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

12 Months Ended

Oct. 28, 2012

Equity [Abstract]

Components of accumulated other comprehensive loss, after-tax basis

Components of accumulated other comprehensive income (loss), on an after-tax basis, were as follows:

	October 28, 2012			October 30, 2011
	(In millions)
Unrealized gain (loss) on investments, net	$	16		$	17
Unrealized gain (loss) on derivative instruments qualifying as cash flow hedges	1			—
Pension liability	(90		)	(25		)
Cumulative translation adjustments	12			14
	$	(61	)	$	6

Summary of stock repurchases

The following table summarizes Applied’s stock repurchases:

	2012		2011		2010
	(In millions, except per share amounts)
Shares of common stock repurchased	126		36		29
Cost of stock repurchased	$	1,416	$	468	$	350
Average price paid per share	$	11.22	$	12.88	$	12.15

Total share-based compensation and related tax benefits

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

	2012		2011		2010
	(In millions)
Share-based compensation	$	182	$	146	$	126
Tax benefit recognized	$	52	$	42	$	38

Effect of share-based compensation on the results of operations

The effect of share-based compensation on the results of operations for fiscal 2012, 2011, and 2010 was as follows:

	2012		2011		2010
	(In millions)
Cost of products sold	$	54	$	48	$	32
Research, development, and engineering	54		46		43
Selling, general and administrative	74		52		51
Total	$	182	$	146	$	126

Weighted average assumptions used for stock options assumed

The weighted average assumptions used in the model for the stock options assumed are outlined below:

	2012
Stock Options:
Dividend yield	2.6	%
Expected volatility	38.7	%
Risk-free interest rate	0.52	%
Expected life (in years)	3.3

Information with repsect to stock options

Information with respect to stock options is as follows:

	2012		2011		2010
	(In millions)
Aggregate intrinsic value of outstanding stock options	$	43	$	58	$	73
Total intrinsic value of stock options exercised	$	21	$	23	$	15
Total fair value of stock options vested	$	41	$	17	$	21
Cash received from stock option exercises	$	33	$	41	$	78
Actual tax benefit realized from options exercised	$	7	$	11	$	4

Stock option activity

Stock option activity for fiscal 2012, 2011 and 2010 was as follows:

	2012				2011				2010
	Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
	(In millions, except per share amounts)
Outstanding, beginning of year	30		$	13.05	51		$	15.04	73		$	14.72
Assumed in Varian acquisition	5		$	4.85	—		$	—	—		$	—
Exercised	(4	)	$	7.30	(5	)	$	9.21	(7	)	$	10.88
Canceled and forfeited	(10	)	$	16.76	(16	)	$	20.28	(15	)	$	15.64
Outstanding, end of year	21		$	10.53	30		$	13.05	51		$	15.04
Exercisable, end of year	20		$	10.71	24		$	14.23	37		$	17.39

Options outstanding and exercisable

The following table summarizes information with respect to options outstanding and exercisable at October 28, 2012:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value		Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value
	(In millions)			(In years)	(In millions)		(In millions)			(In millions)
$3.09 — $9.99	15	$	7.68	1.80	$	43	14	$	7.80	$	40
$10.00 — $19.99	6	$	17.11	0.57	—		6	$	17.11	—
	21	$	10.53	1.43	$	43	20	$	10.71	$	40
Options exercisable and expected to become exercisable	21	$	10.53	1.43	$	43

Restricted stock units and restricted stock activity

A summary of the changes in restricted stock units, restricted stock, performance shares and performance units outstanding under Applied’s equity compensation plans during fiscal 2012 are presented below:

	Shares		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
	(In millions, except per share amounts)
Non-vested restricted stock units, restricted stock, performance shares and performance units at October 25, 2009	12		$	16.16	2.4 Years	$	157
Granted	13		$	12.36
Vested	(5	)	$	17.13
Canceled	(2	)	$	15.41
Non-vested restricted stock units, restricted stock, performance shares and performance units at October 31, 2010	18		$	13.33	2.8 Years	$	227
Granted	17		$	12.62
Vested	(5	)	$	14.64
Canceled	(2	)	$	13.11
Non-vested restricted stock units, restricted stock, performance shares and performance units at October 30, 2011	28		$	12.64	2.8 Years	$	345
Granted	19		$	10.61
Vested	(9	)	$	12.87
Canceled	(2	)	$	12.26
Non-vested restricted stock units, restricted stock, performance shares and performance units at October 28, 2012	36		$	11.53	2.6 Years	$	376
Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest	34		$	11.81	2.3 Years	$	357

Significant valuation assumptions in relation to ESPP

Underlying assumptions used in the model for fiscal 2012, 2011 and 2010 are outlined in the following table:

	2012		2011		2010
ESPP:
Dividend yield	3.01	%	2.53	%	2.44	%
Expected volatility	29.6	%	31.1	%	33.3	%
Risk-free interest rate	0.13	%	0.09	%	0.19	%
Expected life (in years)	0.5		0.5		0.5