Welcome to the Applied Materials Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards you will be invited to participate in a question-and-answer session. As a reminder, this conference is being recorded. In a moment, I'll turn the conference over to Michael Sullivan, Vice President of Investor Relations. Please go ahead, sir.

Thank you. In a moment, we’ll discuss the results for our fourth quarter and 2016 fiscal year which ended on October 30th. Joining me are Gary Dickerson, our President and CEO; and Bob Halliday, our Chief Financial Officer. Before we begin, let me remind you that today’s call contains forward-looking statements including Applied’s current view of its industries, performance, products, share positions, profitability and business outlook. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, and are not guarantees of future performance. Information concerning these risks and uncertainties is contained in Applied’s most recent Form 10-Q and 8-K filings with the SEC. All forward-looking statements are based on management’s estimates, projections and assumptions as of November 17, 2016, and Applied assumes no obligation to update them. Today’s call also includes non-GAAP adjusted financial measures. Reconciliations to GAAP measures are contained in today’s earnings press release and in our reconciliation slides, which are available on the Investor’s page of our website at appliedmaterials.com. And now, I’d like to turn the call over to Gary Dickerson.

Thanks Mike. I’m very delighted to report that Applied Materials delivered record revenue and earnings in our fourth quarter, capping off an outstanding year. In fiscal 2016, we grew orders, revenue and earnings to the highest levels in the Company's history and made significant progress towards our longer term strategic and financial goals. Some of our major accomplishments this year include our highest semiconductor orders in revenues since the year 2000 and record performance in display and service where both groups exceeded all time highs for orders and revenue. I want to thank all of our employees for their passion to create value for our customers and for making 2016 a great year for Applied. Looking ahead, I see tremendous capabilities, momentum and opportunities across the Company. This gives me increased confidence that we will again drive sustainable growth in 2017 and beyond. In today's call, I'll start by explaining some of the key factors contributing to our record performance and describe our strategy for long-term sustainable growth. I'll then provide our market view and describe why Applied has an increasingly positive outlook. I'll conclude with brief updates on our major businesses. After that Bob will provide additional details about our results as well as historical perspective on our future outlook. At Applied our strategy of inflection focused innovation leadership is delivering profitable growth; in both semiconductor display, large multiyear inflections are enabled by materials innovation. Applied has by far the broadest and deepest capabilities in materials engineering. It's our ability to combine these competencies technologies and products that really sets us apart and allows us to sustainably grow faster than the markets we serve. To fuel growth, we focused our organization investments to deliver highly differentiated solutions that enable customers to build new devices and structures that were never…

Thanks, Gary. In September, we raised the ceiling on our expectations for our markets and our company. Since then we've increased our 2016 WFE forecast to a range of $33.5 billion to $34 billion. Our internal projection for 2017 WEF is a $1 billion dollars higher than that and it assumes only modest DRAM investment, China spending and NAND penetration of hard drives. So our early view on 2018 in the longer term horizon is positive as well. So while our Analyst Day was just eight weeks ago I already feel more confident in our ability to hit our 2019 financial model. After the Analyst Day, the slide that sparks most interest was the one comparing average WFE spending and the standard deviation around the average for two periods 2000 through 2009, and 2010 through 2016. What really caught everyone's attention was the one standard deviation fell from $8 billion in the earlier period to $2.07 billion. The WFE industry has evolved since 2010 and that preserves some discussion. I'll give you the major factors that lead me to believe it's a fundamentally more stable and attractive business. First, the semiconductor industry we serve has become larger, more diversified and less volatile. Specifically semi-content was led by PCs, which have multiyear demand cycles time to enterprise upgrades. Now we've added mobility which has annual consumer replacement cycles and generates more semi-revenues than PCs. And today, we are layering on additional semi-demand drivers including big data, IoT, cloud infrastructure, artificial intelligence, virtual reality and self-driving cars. Second, the cycles of the past were mainly driven by PC DRAM, which was the largest most competitive and most generic technology. Today, DRAM is near the bottom in spending. There are fuel producers and the design have been tailored the servers and mobile devices…

Thanks Bob. To help us reach as many of you as we can, please ask just one question at this time. If you have any additional question later, please call the operator and we will do our best to answer that later in the call. Operator let’s please begin.

Certainly [Operator Instructions] Our first question for today comes from the line of C.J. Muse from Evercore.

If you look back your or at least what the implied guide for calendar 16 for Q4, you're growing roughly 24% plus, and if you think about mix, next year I’m assuming, growing display, growing NAND. How should we think about your relative outperformance to the rest of the industry?

