Accounts Receivable, Net

6 Months Ended

May 01, 2011

Accounts Receivable, Net [Abstract]

Accounts Receivable, Net

Note 6   Accounts Receivable, Net

Applied has agreements with various financial institutions to sell accounts receivable and discount promissory notes from selected customers. Applied also discounts letters of credit through various financial institutions. Applied sells its accounts receivable without recourse. Details of discounted letters of credit, factored accounts receivable and discounted promissory notes for the three and six months ended May 1, 2011 and May 2, 2010 were as follows:

	Three Months Ended				Six Months Ended
	May 1,		May 2,		May 1,		May 2,
	2011		2010		2011		2010
	(In millions)
Discounted letters of credit	$	50	$	26	$	173	$	53
Factored accounts receivable and discounted promissory notes		19		24		55		50
Total	$	69	$	50	$	228	$	103

Financing charges on the sale of receivables and discounting of letters of credit are included in interest expense in the accompanying Consolidated Condensed Statements of Operations and were not material for both periods presented.

Accounts receivable are presented net of allowance for doubtful accounts of $74 million at both May 1, 2011 and October 31, 2010. Applied sells principally to manufacturers within the semiconductor, display and solar industries. While Applied believes that its allowance for doubtful accounts is adequate and represents Applied’s best estimate as of May 1, 2011, Applied will continue to closely monitor customer liquidity and other economic conditions, which may result in changes to Applied’s estimates regarding collectability.