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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
|
94-1655526
|
(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
|
|
Accelerated filer
¨
|
|
|
|
Non-accelerated filer
¨
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
¨
|
|
|
Page
|
|
PART I. FINANCIAL INFORMATION
|
|
Item 1:
|
||
|
||
|
||
|
||
|
||
|
||
|
||
Item 2:
|
||
Item 3:
|
||
Item 4:
|
||
|
|
|
|
PART II. OTHER INFORMATION
|
|
Item 1:
|
||
Item 1A:
|
||
Item 2:
|
||
Item 6:
|
||
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
April 27,
2014 |
|
April 28,
2013 |
|
April 27,
2014 |
|
April 28,
2013 |
||||||||
|
(Unaudited)
|
||||||||||||||
|
(In millions, except per share amounts)
|
||||||||||||||
Net sales
|
$
|
2,353
|
|
|
$
|
1,973
|
|
|
$
|
4,543
|
|
|
$
|
3,546
|
|
Cost of products sold
|
1,352
|
|
|
1,165
|
|
|
2,651
|
|
|
2,156
|
|
||||
Gross margin
|
1,001
|
|
|
808
|
|
|
1,892
|
|
|
1,390
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research, development and engineering
|
355
|
|
|
344
|
|
|
711
|
|
|
648
|
|
||||
Marketing and selling
|
107
|
|
|
118
|
|
|
216
|
|
|
223
|
|
||||
General and administrative
|
152
|
|
|
126
|
|
|
241
|
|
|
251
|
|
||||
Impairment of goodwill and intangible assets
|
—
|
|
|
278
|
|
|
—
|
|
|
278
|
|
||||
Restructuring charges and asset impairments
|
—
|
|
|
10
|
|
|
7
|
|
|
19
|
|
||||
Total operating expenses
|
614
|
|
|
876
|
|
|
1,175
|
|
|
1,419
|
|
||||
Income (loss) from operations
|
387
|
|
|
(68
|
)
|
|
717
|
|
|
(29
|
)
|
||||
Interest expense
|
23
|
|
|
24
|
|
|
48
|
|
|
48
|
|
||||
Interest and other income, net
|
1
|
|
|
2
|
|
|
11
|
|
|
5
|
|
||||
Income (loss) before income taxes
|
365
|
|
|
(90
|
)
|
|
680
|
|
|
(72
|
)
|
||||
Provision for income taxes
|
103
|
|
|
39
|
|
|
165
|
|
|
23
|
|
||||
Net income (loss)
|
$
|
262
|
|
|
$
|
(129
|
)
|
|
$
|
515
|
|
|
$
|
(95
|
)
|
Earnings (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.22
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.43
|
|
|
$
|
(0.08
|
)
|
Diluted
|
$
|
0.21
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.42
|
|
|
$
|
(0.08
|
)
|
Weighted average number of shares:
|
|
|
|
|
|
|
|
||||||||
Basic
|
1,216
|
|
|
1,203
|
|
|
1,211
|
|
|
1,200
|
|
||||
Diluted
|
1,229
|
|
|
1,203
|
|
|
1,227
|
|
|
1,200
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
April 27,
2014 |
|
April 28,
2013 |
|
April 27,
2014 |
|
April 28,
2013 |
||||||||
|
(Unaudited)
|
||||||||||||||
|
(In millions)
|
||||||||||||||
Net income (loss)
|
$
|
262
|
|
|
$
|
(129
|
)
|
|
$
|
515
|
|
|
$
|
(95
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Change in unrealized net gain on investments
|
3
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||
Change in unrealized net gain on derivative investments
|
(1
|
)
|
|
2
|
|
|
(2
|
)
|
|
7
|
|
||||
Change in defined and postretirement benefit plans
|
—
|
|
|
1
|
|
|
—
|
|
|
(2
|
)
|
||||
Change in cumulative translation adjustments
|
1
|
|
|
(2
|
)
|
|
(1
|
)
|
|
(5
|
)
|
||||
Other comprehensive income (loss), net of tax
|
3
|
|
|
8
|
|
|
(3
|
)
|
|
7
|
|
||||
Comprehensive income (loss)
|
$
|
265
|
|
|
$
|
(121
|
)
|
|
$
|
512
|
|
|
$
|
(88
|
)
|
|
April 27,
2014 |
|
October 27,
2013 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,453
|
|
|
$
|
1,711
|
|
Short-term investments
|
146
|
|
|
180
|
|
||
Accounts receivable, net
|
1,615
|
|
|
1,633
|
|
||
Inventories
|
1,564
|
|
|
1,413
|
|
||
Other current assets
|
623
|
|
|
705
|
|
||
Total current assets
|
6,401
|
|
|
5,642
|
|
||
Long-term investments
|
836
|
|
|
1,005
|
|
||
Property, plant and equipment, net
|
855
|
|
|
850
|
|
||
Goodwill
|
3,294
|
|
|
3,294
|
|
||
Purchased technology and other intangible assets, net
|
1,018
|
|
|
1,103
|
|
||
Deferred income taxes and other assets
|
151
|
|
|
149
|
|
||
Total assets
|
$
|
12,555
|
|
|
$
|
12,043
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
1,663
|
|
|
$
|
1,649
|
|
Customer deposits and deferred revenue
|
999
|
|
|
794
|
|
||
Total current liabilities
|
2,662
|
|
|
2,443
|
|
||
Long-term debt
|
1,947
|
|
|
1,946
|
|
||
Other liabilities
|
471
|
|
|
566
|
|
||
Total liabilities
|
5,080
|
|
|
4,955
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Common stock
|
12
|
|
|
12
|
|
||
Additional paid-in capital
|
6,269
|
|
|
6,151
|
|
||
Retained earnings
|
12,759
|
|
|
12,487
|
|
||
Treasury stock
|
(11,524
|
)
|
|
(11,524
|
)
|
||
Accumulated other comprehensive loss
|
(41
|
)
|
|
(38
|
)
|
||
Total stockholders’ equity
|
7,475
|
|
|
7,088
|
|
||
Total liabilities and stockholders’ equity
|
$
|
12,555
|
|
|
$
|
12,043
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Treasury Stock
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
Shares
|
|
Amount
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||
Balance at October 27, 2013
|
1,204
|
|
|
$
|
12
|
|
|
$
|
6,151
|
|
|
$
|
12,487
|
|
|
717
|
|
|
$
|
(11,524
|
)
|
|
$
|
(38
|
)
|
|
$
|
7,088
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
515
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
515
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
||||||
Dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(243
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(243
|
)
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
88
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
88
|
|
||||||
Issuance under stock plans, net of a tax benefit of $25 and other
|
13
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
||||||
Balance at April 27, 2014
|
1,217
|
|
|
$
|
12
|
|
|
$
|
6,269
|
|
|
$
|
12,759
|
|
|
717
|
|
|
$
|
(11,524
|
)
|
|
$
|
(41
|
)
|
|
$
|
7,475
|
|
|
Six Months Ended
|
||||||
|
April 27,
2014 |
|
April 28,
2013 |
||||
|
|
|
|
||||
|
(Unaudited)
|
||||||
|
(In millions)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
515
|
|
|
$
|
(95
|
)
|
Adjustments required to reconcile net income (loss) to cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
188
|
|
|
212
|
|
||
Impairment of goodwill and intangible assets
|
—
|
|
|
278
|
|
||
Restructuring charges and asset impairments
|
7
|
|
|
19
|
|
||
Unrealized gain on derivative associated with announced business combination
|
(1
|
)
|
|
—
|
|
||
Share-based compensation
|
88
|
|
|
81
|
|
||
Other
|
(11
|
)
|
|
(46
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
18
|
|
|
(54
|
)
|
||
Inventories
|
(151
|
)
|
|
(46
|
)
|
||
Other assets
|
67
|
|
|
(29
|
)
|
||
Accounts payable and accrued expenses
|
(71
|
)
|
|
(96
|
)
|
||
Customer deposits and deferred revenue
|
205
|
|
|
(16
|
)
|
||
Other liabilities
|
(45
|
)
|
|
32
|
|
||
Cash provided by operating activities
|
809
|
|
|
240
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(113
|
)
|
|
(101
|
)
|
||
Proceeds from sales and maturities of investments
|
521
|
|
|
603
|
|
||
Purchases of investments
|
(324
|
)
|
|
(310
|
)
|
||
Cash provided by investing activities
|
84
|
|
|
192
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from common stock issuances and other
|
91
|
|
|
85
|
|
||
Common stock repurchases
|
—
|
|
|
(148
|
)
|
||
Payments of dividends to stockholders
|
(242
|
)
|
|
(216
|
)
|
||
Cash used in financing activities
|
(151
|
)
|
|
(279
|
)
|
||
Increase in cash and cash equivalents
|
742
|
|
|
153
|
|
||
Cash and cash equivalents — beginning of year
|
1,711
|
|
|
1,392
|
|
||
Cash and cash equivalents — end of year
|
$
|
2,453
|
|
|
$
|
1,545
|
|
Supplemental cash flow information:
|
|
|
|
||||
Cash payments for income taxes
|
$
|
59
|
|
|
$
|
154
|
|
Cash refunds from income taxes
|
$
|
12
|
|
|
$
|
67
|
|
Cash payments for interest
|
$
|
46
|
|
|
$
|
46
|
|
Note 2
|
Earnings (loss) Per Share
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
April 27,
2014 |
|
April 28,
2013 |
|
April 27,
2014 |
|
April 28,
2013 |
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions, except per share amounts)
|
||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
262
|
|
|
$
|
(129
|
)
|
|
$
|
515
|
|
|
$
|
(95
|
)
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
1,216
|
|
|
1,203
|
|
|
1,211
|
|
|
1,200
|
|
||||
Effect of dilutive stock options, restricted stock units and employee stock purchase plan shares
|
13
|
|
|
—
|
|
|
16
|
|
|
—
|
|
||||
Denominator for diluted earnings (loss) per share
|
1,229
|
|
|
1,203
|
|
|
1,227
|
|
|
1,200
|
|
||||
Basic earnings (loss) per share
|
$
|
0.22
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.43
|
|
|
$
|
(0.08
|
)
|
Diluted earnings (loss) per share
|
$
|
0.21
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.42
|
|
|
$
|
(0.08
|
)
|
Potentially dilutive securities
|
—
|
|
|
50
|
|
|
—
|
|
|
50
|
|
Note 3
|
Cash, Cash Equivalents and Investments
|
April 27, 2014
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Cash
|
$
|
691
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
691
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
1,762
|
|
|
—
|
|
|
—
|
|
|
1,762
|
|
||||
Total Cash equivalents
|
1,762
|
|
|
—
|
|
|
—
|
|
|
1,762
|
|
||||
Total Cash and Cash equivalents
|
$
|
2,453
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,453
|
|
Short-term and long-term investments:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and agency securities
|
$
|
68
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
68
|
|
Non-U.S. government securities*
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||
Municipal securities
|
378
|
|
|
2
|
|
|
—
|
|
|
380
|
|
||||
Commercial paper, corporate bonds and medium-term notes
|
151
|
|
|
1
|
|
|
—
|
|
|
152
|
|
||||
Asset-backed and mortgage-backed securities
|
235
|
|
|
1
|
|
|
2
|
|
|
234
|
|
||||
Total fixed income securities
|
847
|
|
|
4
|
|
|
2
|
|
|
849
|
|
||||
Publicly traded equity securities
|
22
|
|
|
34
|
|
|
—
|
|
|
56
|
|
||||
Equity investments in privately-held companies
|
77
|
|
|
—
|
|
|
—
|
|
|
77
|
|
||||
Total short-term and long-term investments
|
$
|
946
|
|
|
$
|
38
|
|
|
$
|
2
|
|
|
$
|
982
|
|
Total Cash, Cash equivalents and Investments
|
$
|
3,399
|
|
|
$
|
38
|
|
|
$
|
2
|
|
|
$
|
3,435
|
|
October 27, 2013
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Cash
|
$
|
611
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
611
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
1,095
|
|
|
—
|
|
|
—
|
|
|
1,095
|
|
||||
Municipal securities