Sure, in our fiscal year and our calendar year next year, we think in the semi, it’s going to be healthier in general for the environment. We feel good about environment. We’re going to gain shares. We don’t want to exact numbers right now, but we’re gain WFE shares in year in a number of place. And then in display, we see display revenues up significant amount next year. And then, we see the service business continue to grow. So we will outperform the market we're in, but additionally we think the markets are pretty good next year. Our outlook is WFE up. Our outlook is that spending on cap on display equipments is up and service again.

Thank you. And our next question comes from the line of Toshiya Hari from Goldman Sachs.

Bob, you talked about the 2017 WFE being up about a $1 billion dollars, based on modest expectation for the DRAM, China and NAND. Can you dig a little bit deeper into those three items and give a little color as to what you're assuming the model?

Sure, part of what we were answering that was that we think its wended back into the '18 too. So, if you look at '17, we think, NAND is up next year. We think foundry strong and we think logic is pretty good. DRAM is up some next year, but what we don’t see as high levels of absolute DRAM spending because this year is not too big. What we’re modeling and we might be a little conservative, it's not a big change in China spending, we think that hits more in '18, if you just look at buildings and shelves and stuffs like that. We are big believers China is going happen. So we think we’ve wended our back into '18 based on our few things. We things China ramps fair mount amore in '18. We think DRAM probably is upside in '18, not to mention semis altered form memories we're starting to see early now. And thirdly, NAND might be end of next year probably going to get about 7,000 wafer starts, something about 1.4 million. And we think all of that eventually get, virtually all of that gets converted. So, we think there is still strong NAND spending in ’18.

Thank you. And our next question comes from the line of Harlan Sur from J. P Morgan.

What are the key takeaways from of the analyst meeting was the order trajectory right, so specifically book to bill as a leading indicator of the revenue and earnings power momentum, past four years you guys have had book to bill greater than one, and obviously clearly an indicator of the growth of the business. As you look at your customer and program pipeline for fiscal '17, combined with your view on growth in flat panel and WSE in which we're spending growth, is 2017 likely to be the fifth consecutive year of book to bill greater than one for the team?

Well while we said earlier on the call was that we see our bookings continuing strong, but the relative books quarter-to-quarter in particular we’re going to stop reporting booking after Q1. We're going to you in Q1, Q1 we see up meaningfully and what we mean by meaningfully is up more than strong double digits, okay from Q4. So people have been worried that peaked in Q3 bookings down some in Q4. We see a strong Q1 and we see a strong year overall. So, we think the momentum is still with us, and our revenues are going to be up, and our shares are going to up next year. In terms of quarterly variability and orders, I'm not sure. In terms of book to bill next year, we don’t have clarity on the second half. Here, it's too early first to tell. But we see a strong WFE year share up, strong spending on display. Frankly, it's more strong in both of those than we saw it eight weeks ago for instance period that large TVs are doing well, the gen 10 stuff, the profitability at the displays guys is good. So, we see display is pretty down strong next year, we see breadthening demand for mobile display up to nine or ten people trying to make OLED displays, not the mobile. And then within WFE, we're getting a lot of pull from customers to increase production and shipments. So, we think overall as next year we think we're going to get very healthy bookings whether it's where it is relative to one I don’t know right now.

Thank you. Our next question comes from the line of Timothy Arcuri from Cowen and Company.

Bob, I'm curious on China, how much you are putting in? I know that you think China is sort of generally more of a 2018 thing than a 2017 things, but I'm wondering if you can give us some numbers in terms of what is embedded in your WFE forecast in next for China versus what is was this year? Thanks.

Well, I'd tell you what’s in -- I'll give you a sense of what's in the numbers and I'll give you my qualitative assessment on the numbers a little bit. We think it's down little bit next year, but the numbers there stays down over the next year, but we think it's flat. So, I think I'm probably conservative on that. So what buried in my numbers is down little bit, but we think that is probably upside that. Gary is shaking his head, but he definitely doesn’t think it's down next year.

Yes, I would say that Applied was strong in all regions including China. And as we've talked about before, it's one of the strongest regions in semi and display. Right now, it looks like '17 is going to be roughly the same as '16, but it's up a pretty significant amount from where we were a couple of years ago. 2018, we think could be meaningfully up above the 2017 forecast. So those were my thoughts.

Thank you. Our next question comes from the line of Atif Malik from Citigroup.

