Accounts Receivable, Net

12 Months Ended

Oct. 30, 2016

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 sells its accounts receivable without recourse. Applied, from time to time, also discounts letters of credit issued by customers through various financial institutions. The discounting of letters of credit depends on many factors, including the willingness of financial institutions to discount the letters of credit and the cost of such arrangements. Details of discounted letters of credit, accounts receivable sold and discounted promissory notes for fiscal years ended 2016, 2015 and 2014 were as follows:

	2016		2015		2014
	(In millions)
Discounted letters of credit	$	—	$	—	$	29
Accounts receivable sold and discounted promissory notes	75		—		45
Total	$	75	$	—	$	74

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 $51 million and $49 million at October 30, 2016 and October 25, 2015, respectively.

	2016			2015			2014
	(In millions)
Beginning balance	$	49		$	58		$	74
Provision	3			—			—
Deductions1	(1		)	(9		)	(16		)
Ending balance	$	51		$	49		$	58

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¹ Fiscal 2016, 2015 and 2014 deductions represent releases of allowance for doubtful accounts credited to expense as a result of an overall lower risk profile of Applied’s customers.

Applied sells its products principally to manufacturers within the semiconductor and display industries. While Applied believes that its allowance for doubtful accounts is adequate and represents its best estimate as of October 30, 2016, it continues to closely monitor customer liquidity and industry and economic conditions, which may result in changes to Applied estimates.