APPLIED MATERIALS INC DE

Previous wording

We provide manufacturing equipment, services and software to the semiconductor, display, and related industries. Our customers include manufacturers of semiconductor wafers and chips, liquid crystal and organic light-emitting diode (OLED) displays, and other electronic devices. These customers may use what they manufacture in their own end products or sell the items to other companies for use in electronic products. Each of our segments is subject to variable industry conditions, as demand for manufacturing equipment and services can change depending on supply and demand for chips, display technologies, and other electronic devices, as well as other factors, such as global economic, political and market conditions, the nature and timing of technological advances in fabrication processes and other factors described under “Risk Factors” in Part II, Item 1A.

Current wording

We provide equipment, services and software to the semiconductor, display, and related industries. Our customers include manufacturers of semiconductor wafers and chips, liquid crystal and organic light-emitting diode (OLED) displays, and other electronic devices. Our customers’ products are used in a wide variety of products such as personal computing devices, mobile phones, artificial intelligence (AI) and data center servers, automobiles, connected devices, industrial applications and consumer electronics. Each of our segments is subject to variable industry conditions, as demand for equipment and services can change depending on supply and demand for chips, display technologies and other electronic devices, as well as other factors, such as global economic, political and market conditions, and the nature and timing of technological advances in fabrication processes.

Previous wording

Research, Development and Engineering (RD&E) expenses for the periods indicated were as follows:

Current wording

Our strategic priorities include developing products that help solve customers’ challenges at technology inflections; expanding our served market opportunities in the semiconductor and display industries; and growing our service business. Our long-term growth strategy requires continued development of new materials engineering capabilities, including products and platforms that enable expansion into new and adjacent markets. Our significant investments in research, development and engineering (RD&E) are intended to enable us to deliver new products and technologies before the emergence of strong demand, allowing customers to incorporate these products into their manufacturing plans during early-stage technology selection. We collaborate closely with our global customers to design systems and processes to meet their technical and production requirements.

Previous wording

Our future operating results depend to a considerable extent on our ability to maintain a competitive advantage in the equipment and service products we provide. Development cycles range from 12 to 36 months depending on whether the product is an enhancement of an existing product, which typically has a shorter development cycle, or a new product, which typically has a longer development cycle. Most of our existing products resulted from internal development activities and innovations involving new technologies, materials and processes. In certain instances, we acquire technologies, either in existing or new product areas, to complement our existing technology capabilities and to reduce time to market.

Current wording

Our future operating results depend to a considerable extent on our ability to maintain a competitive advantage in the equipment and service products we provide. Development cycles depend on whether the product is an enhancement of an existing product, which typically has a shorter development cycle, or a new product, which typically has a longer development cycle. Most of our existing products resulted from internal development activities and innovations involving new technologies, materials and processes. In certain instances, we acquire technologies, either in existing or new product areas, to complement our existing technology capabilities and to reduce time to market. Product development and manufacturing activities occur primarily in the United States, Europe, Israel, and Asia. Our portfolio of equipment and service products are highly technical and are sold primarily through a direct sales force.

Previous wording

We believe that it is critical to continue to make substantial investments in RD&E to assure the availability of innovative technology that meets the current and projected requirements of our customers’ most advanced designs. We have maintained and intend to continue our commitment to investing in RD&E in order to continue to offer new products and technologies.

Current wording

We believe that it is critical to make substantial investments in RD&E to assure the availability of innovative technology that meets the current and projected requirements of our customers’ most advanced designs. We have and continue to invest in RD&E in order to continue to offer new products and technologies.

Previous wording

We operate in three reportable segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. A summary of financial information for each reportable segment is found in Note 15 of Notes to Consolidated Condensed Financial Statements. A discussion of factors that could affect our operations is set forth under “Risk Factors” in Part II, Item 1A, which is incorporated herein by reference. Product development and manufacturing activities occur primarily in the United States, Europe, Israel, and Asia. Our broad range of equipment and service products are highly technical and are sold primarily through a direct sales force.