Question for Gary, Gary thanks for the update on the patterning with the base and double case on EUV and then on the display side, can you just give us a little different update or preview on what's some of the new products that you are looking on, on the OLED side plan to achieve? Are these products meant to remove the supply chain bottlenecks? Or are they going to target some of the cost ownership or other technology challenges?

Our strategy overall is inflection focused innovation and what we've talked about in display is an opportunity to triple our served market over the next few years. The team of display is really-really an outstanding team driving innovative new products, targeting major customer inflections and you can already see growth in display with thin-film encapsulation and e-beam, two products that we've introduced in the last couple of years that are really generating meaningful revenue for the display business. And so, we're really continuing the same playbook, we're focused on in selections that are meaningful for our customers. We have very strong pull and investment from customers in these new products and high confidence that these new businesses will add meaningful revenue for our display business and increased confidence that we're going to hit or exceed the model that we showed for 2019. We will disclose more about the specific products in 2017, next year.

And then I think Atif has asked two questions, even though I asked for one, and I wonder if you could comment on the EUV?

We talked about patterning at our investor meeting in New York and we see patterning as a great opportunity. We forecasted about $3 billion TAM by 2019, and when we look at EUV adoption we agree with others that the view of EUV is going to be mostly focused on vias and cuts in logic. So when you look at the leading customer roadmaps, vias and cuts in logics is about 20% of the total patterning TAM, 80% of the TAM will continue to add multi-patterning and that gives us increased confidence in the $3 billion estimate that we had at our investor meeting. Basically, if you take the most aggressive EUV assumption for adoption, something like 10 layers adopted at five nanometer logic for vias and cuts, you come up to the $3 billion estimate, of course if it's not in this most aggressive assumption then the TAM could be higher. And Applied is really in a great position to gain share, we talked about a $1 billion number in our model for 2019 for Applied, and we've great confidence in that number. We've already gained 15 points of share in patterning since 2012. We're forecasting at least 50% more between now and 2019, really great products in edge, in selective removal, CVD, ALD, CMP, really-really-really great new products and we've line of sight to the 2019 model with many application wins and increasing customer poll for these innovative new products.

Thank you. And our next question comes from the line of Stephen Chin from UBS.

So, I've a follow-up question on your 2017 view on foundry logic WFE, does your 2017 view assume will be much foundry logic customer reuse of 10 nanometer equipment for the 7 nanometer node? Or is it assumed limited equipment reused by foundry logic? Thanks.

Sure, let me -- we've had a couple of questions and peak questions and let me give you some context on how we look at the business, and then I'll answer specific question, Stephen. We actually really believe three things. One, that the industry is growing more-and-more attractively in which we compete, total spending is trending up, and volatility is trending down in both WFE and in capital spending for displays. Secondly, Applied I think is trending up in terms of the breadth of our product offerings and reduced volatilities. We've the similar share across NAND, foundry, DRAM, and logic. We're gaining share. We've a deep product pipeline. So, I think the second thing is the trend is the industry is looking good. The trend is Applied is becoming more-and-more attractive and less volatile. And third, those things combined produced very predictable cash flow, which we could talk about later on the call, gives us opportunity to return cash to investors. In terms of risk that there's some replacement reused in 10 and 7 in next year. I think it's pretty moderate frankly. I think 10 is not going to be a big node. I think people are going to rush to go to 7, but 10 nanometer devices are shipping next year, 7 the year after. So the ability to migrate equipment is somewhat limited. The second thing is the comparison and everybody always gives us the 20 to 16 flash 14 migrations that would distinct in a couple ways. One you had the biggest consumers of computer chips in the world switch from one vendor to another in a node. And secondly, you have gone for the last planar of FinFET device to -- last planer to first FinFET, which really made the last device unattractive. So is it going to be reused sometime equipment from 10 to 7? Yes, so I don’t think its next year and I think it's going to be much smoother than it was in '15?

Thank you. And our next question comes from the line of Krish Sankar from Bank of America.

I'll make a two part question Bob. One as you mentioned the business is getting more seasonal versus cyclical, when you look at the order trend, you had dip in orders for semis in the October quarter. Is that the seasonality you are talking about on a go forward basis and along the same pattern you look in to calendar '17. Can you help us understand dig a little more deeper in how the WFE profile looks like first half versus second half for NAND, DRAM, foundry and logic?

