Organization, Consolidation and Presentation of Financial Statements (Tables)

12 Months Ended

Oct. 27, 2019

Organization, Consolidation and Presentation of Financial Statements [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 Statement of Operations for each of the fiscal years 2018 and 2017 as follows:

	2018								2017
	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	$	17,253	$	(548)	$	—	$	16,705	$	14,537	$	161	$	—	$	14,698
Cost of products sold	$	9,436	$	(250)	$	2	$	9,188	$	8,005	$	76	$	5	$	8,086
Gross profit	$	7,817	$	(298)	$	(2)	$	7,517	$	6,532	$	85	$	(5)	$	6,612
Research, development and engineering	$	2,019	$	—	$	3	$	2,022	$	1,774	$	—	$	7	$	1,781
Marketing and selling	$	521	$	—	$	—	$	521	$	456	$	—	$	1	$	457
General and administrative	$	481	$	—	$	2	$	483	$	434	$	—	$	4	$	438
Interest and other income, net	$	132	$	—	$	7	$	139	$	61	$	—	$	17	$	78
Income before income taxes	$	4,694	$	(298)	$	—	$	4,396	$	3,731	$	85	$	—	$	3,816
Provision for income taxes	$	1,381	$	(23)	$	—	$	1,358	$	297	$	—	$	—	$	297
Net income	$	3,313	$	(275)	$	—	$	3,038	$	3,434	$	85	$	—	$	3,519
Earnings per share: basic	$	3.27	$	(0.27)	$	—	$	3.00	$	3.20	$	0.08	$	—	$	3.28
Earnings per share: diluted	$	3.23	$	(0.27)	$	—	$	2.96	$	3.17	$	0.08	$	—	$	3.25

Adoption of the retirement benefits standard did not have any impact on Applied’s Consolidated Balance Sheet or Consolidated Statement of Cash Flows.

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

Adoption of the revenue recognition standard did not impact cash provided by or used in investing or financing activities in Applied’s Consolidated Statement of Cash Flows for each of fiscal years 2018 and 2017 as follows. The adoption did not impact total cash provided by operating activities, however it impacted individual components of cash provided by operating activities for each of fiscal years 2018 and 2017 as follows:

	2018						2017
	As Previously Reported		Adjustment		As Adjusted		As Previously Reported		Adjustment		As Adjusted
	(In millions)
Cash flows from operating activities:
Net income	$	3,313	$	(275)	$	3,038	$	3,434	$	85	$	3,519
Adjustments required to reconcile net income to cash provided by operating activities:
Deferred income taxes	$	94	$	(23)	$	71	$	(11)	$	(1)	$	(12)
Changes in operating assets and liabilities:
Accounts receivables	$	(226)	$	242	$	16	$	(37)	$	—	$	(37)
Inventories	$	(792)	$	(222)	$	(1,014)	$	(879)	$	70	$	(809)
Other current and non-current assets	$	(93)	$	(106)	$	(199)	$	(157)	$	1	$	(156)
Accounts payable and accrued expenses	$	179	$	(9)	$	170	$	370	$	1	$	371
Contract liabilities	$	(318)	$	393	$	75	$	289	$	(156)	$	133