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Total Cash equivalents
|
1,100
|
|
|
—
|
|
|
—
|
|
|
1,100
|
|
||||
Total Cash and Cash equivalents
|
$
|
1,711
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,711
|
|
Short-term and long-term investments:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and agency securities
|
$
|
170
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
170
|
|
Non-U.S. government securities
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||
Municipal securities
|
379
|
|
|
2
|
|
|
—
|
|
|
381
|
|
||||
Commercial paper, corporate bonds and medium-term notes
|
218
|
|
|
2
|
|
|
1
|
|
|
219
|
|
||||
Asset-backed and mortgage-backed securities
|
268
|
|
|
2
|
|
|
2
|
|
|
268
|
|
||||
Total fixed income securities
|
1,046
|
|
|
6
|
|
|
3
|
|
|
1,049
|
|
||||
Publicly traded equity securities
|
27
|
|
|
33
|
|
|
—
|
|
|
60
|
|
||||
Equity investments in privately-held companies
|
76
|
|
|
—
|
|
|
—
|
|
|
76
|
|
||||
Total short-term and long-term investments
|
$
|
1,149
|
|
|
$
|
39
|
|
|
$
|
3
|
|
|
$
|
1,185
|
|
Total Cash, Cash equivalents and Investments
|
$
|
2,860
|
|
|
$
|
39
|
|
|
$
|
3
|
|
|
$
|
2,896
|
|
|
Cost
|
|
Estimated
Fair Value
|
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Due in one year or less
|
$
|
124
|
|
|
$
|
124
|
|
Due after one through five years
|
488
|
|
|
490
|
|
||
No single maturity date**
|
334
|
|
|
368
|
|
||
|
$
|
946
|
|
|
$
|
982
|
|
Note 4
|
Fair Value Measurements
|
•
|
Level 1 — Quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
|
•
|
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
|
April 27, 2014
|
|
October 27, 2013
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Money market funds
|
$
|
1,762
|
|
|
$
|
—
|
|
|
$
|
1,762
|
|
|
$
|
1,095
|
|
|
$
|
—
|
|
|
$
|
1,095
|
|
U.S. Treasury and agency securities
|
32
|
|
|
36
|
|
|
68
|
|
|
66
|
|
|
104
|
|
|
170
|
|
||||||
Non-U.S. government securities
|
—
|
|
|
15
|
|
|
15
|
|
|
—
|
|
|
11
|
|
|
11
|
|
||||||
Municipal securities
|
—
|
|
|
380
|
|
|
380
|
|
|
—
|
|
|
386
|
|
|
386
|
|
||||||
Commercial paper, corporate bonds and medium-term notes
|
—
|
|
|
152
|
|
|
152
|
|
|
—
|
|
|
219
|
|
|
219
|
|
||||||
Asset-backed and mortgage-backed securities
|
—
|
|
|
234
|
|
|
234
|
|
|
—
|
|
|
268
|
|
|
268
|
|
||||||
Publicly traded equity securities
|
56
|
|
|
—
|
|
|
56
|
|
|
60
|
|
|
—
|
|
|
60
|
|
||||||
Foreign exchange derivative assets
|
—
|
|
|
19
|
|
|
19
|
|
|
—
|
|
|
20
|
|
|
20
|
|
||||||
Total
|
$
|
1,850
|
|
|
$
|
836
|
|
|
$
|
2,686
|
|
|
$
|
1,221
|
|
|
$
|
1,008
|
|
|
$
|
2,229
|
|
Note 5
|
Derivative Instruments and Hedging Activities
|
|
|
|
Three Months Ended April 27, 2014
|
|
Three Months Ended April 28, 2013
|
||||||||||||||||||||
Effective Portion
|
|
Ineffective Portion and Amount
Excluded from Effectiveness Testing |
|
Effective Portion
|
|
Ineffective Portion and Amount
Excluded from Effectiveness Testing |
|||||||||||||||||||
|
Location of Gain or
(Loss) Reclassified from AOCI into Income |
|
Gain or
(Loss) Recognized in AOCI |
|
Gain or (Loss)
Reclassified from AOCI into Income |
|
Gain or (Loss)
Recognized in Income |
|
Gain or
(Loss) Recognized in AOCI |
|
Gain or (Loss)
Reclassified from AOCI into Income |
|
Gain or (Loss)
Recognized in Income |
||||||||||||
|
|
|
(In millions)
|
||||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts
|
Cost of products sold
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
(2
|
)
|
|
$
|
13
|
|
|
$
|
6
|
|
|
$
|
—
|
|
Foreign exchange contracts
|
General and administrative
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
(1
|
)
|
||||||
Total
|
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
(2
|
)
|
|
$
|
13
|
|
|
$
|
9
|
|
|
$
|
(1
|
)
|
|
|
|
Six Months Ended April 27, 2014
|
|
Six Months Ended April 28, 2013
|
||||||||||||||||||||
Effective Portion
|
|
Ineffective Portion and Amount
Excluded from Effectiveness Testing |
|
Effective Portion
|
|
Ineffective Portion and Amount
Excluded from Effectiveness Testing |
|||||||||||||||||||
|
Location of Gain or
(Loss) Reclassified from AOCI into Income |
|
Gain or
(Loss) Recognized in AOCI |
|
Gain or (Loss)
Reclassified from AOCI into Income |
|
Gain or (Loss)
Recognized in Income |
|
Gain or
(Loss) Recognized in AOCI |
|
Gain or (Loss)
Reclassified from AOCI into Income |
|
Gain or (Loss)
Recognized in Income |
||||||||||||
|
|
|
(In millions)
|
||||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts
|
Cost of products sold
|
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
(2
|
)
|
|
$
|
22
|
|
|
$
|
9
|
|
|
$
|
(1
|
)
|
Foreign exchange contracts
|
General and administrative
|
|
—
|
|
|
3
|
|
|
(1
|
)
|
|
—
|
|
|
3
|
|
|
(1
|
)
|
||||||
Total
|
|
|
$
|
4
|
|
|
$
|
7
|
|
|
$
|
(3
|
)
|
|
$
|
22
|
|
|
$
|
12
|
|
|
$
|
(2
|
)
|
|
|
|
Amount of Gain or (Loss)
Recognized in Income
|
||||||||||||||
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||||||
Location of Gain or
(Loss) Recognized in Income |
|
April 27, 2014
|
|
April 28, 2013
|
|
April 27, 2014
|
|
April 28, 2013
|
|||||||||
|
|
|
(In millions)
|
||||||||||||||
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
General and
administrative |
|
$
|
(26
|
)
|
|
$
|
17
|
|
|
$
|
13
|
|
|
$
|
29
|
|
Total
|
|
|
$
|
(26
|
)
|
|
$
|
17
|
|
|
$
|
13
|
|
|
$
|
29
|
|
Note 7
|
Balance Sheet Detail
|
|
April 27,
2014 |
|
October 27,
2013 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Inventories
|
|
|
|
||||
Customer service spares
|
$
|
285
|
|
|
$
|
274
|
|
Raw materials
|
379
|
|
|
325
|
|
||
Work-in-process
|
240
|
|
|
283
|
|
||
Finished goods
|
660
|
|
|
531
|
|
||
|
$
|
1,564
|
|
|
$
|
1,413
|
|
|
April 27,
2014 |
|
October 27,
2013 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Other Current Assets
|
|
|
|
||||
Deferred income taxes, net
|
$
|
318
|
|
|
$
|
323
|
|
Prepaid expenses
|
164
|
|
|
135
|
|
||
Prepaid income taxes and income taxes receivable
|
72
|
|
|
178
|
|
||
Other
|
69
|
|
|
69
|
|
||
|
$
|
623
|
|
|
$
|
705
|
|
|
Useful Life
|
|
April 27,
2014 |
|
October 27,
2013 |
||||
|
|
|
|
|
|
||||
|
(In years)
|
|
(In millions)
|
||||||
Property, Plant and Equipment, Net
|
|
|
|
||||||
Land and improvements
|
|
|
$
|
167
|
|
|
$
|
167
|
|
Buildings and improvements
|
3-30
|
|
1,234
|
|
|
1,217
|
|
||
Demonstration and manufacturing equipment
|
3-5
|
|
818
|
|
|
792
|
|
||
Furniture, fixtures and other equipment
|
3-15
|
|
548
|
|
|
589
|
|
||
Construction in progress
|
|
|
46
|
|
|
52
|
|
||
Gross property, plant and equipment
|
|
|
2,813
|
|
|
2,817
|
|
||
Accumulated depreciation
|
|
|
(1,958
|
)
|
|
(1,967
|
)
|
||
|
|
|
$
|
855
|
|
|
$
|
850
|
|
|
April 27,
2014 |
|
October 27,
2013 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Accounts Payable and Accrued Expenses
|
|
|
|
||||
Accounts payable
|
$
|
606
|
|
|
$
|
582
|
|
Compensation and employee benefits
|
414
|
|
|
417
|
|
||
Warranty
|
109
|
|
|
102
|
|
||
Dividends payable
|
122
|
|
|
121
|
|
||
Income taxes payable
|
94
|
|
|
73
|
|
||
Other accrued taxes
|
40
|
|
|
41
|
|
||
Interest payable
|
30
|
|
|
30
|
|
||
Restructuring reserve
|
15
|
|
|
39
|
|
||
Other
|
233
|
|
|
244
|
|
||
|
$
|
1,663
|
|
|
$
|
1,649
|
|
|
April 27,
2014 |
|
October 27,
2013 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Customer Deposits and Deferred Revenue
|
|
|
|
||||
Customer deposits
|
$
|
152
|
|
|
$
|
175
|
|
Deferred revenue
|
847
|
|
|
619
|
|
||
|
$
|
999
|
|
|
$
|
794
|
|
|
April 27,
2014 |
|
October 27,
2013 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Other Liabilities
|
|
|
|
||||
Deferred income taxes
|
$
|
65
|
|
|
$
|
71
|
|
Income taxes payable
|
132
|
|
|
174
|
|
||
Defined and postretirement benefit plans
|
198
|
|
|
193
|
|
||
Other
|
76
|
|
|
128
|
|
||
|
$
|
471
|
|
|
$
|
566
|
|
Note 8
|
Business Combination
|
Note 9
|
Goodwill, Purchased Technology and Other Intangible Assets
|
|
April 27, 2014
|
|
October 27, 2013
|
||||||||||||||||||||
|
Goodwill
|
|
Other
Intangible
Assets
|
|
Total
|
|
Goodwill
|
|
Other
Intangible
Assets
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Silicon Systems Group
|
$
|
2,151
|
|
|
$
|
142
|
|
|
$
|
2,293
|
|
|
$
|
2,151
|
|
|
$
|
142
|
|
|
$
|
2,293
|
|
Applied Global Services
|
1,027
|
|
|
6
|
|
|
1,033
|
|
|
1,027
|
|
|
—
|
|
|
1,027
|
|
||||||
Display
|
116
|
|
|
—
|
|
|
116
|
|
|
116
|
|
|
—
|
|
|
116
|
|
||||||
Carrying amount
|
$
|
3,294
|
|
|
$
|
148
|
|
|
$
|
3,442
|
|
|
$
|
3,294
|
|
|
$
|
142
|
|
|
$
|
3,436
|
|
|
April 27,
2014 |
|
October 27,
2013 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Purchased technology, net
|
$
|
671
|
|
|
$
|
748
|
|
Intangible assets - finite-lived, net
|
199
|
|
|
213
|
|
||
Intangible assets - indefinite-lived
|
148
|
|
|
142
|
|
||
Total
|
$
|
1,018
|
|
|
$
|
1,103
|
|
|
April 27, 2014
|
|
October 27, 2013
|
||||||||||||||||||||
|
Purchased
Technology
|
|
Other
Intangible
Assets
|
|
Total
|
|
Purchased
Technology
|
|
Other
Intangible
Assets
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Gross carrying amount:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Silicon Systems Group
|
$
|
1,301
|
|
|
$
|
252
|
|
|
$
|
1,553
|
|
|
$
|
1,301
|
|
|
$
|
252
|
|
|
$
|
1,553
|
|
Applied Global Services
|
28
|
|
|
44
|
|
|
72
|
|
|
28
|
|
|
44
|
|
|
72
|
|
||||||
Display
|
110
|
|
|
33
|
|
|
143
|
|
|
110
|
|
|
33
|
|
|
143
|
|
||||||
Energy and Environmental Solutions
|
5
|
|
|
15
|
|
|
20
|
|
|
5
|
|
|
15
|
|
|
20
|
|
||||||
Gross carrying amount
|
$
|
1,444
|
|
|
$
|
344
|
|
|
$
|
1,788
|
|
|
$
|
1,444
|
|
|
$
|
344
|
|
|
$
|
1,788
|
|
Accumulated amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Silicon Systems Group
|
$
|
(637
|
)
|
|
$
|
(67
|
)
|
|
$
|
(704
|
)
|
|
$
|
(562
|
)
|
|
$
|
(58
|
)
|
|
$
|
(620
|
)
|
Applied Global Services
|
(24
|
)
|
|
(44
|
)
|
|
(68
|
)
|
|
(23
|
)
|
|
(42
|
)
|
|
(65
|
)
|
||||||
Display
|
(110
|
)
|
|
(30
|
)
|
|
(140
|
)
|
|
(110
|
)
|
|
(29
|
)
|
|
(139
|
)
|
||||||
Energy and Environmental Solutions
|
(2
|
)
|
|
(4
|
)
|
|
(6
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(3
|
)
|
||||||
Accumulated amortization
|
$
|
(773
|
)
|
|
$
|
(145
|
)
|
|
$
|
(918
|
)
|
|
$
|
(696
|
)
|
|
$
|
(131
|
)
|
|
$
|
(827
|
)
|
Carrying amount
|
$
|
671
|
|
|
$
|
199
|
|
|
$
|
870
|
|
|
$
|
748
|
|
|
$
|
213
|
|
|
$
|
961
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
