2015

corporate citizenship report

 In 2015, Applied Materials delivered solid growth and made
significant progress toward our long-term strategic and financial
goals. Our leadership in materials engineering is making key
technology inflections possible, and creates a great foundation for
future growth and exciting new opportunities for our employees.

As part of our company culture, we believe in making a positive

contribution to the industries and communities in which we
operate. Applied proactively reinforces environmental stewardship
through innovative products and manufacturing methods, we
invest in the communities where we work and live across the
globe, and we strive to enrich our workplace culture for our
employees. We are proud that our accomplishments earned us
a place on the annual 100 Best Corporate Citizens list published
by Corporate Responsibility Magazine.

I invite you to learn more about the company’s sustainability,

workplace and community programs in the 2015 Applied Materials
Corporate Citizenship Report.

Gary Dickerson
President and CEO

2 applied materials Citizenship report 2015

 2015 CORPORATE CITIZENSHIP REPORT

About This Report SUSTAINABILITY commUnity workplace

This 2015 Citizenship Report is the annual
sustainability report of Applied Materials, Inc. 7 Managing 13 Community 18 Training &
and its subsidiaries (collectively referred to as Environmental Investments Development
“Applied” or “the company”). Applied Materials
issued its first Citizenship Report in 2007. The Impact 16 Responding 18 Diversity
2015 report falls within the general guidelines
of the Global Reporting Initiative™ (GRI) 8 Energy To Disaster 19 Ethics
Reporting Framework (Version 3.1). This report
includes information about the company’s 9 Water 16 Employee 19 Safety
economic, environmental and social performance,
9 Greenhouse Engagement
including resource metrics, community
investments, workplace and political activities.
21 Human Rights
It reflects the global operations of Applied for
Gas Emissions
calendar year 2015, except where indicated
21 Public Policy
that data is for Applied’s fiscal year, which ends
11 Waste &
on the last Sunday in October. Applied’s global Recycling
operational footprint fluctuates with business apPendix
acquisitions and divestitures, as well as the
expansion, consolidation and relocation of its 23 Resources &
overall operations. These changes are, in part,
a result of the highly cyclical and evolving References
nature of the primary industries the company
serves. Acquired businesses and operations
are included from the date of acquisition.

A list of additional resources relating to Applied’s
business and sustainability performance is
located in the appendix of this report.

3 applied materials Citizenship report 2015

 FY2015 COMPANY OVERVIEW
For fiscal year ended October 25, 2015

We use materials engineering to improve the way people live. By creating

and modifying materials at an atomic level and on an industrial scale, we
make possible breakthrough innovations that shape the future.

$9.7 billion revenue >10,200 patents $1.5 billion R&D

investment

AMAT stock listing Headquartered in >14,000 employees

on NASDAQ California’s Silicon Valley 81 locations in
18 countries

4 applied materials Citizenship report 2015

 At Applied Materials, our innovations make possible
the technology shaping the future. Rooted in this vision
is the notion that innovative technologies can improve
people’s lives.

From the health and well-being of our employees and their communities, to our
sustainable business practices and corporate governance, every aspect of our business
supports the goal of building a better future for all. The company demonstrates this
commitment through our corporate citizenship investments in three key areas:
Sustainability, Community and the Workplace.

Sustainability Community Workplace

Practices Investments Culture
Applied is committed to The company makes The company is dedicated
sustaining our business strategic investments around to attracting, developing
in an environmentally and the world in education, civic and retaining a world-class
socially responsible way, and engagement, the arts and global workforce and
we take strong measures to the environment to improve respecting the local culture
protect the health and safety communities where we of the regions where we
of workers, customers and work and live. do business.
neighboring communities.

5 applied materials Citizenship report 2015

 sustainability

In This Section In 2015, the company continued to turn our sustainability objectives
»» Managing Environmental Impact and practices into results, improve and enrich communities where we
»» Energy have a presence, and ensure a safe, thriving workplace for employees.
»» Water
»» Greenhouse Gas Emission Applied Materials is committed to positively impacting our environment.
»» Waste & Recycling Our five guiding sustainability principles are: improve energy efficiency;
design for the environment; promote environmental awareness among
employees and the public; minimize pollution wherever possible;
and conserve resources. These principles are demonstrated through
the way we conduct our daily business. Our dedication to sustainability
is reinforced through our membership in the Electronics Industry
Citizenship Coalition (EICC).

