Basis of Presentation Basis of Presentation (Tables)

9 Months Ended

Jul. 28, 2019

Accounting Policies [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

Adoption of the standards related to revenue recognition and retirement benefits impacted Applied’s Consolidated Condensed Statement of Operations for the three and nine months ended July 29, 2018 as follows:

	July 29, 2018
	Three Months Ended										Nine Months Ended
	As Previously Reported		Revenue Recognition Adjustment			Retirement Benefit Adjustment			As Adjusted		As Previously Reported		Revenue Recognition Adjustment			Retirement Benefit Adjustment			As Restated
	(In millions, except per share amounts)
Net sales	$	4,468	$	(306	)	$	—		$	4,162	$	13,239	$	(293	)	$	—		$	12,946
Cost of products sold	$	2,441	$	(144	)	$	1		$	2,298	$	7,202	$	(118	)	$	2		$	7,086
Gross profit	$	2,027	$	(162	)	$	(1	)	$	1,864	$	6,037	$	(175	)	$	(2	)	$	5,860
Research, development and engineering	$	504	$	—		$	1		$	505	$	1,501	$	—		$	2		$	1,503
General and administrative	$	128	$	—		$	—		$	128	$	362	$	—		$	1		$	363
Interest and other income, net	$	41	$	—		$	2		$	43	$	90	$	—		$	5		$	95
Income before income taxes	$	1,239	$	(162	)	$	—		$	1,077	$	3,696	$	(175	)	$	—		$	3,521
Provision for income taxes	$	66	$	(5	)	$	—		$	61	$	1,259	$	(19	)	$	—		$	1,240
Net income	$	1,173	$	(157	)	$	—		$	1,016	$	2,437	$	(156	)	$	—		$	2,281
Earnings per share: basic	$	1.18	$	(0.16	)	$	—		$	1.02	$	2.37	$	(0.15	)	$	—		$	2.22
Earnings per share: diluted	$	1.17	$	(0.16	)	$	—		$	1.01	$	2.35	$	(0.15	)	$	—		$	2.20

Adoption of the standard related to revenue recognition impacted Applied’s Consolidated Balance Sheet at October 28, 2018 as follows:

	October 28, 2018
	As Previously Reported		Adjustment			As Adjusted
	(In millions)
Accounts receivable, net	$	2,565	$	(242	)	$	2,323
Inventories	$	3,722	$	(1	)	$	3,721
Other current assets	$	430	$	100		$	530
Deferred income taxes and other assets	$	470	$	3		$	473
Customer deposits and deferred revenue	$	1,347	$	(1,347	)	$	—
Contract liabilities	$	—	$	1,201		$	1,201
Retained earnings	$	20,874	$	6		$	20,880

The adoption did not impact total cash provided by operating activities, however it impacted individual components of cash provided by operating activities for the nine months ended July 29, 2018 as follows:

	July 29, 2018
	Nine Months Ended
	As Previously Reported			Adjustment			As Adjusted
	(In millions)
Cash flows from operating activities:
Net income	$	2,437		$	(156	)	$	2,281
Adjustments required to reconcile net income to cash provided by operating activities:
Deferred income taxes	$	112		$	(18	)	$	94
Changes in operating assets and liabilities:
Inventories	$	(751	)	$	(108	)	$	(859	)
Accounts payable and accrued expenses	$	214		$	(3	)	$	211
Contract liabilities	$	(84	)	$	285		$	201