April 27,
2014 |
|
April 28,
2013 |
|
April 27,
2014 |
|
April 28,
2013 |
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Silicon Systems Group
|
$
|
42
|
|
|
$
|
44
|
|
|
$
|
84
|
|
|
$
|
88
|
|
Applied Global Services
|
2
|
|
|
1
|
|
|
3
|
|
|
2
|
|
||||
Display
|
—
|
|
|
2
|
|
|
1
|
|
|
4
|
|
||||
Energy and Environmental Solutions
|
1
|
|
|
7
|
|
|
3
|
|
|
13
|
|
||||
Total
|
$
|
45
|
|
|
$
|
54
|
|
|
$
|
91
|
|
|
$
|
107
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
April 27,
2014 |
|
April 28,
2013 |
|
April 27,
2014 |
|
April 28,
2013 |
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Cost of products sold
|
$
|
39
|
|
|
$
|
43
|
|
|
$
|
79
|
|
|
$
|
86
|
|
Research, development and engineering
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Marketing and selling
|
6
|
|
|
8
|
|
|
11
|
|
|
5
|
|
||||
General and administrative
|
—
|
|
|
2
|
|
|
1
|
|
|
15
|
|
||||
Total
|
$
|
45
|
|
|
$
|
54
|
|
|
$
|
91
|
|
|
$
|
107
|
|
|
Amortization
Expense
|
||
|
(In millions)
|
||
2014
|
89
|
|
|
2015
|
175
|
|
|
2016
|
169
|
|
|
2017
|
165
|
|
|
2018
|
163
|
|
|
Thereafter
|
109
|
|
|
Total
|
$
|
870
|
|
Note 10
|
Borrowing Facilities and Long-Term Debt
|
|
Principal Amount
|
|
|
|
|
||||||
|
April 27,
2014 |
|
October 27,
2013 |
|
Effective
Interest Rate
|
|
Interest
Pay Dates
|
||||
|
(In millions)
|
|
|
|
|
||||||
2.650% Senior Notes Due 2016
|
$
|
400
|
|
|
$
|
400
|
|
|
2.666%
|
|
June 15, December 15
|
7.125% Senior Notes Due 2017
|
200
|
|
|
200
|
|
|
7.190%
|
|
April 15, October 15
|
||
4.300% Senior Notes Due 2021
|
750
|
|
|
750
|
|
|
4.326%
|
|
June 15, December 15
|
||
5.850% Senior Notes Due 2041
|
600
|
|
|
600
|
|
|
5.879%
|
|
June 15, December 15
|
||
|
1,950
|
|
|
1,950
|
|
|
|
|
|
||
Total unamortized discount
|
(3
|
)
|
|
(4
|
)
|
|
|
|
|
||
Total long-term debt
|
$
|
1,947
|
|
|
$
|
1,946
|
|
|
|
|
|
Note 11
|
Restructuring Charges and Asset Impairments
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
April 27,
2014 |
|
April 28,
2013 |
|
April 27,
2014 |
|
April 28,
2013 |
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
2012 Global Restructuring Plan
|
|
|
|
|
|
|
|
||||||||
Severance and other employee-related costs
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
7
|
|
|
$
|
8
|
|
2012 EES Restructuring Plan
|
|
|
|
|
|
|
|
||||||||
Severance and other employee-related costs
1
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Contract cancellation and other costs
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Asset impairments
|
—
|
|
|
2
|
|
|
—
|
|
|
5
|
|
||||
Others
|
|
|
|
|
|
|
|
||||||||
Severance and other employee-related costs
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
7
|
|
|
$
|
19
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
April 27,
2014 |
|
April 28,
2013 |
|
April 27,
2014 |
|
April 28,
2013 |
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Silicon Systems Group
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Applied Global Services
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
||||
Energy and Environmental Solutions
|
—
|
|
|
5
|
|
|
—
|
|
|
8
|
|
||||
Corporate Unallocated
|
—
|
|
|
4
|
|
|
7
|
|
|
8
|
|
||||
Total
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
7
|
|
|
$
|
19
|
|
|
2012 Global Restructuring Plan
|
|
2012 EES Restructuring Plan
|
|
Others
|
|
|
||||||||||||||||
|
Severance and Other Employee-Related Costs
|
|
Severance and Other Employee-Related Costs
|
|
Contract Cancellation and Other Costs
|
|
Severance and Other Employee-Related Costs
|
|
Contract Cancellation and Other Costs
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Balance, October 27, 2013
|
$
|
26
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
39
|
|
Provision for restructuring reserves
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||||
Consumption of reserves
|
(25
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|
(30
|
)
|
||||||
Reclassification of restructuring reserves
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||
Balance, April 27, 2014
|
$
|
8
|
|
|
2
|
|
|
4
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
15
|
|
Note 12
|
Stockholders’ Equity, Comprehensive Income and Share-Based Compensation
|
|
Unrealized Gain on Investments, Net
|
|
Unrealized Gain on Derivative Instruments Qualifying as Cash Flow Hedges
|
|
Pension Liability
|
|
Cumulative Translation Adjustments
|
|
Total
|
||||||||||
|
(in millions)
|
|
|
||||||||||||||||
Balance at October 27, 2013
|
$
|
25
|
|
|
$
|
2
|
|
|
$
|
(72
|
)
|
|
$
|
7
|
|
|
$
|
(38
|
)
|
Other comprehensive income (loss) before reclassifications
|
5
|
|
|
3
|
|
|
—
|
|
|
(1
|
)
|
|
7
|
|
|||||
Amounts reclassified out of AOCI
|
(5
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||||
Other comprehensive loss, net of tax
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(1
|
)
|
|
(3
|
)
|
|||||
Balance at April 27, 2014
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
(72
|
)
|
|
$
|
6
|
|
|
$
|
(41
|
)
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
April 28,
2013 |
|
April 28,
2013 |
||||
|
|
|
|
||||
|
(In millions, except per share amounts)
|
||||||
Shares of common stock repurchased
|
8
|
|
|
12
|
|
||
Cost of stock repurchased
|
$
|
100
|
|
|
$
|
148
|
|
Average price paid per share
|
$
|
13.41
|
|
|
$
|
12.58
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
April 27,
2014 |
|
April 28,
2013 |
|
April 27,
2014 |
|
April 28,
2013 |
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Share-based compensation
|
$
|
42
|
|
|
$
|
39
|
|
|
$
|
88
|
|
|
$
|
81
|
|
Tax benefit recognized
|
$
|
12
|
|
|
$
|
11
|
|
|
$
|
25
|
|
|
$
|
23
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
April 27,
2014 |
|
April 28,
2013 |
|
April 27,
2014 |
|
April 28,
2013 |
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Cost of products sold
|
$
|
13
|
|
|
$
|
12
|
|
|
$
|
27
|
|
|
$
|
24
|
|
Research, development, and engineering
|
16
|
|
|
13
|
|
|
33
|
|
|
25
|
|
||||
Marketing and selling
|
5
|
|
|
5
|
|
|
11
|
|
|
10
|
|
||||
General and administrative
|
8
|
|
|
9
|
|
|
17
|
|
|
17
|
|
||||
Restructuring charge
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Total
|
$
|
42
|
|
|
$
|
39
|
|
|
$
|
88
|
|
|
$
|
81
|
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|||
|
|
|
|
|||
|
(In millions, except per share amounts)
|
|||||
Outstanding at October 27, 2013
|
6
|
|
|
$
|
9.12
|
|
Exercised
|
(3
|
)
|
|
$
|
7.98
|
|
Canceled and forfeited
|
(1
|
)
|
|
$
|
15.40
|
|
Outstanding at April 27, 2014
|
2
|
|
|
$
|
10.34
|
|
Exercisable at April 27, 2014
|
1
|
|
|
$
|
5.84
|
|
|
|
Number of Performance-Based Awards Granted
|
|
Percent of Performance-Based Awards Earned as of April 27, 2014*
|
||||
Fiscal Year Granted
|
|
Performance Shares/Performance Units
|
|
Shares of
Restricted Stock
|
|
|||
|
|
(in millions)
|
|
|
||||
2013
|
|
3
|
|
|
—
|
|
|
0%
|
2012
|
|
3
|
|
|
1
|
|
|
14%
|
2011
|
|
2
|
|
|
0.1
|
|
|
100%
|
|
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, performance shares and performance units at October 27, 2013
|
38
|
|
|
$
|
11.11
|
|
|
2.4 years
|
Granted
|
9
|
|
|
$
|
16.34
|
|
|
|
Vested
|
(11
|
)
|
|
$
|
11.03
|
|
|
|
Canceled
|
(2
|
)
|
|
$
|
11.43
|
|
|
|
Non-vested restricted stock units, restricted stock, performance shares and performance units at April 27, 2014
|
34
|
|
|
$
|
12.27
|
|
|
2.7 years
|
|
Three and Six Months Ended
|
||
|
April 27, 2014
|
|
April 28, 2013
|
ESPP:
|
|
|
|
Dividend yield
|
2.14%
|
|
2.94%
|
Expected volatility
|
25.3%
|
|
24.3%
|
Risk-free interest rate
|
0.08%
|
|
0.12%
|
Expected life (in years)
|
0.5
|
|
0.5
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
April 27,
2014 |
|
April 28,
2013 |
|
April 27,
2014 |
|
April 28,
2013 |
|||||||||
(In millions)
|
|||||||||||||||
Service cost
|
$
|
4
|
|
|
$
|
5
|
|
|
$
|
8
|
|
|
$
|
10
|
|
Interest cost
|
4
|
|
|
4
|
|
|
8
|
|
|
8
|
|
||||
Expected return on plan assets
|
(3
|
)
|
|
(3
|
)
|
|
(6
|
)
|
|
(6
|
)
|
||||
Amortization of actuarial loss
|
1
|
|
|
1
|
|
|
2
|
|
|
3
|
|
||||
Net periodic benefit cost
|
$
|
6
|
|
|
$
|
7
|
|
|
$
|
12
|
|
|
$
|
15
|
|
Note 15
|
Warranty, Guarantees and Contingencies
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
April 27,
2014 |
|
April 28,
2013 |
|
April 27,
2014 |
|
April 28,
2013 |
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Beginning balance
|
$
|
106
|
|
|
$
|
109
|
|
|
$
|
102
|
|
|
$
|
119
|
|
Provisions for warranty
|
29
|
|
|
26
|
|
|
56
|
|
|
49
|
|
||||
Consumption of reserves
|
(26
|
)
|
|
(31
|
)
|
|
(49
|
)
|
|
(64
|
)
|
||||
Ending balance
|
$
|
109
|
|
|
$
|
104
|
|
|
$
|
109
|
|
|
$
|
104
|
|
Note 16
|
Industry Segment Operations
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
Net Sales
|
|
Operating
Income (Loss)
|
|
Net Sales
|
|
Operating
Income (Loss)
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
April 27, 2014:
|
|
|
|
|
|
|
|
||||||||
Silicon Systems Group
|
$
|
1,584
|
|
|
$
|
391
|
|
|
$
|
3,068
|
|
|
$
|
705
|
|
Applied Global Services
|
534
|
|
|
148
|
|
|
1,041
|
|
|
273
|
|
||||
Display
|
147
|
|
|
26
|
|
|
306
|
|
|
52
|
|
||||
Energy and Environmental Solutions
|
88
|
|
|
5
|
|
|
128
|
|
|
(6
|
)
|
||||
Total Segment
|
$
|
2,353
|
|
|
$
|
570
|
|
|
$
|
4,543
|
|
|
$
|
1,024
|
|
April 28, 2013:
|
|
|
|
|
|
|
|
||||||||
Silicon Systems Group
|
$
|
1,291
|
|
|
$
|
283
|
|
|
$
|
2,260
|
|
|
$
|
417
|
|
Applied Global Services
|
517
|
|
|
118
|
|
|
988
|
|
|
207
|
|
||||
Display
|
127
|
|
|
19
|
|
|
214
|
|
|
22
|
|
||||
Energy and Environmental Solutions
|
38
|
|
|
(322
|
)
|
|
84
|
|
|
(376
|
)
|
||||
Total Segment
|
$
|
1,973
|
|
|
$
|
98
|
|
|
$
|
3,546
|
|
|
$
|
270
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
April 27,
2014 |
|
April 28,
2013 |
|
April 27,
2014 |
|
April 28,
2013 |
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Total segment operating income
|
$
|
570
|
|
|
$
|
98
|
|
|
$
|
1,024
|
|
|
$
|
270
|
|
Corporate and unallocated costs
|
(183
|
)
|
|
(162
|
)
|
|
(300
|
)
|
|
(291
|
)
|
||||
Restructuring charges and asset impairments
|
—
|
|
|
(4
|
)
|
|
(7
|
)
|
|
(8
|
)
|
||||
Income (loss) from operations
|
$
|
387
|
|
|
$
|
(68
|
)
|
|
$
|
717
|
|
|
$
|
(29
|
)
|
|
Percentage of Net Sales
|
|
Taiwan Semiconductor Manufacturing Company Limited
|
25
|
%
|
Samsung Electronics Co., Ltd.