6 applied materials Citizenship report 2015

 How We Manage Our Environmental Impact
Applied exhibits responsibility towards the environment through our Environmental
Health & Safety (EHS) program, manufacturing practices, business operations,
supply chain initiatives, and the way we operate in our communities.

Our Supply Chain organization collaborates with suppliers to encourage and

support best EHS practices and initiatives that can benefit both the environment
and our respective businesses. Results are monitored through training, auditing
and routine reporting.

The company uses its Environmental Management System (EMS), which is modeled
on the International Organization for Standardization (ISO) 14001 standard, to
measure Applied’s environmental performance. Applied began utilizing an EMS in
2004, when we ISO 14001-certified our Austin, Texas manufacturing location.
Our Supply Chain
Since then, we obtained the ISO 14001 certification for our manufacturing sites in
organization collaborates Singapore, Israel, Montana, Taiwan and Italy. In 2015, our New Product Integration
(NPI) operation in Santa Clara, California was the seventh global location to obtain
with suppliers to encourage
ISO 14001 certification. Applied’s certification roadmap includes registration of
and support best EHS three additional global manufacturing sites: Gloucester, Massachusetts, and
Alzenau and Heimstetten, Germany.
practices and initiatives
In conjunction with the EMS, Applied uses its Energy and Sustainability System
that can benefit both the
(ESS) software to accurately capture and track the company’s environmental
environment and our impact. The ESS enables the company to collect, analyze, interpret, act on and report
power and water consumption, waste generation, greenhouse gas (GHG) emissions
respective businesses.
(Scope 1 and 2 under the “Greenhouse Gas Protocol”*) and business travel data
Results are monitored (Scope 3*) with consistent units and correlation to global reporting standards. The
data that are tracked and consolidated originate primarily from information provided
through training, auditing
on a calendar year basis by utilities and other third parties.
and routine reporting.

* The GHG Protocol is a widely-used international accounting tool for quantifying and analyzing greenhouse gas emissions. It was
created by a partnership between the World Resources Institute and the World Business Council for Sustainable Development.
7 applied materials Citizenship report 2015
 Energy
Applied’s energy usage sustainability strategy focuses on two core areas: maximizing the
energy required for our business, such as through energy management
control systems, lighting and other facilities infrastructure upgrades; and producing
renewable energy at Applied facilities and/or purchasing such energy from local utilities.

As an integral part of our clean energy initiatives, Applied installed a wind turbine at our
Gloucester, Massachusetts facility in 2012, which has generated 20.7 GWh of energy.
Applied sells the renewable energy certificates (RECs) associated with the wind turbine in
support of the Massachusetts Department of Energy Resources (DOER) Renewable Energy
Portfolio Standard. Due to a technical problem in September 2015, the turbine was shut
down and is currently in repair. It is expected to be fully operational by the end of 2016.

Applied’s Santa Clara, California and Austin, Texas facilities support their energy needs with
purchases of green energy (renewable energy from wind or solar sources) from local utility
providers. The green energy purchased supported 100 percent of the power demand for our
two Santa Clara campuses and approximately 28 percent of Austin’s electricity demand in
Green energy supported 2015. In addition, solar panel arrays at Applied’s facilities in Sunnyvale, California; Singapore;
Xi’an, China and Austin, Texas generated a total of 3.5 GWh of energy in 2015.
100% of the power demand
The following Annual Worldwide Energy Consumption table shows direct and indirect
for our two Santa Clara campuses worldwide energy consumption at Applied’s facilities for the last three years, including the
and approximately 28% of amount of energy obtained from renewable sources.

Austin’s electricity demand.

ANNUAL WORLDWIDE
2013 2014 2015
Solar panel arrays at Applied’s ENERGY CONSUMPTION

Direct energy consumption by primary

facilities in Sunnyvale, California; energy source (Gas) (Million Therms)
4.0 4.0 3.8

Indirect energy consumption by primary

Singapore; Xi’an, China and source (Electricity) (GWh)1
311 327 331

Austin, Texas generated a total Renewable energy (Electricity) (GWh)1, 2 68 68 65

Data for reporting years 2013 and 2014 have been modified to account for Applied’s sale of Renewable Energy Certificates
of 3.5 GWh of energy.
1

(RECs).
2
Renewable energy consists of on-site generation from Applied’s solar arrays in Austin, Singapore and China and green power
RECs purchased in Austin and Santa Clara.

