Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Applied Materials Inc., income tax expense (benefit), continuing operations

US$ in millions

12 months ended:	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019	Oct 28, 2018
U.S.	708)	590)	462)	196)	240)	1,035)
Foreign	456)	275)	344)	263)	260)	126)
State	54)	14)	17)	20)	12)	22)
Current	1,218)	879)	823)	479)	512)	1,183)
U.S.	(255)	(62)	(3)	(3)	8)	151)
Foreign	(61)	265)	67)	76)	46)	57)
State	(42)	(8)	(4)	(5)	(3)	(10)
Deferred	(358)	195)	60)	68)	51)	198)
Provision for income taxes	860)	1,074)	883)	547)	563)	1,381)

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27), 10-K (reporting date: 2018-10-28).

Download chart

Item	Description	The company
Current	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Applied Materials Inc. current increased from 2021 to 2022 and from 2022 to 2023.
Deferred	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Applied Materials Inc. deferred increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Provision for income taxes	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Applied Materials Inc. provision for income taxes increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Applied Materials Inc., effective income tax rate (EITR) reconciliation

	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019	Oct 28, 2018
Statutory U.S. federal income tax rate	21.00%	21.00%	21.00%	21.00%	21.00%	23.40%
Effect of foreign operations taxed at various rates	-8.20%	-4.40%	-7.00%	-5.90%	-5.90%	-15.60%
Changes in prior years’ unrecognized tax benefits	-0.20%	-0.90%	0.20%	0.50%	2.60%	0.00%
Resolutions of prior years’ income tax filings	-0.10%	-0.20%	-0.10%	-1.00%	-0.10%	-0.70%
Research and other tax credits	-1.60%	-1.00%	-0.90%	-1.30%	-1.10%	-0.70%
State income taxes, net of federal benefit	0.00%	0.00%	0.00%	0.00%	0.00%	0.20%
U.S. domestic production deduction	0.00%	0.00%	0.00%	0.00%	0.00%	-0.10%
Share-based compensation	0.00%	0.00%	0.00%	0.00%	0.00%	-0.70%
Other	0.20%	-0.40%	-0.20%	-0.20%	0.70%	-0.10%
Effective income tax rate, before changes in U.S. tax law	11.10%	14.10%	13.00%	13.10%	17.20%	5.70%
Changes in U.S. tax law	0.00%	0.00%	0.00%	0.00%	0.00%	23.70%
Effective income tax rate	11.10%	14.10%	13.00%	13.10%	17.20%	29.40%

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27), 10-K (reporting date: 2018-10-28).

Download chart

Item	Description	The company
Effective income tax rate, before changes in U.S. tax law	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Applied Materials Inc. effective income tax rate, before changes in U.S. tax law increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Applied Materials Inc., components of deferred tax assets and liabilities

US$ in millions

	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019	Oct 28, 2018
Capitalized R&D expenses	83)	—)	—)	—)	—)	—)
Allowance for doubtful accounts	4)	5)	4)	4)	8)	8)
Inventory reserves and basis difference	125)	131)	112)	119)	117)	117)
Installation and warranty reserves	35)	29)	29)	14)	11)	7)
Intangible assets	1,031)	984)	1,281)	1,355)	1,472)	—)
Accrued liabilities	19)	35)	31)	24)	15)	20)
Deferred revenue	72)	82)	25)	32)	36)	9)
Tax credits	536)	453)	369)	326)	264)	236)
Deferred compensation	217)	125)	133)	130)	98)	79)
Share-based compensation	50)	42)	34)	30)	36)	37)
Property, plant and equipment	9)	—)	—)	—)	—)	—)
Lease liability	98)	81)	61)	55)	—)	—)
Other	96)	67)	89)	96)	58)	48)
Gross deferred tax assets	2,375)	2,034)	2,168)	2,185)	2,115)	561)
Valuation allowance	(530)	(460)	(361)	(314)	(257)	(230)
Deferred tax assets	1,845)	1,574)	1,807)	1,871)	1,858)	331)
Property, plant and equipment	—)	(111)	(93)	(76)	(65)	(48)
Right of use assets	(103)	(80)	(62)	(54)	—)	—)
Intangible assets	—)	—)	—)	—)	—)	(38)
Undistributed foreign earnings	(23)	(39)	(37)	(39)	(38)	(32)
Foreign exchange	—)	—)	—)	—)	—)	(3)
Deferred tax liabilities	(126)	(230)	(192)	(169)	(103)	(121)
Net deferred tax assets (liabilities)	1,719)	1,344)	1,615)	1,702)	1,755)	210)

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27), 10-K (reporting date: 2018-10-28).

Download chart

Item	Description	The company
Gross deferred tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Applied Materials Inc. gross deferred tax assets decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Applied Materials Inc. deferred tax assets decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Net deferred tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Applied Materials Inc. net deferred tax assets (liabilities) decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Applied Materials Inc., deferred tax assets and liabilities, classification

US$ in millions

		Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019	Oct 28, 2018
	Non-current deferred tax assets (included in Deferred income taxes and other assets)	1,729)	1,395)	1,623)	1,711)	1,766)	222)
	Non-current deferred tax liabilities (included in Other liabilities)	10)	51)	8)	9)	11)	12)

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27), 10-K (reporting date: 2018-10-28).

Download chart

Item	Description	The company
Non-current deferred tax assets (included in Deferred income taxes and other assets)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	Applied Materials Inc. non-current deferred tax assets (included in Deferred income taxes and other assets) decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Non-current deferred tax liabilities (included in Other liabilities)	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	Applied Materials Inc. non-current deferred tax liabilities (included in Other liabilities) increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Applied Materials Inc., adjustments to financial statements

US$ in millions

	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019	Oct 28, 2018
Adjustment to Total Assets
Total assets (as reported)	30,729)	26,726)	25,825)	22,353)	19,024)	17,773)
Less: Noncurrent deferred tax assets, net	1,729)	1,395)	1,623)	1,711)	1,766)	222)
Total assets (adjusted)	29,000)	25,331)	24,202)	20,642)	17,258)	17,551)
Adjustment to Total Liabilities
Total liabilities (as reported)	14,380)	14,532)	13,578)	11,775)	10,810)	10,934)
Less: Noncurrent deferred tax liabilities, net	10)	51)	8)	9)	11)	12)
Total liabilities (adjusted)	14,370)	14,481)	13,570)	11,766)	10,799)	10,922)
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported)	16,349)	12,194)	12,247)	10,578)	8,214)	6,839)
Less: Net deferred tax assets (liabilities)	1,719)	1,344)	1,615)	1,702)	1,755)	210)
Stockholders’ equity (adjusted)	14,630)	10,850)	10,632)	8,876)	6,459)	6,629)
Adjustment to Net Income
Net income (as reported)	6,856)	6,525)	5,888)	3,619)	2,706)	3,313)
Add: Deferred income tax expense (benefit)	(358)	195)	60)	68)	51)	198)
Net income (adjusted)	6,498)	6,720)	5,948)	3,687)	2,757)	3,511)

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27), 10-K (reporting date: 2018-10-28).

Applied Materials Inc., Financial Data: Reported vs. Adjusted

Download chart

Applied Materials Inc., adjusted financial ratios

	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019	Oct 28, 2018
Net Profit Margin
Reported net profit margin	25.86%	25.31%	25.53%	21.04%	18.52%	19.20%
Adjusted net profit margin	24.51%	26.06%	25.79%	21.43%	18.87%	20.35%
Total Asset Turnover
Reported total asset turnover	0.86	0.96	0.89	0.77	0.77	0.97
Adjusted total asset turnover	0.91	1.02	0.95	0.83	0.85	0.98
Financial Leverage
Reported financial leverage	1.88	2.19	2.11	2.11	2.32	2.60
Adjusted financial leverage	1.98	2.33	2.28	2.33	2.67	2.65
Return on Equity (ROE)
Reported ROE	41.94%	53.51%	48.08%	34.21%	32.94%	48.44%
Adjusted ROE	44.42%	61.94%	55.94%	41.54%	42.68%	52.96%
Return on Assets (ROA)
Reported ROA	22.31%	24.41%	22.80%	16.19%	14.22%	18.64%
Adjusted ROA	22.41%	26.53%	24.58%	17.86%	15.98%	20.00%

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27), 10-K (reporting date: 2018-10-28).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Applied Materials Inc. adjusted net profit margin ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Applied Materials Inc. adjusted total asset turnover ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Applied Materials Inc. adjusted financial leverage ratio increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Applied Materials Inc. adjusted ROE improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Applied Materials Inc. adjusted ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Applied Materials Inc., Financial Ratios: Reported vs. Adjusted

Download chart

	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019	Oct 28, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	6,856)	6,525)	5,888)	3,619)	2,706)	3,313)
Net sales	26,517)	25,785)	23,063)	17,202)	14,608)	17,253)
Profitability Ratio
Net profit margin¹	25.86%	25.31%	25.53%	21.04%	18.52%	19.20%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income	6,498)	6,720)	5,948)	3,687)	2,757)	3,511)
Net sales	26,517)	25,785)	23,063)	17,202)	14,608)	17,253)
Profitability Ratio
Adjusted net profit margin²	24.51%	26.06%	25.79%	21.43%	18.87%	20.35%

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27), 10-K (reporting date: 2018-10-28).