|
17
|
%
|
|
Three Months Ended
|
|
Change
|
||||||||||||||||
|
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
|
Q2 2014
over
Q1 2014
|
|
Q2 2014
over
Q2 2013
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except per share amounts and percentages)
|
||||||||||||||||||
New orders
|
$
|
2,629
|
|
|
$
|
2,285
|
|
|
$
|
2,266
|
|
|
$
|
344
|
|
|
$
|
363
|
|
Net sales
|
$
|
2,353
|
|
|
$
|
2,190
|
|
|
$
|
1,973
|
|
|
$
|
163
|
|
|
$
|
380
|
|
Gross margin
|
$
|
1,001
|
|
|
$
|
891
|
|
|
$
|
808
|
|
|
$
|
110
|
|
|
$
|
193
|
|
Gross margin percent
|
42.5
|
%
|
|
40.7
|
%
|
|
41.0
|
%
|
|
1.8 points
|
|
1.5 points
|
|||||||
Operating income (loss)
|
$
|
387
|
|
|
$
|
330
|
|
|
$
|
(68
|
)
|
|
$
|
57
|
|
|
$
|
455
|
|
Operating margin percent
|
16.4
|
%
|
|
15.1
|
%
|
|
(3.4
|
)%
|
|
1.3 points
|
|
19.8 points
|
|||||||
Net income (loss)
|
$
|
262
|
|
|
$
|
253
|
|
|
$
|
(129
|
)
|
|
$
|
9
|
|
|
$
|
391
|
|
Earnings (loss) per diluted share
|
$
|
0.21
|
|
|
$
|
0.21
|
|
|
$
|
(0.11
|
)
|
|
$
|
—
|
|
|
$
|
0.32
|
|
Non-GAAP Adjusted Results
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-GAAP adjusted gross margin
|
$
|
1,041
|
|
|
$
|
930
|
|
|
$
|
852
|
|
|
$
|
111
|
|
|
$
|
189
|
|
Non-GAAP adjusted gross margin percent
|
44.2
|
%
|
|
42.5
|
%
|
|
43.2
|
%
|
|
1.7 points
|
|
1.0 point
|
|||||||
Non-GAAP adjusted operating income
|
$
|
482
|
|
|
$
|
380
|
|
|
$
|
285
|
|
|
$
|
102
|
|
|
$
|
197
|
|
Non-GAAP adjusted operating margin percent
|
20.5
|
%
|
|
17.4
|
%
|
|
14.4
|
%
|
|
3.1 points
|
|
6.1 points
|
|||||||
Non-GAAP adjusted net income
|
$
|
348
|
|
|
$
|
279
|
|
|
$
|
199
|
|
|
$
|
69
|
|
|
$
|
149
|
|
Non-GAAP adjusted earnings per diluted share
|
$
|
0.28
|
|
|
$
|
0.23
|
|
|
$
|
0.16
|
|
|
$
|
0.05
|
|
|
$
|
0.12
|
|
|
Six Months Ended
|
|
Change
|
||||||||
|
April 27,
2014 |
|
April 28,
2013 |
|
YTD Q2 2014
over YTD Q2 2013 |
||||||
|
|
|
|
|
|
||||||
|
(In millions, except per share amounts and percentages)
|
||||||||||
New orders
|
$
|
4,914
|
|
|
$
|
4,379
|
|
|
$
|
535
|
|
Net sales
|
$
|
4,543
|
|
|
$
|
3,546
|
|
|
$
|
997
|
|
Gross margin
|
$
|
1,892
|
|
|
$
|
1,390
|
|
|
$
|
502
|
|
Gross margin percent
|
41.6
|
%
|
|
39.2
|
%
|
|
2.4 points
|
||||
Operating income (loss)
|
$
|
717
|
|
|
$
|
(29
|
)
|
|
$
|
746
|
|
Operating margin percent
|
15.8
|
%
|
|
(0.8
|
)%
|
|
16.6 points
|
||||
Net income (loss)
|
$
|
515
|
|
|
$
|
(95
|
)
|
|
$
|
610
|
|
Earnings (loss) per diluted share
|
$
|
0.42
|
|
|
$
|
(0.08
|
)
|
|
$
|
0.50
|
|
Non-GAAP Adjusted Results
|
|
|
|
|
|
||||||
Non-GAAP adjusted gross margin
|
$
|
1,971
|
|
|
$
|
1,478
|
|
|
$
|
493
|
|
Non-GAAP adjusted gross margin percent
|
43.4
|
%
|
|
41.7
|
%
|
|
1.7 points
|
||||
Non-GAAP adjusted operating income
|
$
|
862
|
|
|
$
|
397
|
|
|
$
|
465
|
|
Non-GAAP adjusted operating margin percent
|
19.0
|
%
|
|
11.2
|
%
|
|
7.8 points
|
||||
Non-GAAP adjusted net income
|
$
|
627
|
|
|
$
|
268
|
|
|
$
|
359
|
|
Non-GAAP adjusted earnings per diluted share
|
$
|
0.51
|
|
|
$
|
0.22
|
|
|
$
|
0.29
|
|
|
Three Months Ended
|
|
Change
|
||||||||||||||||||
|
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
|
Q2 2014
over Q1 2014 |
|
Q2 2014
over Q2 2013 |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
(In millions, except percentages)
|
||||||||||||||||||||
Silicon Systems Group
|
$
|
1,664
|
|
|
63%
|
|
$
|
1,569
|
|
|
69%
|
|
$
|
1,551
|
|
|
68%
|
|
6%
|
|
7%
|
Applied Global Services
|
537
|
|
|
20%
|
|
597
|
|
|
26%
|
|
481
|
|
|
21%
|
|
(10)%
|
|
12%
|
|||
Display
|
340
|
|
|
13%
|
|
79
|
|
|
3%
|
|
195
|
|
|
9%
|
|
330%
|
|
74%
|
|||
Energy and Environmental Solutions
|
88
|
|
|
4%
|
|
40
|
|
|
2%
|
|
39
|
|
|
2%
|
|
120%
|
|
126%
|
|||
Total
|
$
|
2,629
|
|
|
100%
|
|
$
|
2,285
|
|
|
100%
|
|
$
|
2,266
|
|
|
100%
|
|
15%
|
|
16%
|
|
Six Months Ended
|
|
Change
|
||||||||||
|
April 27,
2014 |
|
April 28,
2013 |
|
YTD Q2 2014
over YTD Q2 2013 |
||||||||
|
|
|
|
|
|
|
|
|
|
||||
|
(In millions, except percentages)
|
||||||||||||
Silicon Systems Group
|
$
|
3,233
|
|
|
66%
|
|
$
|
2,914
|
|
|
67%
|
|
11%
|
Applied Global Services
|
1,134
|
|
|
23%
|
|
1,025
|
|
|
23%
|
|
11%
|
||
Display
|
419
|
|
|
8%
|
|
333
|
|
|
8%
|
|
26%
|
||
Energy and Environmental Solutions
|
128
|
|
|
3%
|
|
107
|
|
|
2%
|
|
20%
|
||
Total
|
$
|
4,914
|
|
|
100%
|
|
$
|
4,379
|
|
|
100%
|
|
12%
|
|
Three Months Ended
|
|
Change
|
||||||||||||||||||
|
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
|
Q2 2014
over Q1 2014 |
|
Q2 2014
over Q2 2013 |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
(In millions, except percentages)
|
||||||||||||||||||||
Taiwan
|
$
|
660
|
|
|
25%
|
|
$
|
984
|
|
|
43%
|
|
$
|
902
|
|
|
40%
|
|
(33)%
|
|
(27)%
|
China
|
596
|
|
|
23%
|
|
326
|
|
|
14%
|
|
276
|
|
|
12%
|
|
83%
|
|
116%
|
|||
Korea
|
378
|
|
|
14%
|
|
240
|
|
|
11%
|
|
259
|
|
|
11%
|
|
58%
|
|
46%
|
|||
Japan
|
203
|
|
|
8%
|
|
163
|
|
|
7%
|
|
191
|
|
|
8%
|
|
25%
|
|
6%
|
|||
Southeast Asia
|
72
|
|
|
3%
|
|
50
|
|
|
2%
|
|
67
|
|
|
3%
|
|
44%
|
|
7%
|
|||
Asia Pacific
|
1,909
|
|
|
73%
|
|
1,763
|
|
|
77%
|
|
1,695
|
|
|
74%
|
|
8%
|
|
13%
|
|||
United States
|
521
|
|
|
20%
|
|
403
|
|
|
18%
|
|
398
|
|
|
18%
|
|
29%
|
|
31%
|
|||
Europe
|
199
|
|
|
7%
|
|
119
|
|
|
5%
|
|
173
|
|
|
8%
|
|
67%
|
|
15%
|
|||
Total
|
$
|
2,629
|
|
|
100%
|
|
$
|
2,285
|
|
|
100%
|
|
$
|
2,266
|
|
|
100%
|
|
15%
|
|
16%
|
|
Six Months Ended
|
|
Change
|
||||||||||
|
April 27,
2014 |
|
April 28,
2013 |
|
YTD Q2 2014
over YTD Q2 2013 |
||||||||
|
|
|
|
|
|
|
|
|
|
||||
|
(In millions, except percentages)
|
||||||||||||
Taiwan
|
$
|
1,644
|
|
|
34%
|
|
$
|
1,808
|
|
|
41%
|
|
(9)%
|
China
|
922
|
|
|
19%
|
|
514
|
|
|
12%
|
|
79%
|
||
Korea
|
618
|
|
|
13%
|
|
457
|
|
|
11%
|
|
35%
|
||
Japan
|
366
|
|
|
7%
|
|
372
|
|
|
8%
|
|
(2)%
|
||
Southeast Asia
|
122
|
|
|
2%
|
|
132
|
|
|
3%
|
|
(8)%
|
||
Asia Pacific
|
3,672
|
|
|
75%
|
|
3,283
|
|
|
75%
|
|
12%
|
||
United States
|
924
|
|
|
19%
|
|
789
|
|
|
18%
|
|
17%
|
||
Europe
|
318
|
|
|
6%
|
|
307
|
|
|
7%
|
|
4%
|
||
Total
|
$
|
4,914
|
|
|
100%
|
|
$
|
4,379
|
|
|
100%
|
|
12%
|
|
April 27,
2014 |
||
|
(In millions)
|
||
Beginning balance
|
$
|
2,372
|
|
New orders
|
4,914
|
|
|
Net sales
|
(4,543
|
)
|
|
Net adjustments
|
(8
|
)
|
|
Ending balance
|
$
|
2,735
|
|
|
April 27,
2014 |
|
January 26,
2014 |
|
October 27,
2013 |
|
Q2 2014
over Q1 2014 |
|
Q2 2014
over Q4 2013 |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
(In millions, except percentages)
|
||||||||||||||||||||
Silicon Systems Group
|
$
|
1,449
|
|
|
53%
|
|
$
|
1,370
|
|
|
56%
|
|
$
|
1,295
|
|
|
55%
|
|
6%
|
|
12%
|
Applied Global Services
|
642
|
|
|
24%
|
|
659
|
|
|
27%
|
|
591
|
|
|
25%
|
|
(3)%
|
|
9%
|
|||
Display
|
475
|
|
|
17%
|
|
281
|
|
|
12%
|
|
361
|
|
|
15%
|
|
69%
|
|
32%
|
|||
Energy and Environmental Solutions
|
169
|
|
|
6%
|
|
125
|
|
|
5%
|
|
125
|
|
|
5%
|
|
35%
|
|
35%
|
|||
Total
|
$
|
2,735
|
|
|
100%
|
|
$
|
2,435
|
|
|
100%
|
|
$
|
2,372
|
|
|
100%
|
|
12%
|
|
15%
|
|
Three Months Ended
|
|
Change
|
||||||||||||||||||
|
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
|
Q2 2014
over Q1 2014 |
|
Q2 2014
over Q2 2013 |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
(In millions, except percentages)
|
||||||||||||||||||||
Silicon Systems Group
|
$
|
1,584
|
|
|
67%
|
|
$
|
1,484
|
|
|
68%
|
|
$
|
1,291
|
|
|
65%
|
|
7%
|
|
23%
|
Applied Global Services
|
534
|
|
|
23%
|
|
507
|
|
|
23%
|
|
517
|
|
|
26%
|
|
5%
|
|
3%
|
|||
Display
|
147
|
|
|
6%
|
|
159
|
|
|
7%
|
|
127
|
|
|
7%
|
|
(8)%
|
|
16%
|
|||
Energy and Environmental Solutions
|
88
|
|
|
4%
|
|
40
|
|
|
2%
|
|
38
|
|
|
2%
|
|
120%
|
|
132%
|
|||
Total
|
$
|
2,353
|
|
|
100%
|
|
$
|
2,190
|
|
|
100%
|
|
$
|
1,973
|
|
|
100%
|
|
7%
|
|
19%
|
|
Six Months Ended
|
|
Change
|
||||||||||
|
April 27,
2014 |
|
April 28,
2013 |
|
YTD Q2 2014
over YTD Q2 2013 |
||||||||
|
|
|
|
|
|
|
|
|
|
||||
|
(In millions, except percentages)
|
||||||||||||
Silicon Systems Group
|
$
|
3,068
|
|
|
67%
|
|
$
|
2,260
|
|
|
64%
|
|
36%
|
Applied Global Services
|
1,041
|
|
|
23%
|
|
988
|
|
|
28%
|
|
5%
|
||
Display
|
306
|
|
|
7%
|
|
214
|
|
|
6%
|
|
43%
|
||
Energy and Environmental Solutions
|
128
|
|
|
3%
|
|
84
|
|
|
2%
|
|
52%
|
||
Total
|
$
|
4,543
|
|
|
100%
|
|
$
|
3,546
|
|
|
100%
|
|
28%
|
|
Three Months Ended
|
|
Change
|
||||||||||||||||||
|
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
|
Q2 2014
over Q1 2014 |
|
Q2 2014
over Q2 2013 |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
(In millions, except percentages)
|
||||||||||||||||||||
Taiwan
|
$
|
781
|
|
|
33%
|
|
$
|
705
|
|
|
32%
|
|
$
|
828
|
|
|
42%
|
|
11%
|
|
(6)%
|
China
|
428
|
|
|
18%
|
|
589
|
|
|
27%
|
|
183
|
|
|
9%
|
|
(27)%
|
|
134%
|
|||
Korea
|
351
|
|
|
15%
|
|
201
|
|
|
9%
|
|
226
|
|
|
12%
|
|
75%
|
|
55%
|
|||
Japan
|
215
|
|
|
9%
|
|
164
|
|
|
8%
|
|
157
|
|
|
8%
|
|
31%
|
|
37%
|
|||
Southeast Asia
|
52
|
|
|
2%
|
|
87
|
|
|
4%
|
|
73
|
|
|
4%
|
|
(40)%
|
|
(29)%
|
|||
Asia Pacific
|
1,827
|
|
|
77%
|
|
1,746
|
|
|
80%
|
|
1,467
|
|
|
75%
|
|
5%
|
|
25%
|
|||
United States
|
370
|
|
|
16%
|
|
280
|
|
|
13%
|
|
362
|
|
|
18%
|
|
32%
|
|
2%
|
|||
Europe
|
156
|
|
|
7%
|
|
164
|
|
|
7%
|
|
144
|
|
|
7%
|
|
(5)%
|
|
8%
|
|||
Total
|
$
|
2,353
|
|
|
100%
|
|
$
|
2,190
|
|
|
100%
|
|
$
|
1,973
|
|
|
100%
|
|
7%
|
|
19%
|
|
Six Months Ended
|
|
Change
|
||||||||||
|
April 27,
2014 |
|
April 28,
2013 |
|
YTD Q2 2014
over YTD Q2 2013 |
||||||||
|
|
|
|
|
|
|
|
|
|
||||
|
(In millions, except percentages)
|
||||||||||||
Taiwan
|
$
|
1,486
|
|
|
33%
|
|
$
|
1,393
|
|
|
39%
|
|
7%
|
China
|
1,017
|
|
|
23%
|
|
310
|
|
|
9%
|
|
228%
|
||
Korea
|
552
|
|
|
12%
|
|
431
