Applied Materials Announces Second Quarter Results
(Thomson Reuters ONE) -
* Q2 net sales of $2.44 billion up 4% year over year led by growth in Applied
Global Services and Display
* Q2 non-GAAP adjusted EPS of $0.29 up 4% year over year; GAAP EPS of $0.29 up
38% year over year
SANTA CLARA, Calif., May 14, 2015 - Applied Materials, Inc. (NASDAQ:AMAT), the
global leader in precision materials engineering solutions for the
semiconductor, display and solar industries, today reported results for its
second quarter ended April 26, 2015.
Second quarter orders were $2.52 billion, up 11 percent sequentially and down 4
percent year over year. Net sales were $2.44 billion, up 4 percent sequentially
and up 4 percent year over year.
On a non-GAAP adjusted basis, the company reported gross margin of 43.2 percent,
operating income of $476 million, and net income of $362 million or $0.29 per
diluted share. The company recorded GAAP gross margin of 41.6 percent, operating
income of $416 million, and net income of $364 million or $0.29 per diluted
share.
"Applied posted our highest quarterly revenue in the past three years and
earnings near the top of our guidance range," said Gary Dickerson, president and
CEO. "These results demonstrate that Applied is delivering the enabling products
and services our customers need as they transition complex new devices into
volume production."
Quarterly Results Summary
Change
----------------------
Q2 FY2015 Q2 FY2015
vs. vs.
GAAP Results Q2 FY2015 Q1 FY2015 Q2 FY2014 Q1 FY2015 Q2 FY2014
--------------- ------------- ------------- ------------ ----------- ----------
Net sales $2.44 $2.36 $2.35
billion billion billion 4% 4%
Gross profit $1.02 $959 $1.00
billion million billion 6% 1%
Operating $416 $458 $387
income million million million (9)% 7%
Net income $364 $348 $262
million million million 5% 39%
Diluted
earnings per
share (EPS) $0.29 $0.28 $0.21 4% 38%
Non-GAAP
Adjusted
Results
---------------
Non-GAAP
adjusted $1.06 $1.00 $1.04
gross profit billion billion billion 6% 1%
Non-GAAP
adjusted
operating $476 $447 $482
income million million million 6% (1)%
Non-GAAP
adjusted net $362 $338 $348
income million million million 7% 4%
Non-GAAP
adjusted
diluted EPS $0.29 $0.27 $0.28 7% 4%
Applied's non-GAAP adjusted results exclude the impact of the following, where
applicable: certain items related to mergers and acquisitions; restructuring
charges and any associated adjustments; impairments of assets, goodwill, or
investments; gain or loss on sale of strategic investments or facilities; and
certain tax items. A reconciliation of the GAAP and non-GAAP adjusted results is
provided in the financial tables included in this release. See also "Use of Non-
GAAP Adjusted Financial Measures" section.
Second Quarter Reportable Segment Results and Comparisons to the Prior Quarter
Silicon Systems Group (SSG) orders were $1.70 billion, up 19 percent, with
increases in foundry, flash and DRAM more than offsetting a decline in
logic/other. Net sales increased by 8 percent to $1.56 billion. Non-GAAP
adjusted operating income increased by 19 percent to $418 million or 26.8
percent of net sales. GAAP operating income increased by 22 percent to $374
million or 24.0 percent of net sales.
SSG new order composition was: foundry 36 percent; DRAM 31 percent; flash 21
percent; and logic/other 12 percent.
Applied Global Services orders of $641 million declined 7 percent primarily due
to a seasonal decline in service contract renewals. Net sales of $646 million
increased by 11 percent. Operating income increased to $170 million or 26.3
percent of net sales on both a GAAP and non-GAAP basis.
Display orders of $120 million were up 12 percent reflecting an increase in TV
equipment orders. Net sales declined 41 percent to $163 million, which was in
line with expectations. Operating income decreased to $40 million or 24.5
percent of net sales on both a GAAP and non-GAAP basis.
Energy and Environmental Solutions orders remained flat at $50 million, and net
sales increased by 33 percent to $73 million. EES reported a non-GAAP adjusted
operating loss of $4 million and a GAAP operating loss of $5 million.
Applied's backlog remained essentially flat at $2.78 billion and included
negative adjustments of $69 million, primarily consisting of order cancellations
and other adjustments. Backlog composition by segment was: SSG 53 percent; AGS
29 percent; Display 13 percent; and EES 5 percent.