Current wording

We operate in three reportable segments: Semiconductor Systems, Applied Global Services® (AGS), and Display. A summary of financial information for each reportable segment is found in Note 13 of Notes to Consolidated Condensed Financial Statements. A discussion of factors that could affect our operations is set forth under “Risk Factors” in Part II, Item 1A, which is incorporated herein by reference.

Previous wording

Our results are driven primarily by customer spending on capital equipment and services to support key technology transitions or to increase production volume in response to worldwide demand for semiconductors and displays. The timing of customer investment in manufacturing equipment is also affected by the timing of next-generation process development and the timing of capacity expansion to meet end-market demand. In light of these conditions, our results can vary significantly year-over-year, as well as quarter-over-quarter.

Current wording

Our results are driven primarily by customer spending on capital equipment and services to support key technology transitions or to increase production volume in response to worldwide demand for semiconductors and displays.

Previous wording

The Semiconductor Systems segment is comprised primarily of capital equipment used to fabricate semiconductor chips. Semiconductor industry spending on capital equipment is driven by demand for electronic products, including smartphones and other mobile devices, servers for AI and data center computing, personal computers, automotive electronics, storage, and other products, and the nature and timing of technological advances in fabrication processes, and as a result is subject to variable industry conditions. Spending can also depend on customer facility readiness and timeline for installation of capital equipment at customer sites. Development efforts are focused on solving customers’ key technical challenges in transistor, interconnect, patterning and packaging performance.

Current wording

The Semiconductor Systems segment is comprised primarily of capital equipment used to fabricate semiconductor chips. Spending by semiconductor customers, which include companies that operate in the foundry, logic, memory, and other semiconductor chip markets, is driven by demand for products such as smartphones, mobile devices, personal computers, servers for artificial intelligence (AI) and data centers, automobiles, clean energy, storage, and other products, and the nature and timing of technological advances in fabrication processes. The growth of data and emerging end-market drivers such as AI, the internet of things, 5G networks, electric and autonomous vehicles and augmented and virtual reality are also creating the next wave of growth for the industry. As a result, products within the Semiconductor Systems segment are subject to significant changes in customer requirements, including transitions to smaller dimensions, increasingly complex chip architectures, new materials and an increasing number of applications. Spending can also depend on customer facility readiness and timeline for installation of capital equipment at customer sites. Development efforts are focused on solving customers’ key technical challenges in patterning, transistor, interconnect, process control, and packaging performance.

Previous wording

Demand for Applied Global Services’ solutions are driven by our large and growing installed base of manufacturing systems, and customers’ needs to shorten ramp times, improve device performance and yield, and optimize factory output and operating costs. Industry conditions that affect Applied Global Services’ sales of spares and services are primarily characterized by changes in semiconductor manufacturers’ wafer starts and utilization rates, growth of the installed base of equipment, growing service intensity of newer tools, and our ability to sell more comprehensive service agreements.

Current wording

The AGS segment provides services, spares and factory automation software to customer fabrication plants globally to help customers optimize performance of our large, global installed base of semiconductor, display and other equipment. The AGS segment also includes 200mm and other equipment, which is shipped to many customers globally that serve the non-leading-edge end markets. Demand for AGS’ service and spares is driven by our large and growing installed base of manufacturing systems, and customers’ needs to shorten ramp times, improve system performance, and optimize factory output and operating costs. Industry conditions that affect AGS’ sales of spares and services are primarily characterized by changes in semiconductor manufacturers’ wafer starts and utilization rates, growth of the installed base of equipment and growing service intensity of newer tools. Our strategy is to continue to shift the AGS’ service and spares business to a subscription agreement model, improving customer factory performance and optimizing operating costs, and providing us a more predictable revenue stream.

Previous wording

The Display and Adjacent Markets segment encompasses products for manufacturing liquid crystal and OLED displays, and other display technologies for TVs, monitors, laptops, personal computers, electronic tablets, smart phones, other consumer-oriented devices, equipment upgrades and solar energy cells. The segment is focused on expanding its presence through technologically-differentiated equipment for manufacturing large-scale LCD TVs, OLEDs, low temperature polysilicon (LTPS), metal oxide, and touch panel sectors; and development of products that provide customers with improved performance and yields.