|
|
|
12%
|
|
28%
|
||
Japan
|
379
|
|
|
8%
|
|
255
|
|
|
7%
|
|
49%
|
||
Southeast Asia
|
139
|
|
|
3%
|
|
131
|
|
|
4%
|
|
6%
|
||
Asia Pacific
|
3,573
|
|
|
79%
|
|
2,520
|
|
|
71%
|
|
42%
|
||
United States
|
650
|
|
|
14%
|
|
763
|
|
|
22%
|
|
(15)%
|
||
Europe
|
320
|
|
|
7%
|
|
263
|
|
|
7%
|
|
22%
|
||
Total
|
$
|
4,543
|
|
|
100%
|
|
$
|
3,546
|
|
|
100%
|
|
28%
|
|
Three Months Ended
|
|
Change
|
|
Six Months Ended
|
|
Change
|
||||||||||||||||||||||||
|
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
|
Q2 2014
over Q1 2014 |
|
Q2 2014
over Q2 2013 |
|
April 27,
2014 |
|
April 28,
2013 |
|
YTD Q2 2014
over YTD Q2 2013 |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||||||||||
Gross margin
|
$
|
1,001
|
|
|
$
|
891
|
|
|
$
|
808
|
|
|
$
|
110
|
|
|
$
|
193
|
|
|
$
|
1,892
|
|
|
$
|
1,390
|
|
|
$
|
502
|
|
Gross margin percent
|
42.5
|
%
|
|
40.7
|
%
|
|
41.0
|
%
|
|
1.8 points
|
|
1.5 points
|
|
41.6
|
%
|
|
39.2
|
%
|
|
2.4 points
|
|||||||||||
Non-GAAP Adjusted Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Non-GAAP adjusted gross margin
|
$
|
1,041
|
|
|
$
|
930
|
|
|
$
|
852
|
|
|
$
|
111
|
|
|
$
|
189
|
|
|
$
|
1,971
|
|
|
$
|
1,478
|
|
|
$
|
493
|
|
Non-GAAP adjusted gross margin percent
|
44.2
|
%
|
|
42.5
|
%
|
|
43.2
|
%
|
|
1.7 points
|
|
1.0 point
|
|
43.4
|
%
|
|
41.7
|
%
|
|
1.7 points
|
|
Three Months Ended
|
|
Change
|
|
Six Months Ended
|
|
Change
|
||||||||||||||||||||||||
|
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
|
Q2 2014
over Q1 2014 |
|
Q2 2014
over Q2 2013 |
|
April 27,
2014 |
|
April 28,
2013 |
|
YTD Q2 2014
over YTD Q2 2013 |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Research, development and engineering
|
$
|
355
|
|
|
$
|
356
|
|
|
$
|
344
|
|
|
$
|
(1
|
)
|
|
$
|
11
|
|
|
$
|
711
|
|
|
$
|
648
|
|
|
$
|
63
|
|
|
Three Months Ended
|
|
Change
|
|
Six Months Ended
|
|
Change
|
||||||||||||||||||||||||
|
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
|
Q2 2014
over Q1 2014 |
|
Q2 2014
over Q2 2013 |
|
April 27,
2014 |
|
April 28,
2013 |
|
YTD Q2 2014
over YTD Q2 2013 |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Marketing and selling
|
$
|
107
|
|
|
$
|
109
|
|
|
$
|
118
|
|
|
$
|
(2
|
)
|
|
$
|
(11
|
)
|
|
$
|
216
|
|
|
$
|
223
|
|
|
$
|
(7
|
)
|
|
Three Months Ended
|
|
Change
|
|
Six Months Ended
|
|
Change
|
||||||||||||||||||||||||
|
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
|
Q2 2014
over Q1 2014 |
|
Q2 2014
over Q2 2013 |
|
April 27,
2014 |
|
April 28,
2013 |
|
YTD Q2 2014
over YTD Q2 2013 |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
General and administrative
|
$
|
152
|
|
|
$
|
89
|
|
|
$
|
126
|
|
|
$
|
63
|
|
|
$
|
26
|
|
|
$
|
241
|
|
|
$
|
251
|
|
|
$
|
(10
|
)
|
|
Three Months Ended
|
|
Change
|
|
Six Months Ended
|
|
Change
|
||||||||||||||||||||||||
|
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
|
Q2 2014
over Q1 2014 |
|
Q2 2014
over Q2 2013 |
|
April 27,
2014 |
|
April 28,
2013 |
|
YTD Q2 2014
over YTD Q2 2013 |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Restructuring charges and asset impairments
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
10
|
|
|
$
|
(7
|
)
|
|
$
|
(10
|
)
|
|
$
|
7
|
|
|
$
|
19
|
|
|
$
|
(12
|
)
|
|
Three Months Ended
|
|
Change
|
|
Six Months Ended
|
|
Change
|
||||||||||||||||||||||||
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
|
Q2 2014
over Q1 2014 |
|
Q2 2014
over Q2 2013 |
|
April 27,
2014 |
|
April 28,
2013 |
|
YTD Q2 2014
over YTD Q2 2013 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Interest expense
|
$
|
23
|
|
|
$
|
25
|
|
|
$
|
24
|
|
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
$
|
48
|
|
|
$
|
48
|
|
|
$
|
—
|
|
Interest and other income, net
|
$
|
1
|
|
|
$
|
10
|
|
|
$
|
2
|
|
|
$
|
(9
|
)
|
|
$
|
(1
|
)
|
|
$
|
11
|
|
|
$
|
5
|
|
|
$
|
6
|
|
|
Three Months Ended
|
|
Change
|
|
Six Months Ended
|
|
Change
|
||||||||||||||||||||||||
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
|
Q2 2014
over Q1 2014 |
|
Q2 2014
over Q2 2013 |
|
April 27,
2014 |
|
April 28,
2013 |
|
YTD Q2 2014
over YTD Q2 2013 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||||||||||
Provision for income taxes
|
$
|
103
|
|
|
$
|
62
|
|
|
$
|
39
|
|
|
$
|
41
|
|
|
$
|
64
|
|
|
$
|
165
|
|
|
$
|
23
|
|
|
$
|
142
|
|
Effective tax rate
|
28.2
|
%
|
|
19.7
|
%
|
|
(43.3
|
)%
|
|
8.5 points
|
|
71.5 points
|
|
24.3
|
%
|
|
(31.9
|
)%
|
|
56.2 points
|
|
Three Months Ended
|
|
Change
|
||||||||||||||||||||
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
Q2 2014 over Q1 2014
|
|
Q2 2014 over Q2 2013
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except percentages and ratios)
|
||||||||||||||||||||||
New orders
|
$
|
1,664
|
|
|
$
|
1,569
|
|
|
$
|
1,551
|
|
|
$
|
95
|
|
|
6%
|
|
$
|
113
|
|
|
7%
|
Net sales
|
1,584
|
|
|
1,484
|
|
|
1,291
|
|
|
100
|
|
|
7%
|
|
293
|
|
|
23%
|
|||||
Book to bill ratio
|
1.1
|
|
|
1.1
|
|
|
1.2
|
|
|
|
|
|
|
|
|
|
|||||||
Operating income
|
391
|
|
|
314
|
|
|
283
|
|
|
77
|
|
|
25%
|
|
108
|
|
|
38%
|
|||||
Operating margin
|
24.7
|
%
|
|
21.2
|
%
|
|
21.9
|
%
|
|
|
|
3.5 points
|
|
|
|
2.8 points
|
|||||||
Non-GAAP Adjusted Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Non-GAAP adjusted operating income
|
$
|
433
|
|
|
$
|
357
|
|
|
$
|
329
|
|
|
76
|
|
|
21%
|
|
104
|
|
|
32%
|
||
Non-GAAP adjusted operating margin percent
|
27.3
|
%
|
|
24.1
|
%
|
|
25.5
|
%
|
|
|
|
3.2 points
|
|
|
|
1.8 points
|
|
Six Months Ended
|
|
Change
|
||||||||||
April 27,
2014 |
|
April 28,
2013 |
YTD Q2 2014
over YTD Q2 2013 |
||||||||||
|
|
|
|
|
|
|
|
||||||
|
(In millions, except percentages and ratios)
|
||||||||||||
New orders
|
$
|
3,233
|
|
|
$
|
2,914
|
|
|
$
|
319
|
|
|
11%
|
Net sales
|
3,068
|
|
|
2,260
|
|
|
808
|
|
|
36%
|
|||
Book to bill ratio
|
1.1
|
|
|
1.3
|
|
|
|
|
|
||||
Operating income
|
705
|
|
|
417
|
|
|
288
|
|
|
69%
|
|||
Operating margin
|
23.0
|
%
|
|
18.5
|
%
|
|
|
|
4.5 points
|
||||
Non-GAAP Adjusted Results
|
|
|
|
|
|
|
|||||||
Non-GAAP adjusted operating income
|
$
|
790
|
|
|
$
|
509
|
|
|
281
|
|
|
55%
|
|
Non-GAAP adjusted operating margin percent
|
25.7
|
%
|
|
22.5
|
%
|
|
|
|
3.2 points
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||
|
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
|
April 27,
2014 |
|
April 28,
2013 |
Foundry
|
50%
|
|
60%
|
|
66%
|
|
55%
|
|
69%
|
Memory
|
38%
|
|
32%
|
|
21%
|
|
35%
|
|
18%
|
Logic and other
|
12%
|
|
8%
|
|
13%
|
|
10%
|
|
13%
|
|
100%
|
|
100%
|
|
100%
|
|
100%
|
|
100%
|
|
Three Months Ended
|
|
Change
|
||||||||||||||||||
|
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
Q2 2014
over
Q1 2014
|
|
Q2 2014
over
Q2 2013
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
(In millions, except percentages)
|
||||||||||||||||||||
Taiwan
|
$
|
652
|
|
|
41%
|
|
$
|
593
|
|
|
40%
|
|
$
|
716
|
|
|
55%
|
|
10%
|
|
(9)%
|
|
Six Months Ended
|
|
Change
|
||||||||||
|
April 27,
2014 |
|
April 28,
2013 |
YTD Q2 2014
over YTD Q2 2013 |
|||||||||
|
|
|
|
|
|
|
|
|
|
||||
|
(In millions, except percentages)
|
||||||||||||
Taiwan
|
$
|
1,245
|
|
|
41%
|
|
$
|
1,178
|
|
|
52%
|
|
6%
|
|
Three Months Ended
|
|
Change
|
||||||||||||||||||||
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
Q2 2014 over Q1 2014
|
|
Q2 2014 over Q2 2013
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except percentages and ratios)
|
||||||||||||||||||||||
New orders
|
$
|
537
|
|
|
$
|
597
|
|
|
$
|
481
|
|
|
$
|
(60
|
)
|
|
(10)%
|
|
$
|
56
|
|
|
12%
|
Net sales
|
534
|
|
|
507
|
|
|
517
|
|
|
27
|
|
|
5%
|
|
17
|
|
|
3%
|
|||||
Book to bill ratio
|
1.0
|
|
|
1.2
|
|
|
0.9
|
|
|
|
|
|
|
|
|
|
|||||||
Operating income
|
148
|
|
|
125
|
|
|
118
|
|
|
23
|
|
|
18%
|
|
30
|
|
|
25%
|
|||||
Operating margin
|
27.7
|
%
|
|
24.7
|
%
|
|
22.8
|
%
|
|
|
|
3.0 points
|
|
|
|
4.9 points
|
|||||||
Non-GAAP Adjusted Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Non-GAAP adjusted operating income
|
150
|
|
|
126
|
|
|
120
|
|
|
24
|
|
|
19%
|
|
30
|
|
|
25%
|
|||||
Non-GAAP adjusted operating margin percent
|
28.1
|
%
|
|
24.9
|
%
|
|
23.2
|
%
|
|
|
|
3.2 points
|
|
|
|
4.9 points
|
|
Six Months Ended
|
|
Change
|
||||||||||
April 27,
2014 |
|
April 28,
2013 |
YTD Q2 2014
over YTD Q2 2013 |
||||||||||
|
|
|
|
|
|
|
|
||||||
|
(In millions, except percentages and ratios)
|
||||||||||||
New orders
|
$
|
1,134
|
|
|
$
|
1,025
|
|
|
$
|
109
|
|
|
11%
|
Net sales
|
1,041
|
|
|
988
|
|
|
53
|
|
|
5%
|
|||
Book to bill ratio
|
1.1
|
|
|
1.0
|
|
|
|
|
|
||||
Operating income
|
273
|
|
|
207
|
|
|
66
|
|
|
32%
|
|||
Operating margin
|
26.2
|
%
|
|
21.0
|
%
|
|
|
|
5.2 points
|
||||
Non-GAAP Adjusted Results
|
|
|
|
|
|
|
|||||||
Non-GAAP adjusted operating income
|
$
|
276
|
|
|
$
|
211
|
|
|
65
|
|
|
31%
|
|
Non-GAAP adjusted operating margin percent
|
26.5
|
%
|
|
21.4
|
%
|
|
|
|
5.1 points
|
|
Three Months Ended
|
|
Change
|
||||||||||||||||||||
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
Q2 2014 over Q1 2014
|
|
Q2 2014 over Q2 2013
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except percentages and ratios)
|
||||||||||||||||||||||
New orders
|
$
|
340
|
|
|
$
|
79
|
|
|
$
|
195
|
|
|
$
|
261
|
|
|
330%
|
|
$
|
145
|
|
|
74%
|
Net sales
|
147
|
|
|
159
|
|
|
127
|
|
|
(12
|
)
|
|
(8)%
|
|
20
|
|
|
16%
|
|||||
Book to bill ratio
|
2.3
|
|
|
0.5
|
|
|
1.5
|
|
|
|
|
|
|
|
|
|
|||||||
Operating income
|
26
|
|
|
26
|
|
|
19
|
|
|
—
|
|
|
—%
|
|
7
|
|
|
37%
|
|||||
Operating margin
|
17.7
|
%
|
|
16.4
|
%
|
|
15.0
|
%
|
|
|
|
1.3 points
|
|
|
|
2.7 points
|
|||||||
Non-GAAP Adjusted Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Non-GAAP adjusted operating income
|
$
|
26
|
|
|
$
|
27
|
|
|
$
|
21
|
|