Yes, I do believe that as we said on the call, the previous part of the call, I do think it's more seasonal than cyclical. We have a lot of data that shows that some friends even if you look as we said, the script we got asked the most questions about at the Analyst Day was this average WFE spending since 2010 is up to like 31.7 billion. I think it is with the volatility about 2.8 versus 2009, it was like 25.5 with a volatility of 8 billion. I'll give you more details on that. If you look at memory as a sum because virtually every customer makes DRAM and NAND, the average before 2010 one standard deviation, one sigma was 6 billion on an average spent of 10.7. Since 2010, its $3 billion standard deviation on an average spent of 12 when you put DRAM and NAND together. The second thing is virtually every year there is 2012 I think it is, it’s a pretty much 1 billion to 2 billion every year total memory spending. Now if you get loss in the weeds between DRAM and NAND, it's all different. But the companies manage their budget that way. They still got to put DRAM this year and NAND in that year, RAM fab this year the other fab next year. And then on foundry, foundry spending before 2010, it was $2 billion on an average, if the standard deviation was 2 billion FinEET was 1.5 billion on the spent of 12 brand, and the spend pre-2010 average 4.5. So the magnitude of these standard deviations the volatility is going down, really it's seasonally not cyclical. In terms of to your specific question about I guess this was about next year, we are not exactly sure, I'll…

Thank you. And our next question comes from the line of Farhan Ahmad from Credit Suisse.

My first question is regarding the Jan quarter orders outlook, on the prior call you had kind of indicated that orders would flattish in the Jan quarter from October. I just want to understand like what has improved and how do you see the orders can buy different segment evidence as switching?

I’m trying get up my borders bad habit, but I'll try to help a little bit. What we said last quarter to make, we a put a floor because we have spiked up a lot in every metric you can measure last few quarter, orders, revenue EPS. We want to give people a sense. We’re going to continue strong that our share gains, our revenue growth our operating margin expansion was sustainable. So what we said last quarter was, hey, orders are not going to fall for cliff. The numbers are going to start with three in the next two quarters Q4, and Q1, and in fact they will start with the three and in fact the three was a little bit lot of -- we thought it will be little higher in Q4. And some of those one in the Q1, so we think we’re up double digits in Q1. So, it’s prior a little bit timing and the magnitude is quite little stronger because where we’re getting pull is on some flash devices like that 3D NAND. So, it’s strong and it’s probably stronger even thought 2 months ago.

Thank you. And our next question comes from line of Romit Shah from Nomura Securities.

It just seems that AI machine learning and self-driving car adoption coming along a lot of faster than we thought at the start of the year. And we know these applications are iterative and very compute intensive. And I’m wondering, if this could be, all this could be an incremental driver next year for your memory and logic businesses?

I don’t about next year but I would say that we’re definitely increasingly bullish about the longer term. We’ve talked about five drivers in our model between now and 2019. This multiyear way, so we’re very confident in those drivers, and we’ve talked about that in the prepared remarks. But I would say definitely increasingly bullish relative to the longer term opportunity, as we’re engaged with some of the leading technology companies, around cognitive computing, smart vehicles you saw, big announcement from Samsung this week with an $8 billion acquisition. There is incredible amount of money being spent. And when you look at these drivers, VR, AR, smart vehicles, cognitive computing, all of these different areas. You need a higher performance computing and we had the CEO of one company that was here recently, and we were talking about logic devices, what are the size of those logic devices going to be? And basically he said, as big as I can build them, as big as I can fit it into radical field. And he was also talking about the amount of memory that's going to be needed for some of the future applications. And it’s much, much bigger than I think any of us could imagine. So I would think, we are much more bullish about the longer term relative to the drivers for high performance computing and for memory. I'm also bullish about the innovation pipeline that we have within Applied Materials. I really believe that the 500 million per year that we've moved in terms of innovation, we are already enabling people to design devices that they could not have dreamed of building a few years ago, and I strongly believe that the pipeline we have now the best is still coming in that pipeline. So I'm really bullish about the market. Bob talked about where we compete being better, more stable, upward trajectory, less volatile. Applied is in the best position we've ever been in to enable all of these great big inflections to happen.

Thank you. Our next question comes from the line of Joe Moore from Morgan Stanley.

I wanted to ask about your sort of multiyear commentary when you said you are still optimistic even beyond 2017. Can you talk about NAND in that context and either still very high capital intensity period of planer to 3D conversions and 3D greenfield, you'll get to the point where you are going sort of more layer account increases which is less capital intensive. Shouldn't NAND turn into a headwind and at some point in the next couple of years? And how do you think about that in that multiyear context overall WFE?

