Accounts Receivable, Net

12 Months Ended

Oct. 28, 2012

Receivables [Abstract]

Accounts Receivable, Net

Accounts Receivable, Net

Applied has agreements with various financial institutions to sell accounts receivable and discount promissory notes from selected customers. Applied also discounts letters of credit through various financial institutions. Applied sells its accounts receivable without recourse. Details of discounted letters of credit, factored accounts receivable and discounted promissory notes for fiscal years ended October 28, 2012, October 30, 2011 and October 31, 2010 were as follows:

	2012		2011		2010
	(In millions)
Discounted letters of credit	$	—	$	211	$	230
Factored accounts receivable and discounted promissory notes	93		80		157
Total	$	93	$	291	$	387

Financing charges on the sale of receivables and discounting of letters of credit are included in interest expense in the accompanying Consolidated Statements of Operations and were not material for all years presented.

Accounts receivable are presented net of allowance for doubtful accounts of $87 million at October 28, 2012 and $73 million at October 30, 2011. Changes in allowance for doubtful accounts were as follows:

	2012		2011			2010
	(In millions)
Beginning balance	$	73	$	74		$	67
Provision	14		5			17
Recoveries	—		(6		)	(10		)
Ending balance	$	87	$	73		$	74

Applied sells principally to manufacturers within the semiconductor, display and solar industries. While Applied believes that its allowance for doubtful accounts is adequate and represents Applied’s best estimate as of October 28, 2012, Applied continues to closely monitor customer liquidity and other economic conditions, which may result in changes to Applied’s estimates regarding collectability.