Current wording

The Display segment encompasses products for manufacturing liquid crystal and OLED displays, and other display technologies for TVs, monitors, laptops, personal computers (PC), tablets, smart phones, other consumer-oriented devices, equipment upgrades and solar energy cells. The segment is focused on expanding its presence through technologically-differentiated equipment and products that provide customers with improved performance and yields. Display segment growth depends primarily on consumer demand for increasingly larger and more advanced TVs and high-resolution displays for mobile devices and information technology (IT) products, including laptops, monitors and tablets, as well as new form factors, including thin, light, curved and flexible displays, and new applications such as augmented and virtual reality. The timing of customer investment in manufacturing equipment is also affected by the timing of next-generation process development and of capacity expansion to meet end-market demand.

Previous wording

The Corporate and Other category includes revenues from products, as well as costs of products sold, for fabricating solar photovoltaic cells and modules and certain operating expenses that are not allocated to our reportable segments and are managed separately at the corporate level. These operating expenses include costs for certain management, finance, legal, human resource, and RD&E functions provided at the corporate level and unabsorbed information technology and occupancy. In addition, we do not allocate to our reportable segments restructuring, severance and asset impairment charges and any associated adjustments related to restructuring actions, unless these actions pertain to a specific reportable segment.

Current wording

The Corporate and Other category includes revenues and costs of product not included in our reportable segments, as well as certain operating expenses that are not allocated to our reportable segments and are managed separately at the corporate level. These operating expenses include costs for certain management, finance, legal, human resources, and RD&E functions performed at the corporate level; and unabsorbed information technology and occupancy. In addition, we do not allocate to our reportable segments severance, asset impairment and any associated charges related to restructuring actions, unless these actions pertain to a specific reportable segment.

Previous wording

The United States government has implemented export regulations for U.S. semiconductor items sold or provided to customers in China, which have limited our ability to provide certain products and services to customers in China, particularly in the past two years. The U.S. government is continually considering updates to export regulations, and may issue new or additional updates and other requirements that may have the effect of further limiting our ability to provide certain products and services to customers outside the U.S., including in China. For a description of these risks, see the risk factor entitled “Business and Industry Risks - Global trade issues and changes in and uncertainties with respect to trade policies and export regulations, including import and export license requirements, trade sanctions, tariffs and international trade disputes, have adversely impacted and could further adversely impact our business and operations, and reduce the competitiveness of our products and services relative to local and global competitors” in Part II, Item 1A, “Risk Factors.”

Current wording

The United States government has implemented export regulations for U.S. semiconductor technology sold or provided to customers in China, which have limited our ability to provide certain products and services to customers in China, over the past several years. The U.S. government continues to issue new export licensing requirements, and additional updates and other requirements that have had the effect of further limiting our ability to provide certain products and services to customers outside the U.S., including in China. For a description of these risks, see the risk factor entitled “Business and Industry Risks - Global trade issues and changes in and uncertainties with respect to trade policies and export regulations, including import and export license requirements, trade sanctions, tariffs and international trade disputes, have adversely impacted and could further adversely impact our business and operations, and reduce the competitiveness of our products and services relative to local and global competitors” in Part II, Item 1A, “Risk Factors.”

Previous wording

Fiscal 2024 and 2023 each contain 52 weeks and the first nine months of fiscal 2024 and 2023 each contained 39 weeks.

Current wording

Fiscal 2025 and 2024 each contain 52 weeks and the first three months of fiscal 2025 and 2024 each contained 13 weeks.

Previous wording

The following table presents certain significant measurements for the periods indicated:

Current wording

The following table presents certain significant measurements for the periods presented:

Previous wording

Net revenue for Semiconductor Systems by end use application for the periods indicated were as follows:

Current wording

Net revenue for Semiconductor Systems by market for the periods presented were as follows:

Previous wording

Semiconductor equipment customers continued to make strategic investments in new capacity and new technology transitions during the first nine months of fiscal 2024. Semiconductor Systems revenue increased for the three months and decreased for the nine months ended July 28, 2024 as compared to the same periods in the prior year. Foundry and logic customers’ spending decreased in the three and nine months ended July 28, 2024 compared to the same periods in the prior year driven primarily by lower customer investments in leading-edge manufacturing technologies, partially offset by increased customer investments in mature manufacturing technologies. Memory customers’ spending in the three and nine months ended July 28, 2024 was higher as compared to the same periods in the prior year primarily due to increased investments in DRAM technology transitions.

