Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Tables)

9 Months Ended

Jul. 29, 2012

Equity [Abstract]

Components of accumulated other comprehensive loss, after-tax basis

Components of accumulated other comprehensive income, on an after-tax basis where applicable, were as follows:

	July 29, 2012			October 30, 2011
	(In millions)
Pension liability	$	(25	)	$	(25	)
Unrealized gain (loss) on investments, net	11			17
Unrealized gain (loss) on derivative instruments	(4		)	—
Cumulative translation adjustments	13			14
	$	(5	)	$	6

Summary of stock repurchases

The following table summarizes Applied’s stock repurchases for the three and nine months ended July 29, 2012 and July 31, 2011:

	Three Months Ended				Nine Months Ended
	July 29, 2012		July 31, 2011		July 29, 2012		July 31, 2011
	(In millions, except per share amounts)
Shares of common stock repurchased	47		2		81		20
Cost of stock repurchased	$	500	$	25	$	900	$	293
Average price paid per share	$	10.71	$	12.77	$	11.09	$	14.31

Dividends declared

The following table summarizes the dividends declared during fiscal 2012:

Date Declared	Record Date	Payable Date	Amount per Share	Aggregate Amount (In millions)
December 6, 2011	February 23, 2012	March 15, 2012	$0.08	$103
March 5, 2012	May 24, 2012	June 14, 2012	$0.09	$115
June 12, 2012	August 23, 2012	September 13, 2012	$0.09	$111

Unpaid dividends were estimated based on the number of outstanding shares at the end of the fiscal quarter prior to the applicable record date.

Share-based compensation and related tax benefits

Total share-based compensation and related tax benefits were as follows:

	Three Months Ended				Nine Months Ended
	July 29, 2012		July 31, 2011		July 29, 2012		July 31, 2011
	(In millions)
Share-based compensation	$	42	$	38	$	138	$	110
Tax benefit recognized	$	12	$	11	$	39	$	33

Effect of share-based compensation on the results of operations

The effect of share-based compensation on the results of operations for the three and nine months ended July 29, 2012 and July 31, 2011 was as follows:

	Three Months Ended				Nine Months Ended
	July 29, 2012		July 31, 2011		July 29, 2012		July 31, 2011
	(In millions)
Cost of products sold	$	13	$	13	$	40	$	36
Research, development, and engineering	14		12		40		35
Selling, general and administrative	15		13		58		39
Total share-based compensation	$	42	$	38	$	138	$	110

Stock option activity

Stock option activity for the nine months ended July 29, 2012 was as follows:

	Shares		Weighted Average Exercise Price
	(In millions, except per share amounts)
Outstanding at October 30, 2011	30		$	13.05
Assumed in Varian acquisition	5		$	4.85
Exercised	(3	)	$	7.01
Canceled and forfeited	(9	)	$	16.70
Outstanding at July 29, 2012	23		$	10.73
Exercisable at July 29, 2012	22		$	11.00

Restricted stock unit, restricted stock and performance unit activity

Restricted stock unit, restricted stock, performance share and performance unit activity for the nine months ended July 29, 2012 was as follows:

	Shares		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term
	(In millions, except per share amounts)
Non-vested restricted stock units, restricted stock and performance units at October 30, 2011	28		$	12.64	2.8	Years
Granted	19		$	10.61
Vested	(8	)	$	12.91
Canceled	(2	)	$	12.56
Non-vested restricted stock units, restricted stock and performance units at July 29, 2012	37		$	11.54	2.8	Years

ESPP valuation assumptions

Compensation expense associated with the ESPP is calculated using the fair value of the employees’ purchase rights under the Black-Scholes model. Underlying assumptions used in the model are outlined in the following table:

	Nine Months Ended
	July 29, 2012	July 31, 2011
ESPP:
Dividend yield	2.94%	1.98%
Expected volatility	33%	27%
Risk-free interest rate	0.12%	0.17%
Expected life (in years)	0.5	0.5