8 APPLIED MATERIALS CITIZENSHIP REPORT 2015

 Water
The company regularly analyzes its water usage patterns and determines ways to
Austin Water Reclamation Program minimize water consumption across our operations. Water usage totals will fluctuate
to Save 6 Million Gallons Annually with business activity, research and development needs and product life cycle development.

In 2015, average water usage decreased by eight percent. Applied implemented the
The company regularly seeks new ways to
Austin Industrial Waste Neutralization (IWN) Program in September 2015, which is
conserve and recycle its water. The Austin
anticipated to save the company 6 million gallons of water annually. Its positive future
Industrial Waste Neutralization (IWN) Program,
launched in September, 2015, is set to have a impact was recognized by the City of Austin for Excellence in Water Conservation in 2015.
substantial future impact on water usage—a
The table below shows water usage for the last three years (CCF=100 cubic feet).
savings of approximately 16,000 gallons of
water per day, or 6 million gallons per year. Its
positive environmental impact was recognized
Annual Worldwide
by the City of Austin for Excellence in Water 2013 2014 2015
water usage
Conservation in 2015.

Prior to the IWN program, the Austin wet tool

Worldwide total water usage (CCF)1 538,894 566,804 522,802
manufacturing operations tested waste distilled
water and used reverse osmosis to neutralize the
water and then discharged it to the City of Austin 1
Amounts for owned facilities include domestic, landscaping and process (if any) usage. Amounts for leased facilities
publically-owned treatment works (POTW). include domestic and process (if any) usage, while leased office-only facilities include domestic usage only.

The IWN reclamation program reuses treated

industrial waste water in the cooling towers
at the Austin manufacturing facility as make-up
water. Each gallon of reclaimed IWN waste Greenhouse Gas Emissions
water added to the cooling towers for make-up
Applied’s greenhouse gas (GHG) emissions are a result of energy usage and equipment
directly replaces clean city water that would
otherwise have been used. Excess volumes of process emissions. The company has a long-standing commitment to support efforts
reclaimed waste water continue to flow through to reduce our greenhouse gas emissions through policies and programs, product
the lift station to the City of Austin POTW. manufacturing processes and solutions offered to customers.

During the cooler months, the recycled waste In 2015, our GHG emissions remained flat from 2014 due to a three percent increase
water is expected to provide over 90 percent
in our electricity usage, coupled with a three percent decrease in our natural gas usage.
of the total cooling tower make-up water and
Scope 3 emissions (indirect releases) decreased 45 percent year-over-year primarily
will augment the original make-up water source
during hotter months. due to reduction in business-related air travel.

9 applied materials Citizenship report 2015

 The table below shows Applied’s worldwide direct and indirect GHG emissions for the
last three years.

Annual Worldwide greenhouse

2013 2014 2015
gas emissions 1

Total direct and indirect greenhouse gas

169,571 163,703 170,613
emissions by weight (MTCe) (Scope 1+2)1

Other relevant indirect greehouse gas emissions

18,690 20,724 11,390
by weight (MTCe) (Scope 3 air travel)

1
Indicates Applied’s worldwide direct and indirect GHG emissions for the last three years (MTCe=metric tons of
carbon equivalent); however, does not include renewable energy that is sold into the REC trading market.

To address global-warming potential (GWP), the company takes a proactive, cost-effective

approach to reduce gaseous chemicals used in products, such as perfluorocarbons (PFCs)
and sulfur hexafluoride (SF6). For instance, the Applied Aeris™-G pre-pump plasma
abatement solution, with more than 1,000 customer installations, uses less energy treating
the actual process gas volume, a smaller and more concentrated volume than what is treated
by post-pump abatement units. The plasma dissociation, combined with the low volume of
nitrogen in the Aeris-G chamber during abatement, reduces nitrogen oxide emissions to near
zero. The product also saves subfab space, reduces utility and exhaust connections and
minimizes installation costs, while improving abatement efficiency. Units are synchronized
with chamber operation and operate on-demand to lower electricity usage and reduce the
cost of ownership.

Applied has a long history of supporting employee programs that help reduce greenhouse
gas emissions. Some of these programs include: carpool/ride-matching and vanpool service
for California, Texas and Massachusetts employees; public and alternative transportation
incentives for California employees; electrical vehicle charging stations at our Santa Clara
and Sunnyvale campuses and Austin site; and preferred parking for carpools, hybrid and
electric vehicles in Austin and Santa Clara.