Current wording

The Semiconductor Systems segment continued to represent the largest contributor of net revenue. Semiconductor Systems net revenue increased for the three months ended January 26, 2025 compared to the same period in the prior year as customers continued to make strategic investments in new capacity and new technology transitions. Foundry and logic customers’ spending increased for the three months ended January 26, 2025, compared to the same period in the prior year driven primarily by higher customer investments in leading-edge manufacturing technologies. Memory customers’ spending in the first quarter of fiscal 2025 compared to the same period in the prior year was lower due to decreased investments in DRAM technology transitions.

Previous wording

Our Applied Global Services net revenue in the three and nine months ended July 28, 2024 increased compared to the same periods in the prior year primarily due to an increase in net revenue associated with long-term service agreements and customer spending on spares. Demand for services is expected to grow as the installed base of systems and chambers increases and customers renew long-term service agreements.

Current wording

Our AGS net revenue in the three months ended January 26, 2025 increased compared to the same period in the prior year primarily due to an increase in net revenue associated with long-term service agreements and customer spending on spares, partially offset by lower customer spending on 200mm equipment.

Previous wording

Net revenue by geographic region, determined by the location of customers’ facilities to which products were shipped, were as follows:

Current wording

Net revenue by geographic region, determined by the location of customers’ facilities to which products were shipped and services were performed, was as follows:

Previous wording

The changes in net revenue to customers in all regions in the nine months ended July 28, 2024 compared to the same period in the prior year primarily reflected changes in semiconductor manufacturing equipment spending.

Current wording

The changes in net revenue from customers in all other regions in the three months ended January 26, 2025 compared to the same period in the prior year primarily reflected changes in investment in semiconductor equipment and spending on services.

Previous wording

The changes in RD&E expenses during the three and nine months ended July 28, 2024 compared to the same periods in the prior year were primarily due to additional headcount to support our ongoing investments in product development initiatives, consistent with our growth strategy, offset by lower depreciation expense as a result of changes in certain assets’ useful lives effective as of the beginning of fiscal 2024. We continued to prioritize existing RD&E investments in technical capabilities and critical research and development programs in current and new markets, with a focus on semiconductor technologies. RD&E expenses during the three months ended July 28, 2024 and July 30, 2023 included $53 million and $42 million of share-based compensation expense, respectively. RD&E expense during the nine months ended July 28, 2024 and July 30, 2023 included $163 million and $137 million of share-based compensation expense, respectively.

Current wording

RD&E expenses for the three months ended January 26, 2025 increased compared to the same period in the prior year primarily due to additional headcount to support our ongoing investments in product development initiatives, consistent with our growth strategy. We continued to prioritize existing RD&E investments in technical capabilities and critical RD&E programs in current and new markets.

Previous wording

Marketing and selling expenses for the periods indicated were as follows:

Current wording

Marketing and selling expenses for the three months ended January 26, 2025 was flat compared to the same period in the prior year.

Previous wording

Interest expense and interest and other income (expense), net for the periods indicated were as follows:

Current wording

Interest expense and interest and other income (expense), net for the periods presented were as follows:

Previous wording

Interest expense incurred was primarily associated with issued senior unsecured notes. Interest expense in the three and nine months ended July 28, 2024 remained relatively flat compared to the same periods in the prior year.

Current wording

Interest expense incurred was primarily associated with issued senior unsecured notes. Interest expense in the three months ended January 26, 2025 increased slightly as a result of the issuance of senior unsecured notes in June 2024, compared to the same period in the prior year.

Previous wording

Interest and other income (expense), net in the three months ended July 28, 2024 increased compared to the same period in the prior year, primarily driven by higher cash balances and an increase in market rates resulting in higher interest income, offset by higher net loss and higher impairment on equity investments, compared to the prior year.

Current wording

Interest and other income (expense), net in the three months ended January 26, 2025 decreased compared to the same period in the prior year, primarily driven by higher net loss on equity investments, partially offset by higher interest income.