Sure. Joe. Let me -- this is going to be historic day, I'm going to use phraseology on this in the next minute, it's never been used by a CFO and American Public Company before. All right so hold on. So I have a couple of slides in front of me that shows the demand for solid state disk drive market growth in both enterprise and PCs. So these numbers you can argue them a little bit but I think they are in the ballpark. So, 2015 there was about 12 petabytes of demand for solid state disk drives in enterprise. That goes up to almost a 120,000 petabytes in 2020, so it goes from 12,000 to 120,000, okay. And on the PC side in 2015 it's about 20,000 going to 140,000 petabytes in 2020. Let me give you another way to look at those. Our estimates that the penetration across all PCs including workstation, no parks in 2015 was 21.8% and was only 15% 2014, up to 31.6% of those have solid state disk drives going to 77.5% in 2020. And if you go and look at the enterprise servers, this year it's about 20%, it was 14% of all in 2014 which is going to 26% in 2020. So, again the total petabytes, I'll use that word again, is going up over 100,000 petabytes from 2016 to 2020 in each PCs and enterprise. So the demand is there, they are expanding the addressable market for NAND. So other data I have seen is that for servers alone you might have to have 500,000 wafer starts of capacity and your average NAND effective 100,000 of cost about $5 billion or $6 billion, so that's about $25 billion to $30 billion, and upgrades are about another $25 billion to $30…

Thanks Joe.

And I'd like to say that I was proud to use the word petabytes today.

Thank you. And our next question comes from the line of Patrick Ho from Stifel Nicolaus.

Bob maybe if you can just clarify again the growth that you're expecting in total display spending in 2017, is that incrementally because of the gen 10.5 build out that you're seeing or are you also anticipating a further increase in OLED spending next year?

I think we're seeing a few things, in actual spending, I think probably we're up -- we've slide on that. I think we're up probably more in TVs versus what we thought two months ago. We think that there's huge demand for OLED for mobile, the question is how much -- how fast can they ramp it? I mean I think its question of supply more than demand. I think TV, they can ramp the big TVs and they're going to ramp up pretty aggressively particularly in China, this gen 10.5 is ramping is going to be more to come after that. So we're up to over 16.5 next year for display CapEx. I don't have the numbers from two months ago but to grow is in both. But I think the thing is bigger in two months for us is the TV because the TV sizes are coming bigger than we thought, the individual TV sizes; and the profitability is quite strong in the TV panel business, which is a leading indicator of spending, and then these big fabs. So I think they both are very healthy, but I think the increase is based probably more on the TV side.

Thank you. And our next question comes from the line of Edwin Mok from Needham.

My question is on the DRAM side, Bob you sound a little more conservative on DRAM, but we're seeing here pricing improved and some talk about customer looking into moving to next node. Are you just being conservative or have you -- what are you doing for the customer and how you seeing signs that give you start moving onto your next node?

We can do DRAMs up next year, but we think most customers who make DRAM and NAND are setting a priority on NAND right now because they're seeing an expansion in their addressable market for NAND, number one. And number two; it's a competitive situation that they don't want to miss that growing market. In DRAM, their pricing is pretty good, so I think the capital goals will go to NAND.

Thank you. And our next question comes from the line of Jerome Ramel from BNP Paribas.

I'd like to know what is your assumption in terms of in-store capacity with softer nodes for 10 nanometer for next year?

Our line was quite for a moment. It sounded like you were talking about 10 nanometers and with the capacity at the end of the year or something, so we can quite sure.

Yes.

Can you please just repeat thank you.

Yes, can you share with us what is your assumption for the 10 nanometer node capacity that you have at the end of let's say Q4 2017 for the industry?

Sure, the chart look I am looking at, we put -- I'll give you what I have easily available, okay. The spending in '16 in foundry 59% is we think estimating '16 is for 10/7, and about the same percentage next year because you are still seeing strength at some of the trailing edge stuff 28, and particularly 28 nano is pretty strong still in fact we think it might be up next year. And then in terms of the split between 10 and 7, the total capacity between 10 and 7 is around 70,000 to 80,000 wafer starts again at this year. But 110 to 130 to the next year, I think the vast majority that's 10 nanometer.

Thank you. And our next question comes from the line of Mehdi Hosseini from Susquehanna.

You sound really positive regarding the demand drivers and you are going to stop providing booking numbers on a quarterly basis, if you’ll are so confident why not provide an annual revenue and earnings target, so there we can better track this multiyear cycle that you are going through?

We never have it in the industry and I am not going to start now. I mean, we don’t give guidance out of year.

But you stop providing booking so?

