Financial Analysis

Borrowing Facilities and Debt Revolving Credit Facilities In September 2025, we entered into a $2.0 billion 364-day committed revolving credit agreement (364-Day Credit Agreement) with a group of banks. The 364-Day Credit Agreement includes a provision under which we may request an increase in the amount of the facility of up to $1.0 billion for a total commitment of no more than $3.0 billion, subject to the receipt of commitments from one or more lenders for any such increase and other customary conditions. The 364-Day Credit Agreement is scheduled to expire in September 2026, provided, however, if any loans are outstanding on the maturity date, we may convert all or part of such loans to term loans that will mature in September 2027, subject to payment of a fee by us and other customary conditions. The 364-Day Credit Agreement provides for unsecured borrowings 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. No amounts were outstanding under the 364-Day Credit Agreement as of October 26, 2025. In February 2025, we entered into a $2.0 billion committed revolving credit agreement (Five-Year Credit Agreement) with a group of banks. The Five-Year 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 $2.5 billion, subject to the receipt of commitments from one …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Net revenue for Semiconductor Systems by market for the periods indicated were as follows: 2025 2024 2023 Foundry, logic and other 67 % 68 % 77 % Dynamic random-access memory (DRAM) 26 % 28 % 17 % Flash memory (NAND) 7 % 4 % 6 % 100 % 100 % 100 %

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Fair Value Measurements Assets Measured at Fair Value on a Recurring Basis The following table presents our fair value hierarchy for our financial assets (excluding cash balances) measured at fair value on a recurring basis: October 26, 2025 October 27, 2024 Level 1 Level 2 Total Level 1 Level 2 Total (In millions) Assets: Available-for-sale debt security investments Money market funds* $ 2,264 $ $ 2,264 $ 3,512 $ $ 3,512 Bank certificates of deposit and time deposits 184 184 103 103 U.S. Treasury and agency securities 2,109 319 2,428 2,684 14 2,698 Non-U.S. government securities 5 5 5 5 Municipal securities 473 473 460 460 Commercial paper, corporate bonds and medium-term notes 3,102 3,102 2,590 2,590 Asset-backed and mortgage-backed securities 616 616 654 654 Total available-for-sale debt security investments $ 4,373 $ 4,699 $ 9,072 $ 6,196 $ 3,826 $ 10,022 Equity investments with readily determinable values Publicly traded equity securities $ 2,110 $ $ 2,110 $ 723 $ $ 723 Total equity investments with readily determinable values $ 2,110 $ $ 2,110 $ 723 $ $ 723 Total $ 6,483 $ 4,699 $ 11,182 $ 6,919 $ 3,826 $ 10,745 ______________________________ *Amounts as of October 26, 2025 and October 27, 2024 include $71 million and $91 million, respectively, invested in money market funds related to deferred compensation plans. Due to restrictions on the distribution of these funds, they are classified as restricted cash equivalents and are included in deferred income taxes and other …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Income Taxes The components of income before income taxes for each fiscal year were as follows: 2025 2024 2023 (In millions) U.S. $ 56 $ 833 $ 1,234 Foreign 9,215 7,319 6,482 Total $ 9,271 $ 8,152 $ 7,716 The components of the provision for income taxes for each fiscal year were as follows: 2025 2024 2023 (In millions) Current: U.S. $ 675 $ 1,254 $ 708 Foreign 411 366 456 State 34 33 54 1,120 1,653 1,218 Deferred: U.S. 382 (697) (255) Foreign 788 30 (61) State (17) (11) (42) 1,153 (678) (358) Total $ 2,273 $ 975 $ 860 A reconciliation between the statutory U.S. federal income tax rate and our actual effective income tax rate for each fiscal year is presented below: 2025 2024 2023 Tax provision at U.S. statutory rate 21.0 % 21.0 % 21.0 % Effect of foreign operations taxed at various rates (7.3) (7.6) (8.2) Changes in prior years unrecognized tax benefits (0.2) Resolutions of prior years income tax filings 0.2 (0.1) (0.1) Research and other tax credits (1.3) (1.4) (1.6) Remeasurement of deferred tax assets in Singapore 7.1 Valuation allowance on corporate alternative minimum tax credits 4.4 Other 0.4 0.1 0.2 Total 24.5 % 12.0 % 11.1 % Our provision for income taxes and effective tax rate are affected by the geographical composition of pre-tax income which includes jurisdictions with differing tax rates, conditional reduced tax rates and other income tax incentives. It is also affected by events that vary from period to period, such as changes in income tax laws and the resoluti …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Recently Adopted Accounting Standards Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. In June 2022, the Financial Accounting Standards Board (FASB) issued an accounting standard update which clarifies how the fair value of equity securities subject to contractual sale restrictions is determined (Topic 820). The amendment clarifies that a contractual sale restriction should not be considered in measuring fair value. It also requires certain qualitative and quantitative disclosures related to equity securities subject to contractual sale restrictions. We adopted this authoritative guidance in the first quarter of fiscal 2025. The adoption of this guidance did not have a material impact on our consolidated condensed financial statements. Improvements to Reportable Segment Disclosures . In November 2023, the FASB issued an accounting standard update to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses (Topic 280). The standard requires interim and annual disclosure of significant segment expenses that are regularly provided to the chief operating decision-maker (CODM) and included within the reported measure of a segments profit or loss, requires interim disclosures about a reportable segments profit or loss and assets that are currently required annually, requires disclosure of the position and title of the CODM, clarifies circumstances in which an entity can disclos …