|
(1
|
)
|
|
(4)%
|
|
5
|
|
|
24%
|
||
Non-GAAP adjusted operating margin percent
|
17.7
|
%
|
|
17.0
|
%
|
|
16.5
|
%
|
|
|
|
0.7 point
|
|
|
|
1.2 points
|
|
Six Months Ended
|
|
Change
|
||||||||||
April 27,
2014 |
|
April 28,
2013 |
YTD Q2 2014
over YTD Q2 2013 |
||||||||||
|
|
|
|
|
|
|
|
||||||
|
(In millions, except percentages and ratios)
|
||||||||||||
New orders
|
$
|
419
|
|
|
$
|
333
|
|
|
$
|
86
|
|
|
26%
|
Net sales
|
306
|
|
|
214
|
|
|
92
|
|
|
43%
|
|||
Book to bill ratio
|
1.4
|
|
|
1.6
|
|
|
|
|
|
||||
Operating income
|
52
|
|
|
22
|
|
|
30
|
|
|
136%
|
|||
Operating margin
|
17.0
|
%
|
|
10.3
|
%
|
|
|
|
6.7 points
|
||||
Non-GAAP Adjusted Results
|
|
|
|
|
|
|
|||||||
Non-GAAP adjusted operating income
|
$
|
53
|
|
|
$
|
26
|
|
|
27
|
|
|
104%
|
|
Non-GAAP adjusted operating margin percent
|
17.3
|
%
|
|
12.1
|
%
|
|
|
|
5.2 points
|
|
Three Months Ended
|
|
Change
|
||||||||||||||||||
|
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
Q2 2014
over Q1 2014 |
|
Q2 2014
over Q2 2013 |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
(In millions, except percentages)
|
||||||||||||||||||||
China
|
$
|
135
|
|
|
92%
|
|
$
|
155
|
|
|
97%
|
|
$
|
30
|
|
|
24%
|
|
(13)%
|
|
350%
|
Korea
|
$
|
1
|
|
|
1%
|
|
$
|
4
|
|
|
3%
|
|
$
|
59
|
|
|
46%
|
|
(75)%
|
|
(98)%
|
|
Six Months Ended
|
|
Change
|
||||||||||
|
April 27,
2014 |
|
April 28,
2013 |
YTD Q2 2014
over YTD Q2 2013 |
|||||||||
|
|
|
|
|
|
|
|
|
|
||||
|
(In millions, except percentages)
|
||||||||||||
China
|
$
|
290
|
|
|
95%
|
|
$
|
74
|
|
|
35%
|
|
292%
|
Korea
|
$
|
5
|
|
|
2%
|
|
$
|
102
|
|
|
48%
|
|
(95)%
|
|
Three Months Ended
|
|
Change
|
||||||||||||||||||||
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
Q2 2014 over Q1 2014
|
|
Q2 2014 over Q2 2013
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except percentages and ratios)
|
||||||||||||||||||||||
New orders
|
$
|
88
|
|
|
$
|
40
|
|
|
$
|
39
|
|
|
$
|
48
|
|
|
120%
|
|
$
|
49
|
|
|
126%
|
Net sales
|
88
|
|
|
40
|
|
|
38
|
|
|
48
|
|
|
120%
|
|
50
|
|
|
132%
|
|||||
Book to bill ratio
|
1.0
|
|
|
1.0
|
|
|
1.0
|
|
|
|
|
|
|
|
|
|
|||||||
Operating income (loss)
|
5
|
|
|
(11
|
)
|
|
(322
|
)
|
|
16
|
|
|
145%
|
|
327
|
|
|
102%
|
|||||
Operating margin
|
5.7
|
%
|
|
(27.5
|
)%
|
|
(847.4
|
)%
|
|
|
|
33.2 points
|
|
|
|
853.1 points
|
|||||||
Non-GAAP Adjusted Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Non-GAAP adjusted operating income (loss)
|
7
|
|
|
(10
|
)
|
|
(34
|
)
|
|
17
|
|
|
170%
|
|
41
|
|
|
121%
|
|||||
Non-GAAP adjusted operating margin percent
|
8.0
|
%
|
|
(25.0
|
)%
|
|
(89.5
|
)%
|
|
|
|
33.0 points
|
|
|
|
97.5 points
|
|
Six Months Ended
|
|
Change
|
||||||||||
April 27,
2014 |
|
April 28,
2013 |
YTD Q2 2014
over YTD Q2 2013 |
||||||||||
|
|
|
|
|
|
|
|
||||||
|
(In millions, except percentages and ratios)
|
||||||||||||
New orders
|
$
|
128
|
|
|
$
|
107
|
|
|
$
|
21
|
|
|
20%
|
Net sales
|
128
|
|
|
84
|
|
|
44
|
|
|
52%
|
|||
Book to bill ratio
|
1.0
|
|
|
1.3
|
|
|
|
|
|
||||
Operating loss
|
(6
|
)
|
|
(376
|
)
|
|
370
|
|
|
98%
|
|||
Operating margin
|
(4.7
|
)%
|
|
(447.6
|
)%
|
|
|
|
442.9 points
|
||||
Non-GAAP Adjusted Results
|
|
|
|
|
|
|
|||||||
Non-GAAP adjusted operating loss
|
$
|
(3
|
)
|
|
$
|
(78
|
)
|
|
75
|
|
|
96%
|
|
Non-GAAP adjusted operating margin percent
|
(2.3
|
)%
|
|
(92.9
|
)%
|
|
|
|
90.6 points
|
|
Three Months Ended
|
|
Change
|
||||||||||||||||||
|
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
Q2 2014
over Q1 2014 |
|
Q2 2014
over Q2 2013 |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
(In millions, except percentages)
|
||||||||||||||||||||
China
|
$
|
65
|
|
|
74%
|
|
$
|
11
|
|
|
28%
|
|
$
|
21
|
|
|
55%
|
|
491%
|
|
210%
|
Europe
|
$
|
9
|
|
|
10%
|
|
$
|
17
|
|
|
43%
|
|
$
|
9
|
|
|
24%
|
|
(47)%
|
|
—%
|
|
Six Months Ended
|
|
Change
|
||||||||||
|
April 27,
2014 |
|
April 28,
2013 |
YTD Q2 2014
over YTD Q2 2013 |
|||||||||
|
|
|
|
|
|
|
|
|
|
||||
|
(In millions, except percentages)
|
||||||||||||
China
|
$
|
76
|
|
|
59%
|
|
$
|
36
|
|
|
43%
|
|
111%
|
Europe
|
$
|
26
|
|
|
20%
|
|
$
|
18
|
|
|
22%
|
|
44%
|
|
April 27,
2014 |
|
October 27,
2013 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Cash and cash equivalents
|
$
|
2,453
|
|
|
$
|
1,711
|
|
Short-term investments
|
146
|
|
|
180
|
|
||
Long-term investments
|
836
|
|
|
1,005
|
|
||
Total cash, cash-equivalents and investments
|
$
|
3,435
|
|
|
$
|
2,896
|
|
|
Six Months Ended
|
||||||
|
April 27, 2014
|
|
April 28, 2013
|
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Cash provided by operating activities
|
$
|
809
|
|
|
$
|
240
|
|
Cash provided by investing activities
|
$
|
84
|
|
|
$
|
192
|
|
Cash used in financing activities
|
$
|
(151
|
)
|
|
$
|
(279
|
)
|
|
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
|
|
|
|
|
|
Days sales outstanding
|
62
|
|
63
|
|
59
|
Days inventory outstanding
|
105
|
|
107
|
|
103
|
Days payable outstanding
|
41
|
|
45
|
|
41
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||
(In millions, except percentages)
|
|
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
|
April 27,
2014 |
|
April 28,
2013 |
||||||||||
|
|
|
|
|
||||||||||||||||
Non-GAAP Adjusted Gross Margin
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported gross margin - GAAP basis
|
|
$
|
1,001
|
|
|
$
|
891
|
|
|
$
|
808
|
|
|
$
|
1,892
|
|
|
$
|
1,390
|
|
Certain items associated with acquisitions
1
|
|
39
|
|
|
39
|
|
|
43
|
|
|
78
|
|
|
86
|
|
|||||
Acquisition integration costs
|
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|||||
Non-GAAP adjusted gross margin
|
|
$
|
1,041
|
|
|
$
|
930
|
|
|
$
|
852
|
|
|
$
|
1,971
|
|
|
$
|
1,478
|
|
Non-GAAP adjusted gross margin percent (% of net sales)
|
|
44.2
|
%
|
|
42.5
|
%
|
|
43.2
|
%
|
|
43.4
|
%
|
|
41.7
|
%
|
|||||
Non-GAAP Adjusted Operating Income
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported operating income (loss) - GAAP basis
|
|
$
|
387
|
|
|
$
|
330
|
|
|
$
|
(68
|
)
|
|
$
|
717
|
|
|
$
|
(29
|
)
|
Impairment of goodwill and intangible assets
|
|
—
|
|
|
—
|
|
|
278
|
|
|
—
|
|
|
278
|
|
|||||
Certain items associated with acquisitions
1
|
|
46
|
|
|
45
|
|
|
53
|
|
|
91
|
|
|
107
|
|
|||||
Acquisition integration costs
|
|
10
|
|
|
11
|
|
|
12
|
|
|
21
|
|
|
22
|
|
|||||
Unrealized loss (gain) on derivative associated with announced business combination
|
|
23
|
|
|
(24
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||||
Certain items associated with announced business combination
2
|
|
16
|
|
|
11
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|||||
Restructuring charges and asset impairments
3, 4, 5
|
|
—
|
|
|
7
|
|
|
10
|
|
|
7
|
|
|
19
|
|
|||||
Non-GAAP adjusted operating income
|
|
$
|
482
|
|
|
$
|
380
|
|
|
$
|
285
|
|
|
$
|
862
|
|
|
$
|
397
|
|
Non-GAAP adjusted operating margin percent (% of net sales)
|
|
20.5
|
%
|
|
17.4
|
%
|
|
14.4
|
%
|
|
19.0
|
%
|
|
11.2
|
%
|
|||||
Non-GAAP Adjusted Net Income
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported net income (loss) - GAAP basis
|
|
$
|
262
|
|
|
$
|
253
|
|
|
$
|
(129
|
)
|
|
$
|
515
|
|
|
$
|
(95
|
)
|
Impairment of goodwill and intangible assets
|
|
—
|
|
|
—
|
|
|
278
|
|
|
—
|
|
|
278
|
|
|||||
Certain items associated with acquisitions
1
|
|
46
|
|
|
45
|
|
|
53
|
|
|
91
|
|
|
107
|
|
|||||
Acquisition integration costs
|
|
10
|
|
|
11
|
|
|
12
|
|
|
21
|
|
|
22
|
|
|||||
Unrealized loss (gain) on derivative associated with announced business combination
|
|
23
|
|
|
(24
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||||
Certain items associated with announced business combination
2
|
|
16
|
|
|
11
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|||||
Restructuring charges and asset impairments
3, 4, 5
|
|
—
|
|
|
7
|
|
|
10
|
|
|
7
|
|
|
19
|
|
|||||
Impairment (gain on sale) of strategic investments, net
|
|
2
|
|
|
(5
|
)
|
|
2
|
|
|
(3
|
)
|
|
2
|
|
|||||
Reinstatement of federal R&D tax credit
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(13
|
)
|
|||||
Resolution of prior years’ income tax filings and other tax items
|
|
12
|
|
|
(15
|
)
|
|
—
|
|
|
(3
|
)
|
|
(11
|
)
|
|||||
Income tax effect of non-GAAP adjustments
|
|
(23
|
)
|
|
(4
|
)
|
|
(24
|
)
|
|
(27
|
)
|
|
(41
|
)
|
|||||
Non-GAAP adjusted net income
|
|
$
|
348
|
|
|
$
|
279
|
|
|
$
|
199
|
|
|
$
|
627
|
|
|
$
|
268
|
|
1
|
These items are incremental charges attributable to completed acquisitions, consisting of inventory fair value adjustments on products sold, and amortization of purchased intangible assets.
|
|
|
2
|
These items are incremental charges related to the announced business combination agreement with Tokyo Electron Limited, consisting of acquisition-related and integration costs.
|
|
|
3
|
Results for the three months ended January 26, 2014 and six months ended April 27, 2014 included employee-related costs of $7 million related to the restructuring program announced on October 3, 2012.
|
|
|
4
|
Results for the three months ended April 28, 2013 included $4 million of employee-related costs related to the restructuring program announced on October 3, 2012 and restructuring and asset impairment charges of $6 million related to the restructuring program announced on May 10, 2012.
|
|
|
5
|
Results for the six months ended April 28, 2013 included $8 million of employee-related costs, net, related to the restructuring program announced on October 3, 2012, restructuring and asset impairment charges of $9 million related to the restructuring program announced on May 10, 2012 and employee-related costs of $2 million related to the integration of Varian Semiconductor Equipment Associates, Inc (Varian).
