Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Oct. 26, 2014 | Dec. 12, 2014 | Apr. 27, 2014 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | APPLIED MATERIALS INC /DE | ||
Entity Central Index Key | 6951 | ||
Current Fiscal Year End Date | -16 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | 26-Oct-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | FALSE | ||
Entity Common Stock Shares Outstanding | 1,221,471,983 | ||
Entity Well Known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $22,617,248,500 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Income Statement [Abstract] | |||
Net sales | $9,072 | $7,509 | $8,719 |
Cost of products sold | 5,229 | 4,518 | 5,406 |
Gross margin | 3,843 | 2,991 | 3,313 |
Operating expenses: | |||
Research, development and engineering | 1,428 | 1,320 | 1,237 |
Marketing and selling | 423 | 433 | 481 |
General and administrative | 467 | 465 | 595 |
Impairment of goodwill and intangible assets | 0 | 278 | 421 |
Restructuring charges and asset impairments | 5 | 63 | 168 |
Total operating expenses | 2,323 | 2,559 | 2,902 |
Income from operations | 1,520 | 432 | 411 |
Interest expense | 95 | 95 | 95 |
Interest and other income, net | 23 | 13 | 0 |
Income before income taxes | 1,448 | 350 | 316 |
Provision for income taxes | 376 | 94 | 207 |
Net income | $1,072 | $256 | $109 |
Earnings per share: | |||
Basic (in dollars per share) | $0.88 | $0.21 | $0.09 |
Diluted (in dollars per share) | $0.87 | $0.21 | $0.09 |
Weighted average number of shares: | |||
Basic (in shares) | 1,215 | 1,202 | 1,266 |
Diluted (in shares) | 1,231 | 1,219 | 1,277 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Net income | $1,072 | $256 | $109 |
Other comprehensive income (loss), net of tax: | |||
Change in unrealized net gain on investments | -1 | 9 | -1 |
Change in unrealized net gain on derivative investments | -2 | 1 | 1 |
Change in defined and postretirement benefit plans | -33 | 18 | -65 |
Change in cumulative translation adjustments | -2 | -5 | -2 |
Other comprehensive income (loss), net of tax | -38 | 23 | -67 |
Comprehensive income | $1,034 | $279 | $42 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Oct. 26, 2014 | Oct. 27, 2013 |
In Millions, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $3,002 | $1,711 |
Short-term investments | 160 | 180 |
Accounts receivable, net | 1,670 | 1,633 |
Inventories | 1,567 | 1,413 |
Other current assets | 568 | 705 |
Total current assets | 6,967 | 5,642 |
Long-term investments | 935 | 1,005 |
Property, plant and equipment, net | 861 | 850 |
Goodwill | 3,304 | 3,294 |
Purchased technology and other intangible assets, net | 951 | 1,103 |
Deferred income taxes and other assets | 156 | 149 |
Total assets | 13,174 | 12,043 |
Current liabilities: | ||
Accounts payable and accrued expenses | 1,883 | 1,649 |
Customer deposits and deferred revenue | 940 | 794 |
Total current liabilities | 2,823 | 2,443 |
Long-term debt | 1,947 | 1,946 |
Other liabilities | 536 | 566 |
Total liabilities | 5,306 | 4,955 |
Commitments and contingencies (Note 15) | ||
Stockholders’ equity: | ||
Preferred stock: $.01 par value per share; 1 shares authorized; no shares issued | 0 | 0 |
Common stock: $.01 par value per share; 2,500 shares authorized; 1,221 and 1,204 shares outstanding at 2014 and 2013, respectively | 12 | 12 |
Additional paid-in capital | 6,384 | 6,151 |
Retained earnings | 13,072 | 12,487 |
Treasury stock: 717 shares at 2014 and 2013, net | -11,524 | -11,524 |
Accumulated other comprehensive loss | -76 | -38 |
Total stockholders’ equity | 7,868 | 7,088 |
Total liabilities and stockholders’ equity | $13,174 | $12,043 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Oct. 26, 2014 | Oct. 27, 2013 |
Stockholders’ equity: | ||
Preferred stock, par value per share (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value per share (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 2,500,000,000 | 2,500,000,000 |
Common stock, shares outstanding | 1,221,000,000 | 1,204,000,000 |
Treasury stock, shares | 717,000,000 | 717,000,000 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) |
In Millions, unless otherwise specified | ||||||
Beginning Balance at Oct. 30, 2011 | $8,800 | $13 | $5,616 | $13,029 | ($9,864) | $6 |
Beginning Balance, Shares at Oct. 30, 2011 | 1,306 | 573 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 109 | 109 | ||||
Other comprehensive loss, net of tax | -67 | -67 | ||||
Dividends | -438 | -438 | ||||
Share-based compensation | 182 | 182 | ||||
Stock options assumed in connection with acquisition | 11 | 11 | ||||
Issuance under stock plans, net of a tax detriment | 54 | 54 | ||||
Issuance under stock plans, net of a tax detriment, shares | 17 | |||||
Common stock repurchases | -1,416 | -1 | -1,415 | |||
Common stock repurchases, shares | -126 | -126 | -126 | |||
Ending Balance at Oct. 28, 2012 | 7,235 | 12 | 5,863 | 12,700 | -11,279 | -61 |
Ending Balance, Shares at Oct. 28, 2012 | 1,197 | 699 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 256 | 256 | ||||
Other comprehensive loss, net of tax | 23 | 23 | ||||
Dividends | -469 | -469 | ||||
Share-based compensation | 162 | 162 | ||||
Issuance under stock plans, net of a tax detriment | 126 | 126 | ||||
Issuance under stock plans, net of a tax detriment, shares | 25 | |||||
Common stock repurchases | -245 | -245 | ||||
Common stock repurchases, shares | -18 | -18 | -18 | |||
Ending Balance at Oct. 27, 2013 | 7,088 | 12 | 6,151 | 12,487 | -11,524 | -38 |
Ending Balance, Shares at Oct. 27, 2013 | 1,204 | 717 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 1,072 | 1,072 | ||||
Other comprehensive loss, net of tax | -38 | -38 | ||||
Dividends | -487 | -487 | ||||
Share-based compensation | 177 | 177 | ||||
Issuance under stock plans, net of a tax detriment | 56 | 56 | ||||
Issuance under stock plans, net of a tax detriment, shares | 17 | |||||
Common stock repurchases, shares | 0 | |||||
Ending Balance at Oct. 26, 2014 | $7,868 | $12 | $6,384 | $13,072 | ($11,524) | ($76) |
Ending Balance, Shares at Oct. 26, 2014 | 1,221 | 717 |
Consolidated_Statements_of_Sto1
Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Statement of Stockholders' Equity [Abstract] | |||
Tax detriment included in issuance under stock plans | $27 | $14 | $12 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Cash flows from operating activities: | |||
Net income | $1,072 | $256 | $109 |
Adjustments required to reconcile net income to cash provided by operating activities: | |||
Depreciation and amortization | 375 | 410 | 422 |
Impairment of goodwill and intangible assets | 0 | 278 | 421 |
Restructuring charges and asset impairments | 5 | 63 | 168 |
Unrealized loss on derivative associated with announced business combination | 21 | 7 | 0 |
Deferred income taxes and other | 36 | -91 | 222 |
Share-based compensation | 177 | 162 | 182 |
Changes in operating assets and liabilities, net of amounts acquired: | |||
Accounts receivable | -21 | -404 | 493 |
Inventories | -154 | -141 | 679 |
Other assets | 5 | -70 | 46 |
Accounts payable and accrued expenses | 79 | 21 | -435 |
Customer deposits and deferred revenue | 146 | 39 | -412 |
Income taxes payable | 142 | 57 | -34 |
Other liabilities | -83 | 36 | -10 |
Cash provided by operating activities | 1,800 | 623 | 1,851 |
Cash flows from investing activities: | |||
Capital expenditures | -241 | -197 | -162 |
Cash paid for acquisitions, net of cash acquired | -12 | -1 | -4,190 |
Proceeds from sale of facilities | 25 | 7 | 0 |
Proceeds from sales and maturities of investments | 878 | 1,013 | 1,019 |
Purchases of investments | -811 | -607 | -1,327 |
Cash provided by (used in) investing activities | -161 | 215 | -4,660 |
Cash flows from financing activities: | |||
Proceeds from common stock issuances and others, net | 137 | 182 | 96 |
Common stock repurchases | 0 | -245 | -1,416 |
Payments of dividends to stockholders | -485 | -456 | -434 |
Cash used in financing activities | -348 | -519 | -1,754 |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | -5 |
Increase (decrease) in cash and cash equivalents | 1,291 | 319 | -4,568 |
Cash and cash equivalents — beginning of year | 1,711 | 1,392 | 5,960 |
Cash and cash equivalents — end of year | 3,002 | 1,711 | 1,392 |
Supplemental cash flow information: | |||
Cash payments for income taxes | 195 | 196 | 243 |
Cash refunds from income taxes | 111 | 102 | 79 |
Cash payments for interest | $92 | $92 | $94 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended |
Oct. 26, 2014 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies |
Principles of Consolidation and Basis of Presentation | |
The consolidated financial statements include the accounts of Applied Materials, Inc. and its subsidiaries (Applied or the Company) after elimination of intercompany balances and transactions. All references to a fiscal year apply to Applied’s fiscal year which ends on the last Sunday in October. Fiscal 2014, 2013 and 2012 contained 52 weeks each. Each fiscal quarter of 2014, 2013 and 2012 contained 13 weeks. | |
Certain prior year amounts have been reclassified to conform to current year presentation. | |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, Applied evaluates its estimates, including those related to accounts receivable and sales allowances, fair values of financial instruments, inventories, intangible assets and goodwill, useful lives of intangible assets and property and equipment, fair values of share-based awards, and income taxes, among others. Applied bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. | |
Cash Equivalents | |
All highly-liquid investments with a remaining maturity of three months or less at the time of purchase are considered to be cash equivalents. Cash equivalents consist primarily of investments in institutional money market funds. | |
Investments | |
All of Applied’s investments, except equity investments held in privately-held companies, are classified as available-for-sale at the respective balance sheet dates. Investments classified as available-for-sale are recorded at fair value based upon quoted market prices, and any temporary difference between the cost and fair value of an investment is presented as a separate component of accumulated other comprehensive income (loss). The specific identification method is used to determine the gains and losses on investments. Interest earned on cash and investments, as well as realized gains and losses on sale of securities, are included in interest income in the accompanying Consolidated Statements of Operations. | |
Equity investments in privately-held companies are generally accounted for under the cost method of accounting and are periodically assessed for other-than-temporary impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred. | |
Allowance for Doubtful Accounts | |
Applied maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. This allowance is based on historical experience, credit evaluations, specific customer collection history and any customer-specific issues Applied has identified. Changes in circumstances, such as an unexpected material adverse change in a major customer’s ability to meet its financial obligation to Applied or its payment trends, may require Applied to further adjust its estimates of the recoverability of amounts due to Applied. Bad debt expense and any reversals are recorded in marketing and selling expense in the Consolidated Statement of Operations. | |
Inventories | |
Inventories are stated at the lower of cost or market, with cost determined on a first-in, first-out (FIFO) basis. Applied adjusts inventory carrying value for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. Applied fully reserves for inventories and noncancelable purchase orders for inventory deemed obsolete. Applied performs periodic reviews of inventory items to identify excess inventories on hand by comparing on-hand balances to anticipated usage using recent historical activity as well as anticipated or forecasted demand. If estimates of customer demand diminish further or market conditions become less favorable than those projected by Applied, additional inventory adjustments may be required. | |
Property, Plant and Equipment | |
Property, plant and equipment is stated at cost. Depreciation is provided over the estimated useful lives of the assets using the straight-line method. Estimated useful lives for financial reporting purposes are as follows: buildings and improvements, 3 to 30 years; demonstration and manufacturing equipment, 3 to 5 years; software, 3 to 5 years; and furniture, fixtures and other equipment, 3 to 15 years. Land improvements are amortized over the shorter of 15 years or the estimated useful life. Leasehold improvements are amortized over the shorter of five years or the lease term. | |
Intangible Assets | |
Goodwill and indefinite-lived assets are not amortized, but are reviewed for impairment annually during the fourth quarter of each fiscal year and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Purchased technology and other intangible assets are presented at cost, net of accumulated amortization, and are amortized over their estimated useful lives of 1 to 15 years using the straight-line method. | |
Long-Lived Assets | |
Applied reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets or asset group may not be recoverable. Applied assesses these assets for impairment based on estimated future cash flows from these assets. | |
Research, Development and Engineering Costs | |
Research, development and engineering costs are expensed as incurred. | |
Sales and Value Added Taxes | |
Taxes collected from customers and remitted to governmental authorities are presented on a net basis in the accompanying Consolidated Statements of Operations. | |
Warranty | |
Applied provides for the estimated cost of warranty when revenue is recognized. Estimated warranty costs are determined by analyzing specific product, current and historical configuration statistics and regional warranty support costs. Applied's warranty obligation is affected by product and component failure rates, material usage and labor costs incurred in correcting product failures during the warranty period. If actual warranty costs differ substantially from Applied's estimates, revisions to the estimated warranty liability would be required. | |
Income Taxes | |
Income tax expense is based on pretax earnings. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the book and tax bases of recorded assets and liabilities, net operating losses and tax credit carryforwards. | |
Restructuring | |
From time to time, Applied initiates restructuring activities to appropriately align its cost structure relative to prevailing economic and industry conditions and associated customer demand as well as in connection with certain acquisitions. Costs associated with restructuring actions can include termination benefits and related charges in addition to facility closure, contract termination and other related activities. Costs associated with restructuring activities are included in restructuring charges and asset impairments in the Consolidated Statements of Operations. | |
Revenue Recognition | |
Applied recognizes revenue when all four revenue recognition criteria have been met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; seller’s price to buyer is fixed or determinable; and collectability is probable. Applied’s shipping terms are customarily FOB Applied shipping point or equivalent terms. Applied’s revenue recognition policy generally results in revenue recognition at the following points: (1) for all transactions where legal title passes to the customer upon shipment or delivery, Applied recognizes revenue upon passage of title for all products that have been demonstrated to meet product specifications prior to shipment; the portion of revenue associated with certain installation-related tasks is deferred, and that revenue is recognized upon completion of the installation-related tasks; (2) for products that have not been demonstrated to meet product specifications prior to shipment, revenue is recognized at customer technical acceptance; (3) for transactions where legal title does not pass at shipment or delivery, revenue is recognized when legal title passes to the customer, which is generally at customer technical acceptance; and (4) for arrangements containing multiple elements, the revenue relating to the undelivered elements is deferred using the relative selling price method utilizing estimated sales prices until delivery of the deferred elements. Applied limits the amount of revenue recognition for delivered elements to the amount that is not contingent on the future delivery of products or services, future performance obligations or subject to customer-specified return or adjustment. In cases where Applied has sold products that have been demonstrated to meet product specifications prior to shipment, Applied believes that at the time of delivery, it has an enforceable claim to amounts recognized as revenue. Spare parts revenue is generally recognized upon shipment, and services revenue is generally recognized over the period that the services are provided. | |
