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Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Tables)
 6 Months Ended
Apr. 29, 2018
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 as of October 29, 2017
$
53

 
$
(11
)
 
$
(120
)
 
$
14

 
$
(64
)
Other comprehensive loss before reclassifications
(3
)
 
(13
)
 
—

 
—

 
(16
)
Amounts reclassified out of AOCI
2

 
2

 
(2
)
 
—

 
2

Other comprehensive loss, net of tax
(1
)
 
(11
)
 
(2
)
 
—

 
(14
)
Balance as of April 29, 2018
$
52

 
$
(22
)
 
$
(122
)
 
$
14

 
$
(78
)


 
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 as of October 30, 2016
$
30

 
$
(18
)
 
$
(141
)
 
$
14

 
$
(115
)
Other comprehensive income before reclassifications
14

 
3

 
—

 
—

 
17

Amounts reclassified out of AOCI
1

 
(3
)
 
(10
)
 
—

 
(12
)
Other comprehensive income (loss), net of tax
15

 
—

 
(10
)
 
—

 
5

Balance as of April 30, 2017
$
45

 
$
(18
)
 
$
(151
)
 
$
14

 
$
(110
)
Summary of stock repurchases
The following table summarizes Applied’s stock repurchases for the three and six months ended April 29, 2018 and April 30, 2017:
 
Three Months Ended
 
Six Months Ended
 
April 29,
2018
 
April 30,
2017
 
April 29,
2018
 
April 30,
2017
 
 
 
 
 
 
 
 
 
(in millions, except per share amount)
Shares of common stock repurchased
44

 
7

 
59

 
11

Cost of stock repurchased
$
2,500

 
$
282

 
$
3,282

 
$
412

Average price paid per share
$
56.35

 
$
38.15

 
$
55.62

 
$
35.89
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
 
Six Months Ended
 
April 29,
2018
 
April 30,
2017
 
April 29,
2018
 
April 30,
2017
 
 
 
 
 
 
 
 
 
(In millions)
Cost of products sold
$
21

 
$
16

 
$
43

 
$
33

Research, development and engineering
24

 
21

 
48

 
41

Marketing and selling
8

 
7

 
16

 
14

General and administrative
11

 
9

 
22

 
19

Total share-based compensation
$
64

 
$
53

 
$
129

 
$
107
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 six months ended April 29, 2018 is presented below:
 
Shares
 
Weighted
Average
Grant Date
Fair Value
 
 
 
 
 
(In millions, except per share amounts)
Outstanding as of October 29, 2017
22

 
$
23.96

Granted
6

 
$
51.91

Vested
(8
)
 
$
21.94

Canceled
(1
)
 
$
29.10

Outstanding as of April 29, 2018
19

 
$
32.01
Employee Stock Purchase Plan Valuation Assumptions
Compensation expense is calculated using the fair value of the employees’ purchase rights under the Black-Scholes model. Underlying assumptions used in the model are outlined in the following table:
 
 
 
 
 
Three and Six Months Ended
 
April 29, 2018
 
April 30, 2017
ESPP:
 
 
 
Dividend yield
1.40%
 
1.09%
Expected volatility
35.5%
 
24.9%
Risk-free interest rate
1.83%
 
0.78%
Expected life (in years)
0.5
 
0.5
Weighted average estimated fair value
$14.26
 
$8.08