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||
(In millions, except per share amounts)
|
|
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
|
April 27,
2014 |
|
April 28,
2013 |
||||||||||
|
|
|
|
|
||||||||||||||||
Non-GAAP Adjusted Earnings Per Diluted Share
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported earnings (loss) per diluted share - GAAP basis
|
|
$
|
0.21
|
|
|
$
|
0.21
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.42
|
|
|
$
|
(0.08
|
)
|
Impairment of goodwill and intangible assets
|
|
—
|
|
|
—
|
|
|
0.22
|
|
|
—
|
|
|
0.22
|
|
|||||
Certain items associated with acquisitions
|
|
0.03
|
|
|
0.03
|
|
|
0.04
|
|
|
0.06
|
|
|
0.07
|
|
|||||
Acquisition integration costs
|
|
0.01
|
|
|
0.01
|
|
|
0.01
|
|
|
0.01
|
|
|
0.02
|
|
|||||
Unrealized loss (gain) on derivative associated with announced business combination
|
|
0.01
|
|
|
(0.01
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Certain items associated with announced business combination
|
|
0.01
|
|
|
—
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
|||||
Restructuring charges and asset impairments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
|||||
Reinstatement of federal R&D tax credit and resolution of prior years’ income tax filings and other tax items
|
|
0.01
|
|
|
(0.01
|
)
|
|
—
|
|
|
—
|
|
|
(0.02
|
)
|
|||||
Non-GAAP adjusted earnings per diluted share
|
|
$
|
0.28
|
|
|
$
|
0.23
|
|
|
$
|
0.16
|
|
|
$
|
0.51
|
|
|
$
|
0.22
|
|
Weighted average number of diluted shares
|
|
1,229
|
|
|
1,225
|
|
|
1,217
|
|
|
1,227
|
|
|
1,216
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||
(In millions, except percentages)
|
|
April 27,
2014 |
|
January 26,
2014 |
|
April 28,
2013 |
|
April 27,
2014 |
|
April 28,
2013 |
||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
SSG Non-GAAP Adjusted Operating Income
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported operating income - GAAP basis
|
|
$
|
391
|
|
|
$
|
314
|
|
|
$
|
283
|
|
|
$
|
705
|
|
|
$
|
417
|
|
Certain items associated with acquisitions
1
|
|
42
|
|
|
42
|
|
|
45
|
|
|
84
|
|
|
89
|
|
|||||
Acquisition integration costs
|
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|||||
Restructuring charges and asset impairments
3
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Non-GAAP adjusted operating income
|
|
$
|
433
|
|
|
$
|
357
|
|
|
$
|
329
|
|
|
$
|
790
|
|
|
$
|
509
|
|
Non-GAAP adjusted operating margin percent (% of net sales)
|
|
27.3
|
%
|
|
24.1
|
%
|
|
25.5
|
%
|
|
25.7
|
%
|
|
22.5
|
%
|
|||||
AGS Non-GAAP Adjusted Operating Income
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported operating income - GAAP basis
|
|
$
|
148
|
|
|
$
|
125
|
|
|
$
|
118
|
|
|
$
|
273
|
|
|
$
|
207
|
|
Certain items associated with acquisitions
1
|
|
2
|
|
|
1
|
|
|
1
|
|
|
3
|
|
|
2
|
|
|||||
Restructuring charges and asset impairments
2, 3
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
|||||
Non-GAAP adjusted operating income
|
|
$
|
150
|
|
|
$
|
126
|
|
|
$
|
120
|
|
|
$
|
276
|
|
|
$
|
211
|
|
Non-GAAP adjusted operating margin percent (% of net sales)
|
|
28.1
|
%
|
|
24.9
|
%
|
|
23.2
|
%
|
|
26.5
|
%
|
|
21.4
|
%
|
|||||
Display Non-GAAP Adjusted Operating Income
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported operating income - GAAP basis
|
|
$
|
26
|
|
|
$
|
26
|
|
|
$
|
19
|
|
|
$
|
52
|
|
|
$
|
22
|
|
Certain items associated with acquisitions
1
|
|
—
|
|
|
1
|
|
|
2
|
|
|
1
|
|
|
4
|
|
|||||
Non-GAAP adjusted operating income
|
|
$
|
26
|
|
|
$
|
27
|
|
|
$
|
21
|
|
|
$
|
53
|
|
|
$
|
26
|
|
Non-GAAP adjusted operating margin percent (% of net sales)
|
|
17.7
|
%
|
|
17.0
|
%
|
|
16.5
|
%
|
|
17.3
|
%
|
|
12.1
|
%
|
|||||
EES Non-GAAP Adjusted Operating Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported operating income (loss) - GAAP basis
|
|
$
|
5
|
|
|
$
|
(11
|
)
|
|
$
|
(322
|
)
|
|
$
|
(6
|
)
|
|
$
|
(376
|
)
|
Impairment of goodwill and intangible assets
|
|
—
|
|
|
—
|
|
|
278
|
|
|
—
|
|
|
278
|
|
|||||
Certain items associated with acquisitions
1
|
|
2
|
|
|
1
|
|
|
5
|
|
|
3
|
|
|
12
|
|
|||||
Restructuring charges and asset impairments
2, 3
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
8
|
|
|||||
Non-GAAP adjusted operating income (loss)
|
|
$
|
7
|
|
|
$
|
(10
|
)
|
|
$
|
(34
|
)
|
|
$
|
(3
|
)
|
|
$
|
(78
|
)
|
Non-GAAP adjusted operating margin percent (% of net sales)
|
|
8.0
|
%
|
|
(25.0
|
)%
|
|
(89.5
|
)%
|
|
(2.3
|
)%
|
|
(92.9
|
)%
|
1
|
These items are incremental charges attributable to completed acquisitions, consisting of inventory fair value adjustments on products sold, and amortization of purchased intangible assets.
|
|
|
2
|
Results for the three months ended April 28, 2013 included restructuring and asset impairment charges of $6 million related to the restructuring program announced on May 10, 2012.
|
|
|
3
|
Results for the six months ended April 28, 2013 included restructuring and asset impairment charges of $9 million related to the restructuring program announced on May 10, 2012 and employee-related costs of $2 million related to the integration of Varian.
|
Item 3:
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 1A:
|
Risk Factors
|
•
|
the nature, timing and degree of visibility of changes in end demand for electronic products, including those related to fluctuations in consumer buying patterns tied to seasonality or the introduction of new products, and the effects of these changes on foundry and other customers’ businesses and, in turn, on demand for Applied’s products;
|
•
|
increasing capital requirements for building and operating new fabrication plants and customers’ ability to raise the necessary capital;
|
•
|
differences in growth rates among the semiconductor, display and solar industries;
|
•
|
the increasing importance of establishing, improving and maintaining strong relationships with customers;
|
•
|
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;
|
•
|
manufacturers’ ability to reconfigure and re-use fabrication systems;
|
•
|
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, displays 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, 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 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’ levels of capital expenditures and the allocation of capital investment to market segments that Applied does not serve, such as lithography, or segments where Applied's products have lower relative market presence;
|
•
|
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 adoption of cloud-based memory storage particularly for mobility products, and the associated inhibiting effect on NAND bit growth rates;
|
•
|
the increasing frequency and complexity of technology transitions and inflections, such as 3-D transistors and advanced interconnects, and Applied’s ability to timely and effectively anticipate and adapt to these changes;
|
•
|
shorter cycle times between order placements by customers (particularly foundries) and product shipment, which may lead to inventory write-offs and manufacturing inefficiencies that decrease gross margin;
|
•
|
competitive factors that make it difficult to enhance position, including challenges in securing development-tool-of-record (DTOR) and production-tool-of-record (PTOR) positions with customers;
|
•
|
shifts in sourcing strategies by computer and electronics companies that impact the equipment requirements of Applied's foundry customers;
|
•
|
the concentration of new wafer starts in Korea and Taiwan, where Applied’s service penetration and service-revenue-per-wafer-start have been lower than in other regions; and
|
•
|
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 timing and extent of an expansion of manufacturing facilities in China by Chinese display manufacturers and manufacturers from other countries, and the ability of non-Chinese manufacturers to obtain government approvals on a timely basis;
|
•
|
the rate of transition to larger substrate sizes for TVs and the resulting effect on capital intensity in the industry and on Applied’s product differentiation, gross margin and return on investment;
|
•
|
the importance of new types of display technologies, such as low temperature polysilicon (LTPS), organic light-emitting diode (OLED) and metal oxide, and new touch panel films, such as anti-reflective and anti-fingerprint; and
|
•
|
uncertainty with respect to future display technology end-use applications and growth drivers.
|
•
|
the need to continually decrease the cost-per-watt of electricity produced by solar PV products to at or below grid parity in more global regions by, among other things, reducing operating costs and increasing throughputs for solar PV manufacturing, and improving the conversion efficiency of solar PVs;
|
•
|
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 amount of 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 has resulted in the assessment of duties on solar cells and modules imported from China and led to other trade-related conflicts and 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 availability and condition of used solar equipment, which impacts demand for new equipment;
|
•
|
complexities associated with government-affiliated entities as customers, for example in China;
|
•
|
the financial condition of solar PV customers and their access to affordable financing and capital; and
|
•
|
solar panel manufacturing overcapacity, which has led to weak industry operating performance and outlooks, deterioration of the solar equipment market, and a worsening of the financial condition of certain customers.
|
•
|
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;
|
•
|
differentiate its products from those of competitors and any disruptive technologies, meet customers’ performance specifications, appropriately price products, and achieve market acceptance;
|
•
|
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 product development and sales and marketing strategies that address customers' high value problems and 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.
|
•
|
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 and sourcing 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, energy and shipping costs or shipping delays;
|
•
|
challenges associated with managing more geographically diverse operations and projects, which require 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;
|
•
|
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 global infrastructure and make appropriate changes;
|
•
|
cultural and language differences;
|
•
|
difficulties and uncertainties associated with the entry into new countries;
|
•
|
hiring and integration of an increasing number of new workers, including in countries such as India and China;
|
•
|
the increasing need for the workforce to be more mobile and work in or travel to different regions;
|
•
|
uncertainties with respect to economic growth rates in various countries; and
|
•
|
uncertainties with respect to growth rates for the manufacture and sale of semiconductors, displays and solar PVs in the developing economies of certain countries.
|
•
|
diversion of management’s attention from other operational matters;
|
•
|
contractual restrictions on the conduct of Applied’s business during the pendency of a proposed transaction
;
|
•
|
inability to complete proposed transactions as anticipated or at all and any ensuing obligation to pay a termination fee;
|
•
|
the failure of acquired businesses to meet or exceed expected returns;
|
•
|
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, which can impact the ability to realize anticipated synergies or other benefits;
|
•
|
failure to commercialize purchased technologies;
|
•
|
initial dependence on unfamiliar supply chains or relatively small supply partners;
|
•
|
inability to capitalize on characteristics of new markets that may be significantly different from Applied’s existing markets and where competitors may have stronger market positions and customer relationships;
|
•
|
failure to attract, retain and motivate key employees;
|
•
|
the potential impact of the announcement or consummation of a proposed transaction on relationships with third parties;
|
•
|
potential changes in Applied’s credit rating, which could adversely impact the Company’s access to and cost of capital;
|
•
|
reductions in cash balances and/or increases in debt obligations to finance activities associated with a transaction, which reduce the availability of cash flow for general corporate or other purposes;
|
•
|
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.
|
•
|
the need to devote additional resources to develop new products for, and operate in, new markets;
|
•
|
the need to develop new sales and technical marketing strategies, cultivate relationships with new customers and meet different customer service requirements;
|
•
|
differing rates of profitability and growth among multiple businesses;
|
•
|
Applied’s ability to anticipate demand, capitalize on opportunities, and avoid or minimize risks;
|
•
|
the complexity of managing multiple businesses with variations in production planning, execution, supply chain management and logistics;
|
•
|
the adoption of new business models, business processes and systems;
|
•
|
Applied’s ability to rapidly expand or reduce its operations to meet increased or decreased demand, respectively, and the associated effect on working capital;
|
•
|
the need to attract, motivate and retain employees with skills and expertise in these new areas;
|
•
|
new and more diverse customers and suppliers, including some with limited operating histories, uncertain and/or limited funding, evolving business models and/or locations in regions where Applied does not have, or has limited, operations;
|
•
|
new or different competitors with potentially more financial or other resources, industry experience and/or established customer relationships;
|
•
|
entry into new industries and countries, with differing levels of government involvement, laws and regulations, and business, employment and safety practices;
|
•
|
third parties’ intellectual property rights; and
|
•
|
the need to comply with, or work to establish, industry standards and practices.
|
•
|
the failure or inability of suppliers to timely deliver sufficient quantities of quality parts on a cost-effective basis;
|
•
|
volatility in the availability and cost of materials, including rare earth elements;
|
•
|
difficulties or delays in obtaining required import or export approvals;
|
•
|
information technology or infrastructure failures; and
|
•
|
natural disasters or other events beyond Applied's control (such as earthquakes, floods or storms, regional economic downturns, pandemics, social unrest, political instability, terrorism, or acts of war), particularly where it conducts manufacturing.
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit
No.
|
Description
|
|
Form
|
|
File No.
|
|
Exhibit No.
|
|
Filing Date
|
2.1
|
Amendment No.1 to Business Combination Agreement, dated as of February 14, 2014, by and among Applied Materials, Inc., Tokyo Electron Limited and TEL-Applied Holdings B.V.
|
|
8-K
|
|
000-06920
|
|
2.1
|
|
2/18/14
|
31.1
|
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002†
|
|
|
|
|
|
|
|
|
31.2
|
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002†
|
|
|
|
|
|
|
|
|
32.1
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002‡
|
|
|
|
|
|
|
|
|
32.2
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002‡
|
|
|
|
|
|
|
|
|
101.INS
|
XBRL Instance Document‡
|
|
|
|
|
|
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document‡
|
|
|
|
|
|
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document‡
|
|
|
|
|
|
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document‡
|
|
|
|
|
|
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document‡
|
|
|
|
|
|
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document‡
|
|
|
|
|
|
|
|
|
†
|
Filed herewith.
|
‡
|
Furnished herewith.
|
APPLIED MATERIALS, INC.
