Accounts Receivable, Net

12 Months Ended

Oct. 29, 2017

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.

Applied sold $746 million and $75 million of accounts receivable during fiscal 2017 and 2016, respectively. There was no accounts receivable sold during fiscal 2015. Applied did not discount letters of credit issued by customers or discount promissory notes during fiscal 2017, 2016 or 2015. 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 $34 million and $51 million at October 29, 2017 and October 30, 2016, respectively. Changes in allowance for doubtful accounts in each fiscal year were as follows:

	2017			2016			2015
	(In millions)
Beginning balance	$	51		$	49		$	58
Provision	—			3			—
Deductions1	(17		)	(1		)	(9		)
Ending balance	$	34		$	51		$	49

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¹ Fiscal 2017, 2016 and 2015 deductions primarily represent releases of allowance for doubtful accounts credited to expense as a result of an overall lower risk profile of Applied’s customers and cash collections.

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 29, 2017, it continues to closely monitor customer liquidity and industry and economic conditions, which may result in changes to Applied’s estimates.