Business Outlook
For the third quarter of fiscal 2015, Applied expects net sales to be in the
range of up 2 percent to up 6 percent from the previous quarter, the midpoint of
which would be up 12 percent year over year. Non-GAAP adjusted diluted EPS is
expected to be in the range of $0.31 to $0.35, the midpoint of which would be up
18 percent year over year.
This outlook excludes known charges related to completed acquisitions of $0.03
per share and does not exclude other non-GAAP adjustments that may arise
subsequent to this release.
Use of Non-GAAP Adjusted Financial Measures
Management uses non-GAAP adjusted results to evaluate the company's operating
and financial performance in light of business objectives and for planning
purposes. These measures are not in accordance with GAAP and may differ from
non-GAAP methods of accounting and reporting used by other companies. Applied
believes these measures enhance investors' ability to review the company's
business from the same perspective as the company's management and facilitate
comparisons of this period's results with prior periods. The presentation of
this additional information should not be considered a substitute for results
prepared in accordance with GAAP.
Webcast Information
Applied Materials will discuss these results during an earnings call that begins
at 1:30 p.m. Pacific Time today. A live webcast will be available at
www.appliedmaterials.com. A replay will be available on the website beginning at
5:00 p.m. Pacific Time today.
Forward-Looking Statements
This press release contains forward-looking statements, including those
regarding anticipated growth and trends in our businesses and markets, industry
outlooks, technology transitions, our financial performance and market share
positions, our business outlook for the third quarter of fiscal 2015, and other
statements that are not historical facts. These statements and their underlying
assumptions are subject to risks and uncertainties and are not guarantees of
future performance. Factors that could cause actual results to differ materially
from those expressed or implied by such statements include, without limitation:
the level of demand for our products; global economic and industry conditions;
consumer demand for electronic products; the demand for semiconductors;
customers' technology and capacity requirements; the introduction of new and
innovative technologies, and the timing of technology transitions; our ability
to develop, deliver and support new products and technologies; the concentrated
nature of our customer base; our ability to expand our current markets,
increase market share and develop new markets; market acceptance of existing and
newly developed products; our ability to obtain and protect intellectual
property rights in key technologies; our ability to achieve the objectives of
operational and strategic initiatives, align our resources and cost structure
with business conditions, and attract, motivate and retain key employees; the
variability of operating expenses and results among products and segments, and
our ability to accurately forecast future results, market conditions, customer
requirements and business needs; and other risks and uncertainties described in
our SEC filings, including our most recent Forms 10-Q and 8-K. All forward-
looking statements are based on management's current estimates, projections and
assumptions, and we assume no obligation to update them.
About Applied Materials
Applied Materials, Inc. (Nasdaq:AMAT) is the global leader in precision
materials engineering solutions for the semiconductor, flat panel display and
solar photovoltaic industries. Our technologies help make innovations like
smartphones, flat screen TVs and solar panels more affordable and accessible to
consumers and businesses around the world. Learn more at
www.appliedmaterials.com.
Contact:
Kevin Winston (editorial/media) 408.235.4498
Michael Sullivan (financial community) 408.986.7977
APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
----------------------------------- ----------------------
(In millions, January
except per share April 26, 25, April 27, April 26, April 27,
amounts) 2015 2015 2014 2015 2014
----------- ----------- ----------- ----------- ----------
Net sales $ 2,442 $ 2,359 $ 2,353 $ 4,801 $ 4,543
Cost of products
sold 1,426 1,400 1,352 2,826 2,651
----------- ----------- ----------- ----------- ----------
Gross profit 1,016 959 1,001 1,975 1,892
Operating
expenses:
Research,
development and
engineering 365 351 355 716 711
Marketing and
selling 109 111 107 220 216
General and
administrative 140 117 129 257 249
Loss (gain) on
derivatives
associated with
announced business
combination (14 ) (78 ) 23 (92 ) (1 )
----------- ----------- ----------- ----------- ----------
Total operating
expenses 600 501 614 1,101 1,175
Income from
operations 416 458 387 874 717
Interest expense 24 23 23 47 48
Interest income
and other income
(loss), net (3 ) 2 1 (1 ) 11
----------- ----------- ----------- ----------- ----------
Income before
income taxes 389 437 365 826 680
Provision for
income taxes 25 89 103 114 165
----------- ----------- ----------- ----------- ----------
Net income $ 364 $ 348 $ 262 $ 712 $ 515
----------- ----------- ----------- ----------- ----------
Earnings per
share:
Basic $ 0.30 $ 0.28 $ 0.22 $ 0.58 $ 0.43
Diluted $ 0.29 $ 0.28 $ 0.21 $ 0.57 $ 0.42
Weighted average
number of shares:
Basic 1,230 1,224 1,216 1,227 1,211
Diluted 1,241 1,240 1,229 1,241 1,227
APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
January October
April 26, 25, 26,
(In millions) 2015 2015 2014
------------ ------------ -----------
ASSETS
Current assets:
Cash and cash equivalents $ 3,067 $ 2,929 $ 3,002
Short-term investments 163 158 160
Accounts receivable, net 1,798 1,580 1,670
Inventories 1,713 1,641 1,567
Other current assets 706 625 568
------------ ------------ -----------
Total current assets 7,447 6,933 6,967
Long-term investments 936 930 935
Property, plant and equipment, net 887 864 861
Goodwill 3,304 3,304 3,304
Purchased technology and other
intangible assets, net 860 905 951
Deferred income taxes and other assets 153 137 156
------------ ------------ -----------
Total assets $ 13,587 $ 13,073 $ 13,174
------------ ------------ -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 1,822 $ 1,737 $ 1,883
Customer deposits and deferred revenue 874 784 940
------------ ------------ -----------
Total current liabilities 2,696 2,521 2,823
Long-term debt 1,947 1,947 1,947
Other liabilities 593 533 536
------------ ------------ -----------
Total liabilities 5,236 5,001 5,306
------------ ------------ -----------
Total stockholders' equity 8,351 8,072 7,868
------------ ------------ -----------
Total liabilities and stockholders'
equity $ 13,587 $ 13,073 $ 13,174
------------ ------------ -----------
APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Three Months Ended Six Months Ended
----------------------------------- ----------------------
January
April 26, 25, April 27, April 26, April 27,
(In millions) 2015 2015 2014 2015 2014
----------- ----------- ----------- ----------- ----------
Cash flows from
operating
activities:
Net income $ 364 $ 348 $ 262 $ 712 $ 515
Adjustments required
to reconcile net
income to cash
provided by
operating
activities:
Depreciation and
amortization 90 92 94 182 188
Share-based
compensation 47 48 42 95 88
Excess tax benefits
from share-based
compensation (12 ) (39 ) (7 ) (51 ) (25 )
Other (8 ) 36 12 28 21
Net change in
operating assets and
liabilities (183 ) (425 ) 34 (608 ) 22
----------- ----------- ----------- ----------- ----------
Cash provided by 298 60 437
operating activities 358 809
----------- ----------- ----------- ----------- ----------
Cash flows from
investing
activities:
Capital expenditures (64 ) (49 ) (65 ) (113 ) (113 )
Proceeds from sales
and maturities of
investments 177 140 157 317 521
Purchases of
investments (203 ) (141 ) (161 ) (344 ) (324 )
----------- ----------- ----------- ----------- ----------
Cash provided by (90 ) (50 ) (69 )