When a sales arrangement contains multiple elements, such as hardware and services and/or software products, Applied allocates revenue to each element based on a selling price hierarchy. The selling price for a deliverable is based on its vendor specific objective evidence (VSOE) if available, third party evidence (TPE) if VSOE is not available, or estimated selling price (ESP) if neither VSOE nor TPE is available. Applied generally utilizes the ESP due to the nature of its products. In multiple element arrangements where more-than-incidental software deliverables are included, revenue is allocated to each separate unit of accounting for each of the non-software deliverables and to the software deliverables as a group using the relative selling prices of each of the deliverables in the arrangement based on the aforementioned selling price hierarchy. If the arrangement contains more than one software deliverable, the arrangement consideration allocated to the software deliverables as a group is then allocated to each software deliverable using the guidance for recognizing software revenue. | |
Derivative Financial Instruments | |
Applied uses financial instruments, such as forward exchange and currency option contracts, to hedge a portion of, but not all, existing and anticipated foreign currency denominated transactions typically expected to occur within 24 months. The terms of currency instruments used for hedging purposes are generally consistent with the timing of the transactions being hedged. The purpose of Applied’s foreign currency management is to mitigate the effect of exchange rate fluctuations on certain foreign currency denominated revenues, costs and eventual cash flows. All of Applied’s derivative financial instruments are recorded at fair value based upon quoted market prices for comparable instruments. For derivative instruments designated and qualifying as cash flow hedges of anticipated foreign currency denominated transactions, the effective portion of the gain or loss on these hedges is reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity, and is reclassified into earnings when the hedged transaction affects earnings. If the transaction being hedged fails to occur, or if a portion of any derivative is ineffective, the gain or loss on the associated financial instrument is recorded promptly in earnings. For derivative instruments used to hedge existing foreign currency denominated assets or liabilities, the gain or loss on these hedges is recorded promptly in earnings to offset the changes in the fair value of the assets or liabilities being hedged. Applied does not use derivative financial instruments for trading or speculative purposes. | |
Foreign Currencies | |
As of October 26, 2014, primarily all of Applied’s subsidiaries use the United States dollar as their functional currency. Accordingly, assets and liabilities of these subsidiaries are remeasured using exchange rates in effect at the end of the period, except for non-monetary assets, such as inventories and property, plant and equipment, which are remeasured using historical exchange rates. Foreign currency-denominated revenues and costs are remeasured using average exchange rates for the period, except for costs related to those balance sheet items that are remeasured using historical exchange rates. The resulting remeasurement gains and losses are included in general and administrative expenses in the Consolidated Statements of Operations as incurred. | |
Concentrations of Credit Risk | |
Financial instruments that potentially subject Applied to significant concentrations of credit risk consist principally of cash equivalents, investments, trade accounts receivable and derivative financial instruments used in hedging activities. Applied invests in a variety of financial instruments, such as, but not limited to, certificates of deposit, corporate and municipal bonds, United States Treasury and agency securities, and asset-backed and mortgage-backed securities, and, by policy, limits the amount of credit exposure with any one financial institution or commercial issuer. Applied performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral to secure accounts receivable. Applied maintains an allowance reserve for potentially uncollectible accounts receivable based on its assessment of the collectability of accounts receivable. Applied regularly reviews the allowance by considering factors such as historical experience, credit quality, age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. In addition, Applied utilizes letters of credit to mitigate credit risk when considered appropriate. Applied is exposed to credit-related losses in the event of nonperformance by counterparties to derivative financial instruments, but does not expect any counterparties to fail to meet their obligations. In some instances, Applied has entered into security arrangements which require the counterparties to post collateral to further mitigate credit exposure. | |
Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board (FASB) issued authoritative guidance that requires revenue recognition to depict the transfer of promised goods or services to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This new standard will supersede most current revenue recognition guidance, including industry-specific guidance. The guidance becomes effective for Applied in the first quarter of fiscal 2018, and can be applied either retrospectively or as a cumulative-effect adjustment as of the date of adoption. Early adoption is prohibited. Applied is currently evaluating the effect of this new guidance on Applied's financial position, results of operations and its ongoing financial reporting, including the selection of a transition method. | |
In April 2014, the FASB issued authoritative guidance that raises the threshold for a disposal transaction to qualify as a discontinued operation and requires additional disclosures about discontinued operations and disposals of individually significant components that do not qualify as discontinued operations. The authoritative guidance becomes effective prospectively for Applied in the first quarter of fiscal 2016. Early adoption is permitted, but only for disposals that have not been reported in financial statements previously issued. | |
In July 2013, the FASB issued authoritative guidance that will require an unrecognized tax benefit to be presented as a reduction of a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward, with certain exceptions. The authoritative guidance becomes effective for Applied in the first quarter of fiscal 2015, with early adoption permitted. The guidance is not expected to have a significant impact on Applied's financial position. |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | |||||||||||
Oct. 26, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Earnings Per Share | Earnings Per Share | |||||||||||
Basic earnings per share is determined using the weighted average number of common shares outstanding during the period. Diluted earnings per share is determined using the weighted average number of common shares and potential common shares (representing the dilutive effect of stock options, restricted stock units, and employee stock purchase plan shares) outstanding during the period. Applied’s net income has not been adjusted for any period presented for purposes of computing basic or diluted earnings per share due to the Company’s non-complex capital structure. | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(In millions, except per share amounts) | ||||||||||||
Numerator: | ||||||||||||
Net income | $ | 1,072 | $ | 256 | $ | 109 | ||||||
Denominator: | ||||||||||||
Weighted average common shares outstanding | 1,215 | 1,202 | 1,266 | |||||||||
Effect of dilutive stock options, restricted stock units and employee stock purchase plan shares | 16 | 17 | 11 | |||||||||
Denominator for diluted earnings per share | 1,231 | 1,219 | 1,277 | |||||||||
Basic earnings per share | $ | 0.88 | $ | 0.21 | $ | 0.09 | ||||||
Diluted earnings per share | $ | 0.87 | $ | 0.21 | $ | 0.09 | ||||||
Potentially dilutive securities | 1 | 2 | 9 | |||||||||
Potentially dilutive securities attributable to outstanding stock options and restricted stock units were excluded from the calculation of diluted earnings per share because the combined exercise price, average unamortized fair value and assumed tax benefits upon the exercise of options and the vesting of restricted stock units were greater than the average market price of Applied common stock, and therefore their inclusion would have been anti-dilutive. |
Cash_Cash_Equivalents_and_Inve
Cash, Cash Equivalents and Investments | 12 Months Ended | |||||||||||||||
Oct. 26, 2014 | ||||||||||||||||
Cash and Cash Equivalents [Abstract] | ||||||||||||||||
Cash, Cash Equivalents and Investments | Cash, Cash Equivalents and Investments | |||||||||||||||
Summary of Cash, Cash Equivalents and Investments | ||||||||||||||||
The following tables summarize Applied’s cash, cash equivalents and investments by security type: | ||||||||||||||||
October 26, 2014 | Cost | Gross | Gross | Estimated | ||||||||||||
Unrealized | Unrealized | Fair Value | ||||||||||||||
Gains | Losses | |||||||||||||||
(In millions) | ||||||||||||||||
Cash | $ | 508 | $ | — | $ | — | $ | 508 | ||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | 2,494 | — | — | 2,494 | ||||||||||||
Total Cash equivalents | 2,494 | — | — | 2,494 | ||||||||||||
Total Cash and Cash equivalents | $ | 3,002 | $ | — | $ | — | $ | 3,002 | ||||||||
Short-term and long-term investments: | ||||||||||||||||
U.S. Treasury and agency securities | $ | 62 | $ | — | $ | — | $ | 62 | ||||||||
Non-U.S. government securities* | 14 | — | — | 14 | ||||||||||||
Municipal securities | 391 | 2 | — | 393 | ||||||||||||
Commercial paper, corporate bonds and medium-term notes | 223 | 1 | — | 224 | ||||||||||||
Asset-backed and mortgage-backed securities | 287 | 1 | 2 | 286 | ||||||||||||
Total fixed income securities | 977 | 4 | 2 | 979 | ||||||||||||
Publicly traded equity securities | 19 | 31 | — | 50 | ||||||||||||
Equity investments in privately-held companies | 66 | — | — | 66 | ||||||||||||
Total short-term and long-term investments | $ | 1,062 | $ | 35 | $ | 2 | $ | 1,095 | ||||||||
Total Cash, Cash equivalents and Investments | $ | 4,064 | $ | 35 | $ | 2 | $ | 4,097 | ||||||||
_________________________ | ||||||||||||||||
* Includes agency debt securities guaranteed by non-U.S. governments, which consist of Germany and Canada. | ||||||||||||||||
October 27, 2013 | Cost | Gross | Gross | Estimated | ||||||||||||
Unrealized | Unrealized | Fair Value | ||||||||||||||
Gains | Losses | |||||||||||||||
(In millions) | ||||||||||||||||
Cash | $ | 611 | $ | — | $ | — | $ | 611 | ||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | 1,095 | — | — | 1,095 | ||||||||||||
Municipal securities | 5 | — | — | 5 | ||||||||||||
Total Cash equivalents | 1,100 | — | — | 1,100 | ||||||||||||
Total Cash and Cash equivalents | $ | 1,711 | $ | — | $ | — | $ | 1,711 | ||||||||
Short-term and long-term investments: | ||||||||||||||||
U.S. Treasury and agency securities | $ | 170 | $ | — | $ | — | $ | 170 | ||||||||
Non-U.S. government securities | 11 | — | — | 11 | ||||||||||||
Municipal securities | 379 | 2 | — | 381 | ||||||||||||
Commercial paper, corporate bonds and medium-term notes | 218 | 2 | 1 | 219 | ||||||||||||
Asset-backed and mortgage-backed securities | 268 | 2 | 2 | 268 | ||||||||||||
Total fixed income securities | 1,046 | 6 | 3 | 1,049 | ||||||||||||
Publicly traded equity securities | 27 | 33 | — | 60 | ||||||||||||
Equity investments in privately-held companies | 76 | — | — | 76 | ||||||||||||
Total short-term and long-term investments | $ | 1,149 | $ | 39 | $ | 3 | $ | 1,185 | ||||||||
Total Cash, Cash equivalents and Investments | $ | 2,860 | $ | 39 | $ | 3 | $ | 2,896 | ||||||||
Maturities of Investments | ||||||||||||||||
The following table summarizes the contractual maturities of Applied’s investments at October 26, 2014: | ||||||||||||||||
Cost | Estimated | |||||||||||||||
Fair Value | ||||||||||||||||
(In millions) | ||||||||||||||||
Due in one year or less | $ | 151 | $ | 151 | ||||||||||||
Due after one through five years | 539 | 542 | ||||||||||||||
No single maturity date** | 372 | 402 | ||||||||||||||
$ | 1,062 | $ | 1,095 | |||||||||||||
_________________________ | ||||||||||||||||
** Securities with no single maturity date include publicly-traded and privately-held equity securities, and asset-backed and mortgage-backed securities. | ||||||||||||||||
Gains and Losses on Investments | ||||||||||||||||
Gross realized gains and losses on sales of investments during fiscal 2014, 2013, and 2012 were as follows: | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
(In millions) | ||||||||||||||||
Gross realized gains | $ | 27 | $ | 7 | $ | 3 | ||||||||||
Gross realized losses | $ | 2 | $ | 2 | $ | 3 | ||||||||||
At October 26, 2014, gross unrealized losses related to Applied's investment portfolio were not material. Applied regularly reviews its investment portfolio to identify and evaluate investments that have indications of possible impairment. Factors considered in determining whether an unrealized loss was considered to be temporary, or other-than-temporary and therefore impaired, include: the length of time and extent to which fair value has been lower than the cost basis; the financial condition, credit quality and near-term prospects of the investee; and whether it is more likely than not that Applied will be required to sell the security prior to recovery. Generally, the contractual terms of investments in marketable securities do not permit settlement at prices less than the amortized cost of the investments. Applied determined that the gross unrealized losses on its marketable securities at October 26, 2014, October 27, 2013 and October 28, 2012 were temporary in nature and therefore it did not recognize any impairment of its marketable securities for fiscal 2014, 2013 or 2012. During fiscal 2014, 2013 and 2012, Applied determined that certain of its equity investments held in privately-held companies were other-than-temporarily impaired and, accordingly, recognized impairment charges of $15 million, $6 million and $17 million, respectively. These impairment charges are included in interest and other income, net in the Consolidated Statement of Operations. | ||||||||||||||||
Unrealized gains and temporary losses on investments classified as available-for-sale are included within accumulated other comprehensive income (loss), net of any related tax effect. Upon realization, those amounts are reclassified from accumulated other comprehensive income (loss) to results of operations. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | |||||||||||||||||||||||
Oct. 26, 2014 | ||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements | |||||||||||||||||||||||
Applied’s financial assets are measured and recorded at fair value, except for equity investments in privately-held companies. These equity investments are generally accounted for under the cost method of accounting and are periodically assessed for other-than-temporary impairment when events or circumstances indicate that an other-than-temporary decline in value may have occurred. Applied’s nonfinancial assets, such as goodwill, intangible assets, and property, plant and equipment, are recorded at cost and are assessed for impairment when events or circumstances indicate that an other-than-temporary decline in value may have occurred. | ||||||||||||||||||||||||
Fair Value Hierarchy | ||||||||||||||||||||||||
Applied uses the following fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: | ||||||||||||||||||||||||
• | Level 1 — Quoted prices in active markets for identical assets or liabilities; | |||||||||||||||||||||||
• | Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and | |||||||||||||||||||||||
• | Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | |||||||||||||||||||||||
Applied’s investments consist primarily of debt securities that are classified as available-for-sale and recorded at their fair values. In determining the fair value of investments, Applied uses pricing information from pricing services that value securities based on quoted market prices and models that utilize observable market inputs. In the event a fair value estimate is unavailable from a pricing service, Applied generally obtains non-binding price quotes from brokers. Applied then reviews the information provided by the pricing services or brokers to determine the fair value of its short-term and long-term investments. In addition, to validate pricing information obtained from pricing services, Applied periodically performs supplemental analysis on a sample of securities. Applied reviews any significant unanticipated differences identified through this analysis to determine the appropriate fair value. | ||||||||||||||||||||||||
Investments with remaining effective maturities of 12 months or less from the balance sheet date are classified as short-term investments. Investments with remaining effective maturities of more than 12 months from the balance sheet date are classified as long-term investments. As of October 26, 2014, substantially all of Applied’s available-for-sale, short-term and long-term investments were recognized at fair value that was determined based upon observable inputs. | ||||||||||||||||||||||||
Assets Measured at Fair Value on a Recurring Basis | ||||||||||||||||||||||||
Financial assets (excluding cash balances) measured at fair value on a recurring basis are summarized below as of October 26, 2014 and October 27, 2013: | ||||||||||||||||||||||||
October 26, 2014 | October 27, 2013 | |||||||||||||||||||||||
Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Money market funds | $ | 2,494 | $ | — | $ | 2,494 | $ | 1,095 | $ | — | $ | 1,095 | ||||||||||||