Previous wording

Provision for income taxes and effective tax rates for the periods indicated were as follows:

Current wording

Provision for income taxes and effective tax rates for the periods presented were as follows:

Previous wording

Our effective tax rates for the third quarter of fiscal 2024 and 2023 were 13.0 percent and 13.6 percent, respectively. The effective tax rate for the third quarter of fiscal 2024 was lower than the same period in the prior fiscal year primarily due to larger excess tax benefits from share-based compensation in fiscal 2024.

Current wording

Our effective tax rates for the first quarter of fiscal 2025 and 2024 were 44.1 percent and 12.3 percent, respectively. The effective tax rate for the first quarter of fiscal 2025 was higher than the same period in the prior fiscal year, primarily due to a remeasurement of deferred tax assets resulting from new tax incentive agreements in Singapore in fiscal 2025.

Previous wording

Operating margin for the three and nine months ended July 28, 2024 increased compared to the same periods in the prior year primarily driven by lower material, freight, logistics and manufacturing costs and lower depreciation expense as a result of changes in certain assets’ useful lives effective as of the beginning of fiscal 2024, partially offset by increased RD&E expenses.

Current wording

Semiconductor System’s operating margin for the three months ended January 26, 2025 increased compared to the same period in the prior year primarily driven by favorable changes in customer and product mix, lower material and manufacturing costs, partially offset by increased RD&E expenses.

Previous wording

For a description of recent accounting pronouncements, including the expected dates of adoption and estimated effects, if any, on our consolidated condensed financial statements, see Note 1 of the Notes to Consolidated Condensed Financial Statements.

Current wording

For a description of recently adopted accounting standards, including the date of adoption and the effect, if any, on our consolidated financial statements, see Note 1 “Basis of Presentation and Recently Adopted Accounting Standards,” of the Notes to Consolidated Condensed Financial Statements.

Previous wording

Cash from operating activities for the nine months ended July 28, 2024 was $6.1 billion, which reflects net income adjusted for the effect of non-cash items and changes in working capital components. Significant non-cash items included depreciation, amortization, gain on investments, and share-based compensation. Cash provided by operating activities decreased in the first nine months of fiscal 2024 compared to the same period in the prior year primarily due to lower new billings for products and services for which there were unsatisfied performance obligations, lower collections of customer receivable balances and higher payments for income taxes, partially offset by lower payments to vendors.

Current wording

Cash from operating activities for the three months ended January 26, 2025 was $925 million, which reflects net income adjusted for the effect of non-cash charges and changes in working capital components. Significant non-cash charges included depreciation, amortization, gain or loss on investments, share-based compensation and deferred income taxes. Cash provided by operating activities decreased in the first three months of fiscal 2025 compared to the same period in the prior year primarily due to lower collections of customer receivable balances, lower new billings for products and services for which there were unsatisfied performance obligations, partially offset by lower payments to vendors.

Previous wording

We have agreements with various financial institutions to sell accounts receivable and discount promissory notes from selected customers. We sell our accounts receivable generally without recourse. From time to time, we also discount letters of credit issued by customers through various financial institutions. The discounting of letters of credit depends on many factors, including the willingness of financial institutions to discount the letters of credit and the cost of such arrangements. We sold $395 million and $619 million of account receivables during the nine months ended July 28, 2024 and July 30, 2023, respectively. We did not discount letters of credit issued by customers or discount promissory notes during the nine months ended July 28, 2024 and July 30, 2023, respectively.

Current wording

We have agreements with various financial institutions to sell accounts receivable and discount promissory notes from selected customers. We sell our accounts receivable generally without recourse. From time to time, we also discount letters of credit issued by customers through various financial institutions. The discounting of letters of credit depends on many factors, including the willingness of financial institutions to discount the letters of credit and the cost of such arrangements. We sold $34 million and $169 million of account receivables during the three months ended January 26, 2025 and January 28, 2024, respectively. We did not discount letters of credit issued by customers or discount promissory notes during the three months ended January 26, 2025 and January 28, 2024, respectively.

Previous wording

Our working capital was $13.4 billion as of July 28, 2024 and $11.8 billion as of October 29, 2023.