Applied continues to offer its Work-From-Home (AppliedAnywhere) program with 417

participants and 18 telepresence rooms for virtual meetings.

10 applied materials Citizenship report 2015

 The company also provides employee discounts for the purchase and installation of solar
panels for their homes. Through the Employee Solar Program, eligible employees can receive
a rebate of up to $1,500 through an approved vendor. This program is offered in addition to
state and/or local rebate programs in several areas in the U.S. with Applied operations.

Waste and Recycling

2015 waste reduction Applied consistently works to reduce its solid waste and hazardous and non-hazardous waste
and to increase its recycling and diversion rates. The total amount of hazardous waste or non-
hazardous waste generated depends on fluctuations and changes in business demand, facility
system or process improvements and the use of enhanced materials controls and management.

Hazardous In 2015, the amount of hazardous waste decreased by 52 percent and non-hazardous waste

52%
Waste decreased by 28 percent. The reduction in hazardous waste was primarily due to removal of
a Santa Clara campus machine that generates copper-containing liquid waste, while a second
machine had limited activity during the year. Additionally, a newly-installed waste management
process in Santa Clara was fully operational during 2015.

Applied’s offices, campuses and manufacturing facilities globally implement recycling programs
to decrease non-hazardous waste and increase waste diversion. Activities include recycling of
Landfill solid materials, cafeteria items and building materials, as well as creation of reusable packaging

28%
for shipping and other uses.

ANNUAL WORLDWIDE WASTE,

2013 2014 2015
RECYCLING AND DIVERSIOn

Total weight of waste by type and disposal

Recycled/ method (metric tons):
composted/   Hazardous waste treated off-site 610 458 223

12%
diverted
  Landfill (non-hazardous) 3,351 4,320 3,136

  Recycled/composted/diverted 7,787 7,276 7,906

  Diversion rate (%) 66.3 60.1 71.7

11 applied materials Citizenship report 2015

 community

In This Section As a responsible global citizen, we strive to make a positive contribution

»» Community Investments to the communities where we live and to the world around us. We live
»» Responding To Disaster this core value through initiatives and programs that support community
»» Employee Engagement involvement, corporate philanthropy and employee engagement,
working with organizations that offer programs and services without
discrimination toward any group or individual.

The company and the Applied Materials Foundation focus their

community investments in four key areas: quality education, strong civic
leadership, a vibrant arts and culture scene, and increased environmental
awareness. Applied also encourages employees to engage in their local
community through volunteerism and giving, matching employee gifts
and volunteer hours to not-for-profit organizations.

12 applied materials Citizenship report 2015

 Community Investments
Applied Materials demonstrates its commitment to the community by investing in hundreds
of organizations around the world. The company directs its grantmaking towards the unique
needs of each region, aligning investments with the company’s four philanthropic focus areas
and geographies where we have a presence.

In fiscal year 2015, Applied and the Applied Materials Foundation granted $9.5 million to
communities around the globe. The following Community Investment table shows key data
for the last three years.

ANNUAL COMMUNITY INVESTMENT 2013 2014 2015

Total community investments by Applied and

its Applied Materials Foundation ($ millions) 10.4 9.3 9.5
(excludes administrative)1

Total Giving through the Foundation Match

3.7 3.5 3.8
Program (employee gifts plus match in $ millions)1

Total Volunteer Time Grant hours logged 15, 442 16, 917 14,325

Total contributions issued by Applied Materials

44, 520 46,600 42,900
Foundation based on Time Grant hours

1
Data is for fiscal year.

Because our business Examples of our 2015 work are highlighted in the following sections.

is built on the power of Advancing Educational Achievement

ideas, Applied is committed Because our business is built on the power of ideas, Applied is committed to inspiring the
next generation of innovators, adopting a collaborative approach to advancing education
to inspiring the next achievement and teacher professional development in specific neighborhoods.
generation of innovators. Applied’s Education Initiative in Silicon Valley, California and Austin, Texas aims to narrow
the academic achievement gap by working across sectors to benefit underserved students.
The East Side Alliance, comprised of eight school districts in San Jose and numerous funders

13 applied materials Citizenship report 2015

 and nonprofit organizations, facilitates school district collaboration focused on ensuring
approximately 85,000 K-12 East Side students graduate from high school prepared to
thrive in a college environment. Similarly, E3 Alliance, a regional education collaborative
in Austin, convenes public and private partners to transform teaching and learning in
middle schools that helps improve student achievement.

