5 Equity compensation 2.4 1.0 0.5 Other (1.5 ) (1.7 ) (2.3 ) (37.2 )% 31.8 % 29.9 % Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of deferred income tax assets and liabilities are as follows: 2009 2008 (In thousands) Deferred tax assets: Inventory reserves and basis difference $ 102,180 $ 103,428 Installation and warranty reserves 44,802 |
Industry Segment and Geographic
Industry Segment and Geographic Operations | |
12 Months Ended
Oct. 25, 2009 USD / shares | |
Industry Segment and Geographic Operations [Abstract] | |
Industry Segment and Geographic Operations | Note12 Industry Segment and Geographic Operations Applieds four reportable segments are: Silicon, Applied Global Services, Display, and Energy and Environmental Solutions. Applieds chief operating decision-maker has been identified as the President and Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Segment information is presented based upon Applieds management organization structure as of October25, 2009 and the distinctive nature of each segment. Future changes to this internal financial structure may result in changes to the Companys reportable segments. Each reportable segment is separately managed and has separate financial results that are reviewed by Applieds chief operating decision-maker. Each reportable segment contains closely related products that are unique to the particular segment. Segment operating income is determined based upon internal performance measures used by Applieds chief operating decision-maker. Applied derives the segment results directly from its internal management reporting system. The accounting policies Applied uses to derive reportable segment results are substantially the same as those used for external reporting purposes. Management measures the performance of each reportable segment based upon several metrics including orders, net sales and operating income. Management uses these results to evaluate the performance of, and to assign resources to, each of the reportable segments. Applied does not allocate to its reportable segments certain operating expenses that it manages separately at the corporate level, which include costs related to equity-based compensation and certain components of variable compensation, the global sales organization, corporate functions (certain management, finance, legal, human resources, marketing, and research, development and engineering), and unabsorbed information technology and occupancy. In addition, Applied does not allocate to its reportable segments restructuring and asset impairment charges and any associated adjustments related to restructuring actions. Segment operating income excludes interest income/expense and other financial charges and income taxes according to how a particular reportable segments management is measured. Management does not consider the unallocated costs in measuring the performance of the reportable segments. The Silicon segment includes semiconductor capital equipment for etch, rapid thermal processing, deposition, chemical mechanical planarization, and metrology and inspection. The Applied Global Services segment includes technically differentiated products and services to improve operating efficiency, reduce operating costs and lessen the environmental impact of semiconductor, display and solar customers factories. Applied Global Services products consist of spares, services, certain earlier generation products, and remanufactured equipment. Customer demand for these products and services is fulfilled through a global distribution system with trained service engineers located in close proximity to custo |
Commitments and Contingencies
Commitments and Contingencies | |
12 Months Ended
Oct. 25, 2009 USD / shares | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note13 Commitments and Contingencies Leases Applied leases some of its facilities and equipment under non-cancelable operating leases and has options to renew most leases, with rentals to be negotiated. Total rent expense was $64million for fiscal 2009, $68million for fiscal 2008, and $62million for fiscal 2007. Future minimum lease payments at October25, 2009 totaled $143million and were: $43million for fiscal 2010; $29million for fiscal 2011; $20million for fiscal 2012; $11million for fiscal 2013; $8million for fiscal 2014; and $32million collectively for all periods thereafter. Discounted Letters of Credit Applied discounts letters of credit through various financial institutions. Under these agreements, Applied discounted letters of credit in the amounts of $299million for fiscal 2009, $167million for fiscal 2008 and $431million for fiscal 2007. Discounting fees were not material for all periods presented. In fiscal 2009 and 2008, Applied factored accounts receivable and discounted promissory notes totaling $43million and $138million, respectively. Warranty Applied products are generally sold with a 12-month warranty period following installation. The provision for the estimated cost of warranty is recorded when revenue is recognized. Parts and labor are covered under the terms of the warranty agreement. The warranty provision is based on historical experience by product, configuration and geographic region. Changes in the warranty reserves were as follows: 2009 2008 (In thousands) Beginning balance $ 142,846 $ 184,271 Provisions for warranty 92,976 138,229 Consumption of reserves (118,285 ) (179,654 ) Ending balance $ 117,537 $ 142,846 As noted above, Applieds products are generally sold with a 12-month warranty. Accordingly, current warranty provisions are related to the current years net sales, and warranty consumption is associated with current and prior years net sales. Guarantees During the ordinary course of business, Applied provides standby letters of credit or other guarantee instruments to certain parties as required for certain transactions initiated by either Applied or its subsidiaries. As of October25, 2009, the maximum potential amount of future payments that Applied could be required to make under these guarantee agreements was approximately $83million. Applied has not recorded any liability in connection with these guarantee arrangements below that required to appropriately account for the underlying transaction being guaranteed. Applied does not believe, based on historical experience and information currently available, that it is probable that any amounts will be required to be paid under these guarantee arrangements. Applied also has agreements with various banks to facilitate subsidiary banking operations worldwide, including overdraft arrangements, issuance of bank guarantees, and letters of credit. As of October25, 2009, Applied Materials Inc. has provided pa |
Business Combinations
Business Combinations | |
12 Months Ended
Oct. 25, 2009 USD / shares | |
Business Combinations [Abstract] | |