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Restructuring Charges Fiscal 2025 Restructuring Plan In the fourth quarter of fiscal 2025, we approved a workforce reduction plan (Fiscal 2025 Restructuring Plan) to position us for continued growth as a more competitive and productive organization and expect approximately 4% of our global workforce to be impacted under this plan. The majority of the charges related to the Fiscal 2025 Restructuring Plan were recognized in the fourth quarter of fiscal 2025 and consist primarily of severance and other employment termination benefits to be paid in cash, and other non-cash related charges. Restructuring charges related to the Fiscal 2025 Restructuring Plan were as follows: 2025 (In millions) Severance and other employee-related charges $ 154 Asset impairments 27 Total $ 181 Changes in restructuring reserves related to the Fiscal 2025 Restructuring Plan described above were as follows: Restructuring Charges Reserves (In millions) Balance as of October 27, 2024 $ Restructuring charges 167 Consumption of reserves (2) Balance as of October 26, 2025 $ 165 …

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Contract Balances and Performance Obligations Contract Assets and Liabilities Contract assets primarily result from receivables for goods transferred to customers where payment is conditional upon technical sign off and not just the passage of time. Contract liabilities consist of unsatisfied performance obligations related to advance payments received and billings in excess of revenue recognized. Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Contract assets are generally classified as current and are included in Other Current Assets in the Consolidated Balance Sheets. Contract liabilities are classified as current or non-current based on the timing of when performance obligations will be satisfied and associated revenue is expected to be recognized. Contract balances at the end of each reporting period were as follows: October 26, 2025 October 27, 2024 (In millions) Contract assets $ 281 $ 269 Contract liabilities $ 2,566 $ 2,849 The increase in contract assets during fiscal 2025 was primarily due to an increase in unsatisfied performance obligations related to goods transferred to customers where payment was conditional upon technical sign off. During fiscal 2025, we recognized revenue of approximately $2.4 billion related to contract liabilities at October 27, 2024. Contract liabilities decreased during fiscal 2025 due to revenue recognized related to contract liabilities at October 2 …

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Industry Segment Operations Our two reportable segments are: Semiconductor Systems and Applied Global Services (AGS). The Display operating segment financial results were included in the Corporate and Other category balances below, as management no longer considers the Display operating segment a significant operating segment for separate reporting purposes. Segment information is presented based upon our management organization structure as of October 26, 2025 and the distinctive nature of each segment. Future changes to this internal financial structure may result in changes to our reportable segments. The Semiconductor Systems segment includes semiconductor capital equipment to enable materials engineering steps including etch, rapid thermal processing, deposition, chemical mechanical planarization, metrology and inspection, wafer packaging, and ion implantation. The AGS segment provides integrated solutions to optimize equipment and fab performance and productivity, including spares, upgrades, services, 200 millimeter and other equipment and factory automation software for semiconductor and other products. Our President and Chief Executive Officer is our chief operating decision-maker (CODM). We derive the segment results directly from our internal management reporting system. The accounting policies we use to derive reportable segment results are substantially the same as those used for external reporting purposes. Management measures the performance of each reportable s …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing