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

9 Months Ended

Jul. 31, 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	(36)		73		—		—		37
Amounts reclassified out of AOCI	(9)		(27)		—		—		(36)
Other comprehensive income (loss), net of tax	(45)		46		—		—		1
Balance as of July 31, 2022	$	(46)	$	(57)	$	(169)	$	13	$	(259)

	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	(7)		14		—		—		7
Amounts reclassified out of AOCI	(4)		4		—		—		—
Other comprehensive income (loss), net of tax	(11)		18		—		—		7
Balance as of August 1, 2021	$	9	$	(115)	$	(199)	$	13	$	(292)

Summary of stock repurchases

The following table summarizes Applied’s stock repurchases for the three and nine months ended July 31, 2022 and August 1, 2021:

	Three Months Ended				Nine Months Ended
	July 31, 2022		August 1, 2021		July 31, 2022		August 1, 2021
	(in millions, except per share amount)
Shares of common stock repurchased	10		11		37		17
Cost of stock repurchased	$	1,000	$	1,500	$	4,603	$	2,250
Average price paid per share	$	102.09	$	133.40	$	125.85	$	134.03

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 31, 2022		August 1, 2021		July 31, 2022		August 1, 2021
	(In millions)
Cost of products sold	$	34	$	28	$	112	$	93
Research, development and engineering	35		30		115		101
Marketing and selling	11		11		37		34
General and administrative	15		12		50		44
Total share-based compensation	$	95	$	81	$	314	$	272

Restricted stock units and restricted stock activity

A summary of the changes in restricted stock units, restricted stock, performance share units and performance units outstanding under Applied’s equity compensation plans during the nine months ended July 31, 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	$	136.18
Vested	(5)	$	53.17
Canceled	(1)	$	79.85
Outstanding as of July 31, 2022	11	$	92.09

Schedule of employee stock purchase plan

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

	Nine Months Ended
	July 31, 2022	August 1, 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