8-KOther Events

APPLIED MATERIALS INC /DE 8-K Report, Corporate Update (Sep 8, 2011)

Filed September 8, 2011For Securities:AMAT

Summary

Applied Materials, Inc. (AMAT) filed an 8-K on September 7, 2011, reporting significant positive news regarding a U.S. federal income tax refund. Following an audit for fiscal years 2006 and 2007, the IRS recommended a refund of approximately $240 million plus interest. This recommendation was subsequently approved by the Joint Committee on Taxation of the U.S. Congress. As a result, Applied Materials now expects to receive a cash refund totaling $277 million, including interest, during its fourth quarter of fiscal 2011, which concludes on October 30, 2011. The company anticipates recognizing a tax benefit of $177 million, or approximately $0.13 per diluted share, in its fourth-quarter financial statements. This benefit is net of previously recognized tax benefits, indicating a final resolution and positive impact on earnings.

Key Highlights

  • 1Applied Materials expects to receive a $277 million cash refund from the IRS, including interest.
  • 2The refund pertains to U.S. federal income taxes paid in fiscal years 2006 and 2007.
  • 3The IRS recommendation for the refund has been approved by the Joint Committee on Taxation.
  • 4The refund is anticipated to be received during Applied Materials' fourth quarter of fiscal 2011 (ending October 30, 2011).
  • 5The company expects to recognize a tax benefit of $177 million in its Q4 FY2011 consolidated statement of operations.
  • 6This tax benefit is equivalent to approximately $0.13 per diluted share.
  • 7The recognized benefit is net of previously recognized tax benefits.

Frequently Asked Questions

The main event reported is the final approval by the Joint Committee on Taxation of the U.S. Congress for Applied Materials to receive a cash refund of $277 million (including interest) related to U.S. federal income taxes paid in fiscal years 2006 and 2007.

Applied Materials expects to recognize a tax benefit of $177 million, or approximately $0.13 per diluted share, in its fourth quarter of fiscal 2011. This will positively impact the company's net income for that quarter.

The company anticipates receiving the cash refund during its fourth quarter of fiscal 2011, which ends on October 30, 2011. The corresponding tax benefit will be recognized in the same quarter's financial statements.

The IRS initially recommended a cash refund of approximately $240 million plus interest. The final amount, including interest, for which the refund is expected is $277 million.