APPLIED MATERIALS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
Corporate and Other
| (In millions) | Q2 FY2018 | Q2 FY2017 | |||||
| Unallocated net sales | $ | 25 | $ | 27 | |||
| Unallocated cost of products sold and expenses | (145 | ) | (120 | ) | |||
| Share-based compensation | (64 | ) | (53 | ) | |||
| Total | $ | (184 | ) | $ | (146 | ) | |
Additional Information
| Q2 FY2018 | Q2 FY2017 | ||||
| Net Sales by Geography (In millions) | |||||
| United States | 394 | 383 | |||
| % of Total | 9 | % | 11 | % | |
| Europe | 312 | 189 | |||
| % of Total | 7 | % | 5 | % | |
| Japan | 503 | 332 | |||
| % of Total | 11 | % | 9 | % | |
| Korea | 1,248 | 942 | |||
| % of Total | 27 | % | 27 | % | |
| Taiwan | 727 | 863 | |||
| % of Total | 16 | % | 24 | % | |
| Southeast Asia | 243 | 109 | |||
| % of Total | 5 | % | 3 | % | |
| China | 1,140 | 728 | |||
| % of Total | 25 | % | 21 | % | |
| Employees (In thousands) | |||||
| Regular Full Time | 19.8 | 16.6 | |||
APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS
| Three Months Ended | Six Months Ended | ||||||||||||||
| (In millions, except percentages) | April 29,
2018 | April 30,
2017 | April 29,
2018 | April 30,
2017 | |||||||||||
| Non-GAAP Adjusted Gross Profit | |||||||||||||||
| Reported gross profit - GAAP basis | $ | 2,090 | $ | 1,600 | $ | 4,010 | $ | 3,045 | |||||||
| Certain items associated with acquisitions1 | 44 | 41 | 89 | 83 | |||||||||||
| Non-GAAP adjusted gross profit | $ | 2,134 | $ | 1,641 | $ | 4,099 | $ | 3,128 | |||||||
| Non-GAAP adjusted gross margin | 46.7 | % | 46.3 | % | 46.7 | % | 45.8 | % | |||||||
| Non-GAAP Adjusted Operating Income | |||||||||||||||
| Reported operating income - GAAP basis | $ | 1,327 | $ | 940 | $ | 2,523 | $ | 1,747 | |||||||
| Certain items associated with acquisitions 1 | 49 | 46 | 98 | 93 | |||||||||||
| Acquisition integration costs | 1 | 1 | 2 | 2 | |||||||||||
| Other gains, losses or charges, net | — | — | — | (3 | ) | ||||||||||
| Non-GAAP adjusted operating income | $ | 1,377 | $ | 987 | $ | 2,623 | $ | 1,839 | |||||||
| Non-GAAP adjusted operating margin | 30.2 | % | 27.8 | % | 29.9 | % | 26.9 | % | |||||||
| Non-GAAP Adjusted Net Income | |||||||||||||||
| Reported net income - GAAP basis | $ | 1,129 | $ | 824 | $ | 1,264 | $ | 1,527 | |||||||
| Certain items associated with acquisitions 1 | 49 | 46 | 98 | 93 | |||||||||||
| Acquisition integration costs | 1 | 1 | 2 | 2 | |||||||||||
| Impairment (gain on sale) of strategic investments, net | 5 | — | 4 | 5 | |||||||||||
| Other gains, losses or charges, net | — | — | — | (3 | ) | ||||||||||
| Income tax effect of share-based compensation 2 | 13 | — | (26 | ) | — | ||||||||||
| Income tax effect of changes in applicable U.S. tax laws 3 | 71 | — | 1,077 | — | |||||||||||
| Resolution of prior years’ income tax filings and other tax items | 10 | (6 | ) | (3 | ) | (22 | ) | ||||||||
| Income tax effect of non-GAAP adjustments 4 | (5 | ) | (4 | ) | (8 | ) | (9 | ) | |||||||
| Non-GAAP adjusted net income | $ | 1,273 | $ | 861 | $ | 2,408 | $ | 1,593 | |||||||