In Rehovot, Israel, Applied enhanced its support of after-school centers for disadvantaged
children in the Oshiot neighborhood. Applied Materials Israel also sustained its strong
collaboration with Sinai School, including cash support, employee volunteerism and
student mentorship.

Additionally, through SEMI Foundation’s High Tech University, the company joined other
industry leaders in funding semiconductor career exploration workshops for students in
the U.S., Japan and Korea, inspiring their interest in science, technology and engineering.

Strengthening Communities
With the mission of improving the way people live around the world, Applied acts on its
responsibility to strengthen local communities through increased access to affordable
housing and building capacity of the nonprofit sector.

In 2015, the company participated in efforts to increase opportunities for families to

secure stable housing. In Phoenix, Arizona, Applied supported House of Refuge to provide
shelter to homeless families participating in a basic skills training. In Silicon Valley, the
company funded The Housing Trust’s rental deposit program and took an active role in
local efforts to increase the supply of affordable housing. Outside the U.S., Applied
employee volunteers leveraged a grant to Habitat for Humanity Korea to construct
solar-powered houses for disadvantaged families.

In support of building the capacity of the nonprofit sector to address community needs,
the company worked with Mission Capital to convene Austin, Texas grantees for the 2015
Applied Materials Advancement Academy. In a post-workshop survey, nearly 100
percent of the participants agreed that the program, which focused on nonprofit project
management, would make both an immediate and long-term impact on their organization.

14 applied materials Citizenship report 2015

 Championing Arts and Culture
As a company that thrives on innovation, Applied continued its long-term commitment
to creative expression by investing in local arts and culture activities.

The company supported dozens of exhibitions and performances offered by local arts
organizations in North America, including summer musical theatre in Kalispell, Montana,
symphony productions in Gloucester, Massachusetts and art exhibits in San Jose, California.

In Taiwan, the company marked the 15th anniversary of the Applied Materials Taiwan Art
Festival, celebrating public appreciation of the arts. Since the program began, it has reached
over 56,000 art and music enthusiasts, including 8,500 attendees in 2015.

Applied also renewed its investment in the Shanghai Charyou Youth Volunteer Service Center
in China to support the Arts Talent Camp for western minority youth. The program includes
mentoring from artists, visits to art museums and exposure to multi-cultural environments.

Cultivating Environmental Awareness

Aligned with our sustainability principle to promote environmental awareness among
Aligned with our sustainability
employees and the public, Applied invests in nature education programs for youth and
principle to promote environmental community-based projects.

awareness among employees and In Gloucester, Massachusetts, we invested in the launch of a new school gardens program,
which enabled 1,600 pre-K through 6th grade students to plant, harvest and eat fresh
the public, Applied invests in nature
vegetables from school gardens and local farms. The company supports similar projects in
education programs for youth and Austin and Silicon Valley.

community-based projects. Applied also made a grant to The Jane Goodall Institute Shanghai’s Youth for Environmental
Sustainability program, enabling more than 2,000 students from 55 schools in Shanghai,
Xi’an, Suzhou, Wuxi and Beijing China to participate in environmental education. In Taiwan,
funding for the IShare Community Development Association facilitated environmental
education for 7,000 students across 12 Hsinchu high schools.

In addition, company volunteers in India, Korea and Taiwan joined with other local community
members to plant native vegetation and trees at several regional parks, lakes and preserves
throughout the year.

15 applied materials Citizenship report 2015

 Responding to Disaster
as a global citizen, applied supports relief and recovery efforts in the aftermath of disasters
impacting areas where the company, customers or employees have a presence or where
there is significant community need.

Following the 7.8 magnitude earthquake in nepal in april 2015, applied responded with
Helping Hands Day a donation to the american red cross, which partnered with its nepal chapter to help
Celebrates 20 Years 550,000 victims in the country.

in June 2015, after an explosion that injured 500 at a recreational water park in new taipei,
The tradition of Helping Hands Day began
in 1995, when a small group of employees taiwan, applied employees and the company funded efforts by the sunshine social
and their families helped pack boxes of Welfare Foundation to provide burn rehabilitation services, including physical and
food for Second Harvest Food Bank of occupational therapy, as well as psychosocial support.
Santa Clara and San Mateo Counties.
applied also renewed its funding of children Without Borders to support the long-term
The event has grown over the years into
needs of victims from the March 2011 Japan earthquake and tsunami. the program's
the company’s biggest annual employee
bus circulated among temporary housing areas providing children with a place to do
volunteer event in Santa Clara, packing
over 78,000 boxes with more than 25 their homework and play with friends after school.
million pounds of food.

