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

9 Months Ended

Jul. 31, 2016

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 (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges			Defined and Postretirement Benefit Plans			Cumulative Translation Adjustments		Total
	(in millions)
Balance at October 25, 2015	$	14	$	(15	)	$	(105	)	$	14	$	(92	)
Other comprehensive income (loss) before reclassifications	21		(31		)	—			—		(10		)
Amounts reclassified out of AOCI	—		15			—			—		15
Other comprehensive income (loss), net of tax	21		(16		)	—			—		5
Balance at July 31, 2016	$	35	$	(31	)	$	(105	)	$	14	$	(87	)

	Unrealized Gain on Investments, Net			Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges			Defined and Postretirement Benefit Plans			Cumulative Translation Adjustments		Total
	(in millions)
Balance at October 26, 2014	$	24		$	—		$	(105	)	$	5	$	(76	)
Other comprehensive income (loss) before reclassifications	(3		)	1			(45		)	—		(47		)
Amounts reclassified out of AOCI	—			(6		)	2			9		5
Other comprehensive income (loss), net of tax	(3		)	(5		)	(43		)	9		(42		)
Balance at July 26, 2015	$	21		$	(5	)	$	(148	)	$	14	$	(118	)

Summary of stock repurchases

The following table summarizes Applied’s stock repurchases for the three and nine months ended July 31, 2016 and July 26, 2015:

	Three Months Ended				Nine Months Ended
	July 31, 2016		July 26, 2015		July 31, 2016		July 26, 2015
	(in millions, except per share amount)
Shares of common stock repurchased	9.0		32.1		89.5		32.1
Cost of stock repurchased	$	196	$	625	$	1,721	$	625
Average price paid per share	$	21.88	$	19.47	$	19.22	$	19.47

Effect of share-based compensation on the results of operations

The effect of share-based compensation on the results of operations was as follows:

	Three Months Ended				Nine Months Ended
	July 31, 2016		July 26, 2015		July 31, 2016		July 26, 2015
	(In millions)
Cost of products sold	$	14	$	14	$	46	$	43
Research, development, and engineering	18		17		56		52
Marketing and selling	7		6		20		19
General and administrative	9		9		28		27
Total share-based compensation	$	48	$	46	$	150	$	141

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 the nine months ended July 31, 2016 is presented below:

	Shares		Weighted Average Grant Date Fair Value
	(In millions, except per share amounts)
Outstanding at October 25, 2015	27		$	16.41
Granted	11		$	18.36
Vested	(11	)	$	14.16
Canceled	(2	)	$	17.54
Outstanding at July 31, 2016	25		$	18.16

Schedule of valuation assumptions

Underlying assumptions used in the model are outlined in the following table:

	Nine Months Ended
	July 31, 2016	July 26, 2015
ESPP:
Dividend yield	2.07%	1.56%
Expected volatility	29.8%	31.4%
Risk-free interest rate	0.49%	0.07%
Expected life (in years)	0.5	0.5
Weighted average estimated fair value	$4.47	$6.04