U.S. Treasury and agency securities | 43 | 19 | 62 | 66 | 104 | 170 | ||||||||||||||||||
Non-U.S. government securities | — | 14 | 14 | — | 11 | 11 | ||||||||||||||||||
Municipal securities | — | 393 | 393 | — | 386 | 386 | ||||||||||||||||||
Commercial paper, corporate bonds and medium-term notes | — | 224 | 224 | — | 219 | 219 | ||||||||||||||||||
Asset-backed and mortgage-backed securities | — | 286 | 286 | — | 268 | 268 | ||||||||||||||||||
Publicly traded equity securities | 50 | — | 50 | 60 | — | 60 | ||||||||||||||||||
Foreign exchange derivative assets | — | 52 | 52 | — | 20 | 20 | ||||||||||||||||||
Total | $ | 2,587 | $ | 988 | $ | 3,575 | $ | 1,221 | $ | 1,008 | $ | 2,229 | ||||||||||||
There were no transfers between Level 1 and Level 2 fair value measurements during fiscal 2014 and 2013 and Applied did not have any financial assets measured at fair value on a recurring basis within Level 3 fair value measurements as of October 26, 2014 or October 27, 2013. | ||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Non-recurring Basis | ||||||||||||||||||||||||
Equity investments in privately-held companies are generally accounted for under the cost method of accounting and are periodically assessed for other-than-temporary impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred. If Applied determines that an other-than-temporary impairment has occurred, the investment will be written down to its estimated fair value based on available information, such as pricing in recent rounds of financing, current cash positions, earnings and cash flow forecasts, recent operational performance and any other readily available market data. Equity investments in privately-held companies totaled $66 million at October 26, 2014, of which $57 million of investments were accounted for under the cost method of accounting and $9 million of investments had been measured at fair value on a non-recurring basis within Level 3 fair value measurements due to an other-than-temporary decline in value. Equity investments in privately-held companies totaled $76 million at October 27, 2013, of which $66 million of investments were accounted for under the cost method of accounting and $10 million of investments had been measured at fair value on a non-recurring basis within Level 3 fair value measurements due to an other-than-temporary decline in value. | ||||||||||||||||||||||||
During fiscal 2014, 2013 and 2012, Applied determined that certain of its equity investments held in privately-held companies were other-than-temporarily impaired and, accordingly, recognized impairment charges of $15 million, $6 million and $17 million, respectively. | ||||||||||||||||||||||||
In fiscal 2013 and 2012, Applied recorded goodwill and intangible asset impairment charges related to the Energy and Environmental Solutions segment. The inputs used to measure the fair value of goodwill and intangible assets of the Energy and Environmental Solutions segment are classified as a Level 3 fair value measurement due to the significance of unobservable inputs using company-specific information. The valuation methodology used to estimate the fair value of goodwill and intangible assets is discussed in Note 9, Goodwill, Purchased Technology and Other Intangible Assets. | ||||||||||||||||||||||||
Other | ||||||||||||||||||||||||
The carrying amounts of Applied’s financial instruments, including cash and cash equivalents, accounts receivable, notes payable, and accounts payable and accrued expenses, approximate fair value due to their short maturities. At October 26, 2014, the carrying amount of long-term debt was $1.9 billion and the estimated fair value was $2.2 billion. At October 27, 2013, the carrying amount of long-term debt was $1.9 billion and the estimated fair value was $2.1 billion. The estimated fair value of long-term debt is determined by Level 2 inputs and is based primarily on quoted market prices for the same or similar issues. |
Derivative_Instruments_and_Hed
Derivative Instruments and Hedging Activities | 12 Months Ended | |||||||||||||||||||||||||
Oct. 26, 2014 | ||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities | |||||||||||||||||||||||||
Derivative Financial Instruments | ||||||||||||||||||||||||||
Applied conducts business in a number of foreign countries, with certain transactions denominated in local currencies, such as the Japanese yen, euro, Israeli shekel, Taiwanese dollar and Swiss franc. Applied uses derivative financial instruments, such as forward exchange contracts and currency option contracts, to hedge certain forecasted foreign currency denominated transactions expected to occur typically within the next 24 months. The purpose of Applied’s foreign currency management is to mitigate the effect of exchange rate fluctuations on certain foreign currency denominated revenues, costs and eventual cash flows. The terms of currency instruments used for hedging purposes are generally consistent with the timing of the transactions being hedged. Applied does not use derivative financial instruments for trading or speculative purposes. | ||||||||||||||||||||||||||
Derivative instruments and hedging activities, including foreign currency exchange contracts, are recognized on the balance sheet at fair value. Changes in the fair value of derivatives that do not qualify for hedge treatment, as well as the ineffective portion of any hedges, are recognized currently in earnings. All of Applied’s derivative financial instruments are recorded at their fair value in other current assets or in accounts payable and accrued expenses. | ||||||||||||||||||||||||||
Hedges related to anticipated transactions are designated and documented at the inception of the hedge as cash flow hedges and are typically entered into once per month. Cash flow hedges are evaluated for effectiveness quarterly. The effective portion of the gain or loss on these hedges is reported as a component of accumulated other comprehensive income or loss (AOCI) in stockholders’ equity and is reclassified into earnings when the hedged transaction affects earnings. The majority of the after-tax net income or loss related to derivative instruments included in AOCI at October 26, 2014 is expected to be reclassified into earnings within 12 months. Changes in the fair value of currency forward exchange and option contracts due to changes in time value are excluded from the assessment of effectiveness. Both ineffective hedge amounts and hedge components excluded from the assessment of effectiveness are recognized in earnings. If the transaction being hedged is no longer probable to occur, or if a portion of any derivative is deemed to be ineffective, Applied promptly recognizes the gain or loss on the associated financial instrument in general and administrative expenses. The amount recognized due to discontinuance of cash flow hedges that were probable not to occur by the end of the originally specified time period was not significant for fiscal 2014, 2013 or 2012. | ||||||||||||||||||||||||||
Additionally, forward exchange contracts are generally used to hedge certain foreign currency denominated assets or liabilities. These derivatives are typically entered into once per month and are not designated for hedge accounting treatment. Accordingly, changes in the fair value of these hedges are recorded in earnings to offset the changes in the fair value of the assets or liabilities being hedged. | ||||||||||||||||||||||||||
During the fourth quarters of fiscal 2013 and fiscal 2014, Applied purchased foreign exchange option contracts to limit its foreign exchange risk associated with the announced business combination with Tokyo Electron Limited (TEL). The derivatives used to hedge our currency exposure did not qualify for hedge accounting treatment. These derivatives are marked to market at the end of each reporting period with gains and losses recognized as general and administrative expenses. At October 27, 2013, the fair value of the foreign exchange option contracts was approximately $17 million, and the Company recognized an unrealized loss of $7 million during fiscal 2013 related to such contracts. During fiscal 2014, the derivatives purchased in fiscal 2013 were sold, and the Company recorded gains of $51 million and $42 million, respectively, for the three and twelve month periods ended October 26, 2014. Concurrently, during the fourth quarter of fiscal 2014, the Company purchased new foreign exchange option contracts for the same purpose with an extended maturity. At October 26, 2014, the fair value of the option contracts purchased in fiscal 2014 was approximately $52 million and Applied recorded an unrealized loss of $12 million in fiscal 2014 related to these option contracts. The cash flow impacts of these derivatives have been classified as operating cash flows in the Consolidated Statements of Cash Flows. To further mitigate credit exposure in connection with these foreign exchange option contracts, the Company entered into security arrangements with certain counterparties, which require the counterparties to post collateral amounting to the approximate fair value of the derivative contracts. The cash collateral is included in cash and cash equivalents in the Consolidated Statements of Financial Position, with the corresponding liability included in accounts payable and accrued expenses. | ||||||||||||||||||||||||||
Other than the foreign exchange option contracts discussed in the preceding paragraph, the fair values of other derivative instruments at October 26, 2014 and October 27, 2013 were not material. | ||||||||||||||||||||||||||
The effects of derivative instruments on the Consolidated Statements of Operations for fiscal 2014 and 2013 were as follows: | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Effective Portion | Ineffective Portion and Amount | Effective Portion | Ineffective Portion and Amount | |||||||||||||||||||||||
Excluded from | Excluded from | |||||||||||||||||||||||||
Effectiveness | Effectiveness | |||||||||||||||||||||||||
Testing | Testing | |||||||||||||||||||||||||
Location of Gain or | Gain or | Gain or (Loss) | Gain or (Loss) | Gain or | Gain or (Loss) | Gain or (Loss) | ||||||||||||||||||||
(Loss) Reclassified | (Loss) | Reclassified | Recognized in | (Loss) | Reclassified | Recognized in | ||||||||||||||||||||
from AOCI into | Recognized | from AOCI into | Income | Recognized | from AOCI into | Income | ||||||||||||||||||||
Income | in AOCI | Income | in AOCI | Income | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationships | ||||||||||||||||||||||||||
Foreign exchange contracts | Cost of products sold | $ | 7 | $ | 8 | $ | (2 | ) | $ | 29 | $ | 21 | $ | (3 | ) | |||||||||||
Foreign exchange contracts | General and administrative | — | 1 | (2 | ) | — | 7 | (1 | ) | |||||||||||||||||
Total | $ | 7 | $ | 9 | $ | (4 | ) | $ | 29 | $ | 28 | $ | (4 | ) | ||||||||||||
Amount of Gain or (Loss) | ||||||||||||||||||||||||||
Recognized in Income | ||||||||||||||||||||||||||
Location of Gain or | 2014 | 2013 | ||||||||||||||||||||||||
(Loss) Recognized | ||||||||||||||||||||||||||
in Income | ||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Derivatives Not Designated as Hedging Instruments | ||||||||||||||||||||||||||
Foreign exchange contracts | General and | $ | 49 | $ | 19 | |||||||||||||||||||||
administrative | ||||||||||||||||||||||||||
Total | $ | 49 | $ | 19 | ||||||||||||||||||||||
Credit Risk Contingent Features | ||||||||||||||||||||||||||
If Applied’s credit rating were to fall below investment grade, it would be in violation of credit risk contingent provisions of the derivative instruments discussed above, and certain counterparties to the derivative instruments could request immediate payment on derivative instruments in net liability positions. The aggregate fair value of all derivative instruments with credit-risk related contingent features that were in a net liability position was immaterial as of October 26, 2014 and October 27, 2013. | ||||||||||||||||||||||||||
Entering into foreign exchange contracts with banks exposes Applied to credit-related losses in the event of the banks’ nonperformance. However, Applied’s exposure is not considered significant. |
Accounts_Receivable_Net
Accounts Receivable, Net | 12 Months Ended | |||||||||||
Oct. 26, 2014 | ||||||||||||
Receivables [Abstract] | ||||||||||||
Accounts Receivable, Net | Accounts Receivable, Net | |||||||||||
Applied has agreements with various financial institutions to sell accounts receivable and discount promissory notes from selected customers. Applied sells its accounts receivable without recourse. Applied, from time to time, also discounts letters of credit issued by customers through various financial institutions. The discounting of letters of credit depends on many factors, including the willingness of financial institutions to discount the letters of credit and the cost of such arrangements. Details of discounted letters of credit, factored accounts receivable and discounted promissory notes for fiscal years ended October 26, 2014, October 27, 2013 and October 28, 2012 were as follows: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(In millions) | ||||||||||||
Discounted letters of credit | $ | 29 | $ | — | $ | — | ||||||
Factored accounts receivable and discounted promissory notes | 45 | — | 93 | |||||||||
Total | $ | 74 | $ | — | $ | 93 | ||||||
Financing charges on the sale of receivables and discounting of letters of credit are included in interest expense in the accompanying Consolidated Statements of Operations and were not material for all years presented. | ||||||||||||
Accounts receivable are presented net of allowance for doubtful accounts of $58 million at October 26, 2014 and $74 million at October 27, 2013. Changes in allowance for doubtful accounts were as follows: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(In millions) | ||||||||||||
Beginning balance | $ | 74 | $ | 87 | $ | 73 | ||||||
Provision | — | — | 14 | |||||||||
Deductions1 | (16 | ) | (13 | ) | — | |||||||
Ending balance | $ | 58 | $ | 74 | $ | 87 | ||||||
_____________________________ | ||||||||||||
1 Fiscal 2014 and 2013 deductions represent releases of allowance for doubtful accounts credited to expense as a result of an overall lower risk profile of Applied's customers. | ||||||||||||
Applied sells its products principally to manufacturers within the semiconductor, display and solar industries. While Applied believes that its allowance for doubtful accounts is adequate and represents its best estimate as of October 26, 2014, it continues to closely monitor customer liquidity and industry and economic conditions, which may result in changes to Applied’s estimates regarding collectability. |
Balance_Sheet_Detail
Balance Sheet Detail | 12 Months Ended | |||||||||
Oct. 26, 2014 | ||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||
Balance Sheet Detail | Balance Sheet Detail | |||||||||
October 26, | October 27, | |||||||||
2014 | 2013 | |||||||||
(In millions) | ||||||||||
Inventories | ||||||||||
Customer service spares | $ | 316 | $ | 283 | ||||||
Raw materials | 405 | 361 | ||||||||
Work-in-process | 316 | 292 | ||||||||
Finished goods | 530 | 477 | ||||||||
$ | 1,567 | $ | 1,413 | |||||||
Included in finished goods inventory is $104 million at October 26, 2014, and $136 million at October 27, 2013, of newly-introduced systems at customer locations where the sales transaction did not meet Applied’s revenue recognition criteria as set forth in Note 1. Finished goods inventory includes $192 million and $177 million of evaluation inventory at October 26, 2014 and October 27, 2013, respectively. | ||||||||||
October 26, | October 27, | |||||||||
2014 | 2013 | |||||||||
(In millions) | ||||||||||
Other Current Assets | ||||||||||
Deferred income taxes, net | $ | 232 | $ | 323 | ||||||
Prepaid expenses | 172 | 135 | ||||||||
Prepaid income taxes and income taxes receivable | 79 | 178 | ||||||||
Other | 85 | 69 | ||||||||
$ | 568 | $ | 705 | |||||||
Useful Life | October 26, | October 27, | ||||||||
2014 | 2013 | |||||||||
(In years) | (In millions) | |||||||||
Property, Plant and Equipment, Net | ||||||||||
Land and improvements | $ | 156 | $ | 167 | ||||||
Buildings and improvements | 30-Mar | 1,227 | 1,217 | |||||||
Demonstration and manufacturing equipment | 5-Mar | 829 | 792 | |||||||
Furniture, fixtures and other equipment | 15-Mar | 575 | 589 | |||||||
Construction in progress | 61 | 52 | ||||||||
Gross property, plant and equipment | 2,848 | 2,817 | ||||||||
Accumulated depreciation | (1,987 | ) | (1,967 | ) | ||||||
$ | 861 | $ | 850 | |||||||
Depreciation expense was $191 million, $211 million and $198 million for fiscal 2014, 2013 and 2012, respectively. | ||||||||||
During fiscal 2013 and 2012, fixed asset impairment charges of $12 million and $20 million, respectively were recorded in relation to the Energy and Environmental Solutions segment restructuring plan, as discussed in Note 11, Restructuring Charges and Asset Impairments. | ||||||||||
October 26, | October 27, | |||||||||
2014 | 2013 | |||||||||
(In millions) | ||||||||||
Accounts Payable and Accrued Expenses | ||||||||||
Accounts payable | $ | 613 | $ | 582 | ||||||
Compensation and employee benefits | 524 | 417 | ||||||||
Warranty | 113 | 102 | ||||||||
Income taxes payable | 142 | 73 | ||||||||
Dividends payable | 122 | 121 | ||||||||
Other accrued taxes | 51 | 41 | ||||||||
Interest payable | 30 | 30 | ||||||||
Restructuring reserve | 9 | 39 | ||||||||
Other | 279 | 244 | ||||||||
$ | 1,883 | $ | 1,649 | |||||||
October 26, | October 27, | |||||||||
2014 | 2013 | |||||||||
(In millions) | ||||||||||
Customer Deposits and Deferred Revenue | ||||||||||
Customer deposits | $ | 286 | $ | 175 | ||||||
Deferred revenue | 654 | 619 | ||||||||
$ | 940 | $ | 794 | |||||||
Applied typically receives deposits on future deliverables from customers in the Energy and Environmental Solutions and Display segments. In certain instances, customer deposits may be received from customers in the Applied Global Services segment. | ||||||||||
October 26, | October 27, | |||||||||
2014 | 2013 | |||||||||
(In millions) | ||||||||||
Other Liabilities | ||||||||||
Deferred income taxes | $ | 32 | $ | 71 | ||||||
Income taxes payable | 225 | 174 | ||||||||
Defined and postretirement benefit plans | 208 | 193 | ||||||||
Other | 71 | 128 | ||||||||
$ | 536 | $ | 566 | |||||||
Business_Combinations
Business Combinations | 12 Months Ended | |||||
Oct. 26, 2014 | ||||||
Business Combinations [Abstract] | ||||||
Business Combinations | Business Combinations | |||||
Tokyo Electron Limited | ||||||
On September 24, 2013, Applied and TEL entered into a Business Combination Agreement, which was amended on February 14, 2014, to effect a strategic combination of their respective businesses into a new combined company. TEL, a Japanese corporation, is a global supplier of semiconductor and flat panel display production equipment, and a provider of technical support and services for semiconductor, flat panel display and photovoltaic panel production equipment. Under the terms of the Business Combination Agreement, TEL shareholders will receive 3.25 shares of the new combined company for every TEL share held. Applied shareholders will receive one share of the new combined company for every Applied share held. Based on the number of shares of Applied common stock and shares of TEL common stock expected to be issued and outstanding immediately prior to the closing of the transaction, it is anticipated that, immediately following the transaction, former Applied stockholders and former TEL shareholders will own approximately 68% and 32%, respectively, of the new combined company. | ||||||
The new combined company, Eteris N.V., will have dual headquarters in Tokyo and Santa Clara, and dual listing of its shares on the Tokyo Stock Exchange and NASDAQ, and will be incorporated in the Netherlands. In June 2014, the shareholders of Applied and TEL approved the proposed business combination. The closing of the transaction remains subject to customary conditions, including regulatory approvals. It is expected that the combined company will commence a $3.0 billion stock repurchase program targeted to be executed within 12 months following the closing of the transaction. | ||||||
The Business Combination Agreement contains mutual pre-closing covenants, including the obligation of Applied and TEL to conduct their businesses in the ordinary course consistent in all material respects with past practices. The agreement also contains termination rights for Applied and TEL and provides that upon certain events, such as a termination due to a change in recommendation by the other party or a termination relating to certain tax rulings, a termination fee of $400 million is payable. | ||||||
Varian Semiconductor Equipment Associates, Inc. | ||||||
On November 10, 2011, Applied completed the acquisition of Varian, a public company manufacturer of semiconductor processing equipment and the leading supplier of ion implantation equipment used by chip makers globally, for an aggregate purchase price of $4.2 billion in cash, net of cash acquired and assumed earned equity awards of $27 million, pursuant to an Agreement and Plan of Merger dated as of May 3, 2011. | ||||||
Applied allocated the purchase price of this acquisition to tangible and identifiable intangible assets acquired and liabilities assumed, based on their estimated fair values. These estimates were determined through established and generally accepted valuation techniques. Applied recorded $2.6 billion in goodwill, of which $1.8 billion was allocated to the Silicon Systems Group segment, and the remainder was allocated to the Applied Global Services segment. | ||||||
The following table summarizes the allocation of the assets acquired and liabilities assumed at the acquisition date: | ||||||
Estimated Fair Values | ||||||
(In millions) | ||||||
Fair value of net tangible assets acquired | $ | 892 | ||||
Goodwill | 2,604 | |||||
Purchased intangible assets | 1,365 | |||||
Purchase price allocated | $ | 4,861 | ||||
The following table presents details of the purchase price allocated to purchased intangible assets of Varian at the acquisition date: | ||||||
Useful | Purchased | |||||
Life | Intangible Assets | |||||
(In years) | (In millions) | |||||
Developed technology | 7-Jan | $ | 987 | |||
Customer relationships | 15 | 150 | ||||
In-process technology | 142 | |||||
Patents and trademarks | 10 | 69 | ||||
Backlog | 1 | 7 | ||||
Covenant not to compete | 2 | 10 | ||||
Total purchased intangible assets | $ | 1,365 | ||||
Other | ||||||
From time to time, Applied makes acquisitions of or investments in companies related to existing or new markets for Applied. Applied completed an acquisition during fiscal 2014 which was not significant to Applied's consolidated results of operations and financial position. Substantially all of the consideration was allocated to goodwill and acquisition-related intangible assets. See Note 9 Goodwill, Purchased Technology and Other Intangible Assets for more information. |
Goodwill_Purchased_Technology_
Goodwill, Purchased Technology and Other Intangible Assets | 12 Months Ended | |||||||||||||||||||||||
Oct. 26, 2014 | ||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||
Goodwill, Purchased Technology and Other Intangible Assets | Goodwill, Purchased Technology and Other Intangible Assets | |||||||||||||||||||||||
Goodwill and Purchased Intangible Assets | ||||||||||||||||||||||||
Applied’s methodology for allocating the purchase price relating to purchase acquisitions is determined through established and generally accepted valuation techniques. Goodwill is measured as the excess of the purchase price over the sum of the amounts assigned to tangible and identifiable intangible assets acquired less liabilities assumed. Applied assigns assets acquired (including goodwill) and liabilities assumed to one or more reporting units as of the date of acquisition. Typically, acquisitions relate to a single reporting unit and thus do not require the allocation of goodwill to multiple reporting units. If the products obtained in an acquisition are assigned to multiple reporting units, the goodwill is distributed to the respective reporting units as part of the purchase price allocation process. | ||||||||||||||||||||||||
Goodwill and purchased intangible assets with indefinite useful lives are not amortized, but are reviewed for impairment annually during the fourth quarter of each fiscal year and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The process of evaluating the potential impairment of goodwill and intangible assets requires significant judgment, especially in emerging markets. Applied regularly monitors current business conditions and considers other factors including, but not limited to, adverse industry or economic trends, restructuring actions and lower projections of profitability that may impact future operating results. | ||||||||||||||||||||||||
To test goodwill for impairment, Applied first performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, Applied then performs the two-step goodwill impairment test. Otherwise, the two-step goodwill impairment test is not required. Under the two-step goodwill impairment test, Applied would, in the first step, compare the estimated fair value of each reporting unit to its carrying value. Applied determines the fair value of each of its reporting units based on a weighting of income and market approaches. If the carrying value of a reporting unit exceeds its fair value, Applied would then perform the second step of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. If Applied determines that the carrying value of a reporting unit’s goodwill exceeds its implied fair value, Applied would record an impairment charge equal to the difference. Applied’s reporting units are consistent with the reportable segments identified in Note 16, Industry Segment Operations, which are based on the manner in which Applied operates its business and the nature of those operations. | ||||||||||||||||||||||||
In the fourth quarter of fiscal 2014, Applied performed an annual qualitative assessment to test goodwill for all of its reporting units for impairment. Applied determined that it was more likely than not that each of its reporting units' fair values exceeded their respective carrying values and that it was not necessary to perform the two-step goodwill impairment test for any of its reporting units. | ||||||||||||||||||||||||
During fiscal 2013 and 2012, the solar industry faced a deterioration in market conditions associated with manufacturing overcapacity and weak operating performance and outlook, resulting in uncertainties regarding the timing and nature of a recovery in solar capital equipment expenditures. Applied performed a two-step goodwill impairment test and, as a result, recorded $224 million and $421 million of goodwill impairment charges in its Energy and Environmental Solutions segment in fiscal 2013 and 2012, respectively. As of October 27, 2014, accumulated goodwill impairment charges amounted to $645 million all of which were recorded in the Energy and Environmental Solutions segment. | ||||||||||||||||||||||||
In fiscal 2013, Applied also performed an impairment test for long-lived assets associated with the Energy and Environmental Solutions reporting unit and determined that the majority of intangible assets were impaired, mostly due to the lower long-term revenue and profitability outlook associated with products related to these intangible assets. Accordingly, during fiscal 2013, Applied recorded an impairment charge of $54 million related to these intangible assets, which was the amount by which the carrying value of these intangible assets exceeded their estimated fair value, based on discounted projected cash flows. | ||||||||||||||||||||||||
Applied utilized an equal weighting of both the discounted cash flow method of the income approach and the guideline company method of the market approach to estimate the fair value of the Energy and Environmental Solutions reporting unit. The estimates used in the impairment testing were consistent with the discrete forecasts that Applied uses to manage its business, and considered the significant developments that occurred during the quarter. Under the discounted cash flow method, cash flows beyond the discrete forecasts were estimated using a terminal growth rate, which considered the long-term earnings growth rate specific to the Energy and Environmental Solutions reporting unit. The estimated future cash flows were discounted to present value using a discount rate that was the value-weighted average of the reporting unit's estimated cost of equity and debt derived using both known and estimated market metrics, and was adjusted to reflect risk factors that considered both the timing and risks associated with the estimated cash flows. The tax rate used in the discounted cash flow method reflected the international structure currently in place, which is consistent with the market participant perspective. Under the guideline company method, market multiples were applied to forecasted revenues and earnings before interest, taxes, depreciation and amortization. The market multiples used were consistent with comparable publicly-traded companies. | ||||||||||||||||||||||||
The evaluation of goodwill and intangible assets for impairment requires the exercise of significant judgment. In the event of future changes in business conditions, Applied will be required to reassess and update its forecasts and estimates used in future impairment analyses. If the results of these future analyses are lower than current estimates, a material impairment charge may result at that time. | ||||||||||||||||||||||||
Details of goodwill and other indefinite-lived intangible assets were as follows: | ||||||||||||||||||||||||
October 26, 2014 | October 27, 2013 | |||||||||||||||||||||||
Goodwill | Other | Total | Goodwill | Other | Total | |||||||||||||||||||
Intangible | Intangible | |||||||||||||||||||||||
Assets | Assets | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Silicon Systems Group | $ | 2,151 | $ | 103 | $ | 2,254 | $ | 2,151 | $ | 142 | $ | 2,293 | ||||||||||||
Applied Global Services | 1,027 | 6 | 1,033 | 1,027 | — | 1,027 | ||||||||||||||||||
Display | 126 | 18 | 144 | 116 | — | 116 | ||||||||||||||||||
Carrying amount | $ | 3,304 | $ | 127 | $ | 3,431 | $ | 3,294 | $ | 142 | $ | 3,436 | ||||||||||||
Other intangible assets that are not subject to amortization consist primarily of in-process technology, which will be subject to amortization upon commercialization. The fair value assigned to in-process technology was determined using the income approach taking into account estimates and judgments regarding risks inherent in the development process, including the likelihood of achieving technological success and market acceptance. If an in-process technology project is abandoned, the acquired technology attributable to the project will be written-off. | ||||||||||||||||||||||||
During fiscal 2014, goodwill and other indefinite lived intangible assets decreased by $5 million primarily due to commercialization of in-process technology in the Silicon Systems Group segment, partially offset by increases in goodwill and in-process technology as a result of an acquisition in the Display segment. The acquisition is not material to the consolidated financial position and results of operations of Applied. | ||||||||||||||||||||||||
A summary of Applied's purchased technology and intangible assets is set forth below: | ||||||||||||||||||||||||
October 26, | October 27, | |||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Purchased technology, net | $ | 636 | $ | 748 | ||||||||||||||||||||
Intangible assets - finite-lived, net | 188 | 213 | ||||||||||||||||||||||
Intangible assets - indefinite-lived | 127 | 142 | ||||||||||||||||||||||
Total | $ | 951 | $ | 1,103 | ||||||||||||||||||||
Finite-Lived Purchased Intangible Assets | ||||||||||||||||||||||||
Applied amortizes purchased intangible assets with finite lives using the straight-line method over the estimated economic lives of the assets, ranging from 1 to 15 years. | ||||||||||||||||||||||||
Applied evaluates long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset group may not be recoverable. Applied assesses the fair value of the assets based on the amount of the undiscounted future cash flow that the assets are expected to generate and recognizes an impairment loss when estimated undiscounted future cash flow expected to result from the use of the asset, plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When Applied identifies an impairment, Applied reduces the carrying value of the group of assets to comparable market values, when available and appropriate, or to its estimated fair value based on a discounted cash flow approach. | ||||||||||||||||||||||||
Intangible assets, such as purchased technology, are generally recorded in connection with a business acquisition. The value assigned to intangible assets is usually based on estimates and judgments regarding expectations for the success and life cycle of products and technology acquired. Applied evaluates the useful lives of its intangible assets each reporting period to determine whether events and circumstances require revising the remaining period of amortization. In addition, Applied reviews intangible assets for impairment when events or changes in circumstances indicate their carrying value may not be recoverable. Management considers such indicators as significant differences in actual product acceptance from the estimates, changes in the competitive and economic environments, technological advances, and changes in cost structure. | ||||||||||||||||||||||||
Details of finite-lived intangible assets were as follows: | ||||||||||||||||||||||||
October 26, 2014 | October 27, 2013 | |||||||||||||||||||||||
Purchased | Other | Total | Purchased | Other | Total | |||||||||||||||||||
Technology | Intangible | Technology | Intangible | |||||||||||||||||||||
Assets | Assets | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Gross carrying amount: | ||||||||||||||||||||||||
Silicon Systems Group | $ | 1,346 | $ | 252 | $ | 1,598 | $ | 1,301 | $ | 252 | $ | 1,553 | ||||||||||||
Applied Global Services | 28 | 44 | 72 | 28 | 44 | 72 | ||||||||||||||||||
Display | 110 | 33 | 143 | 110 | 33 | 143 | ||||||||||||||||||
Energy and Environmental Solutions | 5 | 17 | 22 | 5 | 15 | 20 | ||||||||||||||||||
Gross carrying amount | $ | 1,489 | $ | 346 | $ | 1,835 | $ | 1,444 | $ | 344 | $ | 1,788 | ||||||||||||
Accumulated amortization: | ||||||||||||||||||||||||
Silicon Systems Group | $ | (716 | ) | $ | (77 | ) | $ | (793 | ) | $ | (562 | ) | $ | (58 | ) | $ | (620 | ) | ||||||
Applied Global Services | (24 | ) | (44 | ) | (68 | ) | (23 | ) | (42 | ) | (65 | ) | ||||||||||||
Display | (110 | ) | (31 | ) | (141 | ) | (110 | ) | (29 | ) | (139 | ) | ||||||||||||
Energy and Environmental Solutions | (3 | ) | (6 | ) | (9 | ) | (1 | ) | (2 | ) | (3 | ) | ||||||||||||
Accumulated amortization | $ | (853 | ) | $ | (158 | ) | $ | (1,011 | ) | $ | (696 | ) | $ | (131 | ) | $ | (827 | ) | ||||||
Carrying amount | $ | 636 | $ | 188 | $ | 824 | $ | 748 | $ | 213 | $ | 961 | ||||||||||||
Details of amortization expense by segment for fiscal 2014, 2013 and 2012 were as follows: | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Silicon Systems Group | $ | 173 | $ | 172 | $ | 183 | ||||||||||||||||||
Applied Global Services | 3 | 5 | 9 | |||||||||||||||||||||
Display | 2 | 6 | 7 | |||||||||||||||||||||
Energy and Environmental Solutions | 6 | 16 | 25 | |||||||||||||||||||||
Total | $ | 184 | $ | 199 | $ | 224 | ||||||||||||||||||
For fiscal 2014, 2013 and 2012, amortization expense was charged to the following categories: | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Cost of products sold | $ | 159 | $ | 166 | $ | 185 | ||||||||||||||||||
Research, development and engineering | 1 | 1 | 1 | |||||||||||||||||||||
Marketing and selling | 21 | 26 | 30 | |||||||||||||||||||||
General and administrative | 3 | 6 | 8 | |||||||||||||||||||||
Total | $ | 184 | $ | 199 | $ | 224 | ||||||||||||||||||
As of October 26, 2014, future estimated amortization expense is expected to be as follows: | ||||||||||||||||||||||||
Amortization | ||||||||||||||||||||||||
Expense | ||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
2015 | 182 | |||||||||||||||||||||||
2016 | 175 | |||||||||||||||||||||||
2017 | 171 | |||||||||||||||||||||||
2018 | 170 | |||||||||||||||||||||||
2019 | 30 | |||||||||||||||||||||||
Thereafter | 96 | |||||||||||||||||||||||
Total | $ | 824 | ||||||||||||||||||||||
Borrowing_Facilities_and_LongT
Borrowing Facilities and Long-Term Debt | 12 Months Ended | |||||||||||
Oct. 26, 2014 | ||||||||||||
Debt Disclosure [Abstract] | ||||||||||||
Borrowing Facilities and Long Term-Debt | Borrowing Facilities and Long-Term Debt | |||||||||||
Applied has credit facilities for unsecured borrowings in various currencies of up to $1.6 billion, of which $1.5 billion is comprised of a committed revolving credit agreement with a group of banks that is scheduled to expire in May 2017. This agreement provides for borrowings in United States dollars at interest rates keyed to one of the two rates selected by Applied for each advance and includes financial and other covenants. Remaining credit facilities in the amount of approximately $75 million are with Japanese banks. Applied’s ability to borrow under these facilities is subject to bank approval at the time of the borrowing request, and any advances will be at rates indexed to the banks’ prime reference rate denominated in Japanese yen. No amounts were outstanding under any of these facilities at both October 26, 2014 and October 27, 2013 and Applied has not utilized these credit facilities. In connection with the proposed business combination with TEL, Applied intends to amend or replace its undrawn $1.5 billion unsecured revolving credit agreement. In fiscal 2011, Applied established a short-term commercial paper program of up to $1.5 billion. At October 26, 2014 and October 27, 2013, Applied did not have any commercial paper outstanding. | ||||||||||||
Long-term debt outstanding as of October 26, 2014 and October 27, 2013 was as follows: | ||||||||||||
Principal Amount | ||||||||||||
October 26, | October 27, | Effective | Interest | |||||||||
2014 | 2013 | Interest Rate | Pay Dates | |||||||||
(In millions) | ||||||||||||
2.650% Senior Notes Due 2016 | $ | 400 | $ | 400 | 2.67% | June 15, December 15 | ||||||
7.125% Senior Notes Due 2017 | 200 | 200 | 7.19% | April 15, October 15 | ||||||||
4.300% Senior Notes Due 2021 | 750 | 750 | 4.33% | June 15, December 15 | ||||||||
5.850% Senior Notes Due 2041 | 600 | 600 | 5.88% | June 15, December 15 | ||||||||
1,950 | 1,950 | |||||||||||
Total unamortized discount | (3 | ) | (4 | ) | ||||||||
Total long-term debt | $ | 1,947 | $ | 1,946 | ||||||||
Restructuring_Charges_and_Asse
Restructuring Charges and Asset Impairments | 12 Months Ended | |||||||||||||||||||||||
Oct. 26, 2014 | ||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||
Restructuring Charges and Asset Impairments | Restructuring Charges and Asset Impairments | |||||||||||||||||||||||
From time to time, Applied initiates restructuring activities to appropriately align its cost structure relative to prevailing economic and industry conditions and associated customer demand as well as in connection with certain acquisitions. Costs associated with restructuring actions can include termination benefits and related charges in addition to facility closure, contract termination and other related activities. | ||||||||||||||||||||||||
The following table summarizes major components of the restructuring and asset impairment charges during fiscal 2014, 2013 and 2012: | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
2012 Global Restructuring Plan | ||||||||||||||||||||||||
Severance and other employee-related costs | $ | 5 | $ | 39 | $ | 106 | ||||||||||||||||||
2012 EES Restructuring Plan | ||||||||||||||||||||||||
Severance and other employee-related costs | — | 8 | 27 | |||||||||||||||||||||
Contract cancellation and other costs | — | 6 | 1 | |||||||||||||||||||||
Asset impairments | — | 12 | 20 | |||||||||||||||||||||
Others | ||||||||||||||||||||||||
Severance and other employee-related costs | — | 2 | 14 | |||||||||||||||||||||
Contract cancellation and other costs | — | (4 | ) | — | ||||||||||||||||||||
$ | 5 | $ | 63 | $ | 168 | |||||||||||||||||||
Restructuring and asset impairment charges were recorded as follows: | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Silicon Systems Group | $ | — | $ | 1 | $ | 4 | ||||||||||||||||||
Applied Global Services | — | 2 | 15 | |||||||||||||||||||||
Energy and Environmental Solutions | — | 25 | 38 | |||||||||||||||||||||
Corporate Unallocated | 5 | 35 | 111 | |||||||||||||||||||||
Total | $ | 5 | $ | 63 | $ | 168 | ||||||||||||||||||
2012 Global Restructuring Plan | ||||||||||||||||||||||||
On October 3, 2012, Applied announced a restructuring plan (the 2012 Global Restructuring Plan) to realign its global workforce and enhance its ability to invest for growth. Under this plan, Applied implemented a voluntary retirement program and other workforce reduction actions. The voluntary retirement program was available to certain U.S. employees who met minimum age and length of service requirements, as well as other business-specific criteria. Applied implemented other workforce reduction actions globally across multiple business segments and functions, the extent of which depended on the number of employees who participated in the voluntary retirement program and other considerations. A total of approximately 1,300 positions were affected under this plan. As of January 26, 2014, principal activities related to this plan were complete. | ||||||||||||||||||||||||
During fiscal 2014, 2013 and 2012, Applied recognized $5 million, $39 million and $106 million, respectively, of employee-related costs in connection with the 2012 Global Restructuring Plan. Total costs incurred in implementing this plan were $150 million, none of which were allocated to the operating segments. | ||||||||||||||||||||||||
2012 EES Restructuring Plan | ||||||||||||||||||||||||
On May 10, 2012, Applied announced a plan (the 2012 EES Restructuring Plan) to restructure its Energy and Environmental Solutions segment in light of challenging industry conditions affecting the solar photovoltaic and light-emitting diode (LED) equipment markets. As part of this plan, Applied relocated certain manufacturing, business operations and customer support functions of its precision wafering systems business and ceased LED development activities. The 2012 EES Restructuring Plan also impacted certain LED support activities in the Applied Global Services segment. The 2012 EES Restructuring Plan impacted approximately 300 positions globally. As of October 27, 2013, principal activities related to this plan were complete. Total costs incurred in implementing this plan were $87 million, of which $13 million were inventory-related charges. | ||||||||||||||||||||||||
During fiscal 2013 and 2012, Applied recognized $26 million and $48 million respectively, of restructuring and asset impairment charges in connection with the 2012 EES Restructuring Plan. These costs were reported in the Energy and Environmental Solutions and Applied Global Services segments. As of October 26, 2014, there were no remaining severance accruals associated with restructuring reserves under this program. | ||||||||||||||||||||||||
Integration of Varian and Prior Year Restructuring Plans | ||||||||||||||||||||||||
During fiscal 2013 and 2012, Applied also recognized $2 million and $14 million, respectively, of severance and other employee-related costs in connection with the integration of Varian. These costs were reported in the Silicon Systems Group and Applied Global Services segments. As of October 26, 2014, there were no remaining severance accrual associated with restructuring reserves under this program. | ||||||||||||||||||||||||
Changes in restructuring reserves for fiscal 2014, 2013, and 2012 were as follows: | ||||||||||||||||||||||||
2012 Global Restructuring Plan | 2012 EES Restructuring Plan | Others | ||||||||||||||||||||||
Severance and Other Employee-Related Costs | Severance and Other Employee-Related Costs | Contract Cancellation and Other Costs | Severance and Other Employee-Related Costs | Contract Cancellation and Other Costs | Total | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Balance, October 30, 2011 | $ | — | $ | — | $ | — | $ | 6 | $ | 5 | $ | 11 | ||||||||||||
Provision for restructuring reserves | 106 | 27 | 1 | 14 | — | 148 | ||||||||||||||||||
Consumption of reserves | — | (11 | ) | — | (15 | ) | — | (26 | ) | |||||||||||||||
Balance, October 28, 2012 | $ | 106 | $ | 16 | $ | 1 | $ | 5 | $ | 5 | $ | 133 | ||||||||||||
Provision for restructuring reserves | 35 | 7 | 8 | 2 | — | 52 | ||||||||||||||||||
Consumption of reserves | (111 | ) | (18 | ) | (2 | ) | (5 | ) | — | (136 | ) | |||||||||||||
Adjustment of restructuring reserves | (4 | ) | — | (2 | ) | — | (4 | ) | (10 | ) | ||||||||||||||
Balance, October 27, 2013 | $ | 26 | $ | 5 | $ | 5 | $ | 2 | $ | 1 | $ | 39 | ||||||||||||
Provision for restructuring reserves | 7 | — | — | — | — | 7 | ||||||||||||||||||
Consumption of reserves | (27 | ) | (5 | ) | (1 | ) | (2 | ) | — | (35 | ) | |||||||||||||
Adjustment of restructuring reserves | (2 | ) | — | — | — | — | (2 | ) | ||||||||||||||||
Balance, October 26, 2014 | $ | 4 | — | 4 | $ | — | $ | 1 | $ | 9 | ||||||||||||||
Stockholders_Equity_Comprehens
Stockholders' Equity, Comprehensive Income and Share-Based Compensation | 12 Months Ended | |||||||||||||||||||||||
Oct. 26, 2014 | ||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||
Stockholders' Equity, Comprehensive Income and Share-Based Compensation | Stockholders’ Equity, Comprehensive Income and Share-Based Compensation | |||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||
Changes in the components of AOCI, net of tax, were as follows: | ||||||||||||||||||||||||
Unrealized Gain on Investments, Net | Unrealized Gain on Derivative Instruments Qualifying as Cash Flow Hedges | Defined and Postretirement Benefit Plans | Cumulative Translation Adjustments | Total | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Balance at October 27, 2013 | $ | 25 | $ | 2 | $ | (72 | ) | $ | 7 | $ | (38 | ) | ||||||||||||
Other comprehensive income (loss) before reclassifications | 8 | 4 | (36 | ) | (2 | ) | (26 | ) | ||||||||||||||||
Amounts reclassified out of AOCI | (9 | ) | (6 | ) | 3 | — | (12 | ) | ||||||||||||||||
Other comprehensive loss, net of tax | (1 | ) | (2 | ) | (33 | ) | (2 | ) | (38 | ) | ||||||||||||||
Balance at October 26, 2014 | $ | 24 | $ | — | $ | (105 | ) | $ | 5 | $ | (76 | ) | ||||||||||||
Stock Repurchase Program | ||||||||||||||||||||||||
On March 5, 2012, Applied's Board of Directors approved a stock repurchase program authorizing up to $3.0 billion in repurchases over the next three years ending in March 2015. Under this authorization, Applied purchases shares of its common stock on the open market. At October 26, 2014, $1.6 billion remained available for future stock repurchases under this repurchase program. | ||||||||||||||||||||||||
Applied did not repurchase any shares of its common stock during fiscal 2014. The following table summarizes Applied’s stock repurchases for fiscal 2013 and 2012: | ||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||
(In millions, except per share amounts) | ||||||||||||||||||||||||
Shares of common stock repurchased | 18 | 126 | ||||||||||||||||||||||
Cost of stock repurchased | $ | 245 | $ | 1,416 | ||||||||||||||||||||
Average price paid per share | $ | 13.6 | $ | 11.22 | ||||||||||||||||||||
Applied records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon reissuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid in capital. If Applied reissues treasury stock at an amount below its acquisition cost and additional paid in capital associated with prior treasury stock transactions is insufficient to cover the difference between the acquisition cost and the reissue price, this difference is recorded against retained earnings. | ||||||||||||||||||||||||
Dividends | ||||||||||||||||||||||||
During fiscal 2014, Applied’s Board of Directors declared four quarterly cash dividends of $0.10 per share each. During fiscal 2013, Applied’s Board of Directors declared three quarterly cash dividends of $0.10 per share each and one quarterly cash dividend of $0.09 per share. During fiscal 2012, Applied’s Board of Directors declared three quarterly cash dividends of $0.09 per share each and one quarterly cash dividend of $0.08 per share. Dividends declared during fiscal 2014, 2013 and 2012 amounted to $487 million, $469 million and $438 million, respectively. Applied currently anticipates that cash dividends will continue to be paid on a quarterly basis, although the declaration of any future cash dividend is at the discretion of the Board of Directors and will depend on Applied’s financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination by the Board of Directors that cash dividends are in the best interests of Applied’s stockholders. | ||||||||||||||||||||||||
Share-Based Compensation | ||||||||||||||||||||||||
Applied has a stockholder-approved equity plan, the Employee Stock Incentive Plan, which permits grants to employees of share-based awards, including stock options, restricted stock, restricted stock units, performance shares and performance units. In addition, the plan provides for the automatic grant of restricted stock units to non-employee directors and permits the grant of share-based awards to non-employee directors and consultants. Share-based awards made beginning in March 2012 under the plan may be subject to accelerated vesting under certain circumstances in the event of a change in control of Applied. Applied also has two Employee Stock Purchase Plans, one generally for United States employees and a second for employees of international subsidiaries (collectively, ESPP), which enable eligible employees to purchase Applied common stock. | ||||||||||||||||||||||||
During fiscal 2014, 2013, and 2012, Applied recognized share-based compensation expense related to stock options, ESPP shares, restricted stock, restricted stock units, performance shares and performance units. Total share-based compensation and related tax benefits were as follows: | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Share-based compensation | $ | 177 | $ | 162 | $ | 182 | ||||||||||||||||||
Tax benefit recognized | $ | 50 | $ | 45 | $ | 52 | ||||||||||||||||||
The effect of share-based compensation on the results of operations for fiscal 2014, 2013, and 2012 was as follows: | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Cost of products sold | $ | 53 | $ | 50 | $ | 54 | ||||||||||||||||||
Research, development, and engineering | 66 | 53 | 54 | |||||||||||||||||||||
Marketing and selling | 23 | 20 | 22 | |||||||||||||||||||||
General and administrative | 35 | 34 | 52 | |||||||||||||||||||||
Restructuring charge | — | 5 | — | |||||||||||||||||||||
Total | $ | 177 | $ | 162 | $ | 182 | ||||||||||||||||||
The cost associated with share-based awards that are subject solely to time-based vesting requirements, less expected forfeitures, is recognized over the awards’ service period for the entire award on a straight-line basis. The cost associated with performance-based equity awards is recognized for each tranche over the service period, based on an assessment of the likelihood that the applicable performance goals will be achieved. | ||||||||||||||||||||||||
At October 26, 2014, Applied had $241 million in total unrecognized compensation expense, net of estimated forfeitures, related to grants of share-based awards and shares issued under Applied’s ESPP, which will be recognized over a weighted average period of 2.5 years. At October 26, 2014, there were 176 million shares available for grants of share-based awards under the Employee Stock Incentive Plan, and an additional 34 million shares available for issuance under the ESPP. | ||||||||||||||||||||||||
Stock Options | ||||||||||||||||||||||||