|
|
|
|
By:
|
/s/ ROBERT J. HALLIDAY
|
|
Robert J. Halliday
Senior Vice President,
Chief Financial Officer
(Principal Financial Officer)
|
By:
|
/s/ CHARLES W. READ
|
|
Charles W. Read
Corporate Vice President,
Corporate Controller
and Chief Accounting Officer
(Principal Accounting Officer)
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
---|
DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
---|---|---|---|
Yvonne McGill Chief Financial Officer, Dell Technologies Inc. Ms. McGill has extensive executive leadership experience and provides the Board deep industry expertise, financial acumen, and strategic planning experience. She has been Chief Financial Officer of Dell Technologies Inc. (“Dell”), a leading global end-to-end technology provider, since August 2023, and previously held various leadership positions at Dell since joining the company in 1997, including corporate controller and CFO of the Infrastructure Solutions Group, CFO of Asia-Pacific, Japan and China business, and Chief Accounting Officer. Key skills and qualifications Executive Leadership; Financial and Accounting; Strategy and Innovation; Risk Management : Since joining Dell in 1997, Ms. McGill has served in various finance leadership roles, including her current role as Chief Financial Officer. At Dell, Ms. McGill oversees all aspects of the company’s finance function, including accounting, financial planning and analysis, tax, treasury and investor relations, as well as corporate development, global business operations and Dell financial services. She also partners closely with the office of Dell’s CEO to develop and execute a long-term strategy that creates value for Dell’s stakeholders. Prior to Dell, Ms. McGill worked at ManTech International Corporation and Price Waterhouse. Ms. McGill is a Certified Public Accountant (inactive). Industry and Technology; Global Business : During her over 27-year career at Dell, Ms. McGill has gained experience across the company’s comprehensive portfolio of IT hardware, software and service solutions spanning both traditional infrastructure and emerging, multi-cloud technologies. Ms. McGill’s deep knowledge and expertise in the technology sector, including with regards to our end-users and the markets in which we compete, offer valuable insights to our Board. | |||
Xun (Eric) Chen Executive Chairman, ParityBit Technologies, Inc. Dr. Chen has extensive experience establishing, working for and investing in companies in the technology sector and related industries. Since August 2023, Dr. Chen has been Executive Chairman of ParityBit Technologies, Inc. (“ParityBit”), a data technology company he co-founded. From 2018 to August 2023, Dr. Chen was a Managing Partner of SB Investment Advisers (“SBIA”), an investment adviser focused on investments in the technology sector. Prior to joining SBIA, Dr. Chen was the Chief Executive Officer and Co-Founder of ParityBit. He served as CEO of ParityBit since it was founded in 2015, except from 2016 until 2017, when ParityBit was a portfolio company of Team Curis Group, a group of integrated biotechnology and data technology companies and laboratories, during which time Dr. Chen served as CEO of Team Curis Group. From 2008 to 2015, Dr. Chen served as a managing director of Silver Lake, and prior to Silver Lake, he was a senior vice president and member of the executive committee of ASML Holding N.V. Dr. Chen joined ASML following its 2007 acquisition of Brion Technologies, Inc., a company he co-founded in 2002 and served as Chief Executive Officer. Prior to Brion Technologies, Dr. Chen was a senior vice president at J.P. Morgan. Key skills and qualifications Industry and Technology; Strategy and Innovation; Growth and Emerging Technologies : Dr. Chen’s career has focused on the technology sector, and he provides his expertise on our industry, technologies and end markets in the boardroom. Dr. Chen is currently Executive Chairman of ParityBit, a technology company focused on leveraging the power of Big Data, AI technologies, and privacy computing. His other relevant experiences include serving as a Managing Partner of SBIA, an investment adviser focused on investments in the technology sector, serving as a managing director at Silver Lake, a leading private investment firm focused on technology-enabled and related growth industries, and founding and serving as CEO of Brion Technologies, a firm working in computational lithography for integrated circuits in semiconductor manufacturing. Executive Leadership; Global Business : The Board values Dr. Chen’s perspective gained through his various leadership roles at firms with global operations. For example, Dr. Chen is currently the Executive Chairman, and prior to joining SBIA was the CEO and Co-Founder, of ParityBit. Dr. Chen grew ParityBit’s presence globally, including throughout the Asia Pacific Region. Prior to this, Dr. Chen worked at ASML Holding N.V., an industrial manufacturer for chipmakers in the semiconductor industry that is headquartered in The Netherlands and has over 60 locations globally. | |||
Scott A. McGregor President and Chief Executive Officer, Broadcom Corporation (retired) Mr. McGregor brings to our Board executive leadership and deep experience working in the semiconductor and technology industries over many decades. Mr. McGregor served as President and Chief Executive Officer and as a member of the board of directors of Broadcom Corporation, a world leader in wireless connectivity, broadband and networking infrastructure, from 2005 until the company was acquired by Avago Technologies Limited in 2016. Mr. McGregor joined Broadcom from Philips Semiconductors (now NXP Semiconductors), where he was President and Chief Executive Officer. He previously served in a range of senior management positions at Santa Cruz Operation Inc., Digital Equipment Corporation (now part of HP), Xerox Corporation’s Palo Alto Research Center (PARC) and Microsoft, where he was the architect and development team leader for Windows 1.0. Key skills and qualifications Industry and Technology; Executive Leadership; Global Business : Mr. McGregor was CEO of Philips Semiconductors (now NXP Semiconductors), headquartered in the Netherlands, where he oversaw one of the world’s largest semiconductor suppliers. Mr. McGregor was also President and CEO of Broadcom, where he was responsible for guiding the strategic direction of the company, business development and day-to-day operations. Growth and Emerging Technologies; Strategy and Innovation : Throughout his career, Mr. McGregor held strategic roles developing new technologies and growing businesses in new directions. Mr. McGregor started his career at Xerox PARC working on user interface design for the world’s first personal computers. He then joined Microsoft and led the team that created the first version of Microsoft Windows. After pivoting to the semiconductor industry, Mr. McGregor continued to lead through technological innovation at both Broadcom and Philips Semiconductors, expanding each company’s footprint and offerings. At Broadcom, Mr. McGregor led revenue growth from $2.4 billion to over $8 billion during his tenure as CEO. Financial and Accounting; Cybersecurity; Risk Management : As CEO of Broadcom and Philips Semiconductors for approximately 15 years, Mr. McGregor had oversight responsibility for financing activities, risk management and cybersecurity at large companies within the semiconductor industry. As a result of these experiences, as well as oversight of cybersecurity as a board member at Equifax, Mr. McGregor brings invaluable insights in these areas to our Board. | |||
Gary E. Dickerson President and Chief Executive Officer, Applied Materials, Inc. Mr. Dickerson has been President of Applied Materials since 2012 and Chief Executive Officer and a member of the Board of Directors since 2013. Mr. Dickerson joined Applied following its acquisition in 2011 of Varian Semiconductor Equipment Associates, Inc., a supplier of semiconductor manufacturing equipment. Mr. Dickerson had served as Chief Executive Officer and a director of Varian since 2004. Prior to joining Varian in 2004, Mr. Dickerson served 18 years at KLA-Tencor Corporation, a supplier of process control and yield management solutions for the semiconductor and related industries, where he held a variety of roles, including President and Chief Operating Officer. Mr. Dickerson started his semiconductor career in manufacturing and engineering management at General Motors’ Delco Electronics Division and AT&T Technologies, Inc. Key skills and qualifications Industry and Technology; Executive Leadership; Strategy and Innovation; Global Business; Risk Management : Mr. Dickerson has over three decades of experience in executive-level positions at large multi-national companies in the semiconductor and technology industries, including nearly two decades as a chief executive officer at Varian and Applied. Mr. Dickerson’s knowledge of our industry, technologies and end markets provides important insight and leadership to the oversight, planning and execution of our business strategy and operations. At Applied, this has resulted in the company being the world’s leading semiconductor and display equipment company with over $27 billion in annual revenues and operations in 24 countries. Growth and Emerging Technologies; Service, Sales and Operations; Government Policy and Sustainability: Throughout Mr. Dickerson’s career, he has held roles responsible for identifying and developing emerging technologies and service offerings for the semiconductor industry. This includes his first roles in manufacturing and engineering management with General Motors’ Delco Electronics Division and AT&T Technologies, 18 years at KLA-Tencor, progressing from roles in product development and general management of products, sales and services business units to his appointment as President and Chief Operating Officer, and to his leadership and contributions as Chief Executive Officer at Varian and Applied. Mr. Dickerson has government policy experience in guiding Applied through the geopolitical and regulatory environment, as well as from his past service as a board of member of the U.S.-China Business Council. Mr. Dickerson’s experience in sustainability stems from his deep involvement in developing Applied’s sustainability roadmap and championing its sustainability initiatives. Mr. Dickerson draws on these experiences to provide leadership and insight in guiding our core semiconductor business, and as we develop new technologies and services to enable significant value creation for our customers and shareholders. | |||
Alexander A. Karsner Senior Strategist, X (parent company: Alphabet Inc.) Mr. Karsner has extensive global executive leadership experience as well as deep expertise in technology innovation, private equity, public policy and regulation, corporate strategy and sustainability. He is currently a Senior Strategist at X (the Moonshot Factory), the innovation lab of Alphabet Inc., and Executive Chairman of Manifest Energy Inc., an energy technology development and investment firm he founded in 2009. Mr. Karsner is also Founder of Elemental, which innovates market-based solutions and technology for conservation and environment. Key skills and qualifications Executive Leadership; Global Business: Mr. Karsner has over 30 years of experience in executive leadership positions with numerous organizations with significant global operations, including his current role at X and public company board experience at ExxonMobil. Mr. Karsner was the Founder and Managing Director of Enercorp., a company involved in international project development, management and financing of energy infrastructure. Industry and Technology; Growth and Emerging Technologies; Strategy and Innovation: Mr. Karsner currently serves as Senior Strategist at X, which has catalyzed technologies for autonomous vehicles, drone delivery and industrial robotics. From 2016 to 2019, Mr. Karsner served as Managing Partner of Emerson Collective, an investment platform funding venture and private equity portfolios, as well as non-profit, philanthropic investments advancing education, immigration, health and the environment. As a private equity investor, venture partner and strategic advisor, Mr. Karsner’s portfolios have included some of the most innovative startups over the last 15 years, such as Nest (AI), Tesla (mobility), Recurrent (solar), Codexis (biotech), Boom (aerospace) and Carbon (3-D printing). Government Policy and Sustainability: Mr. Karsner has extensive experience in government policy and relations, and offers our Board valuable insight into the regulatory environment. From 2006 to 2008, he served as Assistant Secretary for Energy Efficiency and Renewable Energy at the U.S. Department of Energy, responsible for multi-billion dollar federal applied science R&D programs and national labs. In this role, he helped assemble significant bipartisan coalitions to implement the Energy Policy Act and enact the Energy Independence and Security Act and the America Competes Act. Mr. Karsner was a U.S. Principal representative to the United Nations Framework Convention on Climate Change and a delegate to the bilateral U.S.-China and U.S.-India Track II dialogues on Climate Change, and is a member of the Council on Foreign Relations and the Trilateral Commission. Mr. Karsner also serves on the board of Conservation International and is a member of the boards of advisors of the Energy Futures Initiative, MIT Energy Initiative, MIT Media Lab, the Precourt Institute for Energy at Stanford University and the Polsky Center for Entrepreneurship at the University of Chicago. With these experiences, Mr. Karsner brings a valuable perspective to our Board’s oversight of sustainability, government relations and public policy engagement strategies. | |||
Aart J. de Geus Executive Chair of the Board of Directors, Synopsys, Inc. Dr. de Geus has extensive executive leadership experience and provides the Board his deep expertise in our industry, technology and corporate strategy. Dr. de Geus currently serves as Executive Chair of the Board of Directors of Synopsys, Inc., the leading provider of electronic design automation software, design IP and related services for semiconductor design companies. Since founding Synopsys in 1986, Dr. de Geus has held various positions at the company, including serving as Chief Executive Officer or co-Chief Executive Officer from 1994 to January 2024, Chairman of the Board from 1998 to January 2024, Senior Vice President of Engineering and Senior Vice President of Marketing. Prior to founding Synopsys, Dr. de Geus was employed by General Electric, where he was the Manager of the Advanced Computer-Aided Engineering Group. Key skills and qualifications Industry and Technology; Executive Leadership; Strategy and Innovation; Global Business; Risk Management : As the leading founder of Synopsys, Dr. de Geus has grown Synopsys for over three and a half decades and has held senior roles in engineering and marketing before becoming Chief Executive Officer and subsequently Executive Chair of the Board. He has been involved in all aspects of executive leadership at Synopsys, including determining corporate strategy, overseeing enterprise risk management, closing well over a hundred strategic acquisitions and transactions, and expanding the operations globally. Synopsys now has offices and development centers in North America, Europe, Armenia, Israel, India, Japan, Vietnam, South Korea and China. Growth and Emerging Technologies; Government Policy and Sustainability : Dr. de Geus has expanded Synopsys from a start-up synthesis company to a global high-tech leader in electronic design automation. He has long been considered one of the world’s leading experts on logic synthesis and simulation, frequently keynotes major conferences, is a member of the National Academy of Engineering and the recipient of numerous awards, including the IEEE Robert N. Noyce Medal, the Global Semiconductor Alliance Dr. Morris Chang Exemplary Leadership Award, and the Silicon Valley Leadership Group Lifetime Achievement Award. As a longtime CEO, Dr. de Geus has experience in government policy, such as the CHIPS Act and evolving international export controls, as well as driving sustainability initiatives in the context of regulatory requirements and stakeholder input. |
Name and Principal Position |
Year |
Salary ($) |
Bonus ($) |
Stock
($) |
Non-Equity Incentive Plan Compensation ($) |
All Other Compensation ($) |
Total ($) |
|||||||||||||||||||||
Gary E. Dickerson
|
|
2024
2023 2022 |
|
|
1,030,000
1,030,000 1,030,000 |
|
|
—
— — |
|
|
24,861,142
23,951,048 17,783,334 |
|
|
1,754,734
1,631,520 1,358,055 |
|
|
153,336
241,976 228,583 |
|
|
27,799,212
26,854,544 20,399,972 |
|
|||||||
Brice Hill
Financial Officer and Global
|
|
2024
2023 2022 |
|
|
744,616
708,846 441,346 |
|
|
—
— 2,000,000 |
|
|
5,851,542
5,530,849 8,351,018 |
|
|
1,149,947
1,019,304 523,723 |
|
|
63,641
324,136 58,343 |
|
|
7,809,746
7,583,135 11,374,430 |
|
|||||||
Prabu G. Raja
|
|
2024
2023 2022 |
|
|
792,308
740,000 679,615 |
|
|
—
— — |
|
|
6,968,612
6,636,826 5,372,622 |
|
|
1,229,580
1,091,475 819,791 |
|
|
19,303
18,073 18,682 |
|
|
9,009,803
8,486,374 6,890,710 |
|
|||||||
Omkaram Nalamasu
|
|
2024
2023 2022 |
|
|
659,616
625,385 592,308 |
|
|
—
— — |
|
|
4,255,476
4,037,503 3,727,899 |
|
|
866,608
742,203 568,080 |
|
|
14,440
3,718 4,543 |
|
|
5,796,140
5,408,809 4,892,830 |
|
|||||||
Timothy M. Deane
|
|
2024
2023 2022 |
|
|
642,308
574,947 433,350 |
|
|
—
— — |
|
|
3,776,822
3,097,266 2,807,119 |
|
|
956,313
733,590 412,458 |
|
|
18,855
17,761 16,703 |
|
|
5,394,298
4,423,564 3,669,630 |
|
Customers
Suppliers
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|---|---|---|
DICKERSON GARY E | - | 1,942,220 | 0 |
DICKERSON GARY E | - | 1,716,060 | 0 |
Raja Prabu G. | - | 544,389 | 0 |
Nalamasu Omkaram | - | 190,972 | 0 |
Nalamasu Omkaram | - | 173,290 | 0 |
Deane Timothy M | - | 139,612 | 0 |
DE GEUS AART | - | 109,459 | 0 |
Hill Brice | - | 108,356 | 0 |
Hill Brice | - | 106,023 | 0 |
Deane Timothy M | - | 100,009 | 0 |
Little Teri A. | - | 76,212 | 0 |
Little Teri A. | - | 69,504 | 0 |
Iannotti Thomas J | - | 49,185 | 0 |
CHEN XUN | - | 43,459 | 0 |
Bodner Jeff | - | 11,799 | 0 |
Sanders Adam | - | 5,862 | 0 |
Borkar Rani | - | 1,583 | 7,616 |