Current wording

Our working capital was $13.0 billion as of January 26, 2025 and $12.8 billion as of October 27, 2024.

Previous wording

Days sales outstanding of our accounts receivable for the three months ended July 28, 2024 and July 30, 2023 were 67 days and 74 days, respectively. Days sales outstanding varies due to the timing of shipments and payment terms. The decrease in days sales outstanding was primarily due to favorable revenue linearity and lower accounts receivable balance as a result of the timing of customer payments.

Current wording

Days sales outstanding of our accounts receivable at January 26, 2025 and January 28, 2024 were 76 days and 64 days, respectively. Days sales outstanding varies due to the timing of shipments and payment terms. The increase in days sales outstanding was primarily due to higher accounts receivable balance as a result of the timing of customer payments, and unfavorable revenue linearity.

Previous wording

We used $1,256 million of cash in investing activities during the nine months ended July 28, 2024. Capital expenditures totaled $783 million and purchases of investments, net of proceeds from sales and maturities of investments were $473 million, during the nine months ended July 28, 2024.

Current wording

We used $897 million of cash in investing activities during the three months ended January 26, 2025. Capital expenditures totaled $381 million, purchases of investments, net of proceeds from sales and maturities of investments were $488 million, and net cash paid for acquisition of $28 million, during the three months ended January 26, 2025

Previous wording

We used $2.7 billion of cash in financing activities during the nine months ended July 28, 2024, consisting primarily of cash used for repurchases of common stock of $2.4 billion, dividends to stockholders of $863 million, tax withholding payments for vested equity awards of $258 million and net payments of principal on financing leases of $12 million, partially offset by net proceeds received from the issuance of senior unsecured notes of $694 million and proceeds received from common stock issuances of $119 million under our employee stock purchase plan.

Current wording

We used $1.8 billion of cash in financing activities during the three months ended January 26, 2025, consisting primarily of cash used for repurchases of common stock of $1.3 billion, a quarterly cash dividend paid to stockholders totaling $326 million, and tax withholding payments for vested equity awards of $142 million.

Previous wording

In June 2024, March 2024 and December 2023, our Board of Directors declared quarterly cash dividends in the amount of $0.40, $0.40 and $0.32 per share, respectively. The dividend declared in June 2024 is payable in September 2024. We currently anticipate that cash dividends will continue to be paid on a quarterly basis, although the declaration of any future cash dividend is at the discretion of the Board of Directors and will depend on our financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination by the Board of Directors that cash dividends are in the best interests of our stockholders.

Current wording

We currently anticipate that cash dividends will continue to be paid on a quarterly basis, although the declaration of any future cash dividend is at the discretion of the Board of Directors and will depend on our financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination by the Board of Directors that cash dividends are in the best interests of our stockholders.

Previous wording

In March 2023, our Board of Directors approved a common stock repurchase program authorizing $10.0 billion in repurchases, which supplemented the previously existing $6.0 billion authorization approved in March 2022. As of July 28, 2024, approximately $10.3 billion remained available for future stock repurchases under the repurchase program.

Current wording

In March 2023, our Board of Directors approved a common stock repurchase program authorizing $10.0 billion in repurchases, which supplemented the previously existing authorization. As of January 26, 2025, approximately $7.6 billion remained available for future stock repurchases under the repurchase program.

Previous wording

We have credit facilities for unsecured borrowings in various currencies of up to $1.6 billion, of which $1.5 billion is comprised of a committed revolving credit agreement (Revolving Credit Agreement) with a group of banks. The Revolving Credit Agreement includes a provision under which we may request an increase in the amount of the facility of up to $500 million for a total commitment of no more than $2.0 billion, subject to the receipt of commitments from one or more lenders for any such increase and other customary conditions. The Revolving Credit Agreement is scheduled to expire in February 2026, unless extended as permitted under the Revolving Credit Agreement. The Revolving Credit Agreement provides for borrowings in United States dollars that bear interest for each advance at one of two rates selected by us, plus an applicable margin, which varies according to our public debt credit ratings. The Revolving Credit Agreement includes financial and other covenants with which we were in compliance as of July 28, 2024.

