Business Context and Reporting Period
Applied Materials, Inc. filed this Form 8-K on September 14, 2006, to report the entry into a material definitive agreement. The company is incorporated in Delaware and maintains its principal executive offices in Santa Clara, California.
Key Financial Metrics
This filing does not report revenue, profit, cash flow, margins, or liquidity metrics. The document focuses exclusively on a new financing arrangement.
- New Credit Facility: $100,000,000 364-Day Credit Agreement.
- Lender: Citicorp USA, Inc.
- Effective Date: September 17, 2006.
- Expiration Date: September 16, 2007.
- Outstanding Borrowings: $0 as of the filing date.
- Security: Unsecured.
Material Changes Versus Prior Period
The new Credit Agreement replaces a previous $250,000,000 credit facility that was expiring on September 17, 2006. This represents a reduction in the total available credit capacity from $250 million to $100 million.
Guidance, Outlook, and Risks
Management Commentary: Any advances under the new agreement are expected to be used for general corporate purposes. The agreement includes customary affirmative and negative covenants and requires the maintenance of a funded debt to adjusted earnings ratio.
Risks and Contingencies: A default under the agreement may be triggered by failure to comply with covenants, failure to pay financial obligations, or acceleration of certain debt obligations. A default would permit the lender to require immediate repayment of any outstanding amounts.
Investor Verification Checklist
- Verify the specific terms of the "funded debt to adjusted earnings ratio" covenant required by the new agreement.
- Confirm the interest rate structure and applicable margins for future advances.
- Review the company's current funded debt levels to assess compliance with the new ratio requirement.
- Monitor future filings for any actual drawdowns on the $100 million facility.