Here is all we gave you. We gave you a 2019 model. They gave you the WFE assumption, revenue assumption by product, share assumptions. We told you in the Analyst Day that our share gains were almost linear from now to 2019. And we told you that our service business was going to roll almost lineally by year. And we told you that display was going to be going up to that number too. So our growth in revenue from '15/'16 and 19, we think is pretty straight-lined. Now, giving an absolute numbers a year in advance, we don’t have that level precision.

Thank you. And our next question comes from the line of Tom Diffely from DA Davidson.

When you look to the next few years and all the growth coming from both the flat panel OLED as well as China. What impact does that have on your both cost structure and your market structure?

I am sorry, Tom, could you repeat it please?

Yes, when you look at growth coming specifically from the couple of large markets like OLED and China. What impact does ramping revenue on those particular markets due to your cost structured margin structure overtime?

I'll give a shot. In terms of -- okay, if you want to look at cost structures APPLIED, most of our sales are related to physical products resale and they share common factories, which are predominantly in Singapore and U.S. The material cost, product cost is similar and then Taiwan is a big source for our displays. So material cost structures and supply chains are worldwide, so where we sell them doesn’t matter too much for us. In terms of differentiation and mix which sometimes drive gross margin, different device type customers use different mix of our hardware and products. In terms of OLED, we look at the OLED display market for our existing products as being similar margin profiles to our TV markets and by regions summer. The opportunity for us in margin is the new products, we're going to be introducing in next couple of years in display, which we think of very highly differentiated and very attractive product which have upside for us. In terms of margins by region, it goes predominantly to mix of products. But historically, we provide a high level of service to customers in China and so we usually do well in terms of share there in particular.

Yes, the incremental operating profit, if we look at China is pretty good for us. We have a very strong position nearly great relationships and then really great teams supporting customers both multinationals and the domestic companies and also the incremental profit for us in display is positive for the company overall.

And then operator, I think we have time for just one more question please.

Certainly, our final question for today comes from the line of Jagadish Iyer from Summit Redstone.

Bob, I'm just trying to reconcile on the flash segment. We had a good spending this year, but why we're your orders essentially flat between fiscal 2015 fiscal 2016. I understand its fiscal year, but what does it mean for 2017. I mean fiscal 2017 given the spending that you are seeing for the flash? Thanks.

We had one particular customer in 2015 that gave us orders pretty far and advance because they want to lock in capacity deliveries from us. So, I think that was the aberration. I think the trend line is up, if you look at total WFE, it's up for just flash; and if you look at our sales are up and probably they are up next year too. So we're little bit in 2015 one particular customer and particular want to get in to their pipeline in terms of the queue for production.

Thanks Jagdish for your question and Bob would like to summarize before we close the call.

Sure, it seems like a year ago but we only had Analyst Day about six weeks ago here little more in the New York, and I have to say even in the last eight to nine weeks, I increasingly believe that the industry we serve are becoming more and more attractive than growing, and more diverse and less volatile. Gary talked about some of the demand drivers for our customers whether it's autonomous cars, it's virtual reality, it's AI big data. You really feel that's been driving the Silicon Valley. You see it everywhere. We had some of the CEOs of these companies coming and talk to us and it's real, it's happening. Look at some of the highest performing stocks in the states this year, that's what driving them. So one, the industries we serve and displays also that way were just kind of doubled in terms of spending and becoming more and more attractive and more demand drivers will predict the less volatile for us. Second Applied is performing better, I think we are more and more becoming more and more innovative and executing better in this compounding benefits from that. So, I think that's resulting in a broad range of opportunities. Our biggest promise is just picking and choosing among good opportunities at this point. So Applied is becoming more broader, more diverse and less volatile, and more predictably we're going to do better. Alright. And then finally, those two things combined and potential with tax legislation that there is really good opportunity to return superior cash returns to investors including which we've said I think we said earlier today that we we're conservative in the financial moving a lot, and we showed eight weeks ago in terms of the cash and we kept a little conservatives within the cash and the model because we were wanted to be opportunistic, if the world tax slot changes that we could return even greater return to the investors. So I think the industry is becoming more diverse and less volatile and more attract in terms of growth, more drivers. Applied is becoming that way and the leverage down to the cash line especially, if you get some tax legislation less attractive is pretty powerful combination for Applied.

Great. Okay, thanks Bob. And we’d like to thank everyone for joining us this afternoon. A replay of this call will be available on our website beginning at 5:00 PM Pacific Time today. So thank you for your continued interest in Applied Materials.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. And you may now disconnect. Everyone have a great day.