Over the years, Helping Hands Day has Employee Engagement

expanded to meet the increasing demand
for food bank services in Silicon Valley. In applied facilitates and encourages global employee engagement through matching gifts,
2015, a record 6,010 boxes of food were volunteer time grants and after-hours opportunities.
packed by 312 volunteers—some of whom
have participated for all 20 years. the company’s annual food drive efforts around the world provide nutritional food to
those in need. applied’s 2015 north america Food Drive broke its previous record, raising
Through Helping Hands Day and other
$1.6 million for u.s. food banks. in india, the company held its fourth annual Food Drive,
food drive activities, we are honored to
partner with organizations to address food donating more than $33,000 usD for at-risk populations. applied Materials singapore
insecurity issues in the communities where raised over $34,000 usD for its Food From the heart project, benefiting over 3,800 low-
we work and live. income individuals.

2015 also marked 20 years of annual fundraising for the Dublin simon community by
applied Materials ireland. this year, the event raised approximately $50,000 usD for
housing refurbishment of 21 bedrooms and two apartments for the area’s underserved
and homeless.

16 applied materials Citizenship report 2015

 workplace

In This Section Applied Materials’ innovation begins with our people. By achieving great
»» Training & Development results together in an environment where employees do their best, the
»» Diversity company succeeds.
»» Ethics
»» Safety This value is reflected in our culture of growth, diversity, safety and
»» Human Rights ethics focused on creating meaningful careers at the company. We
»» Public Policy foster personal and professional development opportunities for
employees through Applied Global University, experiences, exposure
and education. At the end of fiscal 2015, Applied’s global workforce
included approximately 14,000 regular employees (not including
temporary employees or interns), spanning 81 locations in 18 countries.

17 applied materials Citizenship report 2015

 Training and Development
The table below reflects key data for the past three years on the company’s workforce internal
formal training hours. In addition, we support and encourage employees to develop their skills
and knowledge in a variety of ways. These developmental opportunities include stretch,
rotational and project assignments within the company, often on cross-functional teams.
Applied employees also benefit from educational offerings at local universities, through
professional membership associations and via access to an in-house technical library.

training & development 2013 2014 2015

Average hours of training per year per person

44 RFT 41.5 RFT 41 RFT
by category: regular full-time employees (RFT)
32 Total 28.5 Total 30 Total
total (RFT, temps, contractors, interns)

Percentage of employees receiving regular

98 98 95
performance and career development reviews1
1
Every employee is encouraged to complete an annual performance evaluation. Following the performance evaluation, employees
are also encouraged to set a development goal. In 2015, 63 percent of employees had a development goal in place.

Diversity
At Applied, we respect each individual, welcome diversity and embrace different perspectives
At Applied Materials, as a key component of innovation. The company commits to workplace diversity through
its policies, programs and initiatives. These include recruiting, community involvement,
we respect each employee resource groups (ERG), and recognition programs events in
individual, welcome Santa Clara, Austin, India and other global locations.

diversity and embrace Our ERGs, for example, provide an open forum to express a dimension of diversity or shared
interest and help strengthen the connection to local communities. Applied sponsors more than
different perspectives a dozen ERGs, including Hispanics in Partnership (HIP); the Black Employee Network; Young
as a key component Professionals Network; and the Women’s Professional Development Network (WPDN).

of innovation. Some 2015 diversity program highlights included the 10th anniversary of the Santa Clara
chapter of WPDN, annual Diversity Day celebrations in Santa Clara and Austin; and
decade-long recognition on the list of Victory Media’s “Top 100 Military Friendly Employers.”

18 applied materials Citizenship report 2015

 Ethics
Applied’s core values include responsibility, integrity, mutual trust and respect. These
values are foundational to our success—they are a vital part of our culture and integral
to the way we work with employees, customers, suppliers, competitors and the public.

To reinforce our commitment to ethics, in November 2015, Applied Materials held its
annual Ethics Week, which included a variety of compliance communications from
senior executives and interactive sessions in Santa Clara and Austin. The Ethics Week
events focused on our commitment to conduct all aspects of business with integrity
and honesty, speak up if we see or suspect something is wrong, and be open and
honest at all times. Similar Ethics Week events will occur at all of Applied’s major
global locations in 2016.