Current wording

We have credit facilities for unsecured borrowings in various currencies of up to $1.6 billion, of which $1.5 billion is comprised of a committed revolving credit agreement (Revolving Credit Agreement) with a group of banks. The Revolving Credit Agreement is scheduled to expire in February 2026, unless extended as permitted under the Revolving Credit Agreement. The Revolving Credit Agreement includes financial and other covenants with which we were in compliance as of January 26, 2025. No amounts were outstanding under the Revolving Credit Agreement as of January 26, 2025 and October 27, 2024. See Note 9, Borrowing Facilities and Debt, of the Notes to the Consolidated Condensed Financial Statements for further discussion related to our Revolving Credit Agreement and other credit facilities.

Previous wording

We have a short-term commercial paper program under which we may issue unsecured commercial paper notes of up to a total amount of $1.5 billion. As of July 28, 2024, we had commercial paper notes outstanding with an aggregate principal amount of $100 million. The proceeds from the issuances of commercial paper are used for general corporate purposes. The commercial paper is backstopped by the Revolving Credit Agreement and borrowings under the Revolving Credit Agreement reduce the amount of commercial paper notes we can issue.

Current wording

We have a short-term commercial paper program under which we may from time to time issue unsecured commercial paper notes of up to a total amount of $1.5 billion. The proceeds from the issuances of commercial paper are used for general corporate purposes. As of January 26, 2025, we had commercial paper notes outstanding with an aggregate principal amount of $100 million. The commercial paper program is backstopped by the Revolving Credit Agreement and borrowings under the Revolving Credit Agreement reduce the amount of commercial paper notes we can issue.

Previous wording

We had senior unsecured notes in the aggregate principal amount of $6.2 billion outstanding as of July 28, 2024. See Note 10 of the Notes to the Consolidated Condensed Financial Statements for additional discussion of existing debt. We may seek to refinance our existing debt and may incur additional indebtedness depending on our capital requirements, general corporate purposes and the availability of financing.

Current wording

We had senior unsecured notes in the aggregate principal amount of $6.2 billion outstanding as of January 26, 2025. See Note 9 of the Notes to the Consolidated Condensed Financial Statements for additional discussion of existing debt.

Previous wording

In the ordinary course of business, we provide standby letters of credit or other guarantee instruments to third parties as required for certain transactions initiated by either us or our subsidiaries. As of July 28, 2024, the maximum potential amount of future payments that we could be required to make under these guarantee agreements was approximately $308 million. We have not recorded any liability in connection with these guarantee agreements beyond that required to appropriately account for the underlying transaction being guaranteed. We do not believe, based on historical experience and information currently available, that it is probable that any amounts will be required to be paid under these guarantee agreements.

Current wording

In the ordinary course of business, we provide standby letters of credit or other guarantee instruments to third parties as required for certain transactions initiated by either us or our subsidiaries. We also have agreements with various banks to facilitate subsidiary banking operations worldwide, including overdraft arrangements, issuance of bank guarantees, and letters of credit. See Note 12 of the Notes to the Consolidated Condensed Financial Statements for additional discussion related to our guarantee agreements and arrangements.

Previous wording

On August 9, 2022, the U.S. government enacted the U.S. CHIPS and Science Act (“CHIPS Act”). The CHIPS Act creates a 25% investment tax credit for certain investments in domestic semiconductor manufacturing. The credit is provided for qualifying property, which is placed in service after December 31, 2022, for which construction begins before January 1, 2027, and is treated as a government grant. We recognize this investment tax credit when there is reasonable assurance that we will qualify for the credit and the benefit will be received. Investments related to the 25% investment tax credit reduced our income taxes payable by $112 million as of July 28, 2024.

Current wording

On August 9, 2022, the U.S. government enacted the U.S. CHIPS and Science Act (“CHIPS Act”). The CHIPS Act creates a 25% investment tax credit for certain investments in domestic semiconductor manufacturing. The credit is provided for qualifying property, which is placed in service after December 31, 2022, for which construction begins before January 1, 2027, and is treated as a government grant. We recognize this investment tax credit when there is reasonable assurance that we will qualify for the credit and the benefit will be received. Investments related to the 25% investment tax credit reduced our income taxes payable by $257 million as of January 26, 2025.