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Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Tables)
 12 Months Ended
Oct. 26, 2014
Equity [Abstract]  
Components of accumulated other comprehensive loss, after-tax basis
Changes in the components of AOCI, net of tax, were as follows:
 
 
Unrealized Gain on Investments, Net
 
Unrealized Gain on Derivative Instruments Qualifying as Cash Flow Hedges
 
Defined and Postretirement Benefit Plans
 
Cumulative Translation Adjustments
 
Total
 
(in millions)
 
 
Balance at October 27, 2013
$
25

 
$
2

 
$
(72
)
 
$
7

 
$
(38
)
Other comprehensive income (loss) before reclassifications
8

 
4

 
(36
)
 
(2
)
 
(26
)
Amounts reclassified out of AOCI
(9
)
 
(6
)
 
3

 
—

 
(12
)
Other comprehensive loss, net of tax
(1
)
 
(2
)
 
(33
)
 
(2
)
 
(38
)
Balance at October 26, 2014
$
24

 
$
—

 
$
(105
)
 
$
5

 
$
(76
)
Summary of stock repurchases
The following table summarizes Applied’s stock repurchases for fiscal 2013 and 2012:
 
 
2013
 
2012
 
 
 
 
 
(In millions, except per share amounts)
Shares of common stock repurchased
18

 
126

Cost of stock repurchased
$
245

 
$
1,416

Average price paid per share
$
13.60

 
$
11.22
Total share-based compensation and related tax benefits
Total share-based compensation and related tax benefits were as follows:
 
 
2014
 
2013
 
2012
 
 
 
 
 
 
 
(In millions)
Share-based compensation
$
177

 
$
162

 
$
182

Tax benefit recognized
$
50

 
$
45

 
$
52
Effect of share-based compensation on the results of operations
The effect of share-based compensation on the results of operations for fiscal 2014, 2013, and 2012 was as follows:
 
 
2014
 
2013
 
2012
 
 
 
 
 
 
 
(In millions)
Cost of products sold
$
53

 
$
50

 
$
54

Research, development, and engineering
66

 
53

 
54

Marketing and selling
23

 
20

 
22

General and administrative
35

 
34

 
52

Restructuring charge
—

 
5

 
—

Total
$
177

 
$
162

 
$
182
Weighted average assumptions used for stock options assumed
The weighted average assumptions used in the model for the stock options granted and assumed are outlined below:
 
2013
 
2012
Stock Options:
 
 
 
Dividend yield
2.7
%
 
2.6
%
Expected volatility
29.5
%
 
38.7
%
Risk-free interest rate
1.44
%
 
0.52
%
Expected life (in years)
4.5

 
3.3
Information with repsect to stock options
Information with respect to stock options is as follows:
 
2014
 
2013
 
2012
 
(In millions)
Aggregate intrinsic value of outstanding stock options
$
19

 
$
49

 
$
43

Total intrinsic value of stock options exercised
$
39

 
$
63

 
$
21

Total fair value of stock options vested
$
1

 
$
4

 
$
41

Cash received from stock option exercises
$
29

 
$
88

 
$
33

Actual tax benefit realized from options exercised
$
12

 
$
19

 
$
7
Stock option activity
Stock option activity for fiscal 2014, 2013 and 2012 was as follows:
 
 
2014
 
2013
 
2012
 
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
6

 
$
9.12

 
21

 
$
10.53

 
30

 
$
13.05

Granted and assumed in Varian acquisition
—

 
$
—

 
1

 
$
15.06

 
5

 
$
4.85

Exercised
(4
)
 
$
7.85

 
(11
)
 
$
8.16

 
(4
)
 
$
7.30

Canceled and forfeited
—

 
$
—

 
(5
)
 
$
17.62

 
(10
)
 
$
16.76

Outstanding, end of year
2

 
$
10.87

 
6

 
$
9.12

 
21

 
$
10.53

Exercisable, end of year
1

 
$
7.97

 
5

 
$
7.90

 
20

 
$
10.71
Options outstanding and exercisable
The following table summarizes information with respect to options outstanding and exercisable at October 26, 2014:
 
 
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)
$3.36 — $9.99
1

 
$
5.31

 
1.81
 
$
12

 
1

 
$
5.30

 
$
12

$10.00 — $15.06
1

 
$
14.96

 
5.59
 
7

 
—

 
$
14.71

 
2

 
2

 
$
10.87

 
3.99
 
$
19

 
1

 
$
7.97

 
$
14

Options exercisable and expected to become exercisable
2

 
$
10.87

 
3.99
 
$
19

 
 
 
 
 
 
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 2014, 2013 and 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 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

Granted
19

 
$
10.55

 
 
 
 
Vested
(11
)
 
$
11.44

 
 
 
 
Canceled
(6
)
 
$
11.28

 
 
 
 
Non-vested restricted stock units, restricted stock, performance shares and performance units at October 27, 2013
38

 
$
11.11

 
2.4 years
 
$
662

Granted
11

 
$
16.58

 
 
 
 
Vested
(13
)
 
$
11.13

 
 
 
 
Canceled
(3
)
 
$
11.72

 
 
 
 
Non-vested restricted stock units, restricted stock, performance shares and performance units at October 26, 2014
33

 
$
12.59

 
2.3 years
 
$
698

Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest
30

 
$
12.47

 
2.1 years
 
$
630
Significant valuation assumptions in relation to ESPP
Underlying assumptions used in the model for fiscal 2014, 2013 and 2012 are outlined in the following table:
 
 
2014
 
2013
 
2012
ESPP:
 
 
 
 
 
Dividend yield
1.96
%
 
2.80
%
 
3.01
%
Expected volatility
26.3
%
 
24.8
%
 
29.6
%
Risk-free interest rate
0.06
%
 
0.09
%
 
0.13
%
Expected life (in years)
0.5

 
0.5

 
0.5