(used in) investing
activities (140 ) 84
----------- ----------- ----------- ----------- ----------
Cash flows from
financing
activities:
Proceeds from common
stock issuances and
others, net 42 - 56 42 66
Excess tax benefits
from share-based
compensation 12 39 7 51 25
Payments of
dividends to
stockholders (123 ) (122 ) (122 ) (245 ) (242 )
----------- ----------- ----------- ----------- ----------
Cash used in (69 ) (83 ) (59 )
financing activities (152 ) (151 )
----------- ----------- ----------- ----------- ----------
Effect of exchange
rate changes on cash
and cash equivalents (1 ) - - (1 ) -
----------- ----------- ----------- ----------- ----------
Increase (decrease) 138 (73 ) 309
in cash and cash
equivalents 65 742
Cash and cash
equivalents -
beginning of period 2,929 3,002 2,144 3,002 1,711
----------- ----------- ----------- ----------- ----------
Cash and cash $ 3,067 $ 2,929 $ 2,453
equivalents - end of
period $ 3,067 $ 2,453
----------- ----------- ----------- ----------- ----------
Supplemental cash
flow information:
Cash payments for
income taxes $ 118 $ 89 $ 33 $ 207 $ 59
Cash refunds from
income taxes $ 2 $ 3 $ 3 $ 5 $ 12
Cash payments for
interest $ 7 $ 39 $ 7 $ 46 $ 46
APPLIED MATERIALS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
Reportable Segment Results
Q2 FY2015 Q1 FY2015 Q2 FY2014
----------------------------------- ----------------------------------- ----------------------------------
Operating Operating Operating
(In New Net Income New Net Income New Net Income
millions) Orders Sales (Loss) Orders Sales (Loss) Orders Sales (Loss)
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------
SSG $ 1,704 $ 1,560 $ 374 $ 1,426 $ 1,446 $ 307 $ 1,664 $ 1,584 $ 391
AGS 641 646 170 690 583 153 537 534 148
Display 120 163 40 107 275 72 340 147 26
EES 50 73 (5 ) 50 55 (4 ) 88 88 5
Corporate - - (163 ) - - (70 ) - - (183 )
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------
Con-
solidated $ 2,515 $ 2,442 $ 416 $ 2,273 $ 2,359 $ 458 $ 2,629 $ 2,353 $ 387
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------
Corporate Unallocated Expenses
Q2 Q1 Q2
(In millions) FY2015 FY2015 FY2014
--------- -------- --------
Share-based compensation 47 48 42
Certain items associated with announced business
combination 29 20 16
Loss (gain) on derivative associated with
announced business combination, net (14 ) (78 ) 23
Other unallocated expenses 101 80 102
--------- -------- --------
Total corporate $ 163 $ 70 $ 183
--------- -------- --------
APPLIED MATERIALS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
Additional Information
Q2 FY2015 Q1 FY2015 Q2 FY2014
---------------- ---------------- ---------------
New Orders and Net Sales by
Geography
New Net New Net New Net
(In $ millions) Orders Sales Orders Sales Orders Sales
-------- ------- -------- ------- -------- ------
United States 368 632 411 529 521 370
% of Total 15 % 26 % 18 % 22 % 20 % 16 %
Europe 131 150 148 143 199 156
% of Total 5 % 6 % 6 % 6 % 7 % 7 %
Japan 365 257 242 231 203 215
% of Total 15 % 10 % 11 % 10 % 8 % 9 %
Korea 607 449 546 464 378 351
% of Total 24 % 18 % 24 % 20 % 14 % 15 %
Taiwan 589 455 545 519 660 781
% of Total 23 % 19 % 24 % 22 % 25 % 33 %
Southeast Asia 103 87 85 85 72 52
% of Total 4 % 4 % 4 % 4 % 3 % 2 %
China 352 412 296 388 596 428
% of Total 14 % 17 % 13 % 16 % 23 % 18 %
Employees (In thousands)
Regular Full Time 14.3 14.1 13.7
APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS
Three Months Ended Six Months Ended
--------------------------------- ----------------------
January
(In millions, except April 26, 25, April 27, April 26, April 27,
percentages) 2015 2015 2014 2015 2014
----------- --------- ----------- ----------- ----------
Non-GAAP Adjusted
Gross Profit
Reported gross
profit - GAAP basis $ 1,016 $ 959 $ 1,001 $ 1,975 $ 1,892
Certain items
associated with
acquisitions(1) 39 40 39 79 78
Acquisition
integration costs - - 1 - 1
----------- --------- ----------- ----------- ----------
Non-GAAP adjusted
gross profit $ 1,055 $ 999 $ 1,041 $ 2,054 $ 1,971
----------- --------- ----------- ----------- ----------
Non-GAAP adjusted
gross margin 43.2 % 42.3 % 44.2 % 42.8 % 43.4 %
Non-GAAP Adjusted
Operating Income