Applied grants options to purchase, at future dates, shares of its common stock to employees and consultants. The exercise price of each stock option equals the fair market value of Applied common stock on the date of grant. Options typically vest over three to four years, subject to the grantee’s continued service with Applied through the scheduled vesting date, and expire no later than seven years from the grant date. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. This model was developed for use in estimating the value of publicly traded options that have no vesting restrictions and are fully transferable. Applied’s employee stock options have characteristics significantly different from those of publicly traded options. There were no stock options granted during fiscal 2014. The weighted average assumptions used in the model for the stock options granted and assumed are outlined below: | ||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||
Stock Options: | ||||||||||||||||||||||||
Dividend yield | 2.7 | % | 2.6 | % | ||||||||||||||||||||
Expected volatility | 29.5 | % | 38.7 | % | ||||||||||||||||||||
Risk-free interest rate | 1.44 | % | 0.52 | % | ||||||||||||||||||||
Expected life (in years) | 4.5 | 3.3 | ||||||||||||||||||||||
Information with respect to stock options is as follows: | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Aggregate intrinsic value of outstanding stock options | $ | 19 | $ | 49 | $ | 43 | ||||||||||||||||||
Total intrinsic value of stock options exercised | $ | 39 | $ | 63 | $ | 21 | ||||||||||||||||||
Total fair value of stock options vested | $ | 1 | $ | 4 | $ | 41 | ||||||||||||||||||
Cash received from stock option exercises | $ | 29 | $ | 88 | $ | 33 | ||||||||||||||||||
Actual tax benefit realized from options exercised | $ | 12 | $ | 19 | $ | 7 | ||||||||||||||||||
Stock option activity for fiscal 2014, 2013 and 2012 was as follows: | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
Shares | Weighted | Shares | Weighted | Shares | Weighted | |||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||
Exercise | Exercise | Exercise | ||||||||||||||||||||||
Price | Price | Price | ||||||||||||||||||||||
(In millions, except per share amounts) | ||||||||||||||||||||||||
Outstanding, beginning of year | 6 | $ | 9.12 | 21 | $ | 10.53 | 30 | $ | 13.05 | |||||||||||||||
Granted and assumed in Varian acquisition | — | $ | — | 1 | $ | 15.06 | 5 | $ | 4.85 | |||||||||||||||
Exercised | (4 | ) | $ | 7.85 | (11 | ) | $ | 8.16 | (4 | ) | $ | 7.3 | ||||||||||||
Canceled and forfeited | — | $ | — | (5 | ) | $ | 17.62 | (10 | ) | $ | 16.76 | |||||||||||||
Outstanding, end of year | 2 | $ | 10.87 | 6 | $ | 9.12 | 21 | $ | 10.53 | |||||||||||||||
Exercisable, end of year | 1 | $ | 7.97 | 5 | $ | 7.9 | 20 | $ | 10.71 | |||||||||||||||
The following table summarizes information with respect to options outstanding and exercisable at October 26, 2014: | ||||||||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||||||
Range of | Number of | Weighted | Weighted | Aggregate | Number of | Weighted | Aggregate | |||||||||||||||||
Exercise Prices | Shares | Average | Average | Intrinsic | Shares | Average | Intrinsic | |||||||||||||||||
Exercise | Remaining | Value | Exercise | Value | ||||||||||||||||||||
Price | Contractual | Price | ||||||||||||||||||||||
Life | ||||||||||||||||||||||||
(In millions) | (In years) | (In millions) | (In millions) | (In millions) | ||||||||||||||||||||
$3.36 — $9.99 | 1 | $ | 5.31 | 1.81 | $ | 12 | 1 | $ | 5.3 | $ | 12 | |||||||||||||
$10.00 — $15.06 | 1 | $ | 14.96 | 5.59 | 7 | — | $ | 14.71 | 2 | |||||||||||||||
2 | $ | 10.87 | 3.99 | $ | 19 | 1 | $ | 7.97 | $ | 14 | ||||||||||||||
Options exercisable and expected to become exercisable | 2 | $ | 10.87 | 3.99 | $ | 19 | ||||||||||||||||||
Option prices at the lower end of the range were principally attributable to stock options assumed in connection with the Varian acquisition in fiscal year 2012. | ||||||||||||||||||||||||
Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | ||||||||||||||||||||||||
Restricted stock units are converted into shares of Applied common stock upon vesting on a one-for-one basis. Restricted stock has the same rights as other issued and outstanding shares of Applied common stock except these shares generally have no right to dividends and are held in escrow until the award vests. Performance shares and performance units are awards that result in a payment to a grantee, generally in shares of Applied common stock on a one-for-one basis if performance goals and/or other vesting criteria established by the Human Resources and Compensation Committee of Applied's Board of Directors (the Committee) are achieved or the awards otherwise vest. Restricted stock units, restricted stock, performance shares and performance units typically vest over four years and vesting is usually subject to the grantee’s continued service with Applied and, in some cases, achievement of specified performance goals. The compensation expense related to the service-based awards is determined using the fair market value of Applied common stock on the date of the grant, and the compensation expense is recognized over the vesting period. | ||||||||||||||||||||||||
Restricted stock, performance shares and performance units granted to certain executive officers are subject to the achievement of specified performance goals (performance-based awards). These performance-based awards become eligible to vest only if performance goals are achieved and then actually will vest only if the grantee remains employed by Applied through each applicable vesting date. These performance-based awards require the achievement of targeted levels of adjusted annual operating profit margin. For the fiscal 2013 performance-based awards, additional shares become eligible for time-based vesting if Applied achieves certain levels of total shareholder return (TSR) relative to a peer group, comprised of companies in the Standard & Poor's 500 Information Technology Index, measured at the end of a two-year period. | ||||||||||||||||||||||||
The fair value of these performance-based awards is estimated on the date of grant and assumes that the specified performance goals will be achieved. If the goals are achieved, these awards vest over a specified remaining service period of generally three or four years, provided that the grantee remains employed by Applied through each scheduled vesting date. If the performance goals are not met as of the end of the performance period, no compensation expense is recognized and any previously recognized compensation expense is reversed. The expected cost of each award is reflected over the service period and is reduced for estimated forfeitures. | ||||||||||||||||||||||||
A summary of the changes in restricted stock units, restricted stock, performance shares and performance units outstanding under Applied’s equity compensation plans during fiscal 2014, 2013 and 2012 are presented below: | ||||||||||||||||||||||||
Shares | Weighted | Weighted | Aggregate | |||||||||||||||||||||
Average | Average | Intrinsic | ||||||||||||||||||||||
Grant Date | Remaining | Value | ||||||||||||||||||||||
Fair Value | Contractual Term | |||||||||||||||||||||||
(In millions, except per share amounts) | ||||||||||||||||||||||||
Non-vested restricted stock units, restricted stock, performance shares and performance units at October 30, 2011 | 28 | $ | 12.64 | 2.8 years | $ | 345 | ||||||||||||||||||
Granted | 19 | $ | 10.61 | |||||||||||||||||||||
Vested | (9 | ) | $ | 12.87 | ||||||||||||||||||||
Canceled | (2 | ) | $ | 12.26 | ||||||||||||||||||||
Non-vested restricted stock units, restricted stock, performance shares and performance units at October 28, 2012 | 36 | $ | 11.53 | 2.6 years | $ | 376 | ||||||||||||||||||
Granted | 19 | $ | 10.55 | |||||||||||||||||||||
Vested | (11 | ) | $ | 11.44 | ||||||||||||||||||||
Canceled | (6 | ) | $ | 11.28 | ||||||||||||||||||||
Non-vested restricted stock units, restricted stock, performance shares and performance units at October 27, 2013 | 38 | $ | 11.11 | 2.4 years | $ | 662 | ||||||||||||||||||
Granted | 11 | $ | 16.58 | |||||||||||||||||||||
Vested | (13 | ) | $ | 11.13 | ||||||||||||||||||||
Canceled | (3 | ) | $ | 11.72 | ||||||||||||||||||||
Non-vested restricted stock units, restricted stock, performance shares and performance units at October 26, 2014 | 33 | $ | 12.59 | 2.3 years | $ | 698 | ||||||||||||||||||
Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest | 30 | $ | 12.47 | 2.1 years | $ | 630 | ||||||||||||||||||
At October 26, 2014, 1 million additional performance-based awards could be earned upon certain levels of achievement of Applied's TSR relative to a peer group at a future date. | ||||||||||||||||||||||||
The actual tax benefit realized for the tax deductions from vested restricted stock units totaled $61 million in fiscal 2014, $42 million in fiscal 2013 and $27 million in fiscal 2012. | ||||||||||||||||||||||||
Employee Stock Purchase Plans | ||||||||||||||||||||||||
Under the ESPP, substantially all employees may purchase Applied common stock through payroll deductions at a price equal to 85 percent of the lower of the fair market value of Applied common stock at the beginning or end of each 6-month purchase period, subject to certain limits. Based on the Black-Scholes option pricing model, the weighted average estimated fair value of purchase rights under the ESPP was $4.56 per share for the year ended October 26, 2014, $3.08 per share for the year ended October 27, 2013 and $2.73 per share for the year ended October 28, 2012. The number of shares issued under the ESPP during fiscal October 26, 2014, October 27, 2013 and October 28, 2012 was 6 million, 7 million and 7 million, respectively. At October 26, 2014, there were 34 million available for future issuance under the ESPP. Compensation expense is calculated using the fair value of the employees’ purchase rights under the Black-Scholes model. Underlying assumptions used in the model for fiscal 2014, 2013 and 2012 are outlined in the following table: | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
ESPP: | ||||||||||||||||||||||||
Dividend yield | 1.96 | % | 2.8 | % | 3.01 | % | ||||||||||||||||||
Expected volatility | 26.3 | % | 24.8 | % | 29.6 | % | ||||||||||||||||||
Risk-free interest rate | 0.06 | % | 0.09 | % | 0.13 | % | ||||||||||||||||||
Expected life (in years) | 0.5 | 0.5 | 0.5 | |||||||||||||||||||||
Employee_Benefit_Plans
Employee Benefit Plans | 12 Months Ended | |||||||||||||||||||||||||||||||
Oct. 26, 2014 | ||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||||||||||
Employee Benefit Plans | Employee Benefit Plans | |||||||||||||||||||||||||||||||
Employee Bonus Plans | ||||||||||||||||||||||||||||||||
Applied has various employee bonus plans. A discretionary bonus plan provides for the distribution of a percentage of pre-tax income to Applied employees who are not participants in other performance-based incentive plans, up to a maximum percentage of eligible compensation. Other plans provide for bonuses to Applied’s executives and other key contributors based on the achievement of profitability and/or other specified performance criteria. Charges under these plans were $290 million for fiscal 2014, $269 million for fiscal 2013, and $271 million charges for fiscal 2012. | ||||||||||||||||||||||||||||||||
Employee Savings and Retirement Plan | ||||||||||||||||||||||||||||||||
Applied’s Employee Savings and Retirement Plan (the 401(k) Plan) is qualified under Sections 401(a) and (k) of the Internal Revenue Code (the Code). Eligible employees may make salary deferral and catch-up contributions under the 401(k) Plan on a pre-tax basis and/or (effective as of the first payroll period beginning on or after December 22, 2012) on a Roth basis, subject to an annual dollar limit established by the Code. | ||||||||||||||||||||||||||||||||
Applied matches 100% of participant salary and/or Roth deferral contributions up to the first 3% of eligible contribution and then 50% of every dollar between 4% and 6% of eligible contribution. Applied does not make matching contributions on any catch-up contributions made by participants. Plan participants who were employed by Applied or any of its affiliates on or after January 1, 2010 became 100% vested in their Applied matching contribution account balances. Applied’s matching contributions under the 401(k) Plan were approximately $29 million, net of $1 million in forfeitures for fiscal 2014 and fiscal 2013 and $37 million for fiscal 2012. | ||||||||||||||||||||||||||||||||
Defined Benefit Pension Plans of Foreign Subsidiaries and Other Post-Retirement Benefits | ||||||||||||||||||||||||||||||||
Several of Applied’s foreign subsidiaries have defined benefit pension plans covering substantially all of their eligible employees. Benefits under these plans are typically based on years of service and final average compensation levels. The plans are managed in accordance with applicable local statutes and practices. Applied deposits funds for certain of these plans with insurance companies, pension trustees, government-managed accounts, and/or accrues the expense for the unfunded portion of the benefit obligation on its Consolidated Financial Statements. Applied’s practice is to fund the various pension plans in amounts sufficient to meet the minimum requirements as established by applicable local governmental oversight and taxing authorities. Depending on the design of the plan, local custom and market circumstances, the liabilities of a plan may exceed qualified plan assets. The differences between the aggregate projected benefit obligations and aggregate plan assets of these plans have been recorded as liabilities by Applied and are included in other liabilities and accrued expenses in the Consolidated Balance Sheets. | ||||||||||||||||||||||||||||||||
Applied also has a U.S. post-retirement plan that provides certain medical and vision benefits to eligible retirees who are at least age 55 and whose years of service plus their age equals at least 65 at their date of retirement. An eligible retiree also may elect coverage for an eligible spouse or domestic partner who is not eligible for Medicare. Coverage under the plan generally ends for both the retiree and spouse or domestic partner upon becoming eligible for Medicare. In addition, Applied also has a post-retirement benefit plan as a result of the acquisition of Varian. Applied’s liability under these post-retirement plans, which was included in other liabilities in the Consolidated Balance Sheets, was $34 million at October 26, 2014 and October 27, 2013. | ||||||||||||||||||||||||||||||||
A summary of the changes in benefit obligations and plan assets, which includes post-retirement benefits, for fiscal October 26, 2014 and October 27, 2013 is presented below. | ||||||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||||||
(In millions, except percentages) | ||||||||||||||||||||||||||||||||
Change in projected benefit obligation | ||||||||||||||||||||||||||||||||
Beginning projected benefit obligation | $ | 445 | $ | 434 | ||||||||||||||||||||||||||||
Service cost | 17 | 20 | ||||||||||||||||||||||||||||||
Interest cost | 17 | 15 | ||||||||||||||||||||||||||||||
Plan participants’ contributions | 1 | 1 | ||||||||||||||||||||||||||||||
Actuarial (gain) loss | 62 | (16 | ) | |||||||||||||||||||||||||||||
Curtailments, settlements and special termination benefits | (26 | ) | (8 | ) | ||||||||||||||||||||||||||||
Foreign currency exchange rate changes | (22 | ) | 10 | |||||||||||||||||||||||||||||
Benefits paid | (12 | ) | (10 | ) | ||||||||||||||||||||||||||||
Plan amendments and business combinations | (3 | ) | (1 | ) | ||||||||||||||||||||||||||||
Ending projected benefit obligation | $ | 479 | $ | 445 | ||||||||||||||||||||||||||||
Ending accumulated benefit obligation | $ | 446 | $ | 409 | ||||||||||||||||||||||||||||
Range of assumptions to determine benefit obligations | ||||||||||||||||||||||||||||||||
Discount rate | 1.0% - 4.4% | 1.1% - 4.5% | ||||||||||||||||||||||||||||||
Rate of compensation increase | 2.0% - 4.0% | 2.0% - 4.7% | ||||||||||||||||||||||||||||||
Change in plan assets | ||||||||||||||||||||||||||||||||
Beginning fair value of plan assets | $ | 248 | $ | 214 | ||||||||||||||||||||||||||||
Return on plan assets | 20 | 18 | ||||||||||||||||||||||||||||||
Employer contributions | 48 | 24 | ||||||||||||||||||||||||||||||
Plan participants’ contributions | 1 | 1 | ||||||||||||||||||||||||||||||
Foreign currency exchange rate changes | (11 | ) | 8 | |||||||||||||||||||||||||||||
Divestitures, settlements and business combinations | (26 | ) | (7 | ) | ||||||||||||||||||||||||||||
Benefits paid | (12 | ) | (10 | ) | ||||||||||||||||||||||||||||
Ending fair value of plan assets | $ | 268 | $ | 248 | ||||||||||||||||||||||||||||
Funded status | $ | (211 | ) | $ | (197 | ) | ||||||||||||||||||||||||||
Amounts recognized in the consolidated balance sheets | ||||||||||||||||||||||||||||||||
Noncurrent asset | $ | 17 | $ | 9 | ||||||||||||||||||||||||||||
Current liability | (3 | ) | (4 | ) | ||||||||||||||||||||||||||||
Noncurrent liability | (225 | ) | (202 | ) | ||||||||||||||||||||||||||||
Total | $ | (211 | ) | $ | (197 | ) | ||||||||||||||||||||||||||
Estimated amortization from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year | ||||||||||||||||||||||||||||||||
Actuarial loss | $ | 6 | $ | 4 | ||||||||||||||||||||||||||||
Prior service cost (credit) | — | — | ||||||||||||||||||||||||||||||
Total | $ | 6 | $ | 4 | ||||||||||||||||||||||||||||
Amounts recognized in accumulated other comprehensive loss | ||||||||||||||||||||||||||||||||
Net actuarial loss | $ | 134 | $ | 91 | ||||||||||||||||||||||||||||
Prior service cost (credit) | (1 | ) | 2 | |||||||||||||||||||||||||||||
Total | $ | 133 | $ | 93 | ||||||||||||||||||||||||||||
Plans with projected benefit obligations in excess of plan assets | ||||||||||||||||||||||||||||||||
Projected benefit obligation | $ | 326 | $ | 438 | ||||||||||||||||||||||||||||
Fair value of plan assets | $ | 98 | $ | 233 | ||||||||||||||||||||||||||||
Plans with accumulated benefit obligations in excess of plan assets | ||||||||||||||||||||||||||||||||
Accumulated benefit obligation | $ | 297 | $ | 269 | ||||||||||||||||||||||||||||
Fair value of plan assets | $ | 98 | $ | 99 | ||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||||||
Plan assets — allocation | ||||||||||||||||||||||||||||||||
Equity securities | 39 | % | 37 | % | ||||||||||||||||||||||||||||
Debt securities | 38 | % | 36 | % | ||||||||||||||||||||||||||||
Insurance contracts | 15 | % | 19 | % | ||||||||||||||||||||||||||||
Other investments | 5 | % | 5 | % | ||||||||||||||||||||||||||||
Cash | 3 | % | 3 | % | ||||||||||||||||||||||||||||
The following table presents a summary of the ending fair value of the plan assets: | ||||||||||||||||||||||||||||||||
October 26, 2014 | October 27, 2013 | |||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Equity securities | $ | 38 | $ | 66 | $ | — | $ | 104 | $ | 27 | $ | 65 | $ | — | $ | 92 | ||||||||||||||||
Debt securities | 8 | 94 | — | 102 | 6 | 84 | — | 90 | ||||||||||||||||||||||||
Insurance contracts | — | — | 41 | 41 | — | — | 47 | 47 | ||||||||||||||||||||||||
Other investments | — | 12 | — | 12 | — | 12 | — | 12 | ||||||||||||||||||||||||
Cash | 9 | — | — | 9 | 7 | — | — | 7 | ||||||||||||||||||||||||
Total | $ | 55 | $ | 172 | $ | 41 | $ | 268 | $ | 40 | $ | 161 | $ | 47 | $ | 248 | ||||||||||||||||
The following table presents the activity in Level 3 instruments during fiscal 2014 and 2013: | ||||||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Balance, beginning of year | $ | 47 | $ | 49 | ||||||||||||||||||||||||||||
Actual return on plan assets: | ||||||||||||||||||||||||||||||||
Relating to assets still held at reporting date | — | (1 | ) | |||||||||||||||||||||||||||||
Purchases, sales, settlements, net | (2 | ) | (4 | ) | ||||||||||||||||||||||||||||
Currency impact | (4 | ) | 3 | |||||||||||||||||||||||||||||
Balance, end of year | $ | 41 | $ | 47 | ||||||||||||||||||||||||||||
Applied’s investment strategy for its defined benefit plans is to invest plan assets in a prudent manner, maintaining well-diversified portfolios with the long-term objective of meeting the obligations of the plans as they come due. Asset allocation decisions are typically made by plan fiduciaries with input from Applied’s international pension committee. Applied’s asset allocation strategy incorporates a sufficient equity exposure in order for the plans to benefit from the expected better long-term performance of equities relative to the plans’ liabilities. Applied retains investment managers, where appropriate, to manage the assets of the plans. Performance of investment managers is monitored by plan fiduciaries with the assistance of local investment consultants. The investment managers make investment decisions within the guidelines set forth by plan fiduciaries. Risk management practices include diversification across asset classes and investment styles, and periodic rebalancing toward target asset allocation ranges. Investment managers may use derivative instruments for efficient portfolio management purposes. Plan assets do not include any of Applied’s own equity or debt securities. | ||||||||||||||||||||||||||||||||
A summary of the components of net periodic benefit costs and the weighted average assumptions used for net periodic benefit cost and benefit obligation calculations for fiscal 2014, 2013 and 2012 is presented below. | ||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||
(In millions, except percentages) | ||||||||||||||||||||||||||||||||
Components of net periodic benefit cost | ||||||||||||||||||||||||||||||||
Service cost | $ | 17 | $ | 20 | $ | 16 | ||||||||||||||||||||||||||
Interest cost | 17 | 15 | 14 | |||||||||||||||||||||||||||||
Expected return on plan assets | (14 | ) | (12 | ) | (11 | ) | ||||||||||||||||||||||||||
Amortization of actuarial loss and prior service credit | 4 | 6 | — | |||||||||||||||||||||||||||||
Settlement and curtailment loss | 3 | — | 6 | |||||||||||||||||||||||||||||
Net periodic benefit cost | $ | 27 | $ | 29 | $ | 25 | ||||||||||||||||||||||||||
Weighted average assumptions | ||||||||||||||||||||||||||||||||
Discount rate | 3.68 | % | 3.46 | % | 4.53 | % | ||||||||||||||||||||||||||
Expected long-term return on assets | 5.64 | % | 5.38 | % | 5.91 | % | ||||||||||||||||||||||||||
Rate of compensation increase | 3.29 | % | 3.07 | % | 3.09 | % | ||||||||||||||||||||||||||
Asset return assumptions are derived based on actuarial and statistical methodologies, from analysis of long-term historical data relevant to the country in which each plan is in effect and the investments applicable to the corresponding plan. The discount rate for each plan was derived by reference to appropriate benchmark yields on high quality corporate bonds, allowing for the approximate duration of both plan obligations and the relevant benchmark yields. | ||||||||||||||||||||||||||||||||
Future expected benefit payments for the pension plans and the post-retirement plan over the next ten fiscal years are as follows: | ||||||||||||||||||||||||||||||||
Benefit Payments | ||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
2015 | $ | 12 | ||||||||||||||||||||||||||||||
2016 | 13 | |||||||||||||||||||||||||||||||
2017 | 13 | |||||||||||||||||||||||||||||||
2018 | 14 | |||||||||||||||||||||||||||||||
2019 | 14 | |||||||||||||||||||||||||||||||
2020-2024 | 81 | |||||||||||||||||||||||||||||||
$ | 147 | |||||||||||||||||||||||||||||||
Company contributions to these plans for fiscal 2015 are expected to be approximately $9 million. | ||||||||||||||||||||||||||||||||
Executive Deferred Compensation Plans | ||||||||||||||||||||||||||||||||
Applied sponsors two unfunded deferred compensation plans, the Executive Deferred Compensation Plan (Predecessor EDCP) and the 2005 Executive Deferred Compensation Plan (2005 EDCP), under which certain employees may elect to defer a portion of their following year’s eligible earnings. The Predecessor EDCP was frozen as of December 31, 2004 such that no new deferrals could be made under the plan after that date and the plan would qualify for “grandfather” relief under Section 409A of the Code. The Predecessor EDCP participant accounts continue to be maintained under the plan and credited with deemed interest. The 2005 EDCP was implemented by Applied effective as of January 1, 2005 and is intended to comply with the requirements of Section 409A of the Code. The ability to elect new deferrals of compensation under the 2005 EDCP was suspended effective as of October 1, 2014. In addition, Applied also sponsors a non-qualified deferred compensation plan as a result of the acquisition of Varian. Amounts payable, including accrued deemed interest, totaled $40 million at October 26, 2014, of which $35 million was included in accounts payable and accrued expenses and $5 million was included in other liabilities in the Consolidated Balance Sheets. Amounts payable, including accrued deemed interest, totaled $49 million at October 27, 2013, which was included in other liabilities in the Consolidated Balance Sheets. Under the Predecessor EDCP and 2005 EDCP, in the event of change of control (as defined under these plans), the distribution of all deferred balances would be required. |
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||||
Oct. 26, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Income Taxes | Income Taxes | |||||||||||
The components of income before income taxes for fiscal 2014, 2013 and 2012 were as follows: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(In millions) | ||||||||||||
U.S. | $ | 612 | $ | 194 | $ | 381 | ||||||
Foreign | 836 | 156 | (65 | ) | ||||||||
$ | 1,448 | $ | 350 | $ | 316 | |||||||
The components of the provision for income taxes for fiscal 2014, 2013 and 2012 were as follows: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(In millions) | ||||||||||||
Current: | ||||||||||||
U.S. | $ | 270 | $ | 3 | $ | 74 | ||||||
Foreign | 97 | 72 | 75 | |||||||||
State | 27 | 2 | 8 | |||||||||
394 | 77 | 157 | ||||||||||
Deferred: | ||||||||||||
U.S. | (9 | ) | 34 | 52 | ||||||||
Foreign | (3 | ) | (19 | ) | (4 | ) | ||||||
State | (6 | ) | 2 | 2 | ||||||||
(18 | ) | 17 | 50 | |||||||||
$ | 376 | $ | 94 | $ | 207 | |||||||
A reconciliation between the statutory U.S. federal income tax rate of 35 percent and Applied’s actual effective income tax rate for fiscal 2014, 2013 and 2012 is presented below: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Tax provision at U.S. statutory rate | 35 | % | 35 | % | 35 | % | ||||||
Resolutions from prior years’ income tax filings | 2 | (4.7 | ) | (6.0 | ) | |||||||
Effect of foreign operations taxed at various rates | (10.9 | ) | (21.1 | ) | (8.5 | ) | ||||||
State income taxes, net of federal benefit | 1 | 0.8 | 2 | |||||||||
Research and other tax credits | (0.3 | ) | (5.4 | ) | (1.0 | ) | ||||||
Production benefit | (1.3 | ) | (1.0 | ) | (8.0 | ) | ||||||
Acquisition costs | 0.8 | — | — | |||||||||
Goodwill impairment | — | 22.5 | 47 | |||||||||
Share-based compensation | 0.4 | 2.2 | 4 | |||||||||
Other | (0.7 | ) | (1.4 | ) | 1 | |||||||
26 | % | 26.9 | % | 65.5 | % | |||||||
The effective tax rate for fiscal 2014 was lower than the rate for fiscal 2013 due primarily to nondeductible goodwill impairment charges in fiscal 2013, offset by resolutions and changes related to prior years and expiration of the U.S. federal research and development tax credit. The effective tax rate for fiscal 2013 was significantly lower than the rate for fiscal 2012 due primarily to the geographic composition of Applied's pre-tax income, lower nondeductible goodwill impairment charges, and reinstatement of the U.S. federal research and development tax credit retroactive to its expiration in December 2012. These reductions were partially offset by a lower benefit in fiscal 2013 from the U.S. federal domestic production deduction. | ||||||||||||
In the reconciliation between the statutory U.S. federal income tax rate and the actual effective income tax rate for fiscal 2014, the effect of foreign operations taxed at various rates represents the difference between an income tax provision at the U.S. federal statutory income tax rate and the recorded income tax provision, with the difference expressed as a percentage of worldwide income before income taxes. This effect is substantially related to the tax effect of foreign income before income taxes generated in jurisdictions with lower statutory tax rates. The foreign operations with the most significant effective tax rate impact are Singapore and Israel. The fiscal 2014 statutory tax rates for Singapore and Israel are 17% and 26.5%, respectively. Applied has been granted tax holidays for both jurisdictions that expire in fiscal 2025 and fiscal 2017, respectively, excluding potential renewals and subject to certain conditions with which Applied expects to comply. The tax benefit arising from these tax holidays was $85 million for fiscal 2014 or $0.07 per diluted share. | ||||||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of deferred income tax assets and liabilities were as follows: | ||||||||||||
October 26, | October 27, | |||||||||||
2014 | 2013 | |||||||||||
(In millions) | ||||||||||||
Deferred tax assets: | ||||||||||||
Allowance for doubtful accounts | $ | 26 | $ | 27 | ||||||||
Inventory reserves and basis difference | 128 | 134 | ||||||||||
Installation and warranty reserves | 18 | 14 | ||||||||||
Accrued liabilities | 123 | 138 | ||||||||||
Deferred revenue | 32 | 27 | ||||||||||
Tax credits and net operating losses | 160 | 182 | ||||||||||
Deferred compensation | 44 | 33 | ||||||||||
Share-based compensation | 57 | 60 | ||||||||||
Fixed assets | 16 | (34 | ) | |||||||||
Other | 27 | 13 | ||||||||||
Gross deferred tax assets | 631 | 594 | ||||||||||
Valuation allowance | (173 | ) | (116 | ) | ||||||||
Total deferred tax assets | 458 | 478 | ||||||||||
Deferred tax liabilities: | ||||||||||||
Intangible assets | (92 | ) | (82 | ) | ||||||||
Undistributed foreign earnings | (87 | ) | (75 | ) | ||||||||
Foreign exchange | (12 | ) | (18 | ) | ||||||||
Total gross deferred tax liabilities | (191 | ) | (175 | ) | ||||||||
Net deferred tax assets | $ | 267 | $ | 303 | ||||||||
The following table presents the breakdown between current and non-current net deferred tax assets and liabilities: | ||||||||||||
October 26, | October 27, | |||||||||||
2014 | 2013 | |||||||||||
(In millions) | ||||||||||||
Current deferred tax asset | $ | 232 | $ | 323 | ||||||||
Non-current deferred tax asset | 67 | 53 | ||||||||||
Current deferred tax liability | — | (2 | ) | |||||||||
Non-current deferred tax liability | (32 | ) | (71 | ) | ||||||||
$ | 267 | $ | 303 | |||||||||
Current deferred tax liabilities are included in accounts payable and accrued expenses on the Consolidated Balance Sheets and non-current deferred tax liabilities are included in other liabilities on the Consolidated Balance Sheets. | ||||||||||||
A valuation allowance is recorded to reflect the estimated amount of deferred tax assets that may not be realized. During fiscal 2014, the valuation allowance against current state research and development credit carryforwards increased by $39 million and the valuation allowance against foreign deferred tax assets increased by $18 million. | ||||||||||||
For fiscal 2014, U.S. income taxes have not been provided for approximately $2.7 billion of cumulative undistributed earnings of several foreign subsidiaries. Applied intends to reinvest these earnings indefinitely in operations outside of the U.S. If these earnings were distributed to the United States in the form of dividends or otherwise, or if the shares of the relevant foreign subsidiaries were sold or otherwise transferred, Applied would be subject to additional U.S. income taxes (subject to an adjustment for foreign tax credits) and foreign withholding taxes. Determination of the amount of unrecognized deferred income tax liability related to these earnings is not practicable. | ||||||||||||
At October 26, 2014, Applied has state research and development tax credit carryforwards of $146 million, including $112 million of credits that are carried over until exhausted and $34 million which are carried over for 15 years and begin to expire in fiscal 2021. Applied has a net operating loss carryover in state jurisdictions of $45 million which begin to expire in fiscal 2018. Management believes it is more likely than not that all loss and tax credit carryovers at October 26, 2014, net of valuation allowance, will be utilized in future periods. | ||||||||||||
Applied’s income taxes payable have been reduced by the tax benefits associated with employee stock option transactions. These benefits, credited directly to stockholders’ equity with a corresponding reduction to taxes payable, amounted to $27 million for fiscal 2014, $11 million for fiscal 2013, and $2 million for fiscal 2012. | ||||||||||||
Applied maintains liabilities for uncertain tax positions. These liabilities involve considerable judgment and estimation and are continuously monitored by management based on the best information available. A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows: | ||||||||||||
2014 | 2013 | |||||||||||
(In millions) | ||||||||||||
Beginning balance of gross unrecognized tax benefits | $ | 194 | $ | 174 | ||||||||
Settlements with tax authorities | (143 | ) | (15 | ) | ||||||||
Lapses of statutes of limitation | (2 | ) | (15 | ) | ||||||||
Increases in tax positions for current year | 52 | 48 | ||||||||||
Increases in tax positions for prior years | 42 | 2 | ||||||||||
Decreases in tax positions for prior years | (9 | ) | — | |||||||||
Ending balance of gross unrecognized tax benefits | $ | 134 | $ | 194 | ||||||||
In the provision for income taxes in the Consolidated Statement of Operations, tax expense of $18 million was realized in fiscal 2014 and a tax benefit of $1 million was realized in fiscal 2013 related to interest and penalties on unrecognized tax benefits. The liability for interest and penalties was $25 million as of October 26, 2014 and $7 million as of October 27, 2013 and was classified as a non-current liability in the Consolidated Balance Sheets. | ||||||||||||
Included in the ending balance of unrecognized tax benefits for fiscal 2014 and fiscal 2013 are $124 million and $183 million, respectively, of tax benefits that, if recognized, would affect the effective tax rate. Also included in the ending balance of unrecognized tax benefits for fiscal 2014 and fiscal 2013 are $9 million and $10 million respectively, of tax benefits that, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes. | ||||||||||||
