Applied Materials Delivers Strong Year-On-Year Growth in

Applied Materials Delivers Strong Year-On-Year Growth in Quarterly Revenue and Earnings Per Share

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