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

6 Months Ended

May 01, 2022

Equity [Abstract]

Components of accumulated other comprehensive loss, after-tax basis

Changes in the components of accumulated other comprehensive income (AOCI), net of tax, were as follows:

 

	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 31, 2021	$	(1)	$	(103)	$	(169)	$	13	$	(260)
Other comprehensive income (loss) before reclassifications	(38)		46		—		—		8
Amounts reclassified out of AOCI	(10)		(13)		—		—		(23)
Other comprehensive income (loss), net of tax	(48)		33		—		—		(15)
Balance as of May 1, 2022	$	(49)	$	(70)	$	(169)	$	13	$	(275)

	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 25, 2020	$	20	$	(133)	$	(199)	$	13	$	(299)
Other comprehensive income (loss) before reclassifications	(6)		12		—		—		6
Amounts reclassified out of AOCI	(4)		7		—		—		3
Other comprehensive income (loss), net of tax	(10)		19		—		—		9
Balance as of May 2, 2021	$	10	$	(114)	$	(199)	$	13	$	(290)

Summary of stock repurchases

The following table summarizes Applied’s stock repurchases for the three and six months ended May 1, 2022 and May 2, 2021:

	Three Months Ended				Six Months Ended
	May 1, 2022		May 2, 2021		May 1, 2022		May 2, 2021
	(in millions, except per share amount)
Shares of common stock repurchased	15		6		27		6
Cost of stock repurchased	$	1,800	$	750	$	3,603	$	750
Average price paid per share	$	124.84	$	135.30	$	134.54	$	135.30

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
	May 1, 2022		May 2, 2021		May 1, 2022		May 2, 2021
	(In millions)
Cost of products sold	$	36	$	29	$	78	$	65
Research, development and engineering	37		31		80		71
Marketing and selling	12		10		26		23
General and administrative	16		14		35		32
Total share-based compensation	$	101	$	84	$	219	$	191

Restricted stock units and restricted stock activity

A summary of the changes in any restricted stock units, restricted stock, performance share units and performance units outstanding under Applied’s equity compensation plans during the six months ended May 1, 2022 is presented below:

	Shares	Weighted Average Grant Date Fair Value
	(In millions, except per share amounts)
Outstanding as of October 31, 2021	13	$	63.29
Granted	4	$	144.58
Vested	(5)	$	52.59
Canceled	(1)	$	76.06
Outstanding as of May 1, 2022	11	$	91.51

Schedule of employee stock purchase plan

Compensation expense is calculated using the fair value of the employees’ purchase rights under the Black-Scholes model.

	Three and Six Months Ended
	May 1, 2022	May 2, 2021
Dividend yield	0.74%	0.72%
Expected volatility	45.2%	44.6%
Risk-free interest rate	0.60%	0.05%
Expected life (in years)	0.5	0.5
Weighted average estimated fair value	$35.79	$33.48