Reported operating
income - GAAP basis $ 416 $ 458 $ 387 $ 874 $ 717
Certain items
associated with
acquisitions(1) 45 46 46 91 91
Acquisition
integration costs - 1 10 1 21
Loss (gain) on
derivatives
associated with
announced business
combination, net (14 ) (78 ) 23 (92 ) (1 )
Certain items
associated with
announced business
combination(2) 29 20 16 49 27
Restructuring
charges and asset
impairments(3) - - - - 7
----------- --------- ----------- ----------- ----------
Non-GAAP adjusted
operating income $ 476 $ 447 $ 482 $ 923 $ 862
----------- --------- ----------- ----------- ----------
Non-GAAP adjusted
operating margin 19.5 % 18.9 % 20.5 % 19.2 % 19.0 %
Non-GAAP Adjusted
Net Income
Reported net income
- GAAP basis(4) $ 364 $ 348 $ 262 $ 712 $ 515
Certain items
associated with
acquisitions(1) 45 46 46 91 91
Acquisition
integration costs - 1 10 1 21
Loss (gain) on
derivatives
associated with
announced business
combination, net (14 ) (78 ) 23 (92 ) (1 )
Certain items
associated with
announced business
combination(2) 29 20 16 49 27
Restructuring
charges and asset
impairments(3) - - - - 7
Impairment (gain on
sale) of strategic
investments, net 6 1 2 7 (3 )
Reinstatement of
federal R&D tax
credit, resolution
of prior years'
income tax filings
and other tax
items(4) (54 ) (17 ) 12 (71 ) (3 )
Income tax effect of
non-GAAP adjustments (14 ) 17 (23 ) 3 (27 )
----------- --------- ----------- ----------- ----------
Non-GAAP adjusted
net income $ 362 $ 338 $ 348 $ 700 $ 627
----------- --------- ----------- ----------- ----------
1 These items are incremental charges attributable to completed acquisitions,
consisting of 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 planning costs.
3 Results for the six months ended April 27, 2014 included a $7 million of
employee-related costs related to the restructuring program announced on
October 3, 2012.
4 Amounts for the three and six months ended April 26, 2015 included an
adjustment to decrease the provision for income taxes by $39 million and $35
million, respectively, with a corresponding increase in net income and
diluted earnings per share of $0.03. The adjustment was excluded in
Applied's non-GAAP adjusted results and was made primarily to correct an
error in the recognition of cost of sales in the U.S. related to
intercompany sales, which resulted in overstating profitability in the U.S.
and the provision for income taxes in immaterial amounts in each year since
fiscal 2010.
APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS
Three Months Ended Six Months Ended
-------------------------------- --------------------
April January April April April
(In millions except per 26, 25, 27, 26, 27,
share amounts) 2015 2015 2014 2015 2014
---------- ---------- ---------- ---------- ---------
Non-GAAP Adjusted
Earnings Per Diluted
Share
Reported earnings per
diluted share - GAAP
basis(1) $ 0.29 $ 0.28 $ 0.21 $ 0.57 $ 0.42
Certain items
associated with
acquisitions 0.03 0.03 0.03 0.07 0.06
Acquisition integration
costs - - 0.01 - 0.01
Certain items
associated with
announced business
combination 0.02 0.01 0.01 0.03 0.02
Loss (gain) on
derivative associated
with announced business
combination, net (0.01 ) (0.04 ) 0.01 (0.05 ) -
Reinstatement of
federal R&D tax credit,
resolution of prior
years' income tax
filings and other tax
items(1) (0.04 ) (0.01 ) 0.01 (0.06 ) -
---------- ---------- ---------- ---------- ---------
Non-GAAP adjusted
earnings per diluted
share $ 0.29 $ 0.27 $ 0.28 $ 0.56 $ 0.51
---------- ---------- ---------- ---------- ---------
Weighted average number
of diluted shares 1,241 1,240 1,229 1,241 1,227
1 Amounts for the three and six months ended April 26, 2015 included an
adjustment to decrease the provision for income taxes by $39 million and $35
million, respectively, with a corresponding increase in net income and
diluted earnings per share of $0.03. The adjustment was excluded in
Applied's non-GAAP adjusted results and was made primarily to correct an
error in the recognition of cost of sales in the U.S. related to
intercompany sales, which resulted in overstating profitability in the U.S.
and the provision for income taxes in immaterial amounts in each year since
fiscal 2010.
APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS
Three Months Ended Six Months Ended
------------------------------- --------------------
April January April April April
(In millions, except 26, 25, 27, 26, 27,
percentages) 2015 2015 2014 2015 2014
---------- ---------- --------- ---------- ---------
SSG Non-GAAP Adjusted
Operating Income
Reported operating
income - GAAP basis $ 374 $ 307 $ 391 $ 681 $ 705
Certain items associated
with acquisitions(1) 44 43 42 87 84
Acquisition integration
costs - - - - 1
---------- ---------- --------- ---------- ---------
Non-GAAP adjusted
operating income $ 418 $ 350 $ 433 $ 768 $ 790
---------- ---------- --------- ---------- ---------
Non-GAAP adjusted
operating margin 26.8 % 24.2 % 27.3 % 25.5 % 25.7 %
AGS Non-GAAP Adjusted
Operating Income
Reported operating
income - GAAP basis $ 170 $ 153 $ 148 $ 323 $ 273
Certain items associated
with acquisitions(1) - 1 2 1 3
---------- ---------- --------- ---------- ---------
Non-GAAP adjusted
operating income $ 170 $ 154 $ 150 $ 324 $ 276
---------- ---------- --------- ---------- ---------
Non-GAAP adjusted
operating margin 26.3 % 26.4 % 28.1 % 26.4 % 26.5 %
Display Non-GAAP
Adjusted Operating
Income
Reported operating
income - GAAP basis $ 40 $ 72 $ 26 $ 112 $ 52
Certain items associated
with acquisitions(1) - 1 - 1 1
---------- ---------- --------- ---------- ---------
Non-GAAP adjusted
operating income $ 40 $ 73 $ 26 $ 113 $ 53
---------- ---------- --------- ---------- ---------
Non-GAAP adjusted
operating margin 24.5 % 26.5 % 17.7 % 25.8 % 17.3 %
EES Non-GAAP Adjusted
Operating Income (Loss)
Reported operating
income (loss) - GAAP
basis $ (5 ) $ (4 ) $ 5 $ (9 ) $ (6 )
Certain items associated
with acquisitions(1) 1 1 2 2 3
---------- ---------- --------- ---------- ---------
Non-GAAP adjusted
operating income (loss) $ (4 ) $ (3 ) $ 7 $ (7 ) $ (3 )
---------- ---------- --------- ---------- ---------
Non-GAAP adjusted
operating margin (5.5 )% (5.5 )% 8.0 % (5.5 )% (2.3 )%
1 These items are incremental charges attributable to completed acquisitions,
consisting of amortization of purchased intangible assets.
APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED OPERATING EXPENSES
Three Months Ended
--------------------------
April January
(In millions) 26, 2015 25, 2015
------------ -------------
Operating expenses - GAAP basis $ 600 $ 501
Gain on derivative associated with announced
business combination, net 14 78
Certain items associated with acquisitions (6 ) (6 )
Acquisition integration costs - (1 )
Certain items associated with announced business
combination (29 ) (20 )
------------ -------------
Non-GAAP adjusted operating expenses $ 579 $ 552
------------ -------------
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED EFFECTIVE INCOME TAX RATE
Three Months
Ended
(In millions, except percentages) April 26, 2015
---------------
Provision for income taxes - GAAP basis(1) (a) $ 25
Reinstatement of federal R&D tax credit, resolutions of prior
years' income tax filings and other tax items 54
Income tax effect of non-GAAP adjustments(1) 14
---------------
Non-GAAP adjusted provision for income taxes (b) $ 93
---------------
Income before income taxes - GAAP basis (c) $ 389
Certain items associated with acquisitions 45
Gain on derivative associated with announced business
combination (14 )
Certain items associated with announced business combination 29
Impairment of strategic investments, net 6
---------------
Non-GAAP adjusted income before income taxes (d) $ 455
---------------
Effective income tax rate - GAAP basis(1) (a/c) 6.4 %
---------------
Non-GAAP adjusted effective income tax rate (b/d) 20.4 %
---------------
1 Amounts for the three months ended April 26, 2015 included an adjustment to
decrease the provision for income taxes by $39 million, with a corresponding
increase in net income and diluted earnings per share of $0.03. The
adjustment was excluded in Applied's non-GAAP adjusted results and was made
primarily to correct an error in the recognition of cost of sales in the
U.S. related to intercompany sales, which resulted in overstating
profitability in the U.S. and the provision for income taxes in immaterial
amounts in each year since fiscal 2010.
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Applied Materials via GlobeNewswire
[HUG#1921623]
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Datum: 14.05.2015 - 22:01 Uhr
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News-ID 393560
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