2023 Calculations

¹ Net profit margin = 100 × Net income ÷ Net sales
= 100 × 6,856 ÷ 26,517 = 25.86%

² Adjusted net profit margin = 100 × Adjusted net income ÷ Net sales
= 100 × 6,498 ÷ 26,517 = 24.51%

Download chart

Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Applied Materials Inc. adjusted net profit margin ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019	Oct 28, 2018
As Reported
Selected Financial Data (US$ in millions)
Net sales	26,517)	25,785)	23,063)	17,202)	14,608)	17,253)
Total assets	30,729)	26,726)	25,825)	22,353)	19,024)	17,773)
Activity Ratio
Total asset turnover¹	0.86	0.96	0.89	0.77	0.77	0.97
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Net sales	26,517)	25,785)	23,063)	17,202)	14,608)	17,253)
Adjusted total assets	29,000)	25,331)	24,202)	20,642)	17,258)	17,551)
Activity Ratio
Adjusted total asset turnover²	0.91	1.02	0.95	0.83	0.85	0.98

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27), 10-K (reporting date: 2018-10-28).

2023 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 26,517 ÷ 30,729 = 0.86

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 26,517 ÷ 29,000 = 0.91

Download chart

Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Applied Materials Inc. adjusted total asset turnover ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019	Oct 28, 2018
As Reported
Selected Financial Data (US$ in millions)
Total assets	30,729)	26,726)	25,825)	22,353)	19,024)	17,773)
Stockholders’ equity	16,349)	12,194)	12,247)	10,578)	8,214)	6,839)
Solvency Ratio
Financial leverage¹	1.88	2.19	2.11	2.11	2.32	2.60
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets	29,000)	25,331)	24,202)	20,642)	17,258)	17,551)
Adjusted stockholders’ equity	14,630)	10,850)	10,632)	8,876)	6,459)	6,629)
Solvency Ratio
Adjusted financial leverage²	1.98	2.33	2.28	2.33	2.67	2.65

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27), 10-K (reporting date: 2018-10-28).

2023 Calculations

¹ Financial leverage = Total assets ÷ Stockholders’ equity
= 30,729 ÷ 16,349 = 1.88

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 29,000 ÷ 14,630 = 1.98

Download chart

Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Applied Materials Inc. adjusted financial leverage ratio increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019	Oct 28, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	6,856)	6,525)	5,888)	3,619)	2,706)	3,313)
Stockholders’ equity	16,349)	12,194)	12,247)	10,578)	8,214)	6,839)
Profitability Ratio
ROE¹	41.94%	53.51%	48.08%	34.21%	32.94%	48.44%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income	6,498)	6,720)	5,948)	3,687)	2,757)	3,511)
Adjusted stockholders’ equity	14,630)	10,850)	10,632)	8,876)	6,459)	6,629)
Profitability Ratio
Adjusted ROE²	44.42%	61.94%	55.94%	41.54%	42.68%	52.96%

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27), 10-K (reporting date: 2018-10-28).

2023 Calculations

¹ ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 6,856 ÷ 16,349 = 41.94%

² Adjusted ROE = 100 × Adjusted net income ÷ Adjusted stockholders’ equity
= 100 × 6,498 ÷ 14,630 = 44.42%

Download chart

Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Applied Materials Inc. adjusted ROE improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019	Oct 28, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	6,856)	6,525)	5,888)	3,619)	2,706)	3,313)
Total assets	30,729)	26,726)	25,825)	22,353)	19,024)	17,773)
Profitability Ratio
ROA¹	22.31%	24.41%	22.80%	16.19%	14.22%	18.64%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income	6,498)	6,720)	5,948)	3,687)	2,757)	3,511)
Adjusted total assets	29,000)	25,331)	24,202)	20,642)	17,258)	17,551)
Profitability Ratio
Adjusted ROA²	22.41%	26.53%	24.58%	17.86%	15.98%	20.00%

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27), 10-K (reporting date: 2018-10-28).

2023 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 6,856 ÷ 30,729 = 22.31%

² Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 6,498 ÷ 29,000 = 22.41%

Download chart

Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Applied Materials Inc. adjusted ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Applied Materials Inc. (NASDAQ:AMAT)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

Applied Materials Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Applied Materials Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)