Applied Materials: CSR & Community Programs Overview Global Conference on Business Ethics Santa Clara University February 17, 2005

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Applied Materials CSR Community Programs
OverviewGlobal Conference on Business
EthicsSanta Clara UniversityFebruary 17, 2005

• Mike OFarrell
• Vice President, Global Community Affairs
• Applied Materials, Inc.

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Agenda

• Company Overview (10 Minutes)
• Corporate Social Responsibility/Community Affairs
  (35 Minutes)
• QA (30 Minutes)

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You have probably used something made with
Applied Materials Equipment

• We make the machines that -
• Make computer chips
• Make flat screen monitors and TVs
• Test pixels
• Our customers make the computer chips
• Intel, IBM, Samsung, Texas Instruments
• To sell those chips to companies like
• Dell, Sony, Nokia
• So that all of us can buy computers, cell phones,
  games and other electronics.

Semiconductors, Flat Screens, Fab Service
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The Food Chain
Source Dataquest, Applied Materials
Corporate Marketing estimates, WSTS, SEMI
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Applied Materials Overview

• Fiscal 2004 revenue was 8.0 Billion
• 17 of net sales were in U.S.
• Net income was 16.9 of revenue
• Cyclical business environment
• Approximately 12,000 employees in over 65
  locations throughout China Europe and Israel
  India, Malaysia and Singapore Japan Korea
  Taiwan and the United States
• Only five sites have 3 or more of worldwide
  employment base
• Only 17 sites have at least 100 employees
• Business is moving (and will continue to move) to
  Asia

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Applied Materials Overview

• Past Awards Recognition
• Americas Most Admired Companies, Fortune
  Magazine
• 100 Best Corporate Citizens, Business Ethics
• 100 Best Managed Companies, Industry Week
• Top Ten Performing Stocks of the Decade, Smart
  Money
• 100 Best Companies to Work For, Fortune Magazine
• 50 Best Companies for Minorities, Fortune
  Magazine
• Corporate Education Partner of the Year in the
  Greater Bay Area, San Francisco Business Times
• Outstanding Corporation Award, Association of
  Fundraising Professionals of Austin, Texas also
  AFP Silicon Valley
• Business in the Arts Award, Business Committee
  for the Arts Forbes Magazine
• Climate Protection Award, U.S. Environmental
  Protection Agency

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Applied Materials Overview

• Top Corporate Philanthropists in the Greater Bay
  Area (Ranked by 2003 Cash Giving to Bay
  Area-based Nonprofits), San Francisco Business
  Times
• Intel Corp. (2)
• Applied Materials, Inc. (5)
• Hewlett-Packard Co. (8)
• IBM Corp. (12)
• Cisco Systems, Inc. (13)
• Microsoft Corp. (14)

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Community Affairs Supports Company Value and
Corporate Citizenship

• Company Value
• Make a positive social contribution in our
  communities
• Vision
• Applied Materials is a world-class leader in
  corporate
• social responsibility and global citizenship.
• Department Mission
• To lead the Companys efforts in global corporate
• citizenship, ensuring that Applied Materials
  continually
• builds on its fundamental principles of positive
  social
• responsibility, active community involvement,
  innovative
• philanthropy, and employee engagement.

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Goals Stakeholder Focus

• Enable the Company to achieve goals with four key
  stakeholder
• groups Investors, Customers, Communities
  Employees
• Strategies
• Four key strategies have helped us to achieve
  reputation as a leader in the community
• Be a leader and convener use influence
  innovate focus
• Re larger investments, use a venture
  philanthropy model
• Be a proactive partner, rather than a passive
  grant-maker
• Be willing to invest RD and CF dollars
• Attract broad funding base
• Use all corporate assets, not just dollars
• Optimize impact by linking and leveraging
  investments

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Philanthropy Targets

• Targeted Spending for Philanthropy
• 1 of the Companys pre-tax income
• Applied Materials Foundation formed in 1994 to
  help manage through cycles
• Spending distribution
• Education 65
• Civic 25
• Arts 10
• 32 is outside of North America (excl. global
  programs)
• Employees contribute significantly (time and
  money)

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Current Representative Programs That Reflect
Our Philosophy Strategies

• Education
• Education Initiative (Inaugural SF Bay Area
  Regional Award, 2004)
• University Partnership Committee
• Shanghai Taiwan RD Funds
• Civic
• Tech Awards/TLVN
• Housing Trust Fund
• Silicon Valley Childrens Hospital
• Semicon China 2005 Technical Symposium Trade
  Show re Environmental/Energy Saving Products and
  Solutions
• North America Food Drive
• Arts Culture
• Art _at_ Applied (Incl. Mt. Fuji Climb)
• Other
• Tsunami Leveraged Response w/Tech Awards
  Laureates
• Employee Giving/Global Giving
• Employee Volunteerism

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Next Steps / Opportunities

• Expand Non-North America Regional Programs
• Refine Focus Spending Levels
• Enable Sustainable High Growth Business Climates
  (e.g., Trade Show/Technical Symposium re
  Environmental Energy Saving Solutions in China)
• Corporate Social Responsibility Enhance
  Management Process and Reporting Use Interim
  Communications to Bolster Reporting to
  Stakeholders Tell Our Strong Story Better
• Continue to Better Align Community Programs With
  Individual Employee Interests (Similar to
  Employee Giving and Volunteerism Programs),
  Especially to Address the Smaller Sites

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QA