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

9 Months Ended

Jul. 28, 2019

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 28, 2018	$	7		$	(9	)	$	(137	)	$	14		$	(125	)
Adoption of new accounting standards (a)	(17		)	—			—			—			(17		)
Other comprehensive income (loss) before reclassifications	19			(13		)	—			(1		)	5
Other comprehensive income (loss), net of tax	19			(13		)	—			(1		)	5
Balance as of July 28, 2019	$	9		$	(22	)	$	(137	)	$	13		$	(137	)

(a) - Represents the reclassification adjustment related to the adoption of Accounting Standard Update (ASU) 2016-01 Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities in the first quarter of fiscal 2019. See Note 1.

	Unrealized Gain (Loss) 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	)
Adoption of new accounting standards (b)	5			(2		)	—			—		3
Other comprehensive income (loss) before reclassifications	(7		)	(4		)	—			—		(11		)
Amounts reclassified out of AOCI	(12		)	9			(2		)	—		(5		)
Other comprehensive income (loss), net of tax	(19		)	5			(2		)	—		(16		)
Balance as of July 29, 2018	$	39		$	(8	)	$	(122	)	$	14	$	(77	)

(b) - Represents the reclassification adjustment related to the early adoption of Accounting Standards Update (ASU) 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.

Summary of stock repurchases

The following table summarizes Applied’s stock repurchases for the three and nine months ended July 28, 2019 and July 29, 2018:

	Three Months Ended				Nine Months Ended
	July 28, 2019		July 29, 2018		July 28, 2019		July 29, 2018
	(in millions, except per share amount)
Shares of common stock repurchased	12		25		50		84
Cost of stock repurchased	$	528	$	1,251	$	1,903	$	4,533
Average price paid per share	$	42.07	$	49.31	$	37.88	$	53.72

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 28, 2019		July 29, 2018		July 28, 2019		July 29, 2018
	(In millions)
Cost of products sold	$	23	$	22	$	67	$	65
Research, development and engineering	25		24		74		72
Marketing and selling	8		7		23		23
General and administrative	11		11		33		33
Total share-based compensation	$	67	$	64	$	197	$	193

Restricted stock units and restricted stock activity

A summary of the changes in any restricted stock units, restricted stock, performance shares and performance units outstanding under Applied’s equity compensation plans during the nine months ended July 28, 2019 is presented below:

	Shares		Weighted Average Grant Date Fair Value
	(In millions, except per share amounts)
Outstanding as of October 28, 2018	18		$	32.64
Granted	8		$	35.59
Vested	(7	)	$	28.25
Canceled	(1	)	$	34.16
Outstanding as of July 28, 2019	18		$	35.58

Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions

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

	Nine Months Ended
	July 28, 2019	July 29, 2018
ESPP:
Dividend yield	2.18%	1.40%
Expected volatility	37.1%	35.5%
Risk-free interest rate	2.51%	1.83%
Expected life (in years)	0.5	0.5
Weighted average estimated fair value	$9.78	$14.26