In 2015, for the fourth consecutive year, Applied was named a World’s Most Ethical
Company® by the Ethisphere Institute, an independent center of research promoting
best practices in corporate ethics and governance.

Our EHS Management System

Safety at Applied
aligns and integrates with our
Applied conducts its business operations in a manner that protects the health and
site business processes and safety of workers, customers and neighboring communities. We are committed to

incorporates formal risk complying with or exceeding all relevant regulatory requirements.

assessments and mitigation Our Environmental, Health and Safety (EHS) Management System aligns and integrates
with our site business processes and incorporates formal risk assessments and mitigation
practices, validated by routine practices, validated by routine internal audits of major sites and periodic third-party

internal audits of major audits of our certified manufacturing sites. The EHS Management System includes
safety self-inspections, walkthroughs, safety review board meetings and committees,
sites and periodic third- training and new chemical approvals, among other ongoing activities.

party audits of our certified Applied Materials’ manufacturing sites that are registered to Occupational Health

manufacturing sites. and Safety Assessment Series (OHSAS) standard 18001 include: Austin, Texas and
Santa Clara, California (New Product Integration site); Singapore; and Tainan, Taiwan.
Applied’s certification roadmap includes registration of five additional global

19 applied materials Citizenship report 2015

 manufacturing sites: Kalispell, Montana; Gloucester, Massachusetts; Rehovot, Israel;
and Alzenau and Heimstetten, Germany. All non-registered sites utilize the same
elements of the EHS Management System to align with appropriate environmental,
health and safety practices globally.

The table below details the company’s safety performance metrics for the past three fiscal
years. Worldwide safety results remained flat between 2014 to 2015. Additionally, the
company had no environmental, safety or regulatory notices of violations or fines in fiscal 2015.

safety performance 1 2013 2014 2015

North America

  Total case incidence rate (TCIR) 0.71 0.70 0.69

  Injuries or illnesses resulting in days away

from work, restricted work activity, or job
0.47 0.38 0.46
transfer for every 100 employees (Days
Away & Restricted Time or DART)

  Number of work-related fatalities 0 0 0

Worldwide

  TCIR 0.48 0.46 0.46

  Injuries or illnesses resulting in days away

from work, restricted work activity, or job
0.33 0.26 0.32
transfer for every 100 employees (Days
Away & Restricted Time or DART)

  Number of work-related fatalities 0 0 0

  Number of office ergonomic evaluations

934 1,079 1,208
performed

1
Data is for each of the fiscal years.

20 applied materials Citizenship report 2015

Committed to Human Rights
Corporate Citizenship
Applied Materials is committed to human rights. We consistently strive to operate in an
ethical and responsible manner, both with our workforce and through our supply chain. Our
We are honored to be consistently recognized for
our achievements by many industry organizations Standards of Business Conduct includes several important provisions about human rights,
and publications. Some 2015 highlights include: including prohibitions on the use of child labor or forced, bonded or indentured labor in our
operations; and harsh or inhumane treatment, including corporal punishment or the threat of
»» Corporate Responsibility Magazine’s annual list of
100 Best Corporate Citizens for 12 years corporal punishment. In 2013, Applied reinforced and clarified its prohibition on child labor in

»» FORTUNE magazine’s World’s Most Admired all countries in which it operates by implementing a Global Policy for Child Labor Avoidance.
Companies® for two decades, regularly ranking
among the top 5 in the semiconductor industry
»» Newsweek Magazine’s Top Greenest Companies human rights indicator 2013 2014 2015
in America since it began in 2009
Number and percentage of operations that have
»» Victory Media’s Top 100 Military Friendly been subject to human rights reviews or impact 0 0 0
Employers® for 10 years running assessments, by country
»» Computerworld’s Best Places to Work in IT for
six years consecutively
»» Listing on first Thomson Reuters’ Top Bay
Area Innovators
Public Policy
»» Debut on Silicon Valley Business Journal’s 2015
Top Healthiest Employers in the Greater Bay Area As a responsible corporate citizen, Applied interacts with government officials, elected
representatives and candidates, and provides information about the company, our business

2015 THOMSON REUTERS and stakeholders, including trade associations of which we are a member. This includes

TOP 100
efforts through our Government Affairs group to shape public policy on certain issues that
affect the company’s business. In 2015, these issues included budget and appropriations,
BAY AREA INNOVATOR energy, immigration, natural resources, regulatory, and tax and trade issues. The company’s
lobbying activities are disclosed in periodic reports filed with the U.S. Senate and U.S. House
of Representatives or the appropriate state agency (such as the California Secretary of
State, New York State Joint Committee on Ethics, or Secretary of the Commonwealth of
Massachusetts), as applicable.