Business Combinations | Note14 Business Combinations On January31, 2008, Applied acquired all of the outstanding shares of Baccini, a privately-held company based in Italy, for a purchase price of $215million in cash, net of cash and marketable securities acquired. The acquired business is a leading supplier of automated metallization and test systems for manufacturing c-Si photovoltaic cells. In connection with this acquisition, Applied recorded goodwill of $158million and intangible assets of $130million. Of the $130million of acquired intangible assets, $61million was assigned to acquired backlog (to be amortized over 2years), $34million was assigned to customer relationships (to be amortized over 9years), $27million was assigned to purchased technology (to be amortized over 7years), $6million was assigned to covenants not to compete (to be amortized over 2years), and $3million was assigned to trademarks and tradenames (to be amortized over 7years). The allocation of the purchase price was based on estimates of the fair value of the assets acquired and is subject to adjustment upon finalization of the purchase price allocation. The acquired business is reported under the Energy and Environmental Solutions segment. On November9, 2007, Applied purchased from Edwards Vacuum, Inc. certain assets of its Kachina semiconductor equipment parts cleaning and refurbishment business for $19million. The acquisition expanded Applieds existing Chamber Performance Services network of facilities that provide customers worldwide with technology and support for maintaining their chamber components. In connection with this acquisition, Applied recorded goodwill of $13million and an intangible asset of $3million (customer relationships, to be amortized over 13years). The acquired business is reported under the Applied Global Services segment. On August23, 2007, Applied acquired all of the outstanding shares of Switzerland-based HCT for $463million in cash, net of cash acquired. The acquired business is a leading supplier of precision wafering systems used principally in manufacturing c-Si substrates for the solar industry. In connection with this acquisition, Applied recorded goodwill of $354million and other intangible assets of $180million. Of the $180million of acquired intangible assets, $59million was assigned to purchased technology (to be amortized over 11years), $59million was assigned to customer relationships (to be amortized over 7years), $47million was assigned to acquired backlog (to be amortized over 1year), $8million was assigned to trademarks and tradenames (to be amortized over 13years), and $7million was assigned to covenants not to compete (to be amortized over 3years). The acquired business is reported under the Energy and Environmental Solutions segment. On March30, 2007, Applied purchased Brooks Software, a division of Brooks Automation, Inc., for $137million in cash. The acquired business is a leading provider of factory management and control software to the semiconductor and flat panel display industries. The products complement Applieds existing software applications and enable Applied to offer customers a comprehensive compu |
Subsequent Events Through Decem
Subsequent Events Through December 11, 2009 | |
12 Months Ended
Oct. 25, 2009 USD / shares | |
Subsequent Events Through December 11, 2009 [Abstract] | |
Subsequent Events Through December 11, 2009 | Note15 Subsequent Events Through December11, 2009 On November11, 2009, Applied announced that it will implement a restructuring program beginning in the first quarter of fiscal 2010. As part of this program, Applied plans to reduce its global workforce as of October25, 2009 by approximately 1,300 to 1,500 positions, or 10 to 12percent, over a period of 18months, consistent with local legal requirements and in consultation with employee works councils and other employee representatives, as applicable. The Company anticipates the pre-tax cost of the plan to be between $100million and $125million. On November16, 2009, Applied entered into an agreement to acquire all of the outstanding shares of Semitool, Inc. (Semitool), a public company based in the state of Montana, for $11 per share in an all-cash tender offer (the Offer). Semitool is a leading supplier of electrochemical plating and wafer surface preparation equipment used by semiconductor packaging and manufacturing companies globally. Under the terms of the agreement approved by the Boards of Directors of both companies, Applied will pay an aggregate purchase price of approximately $364million based on the fully-diluted capitalization of Semitool upon closing the acquisition (the Merger). The acquisition will be conducted through a tender offer for all of the outstanding shares of Semitool and is conditioned on the occurrence or absence of certain events, including the tender of at least 66.67% of Semitools outstanding stock on a fully-diluted basis, as well as regulatory approvals and other customary closing conditions. Subsequent to announcement of the Offer, three purported class action lawsuits were filed in state court in the County of Flathead, State of Montana, against Semitool, Semitools directors, Applied and Applieds acquisition subsidiary. The actions seek certification of a class of all holders of Semitool common stock (except the defendants and their affiliates). The complaints allege, among other things, that Semitools directors breached their fiduciary duties by failing to maximize shareholder value, securing benefits for certain defendants at the expense or to the detriment of Semitools public shareholders, discouraging and/or inhibiting alternative offers, and failing to disclose material nonpublic information, and that Applied aided and abetted such alleged breaches. The actions seek injunctive relief enjoining the defendants from consummating the Offer and the Merger, damages, and attorneys fees. Applied believes the claims alleged against it are without merit and intends to defend against them vigorously. |
Unaudited Quarterly Consolidate
Unaudited Quarterly Consolidated Financial Data | |
12 Months Ended
Oct. 25, 2009 USD / shares | |
Unaudited Quarterly Consolidated Financial Data [Abstract] | |
Unaudited Quarterly Consolidated Financial Data | Note16 Unaudited Quarterly Consolidated Financial Data Fiscal Quarter First Second Third Fourth Fiscal Year (In thousands, except per share amounts) 2009: Net sales $ 1,333,396 $ 1,020,077 $ 1,133,740 $ 1,526,394 $ 5,013,607 Gross margin $ 391,576 $ 155,519 $ 324,874 $ 558,836 $ 1,430,805 Net income (loss) $ (132,934 ) $ (255,390 ) $ (54,865 ) $ 137,862 $ (305,327 ) Earnings (loss) per diluted share (0.10 ) $ (0.19 ) $ (0.04 ) $ 0.10 $ (0.23 ) 2008: Net sales $ 2,087,397 $ 2,149,998 $ 1,848,168 $ 2,043,677 $ 8,129,240 Gross margin $ 934,981 $ 966,828 $ 742,314 $ 798,705 $ 3,442,828 Net income $ 262,376 $ 302,507 $ 164,768 $ 231,095 $ 960,746 Earnings per diluted share $ 0.19 $ 0.22 $ 0.12 $ 0.17 $ 0.70 |