Consistent with U.S. campaign finance law, the Applied Materials, Inc. Political Action
Committee (AMPAC) may make campaign contributions to candidates for state or U.S. federal
office, other political action committees and political party committees where permitted.

21 applied materials Citizenship report 2015

 AMPAC is funded through voluntary contributions from the company’s eligible employees
(principally executives) and directors, although the company pays its administrative expenses.
Its activities are overseen by the AMPAC Board of Directors, consisting of Applied employees,
including several company vice presidents. Applied’s state contributions committee
(consisting of the same individuals who serve on the AMPAC Board) oversees corporate
political spending.

The company occasionally makes financial and in-kind political contributions within the
United States as permitted by applicable laws, such as contributions to candidates for
California statewide offices and state legislatures. All contributions must be made for
appropriate corporate purposes only, without regard for the private political preferences
of executives. Neither Applied nor AMPAC makes contributions to so-called “super PACs”
nor do they make political contributions outside the United States. Applied does occasionally
make independent expenditures in support of or in opposition to issue campaigns where
permitted, but did not do so in 2015.

political contributions 2013 2014 20152

Total value of financial and in-kind

contributions to political parties,
$12,500 $6,500 $0
politicians, and related institutions
by Applied Materials, Inc.1
Total value of financial and in-kind
contributions to political parties,
$56,000 $68,000 $70,000
politicians, and related institutions
by AMPAC.1
1
All contributions are made in the U.S. only.
2
Detailed 2015 contributions by Applied and AMPAC can be found as part of the 2015 Political Disclosure Report.

Additionally, Applied belongs to various trade associations and similar organizations

representing the range of issues that the company cares about and believes will benefit the
company’s business activities.

More detailed information regarding political contributions or membership fees from Applied
and/or its AMPAC can be found as part of the 2015 Political Disclosure Report.

22 applied materials Citizenship report 2015

 appendix
RESOURCES AND REFERENCES
Additional information regarding Applied Materials’ business and its corporate
citizenship activities are available on our website at the following links:

»» 2015 Annual Report with 10-K

»» Awards and Recognition
»» Carbon Disclosure Project (Annual Water Use and Greenhouse Gas Emissions Reports)
Legal Disclosure »» Conflict Minerals Policy and Reporting
Safe Harbor Statement. This report contains
»» Corporate Governance
forward-looking statements, including those
regarding Applied’s performance, operations, »» Corporate Responsibility
strategies and goals, and other statements that
are not historical facts. These statements are »» Community
subject to risks and uncertainties that could
»» Sustainability
cause actual results to differ materially from
those expressed or implied by such statements, »» Workplace
and are not guarantees of future performance.
Information concerning these risks and »» Corporate Responsibility Reports
uncertainties is contained in Applied’s most
recent reports filed with the Securities and
»» Environmental, Health and Safety Policy
Exchange Commission. All forward-looking »» How We Do It (A primer regarding our business, products, and industries we serve)
statements are based on management’s
stimates, projections and assumptions as of »» ISO Certifications
June 17, 2016, and Applied undertakes no
obligation to update them. »» 2015 Political Disclosure Report
»» Press Releases
© 2016 Applied Materials, Inc. Applied Materials
and the Applied Materials logo are trademarks »» Organizational Profile
of Applied Materials, Inc. and/or its affiliates
in the U.S. and other countries. Third party »» Transparency in Supply Chains Act
trademarks mentioned are the property of their
respective owners. Fortune World’s Most Admired
Companies logo from FORTUNE Magazine, March 1, If you would like more information about Applied Materials, visit our website at
2016 ©2016 Time Inc. Used under license. FORTUNE
www.appliedmaterials.com. If you have specific questions or comments on the content of
and Time Inc. are not affiliated with, and do not
endorse products or services of, Applied Materials. this report, contact our sustainability reporting team at: [email protected].

23 applied materials Citizenship report 2015