In fiscal 2014, Applied received a refund of $18 million, including interest, as a result of settling an audit of fiscal 2008 through fiscal 2012 in Korea, and received a refund of $17 million, including interest, as a result of settling an Internal Revenue Service (IRS) audit of Varian for fiscal 2010. These settlements resulted in the recognition of a tax benefit of $3 million in the Consolidated Statement of Operations. In fiscal 2013, Applied received a refund of $31 million, including interest, as a result of settling an IRS audit of fiscal 2008 and fiscal 2009. This resulted in the recognition of a tax benefit of $12 million in the Consolidated Statement of Operations. In fiscal 2013, Applied paid $14 million to the IRS as part of an ongoing audit of Varian for fiscal 2010 through fiscal 2012. No tax expense or benefit was recognized. | ||||||||||||
A number of Applied’s tax returns remain subject to examination by taxing authorities. These include U.S. federal returns for fiscal 2010 and later years, California returns for fiscal 2010 and later years, tax returns for certain other states for fiscal 2010 and later years, and tax returns in certain jurisdictions outside of the United States for fiscal 2007 and later years. | ||||||||||||
The timing of the resolution of income tax examinations, as well as the amounts and timing of various tax payments that may be part of the settlement process, is highly uncertain. This could cause large fluctuations in the balance sheet classification of current assets and non-current assets and liabilities. Applied continues to have ongoing negotiations with various taxing authorities throughout the year. |
Warranty_Guarantees_Commitment
Warranty, Guarantees, Commitments and Contingencies | 12 Months Ended | |||||||
Oct. 26, 2014 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||
Warranty, Guarantees, Commitments and Contingencies | Warranty, Guarantees, Commitments and Contingencies | |||||||
Leases | ||||||||
Applied leases some of its facilities and equipment under non-cancelable operating leases and has options to renew most leases, with rentals to be negotiated. Total rent expense was $37 million for fiscal 2014, $36 million for fiscal 2013, and $38 million for fiscal 2012. | ||||||||
As of October 26, 2014, future minimum lease payments are expected to be as follows: | ||||||||
Lease Payments | ||||||||
(In millions) | ||||||||
2015 | $ | 28 | ||||||
2016 | 18 | |||||||
2017 | 10 | |||||||
2018 | 6 | |||||||
2019 | 3 | |||||||
Thereafter | 5 | |||||||
$ | 70 | |||||||
Warranty | ||||||||
Changes in the warranty reserves during fiscal 2014 and 2013 were as follows: | ||||||||
2014 | 2013 | |||||||
(In millions) | ||||||||
Beginning balance | $ | 102 | $ | 119 | ||||
Provisions for warranty | 115 | 103 | ||||||
Consumption of reserves | (104 | ) | (120 | ) | ||||
Ending balance | $ | 113 | $ | 102 | ||||
Applied products are generally sold with a 12-month warranty period following installation. The provision for the estimated cost of warranty is recorded when revenue is recognized. Parts and labor are covered under the terms of the warranty agreement. The warranty provision is based on historical experience by product, configuration and geographic region. Quarterly warranty consumption is generally associated with sales that occurred during the preceding four quarters, and quarterly warranty provisions are generally related to the current quarter’s sales. | ||||||||
Guarantees | ||||||||
In the ordinary course of business, Applied provides standby letters of credit or other guarantee instruments to third parties as required for certain transactions initiated by either Applied or its subsidiaries. As of October 26, 2014, the maximum potential amount of future payments that Applied could be required to make under these guarantee agreements was approximately $46 million. Applied has not recorded any liability in connection with these guarantee agreements beyond that required to appropriately account for the underlying transaction being guaranteed. Applied does not believe, based on historical experience and information currently available, that it is probable that any amounts will be required to be paid under these guarantee agreements. | ||||||||
Applied also has agreements with various banks to facilitate subsidiary banking operations worldwide, including overdraft arrangements, issuance of bank guarantees, and letters of credit. As of October 26, 2014, Applied Materials Inc. has provided parent guarantees to banks for approximately $102 million to cover these arrangements. | ||||||||
Legal Matters | ||||||||
Korea Criminal Proceedings | ||||||||
In 2010, the Seoul Eastern District Court began hearings on indictments brought by the Seoul Prosecutor's Office for the Eastern District of Korea (the Prosecutor's Office) alleging that employees of several companies improperly received and used confidential information belonging to Samsung Electronics Co., Ltd. (Samsung), a major Applied customer based in Korea. The individuals charged included the former head of Applied Materials Korea (AMK), who at the time of the indictment was a vice president of Applied Materials, Inc., and certain other AMK employees. Neither Applied nor any of its subsidiaries was named as a party to the proceedings. Hearings on these matters concluded in November 2012 and the Court issued its decision on February 7, 2013. As part of the ruling, nine AMK employees (including the former head of AMK) were acquitted of all charges, while one AMK employee was found guilty on some of the charges and received a suspended jail sentence. The Prosecutor's Office and various individuals appealed the matter to the High Court. On June 20, 2014, the High Court rendered its decision, finding all defendants not guilty, including all ten AMK employees. The prosecutor has appealed the High Court decision to the Korean Supreme Court. | ||||||||
Other Matters | ||||||||
From time to time, Applied receives notification from third parties, including customers and suppliers, seeking indemnification, litigation support, payment of money or other actions by Applied in connection with claims made against them. In addition, from time to time, Applied receives notification from third parties claiming that Applied may be or is infringing or misusing their intellectual property or other rights. Applied also is subject to various other legal proceedings and claims, both asserted and unasserted, that arise in the ordinary course of business. | ||||||||
Although the outcome of the above-described matters, claims and proceedings cannot be predicted with certainty, Applied does not believe that any will have a material effect on its consolidated financial condition or results of operations. |
Industry_Segment_Operations
Industry Segment Operations | 12 Months Ended | |||||||||||||||||||
Oct. 26, 2014 | ||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||
Industry Segment Operations | Industry Segment Operations | |||||||||||||||||||
Applied’s four reportable segments are: Silicon Systems Group, Applied Global Services, Display, and Energy and Environmental Solutions. As defined under the accounting literature, Applied’s chief operating decision-maker has been identified as the President and Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Segment information is presented based upon Applied’s management organization structure as of October 26, 2014 and the distinctive nature of each segment. Future changes to this internal financial structure may result in changes to Applied’s reportable segments. | ||||||||||||||||||||
Each reportable segment is separately managed and has separate financial results that are reviewed by Applied’s chief operating decision-maker. Each reportable segment contains closely related products that are unique to the particular segment. Segment operating income is determined based upon internal performance measures used by Applied’s chief operating decision-maker. | ||||||||||||||||||||
Applied derives the segment results directly from its internal management reporting system. The accounting policies Applied uses to derive reportable segment results are substantially the same as those used for external reporting purposes. Management measures the performance of each reportable segment based upon several metrics including orders, net sales and operating income. Management uses these results to evaluate the performance of, and to assign resources to, each of the reportable segments. Applied does not allocate to its reportable segments certain operating expenses that it manages separately at the corporate level, which include costs related to share-based compensation; certain management, finance, legal, human resources, and research, development and engineering functions provided at the corporate level; and unabsorbed information technology and occupancy. In addition, Applied does not allocate to its reportable segments restructuring and asset impairment charges and any associated adjustments related to restructuring actions, unless these actions pertain to a specific reportable segment. Segment operating income excludes interest income/expense and other financial charges and income taxes. Management does not consider the unallocated costs in measuring the performance of the reportable segments. | ||||||||||||||||||||
The Silicon Systems Group segment includes semiconductor capital equipment for etch, rapid thermal processing, deposition, chemical mechanical planarization, metrology and inspection, wafer packaging, and ion implantation. | ||||||||||||||||||||
The Applied Global Services segment includes technically differentiated products and services to improve operating efficiency, reduce operating costs and lessen the environmental impact of semiconductor, display and solar customers' factories. Applied Global Services’ products consist of spares, services, certain earlier generation products, remanufactured equipment, and products that have reached a particular stage in the product lifecycle. Customer demand for these products and services is fulfilled through a global distribution system with trained service engineers located in close proximity to customer sites. | ||||||||||||||||||||
The Display segment includes products for manufacturing LCDs, organic light-emitting diodes (OLEDs), and other display technologies for TVs, personal computers, tablets, smart phones, and other consumer-oriented devices. | ||||||||||||||||||||
The Energy and Environmental Solutions segment includes products for fabricating solar photovoltaic cells and modules, high throughput roll-to-roll deposition equipment for flexible electronics and other applications. | ||||||||||||||||||||
In November 2011, Applied completed its acquisition of Varian. Beginning in the first quarter of fiscal 2012, the acquired business is primarily included in the results for the Silicon Systems Group and Applied Global Services segments, with certain corporate functions included in corporate and unallocated costs. | ||||||||||||||||||||
With the acquisition of Varian, Applied acquired ion implantation technology for semiconductor as well as for c-Si solar cell manufacturing, which was recorded under the Silicon Systems Group segment in fiscal 2012. In fiscal 2013, Applied began marketing the solar implant products commercially through its Energy and Environmental Solutions segment. Accordingly, effective in the first quarter of fiscal 2013, Applied accounts for its solar implant products under the Energy and Environmental Solutions segment. The effect of the solar implant products was not material to the operations of either the Silicon Systems Group or Energy and Environmental Solutions segments. | ||||||||||||||||||||
Information for each reportable segment as of October 26, 2014, October 27, 2013 and October 28, 2012 and for the fiscal years then ended, is as follows: | ||||||||||||||||||||
Net Sales | Operating | Depreciation/ | Capital | Segment | ||||||||||||||||
Income (Loss) | Amortization | Expenditures | Assets | |||||||||||||||||
(In millions) | ||||||||||||||||||||
2014:00:00 | ||||||||||||||||||||
Silicon Systems Group | $ | 5,978 | $ | 1,391 | $ | 268 | $ | 134 | $ | 5,508 | ||||||||||
Applied Global Services | 2,200 | 573 | 11 | 7 | 2,042 | |||||||||||||||
Display | 615 | 129 | 5 | 4 | 423 | |||||||||||||||
Energy and Environmental Solutions | 279 | 15 | 9 | 1 | 173 | |||||||||||||||
Total Segment | $ | 9,072 | $ | 2,108 | $ | 293 | $ | 146 | $ | 8,146 | ||||||||||
2013:00:00 | ||||||||||||||||||||
Silicon Systems Group | $ | 4,775 | $ | 876 | $ | 260 | $ | 118 | $ | 5,525 | ||||||||||
Applied Global Services | 2,023 | 436 | 13 | 7 | 1,958 | |||||||||||||||
Display | 538 | 74 | 8 | 6 | 293 | |||||||||||||||
Energy and Environmental Solutions | 173 | (433 | ) | 22 | 1 | 183 | ||||||||||||||
Total Segment | $ | 7,509 | $ | 953 | $ | 303 | $ | 132 | $ | 7,959 | ||||||||||
2012:00:00 | ||||||||||||||||||||
Silicon Systems Group | $ | 5,536 | $ | 1,243 | $ | 256 | $ | 71 | $ | 5,106 | ||||||||||
Applied Global Services | 2,285 | 502 | 17 | 8 | 2,035 | |||||||||||||||
Display | 473 | 25 | 8 | 1 | 278 | |||||||||||||||
Energy and Environmental Solutions | 425 | (668 | ) | 38 | 6 | 513 | ||||||||||||||
Total Segment | $ | 8,719 | $ | 1,102 | $ | 319 | $ | 86 | $ | 7,932 | ||||||||||
Operating results for fiscal 2014, 2013 and 2012 included restructuring charges and asset impairments as discussed in detail in Note 11, Restructuring Charges and Asset Impairments. | ||||||||||||||||||||
Reconciliations of segment operating results to Applied consolidated totals for fiscal 2014, 2013 and 2012 are as follows: | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
(In millions) | ||||||||||||||||||||
Total segment operating income | $ | 2,108 | $ | 953 | $ | 1,102 | ||||||||||||||
Corporate and unallocated costs | (540 | ) | (462 | ) | (580 | ) | ||||||||||||||
Restructuring charges and asset impairments | (5 | ) | (35 | ) | (111 | ) | ||||||||||||||
Certain items associated with announced business combination | (73 | ) | (17 | ) | — | |||||||||||||||
Gain (loss) on derivative associated with announced business combination | 30 | (7 | ) | — | ||||||||||||||||
Income from operations | $ | 1,520 | $ | 432 | $ | 411 | ||||||||||||||
Corporate and unallocated costs for fiscal 2012 included deal and other costs related to completed acquisitions of $45 million. | ||||||||||||||||||||
Reconciliations of depreciation and amortization expense to Applied consolidated totals for fiscal 2014, 2013 and 2012 are as follows: | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
(In millions) | ||||||||||||||||||||
Total segment depreciation and amortization | $ | 293 | $ | 303 | $ | 319 | ||||||||||||||
Depreciation on shared facilities and information technology assets | 82 | 107 | 103 | |||||||||||||||||
Consolidated depreciation and amortization | $ | 375 | $ | 410 | $ | 422 | ||||||||||||||
Reconciliations of capital expenditures to Applied consolidated totals for fiscal 2014, 2013 and 2012 are as follows: | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
(In millions) | ||||||||||||||||||||
Total segment capital expenditures | $ | 146 | $ | 132 | $ | 86 | ||||||||||||||
Shared facilities and information technology assets | 95 | 65 | 76 | |||||||||||||||||
Consolidated capital expenditures | $ | 241 | $ | 197 | $ | 162 | ||||||||||||||
Reconciliations of segment assets to Applied consolidated totals as of October 26, 2014, and October 27, 2013 are as follows: | ||||||||||||||||||||
October 26, | October 27, | |||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
(In millions) | ||||||||||||||||||||
Total segment assets | $ | 8,146 | $ | 7,959 | ||||||||||||||||
Cash and investments | 4,060 | 2,896 | ||||||||||||||||||
Allowance for bad debts | (58 | ) | (74 | ) | ||||||||||||||||
Deferred income taxes | 299 | 376 | ||||||||||||||||||
Other current assets | 147 | 203 | ||||||||||||||||||
Common property, plant and equipment | 522 | 541 | ||||||||||||||||||
Other assets | 58 | 142 | ||||||||||||||||||
Consolidated total assets | $ | 13,174 | $ | 12,043 | ||||||||||||||||
For geographical reporting, revenue by geographic location is determined by the location of customers’ facilities to which products were shipped. Long-lived assets consist primarily of property, plant and equipment and equity-method investments, and are attributed to the geographic location in which they are located. Net sales and long-lived assets by geographic region were as follows: | ||||||||||||||||||||
Net Sales | Long-lived | |||||||||||||||||||
Assets | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
2014:00:00 | ||||||||||||||||||||
United States | $ | 1,966 | $ | 636 | ||||||||||||||||
Taiwan | 2,702 | 34 | ||||||||||||||||||
China | 1,608 | 61 | ||||||||||||||||||
Korea | 965 | 12 | ||||||||||||||||||
Japan | 817 | 5 | ||||||||||||||||||
Europe | 658 | 99 | ||||||||||||||||||
Southeast Asia | 356 | 77 | ||||||||||||||||||
Total outside United States | 7,106 | 288 | ||||||||||||||||||
Consolidated total | $ | 9,072 | $ | 924 | ||||||||||||||||
2013:00:00 | ||||||||||||||||||||
United States | $ | 1,473 | $ | 620 | ||||||||||||||||
Taiwan | 2,640 | 37 | ||||||||||||||||||
China | 787 | 65 | ||||||||||||||||||
Korea | 924 | 8 | ||||||||||||||||||
Japan | 685 | 4 | ||||||||||||||||||
Europe | 680 | 99 | ||||||||||||||||||
Southeast Asia | 320 | 81 | ||||||||||||||||||
Total outside United States | 6,036 | 294 | ||||||||||||||||||
Consolidated total | $ | 7,509 | $ | 914 | ||||||||||||||||
2012:00:00 | ||||||||||||||||||||
United States | $ | 1,749 | $ | 666 | ||||||||||||||||
Taiwan | 2,411 | 36 | ||||||||||||||||||
China | 783 | 74 | ||||||||||||||||||
Korea | 1,897 | 9 | ||||||||||||||||||
Japan | 704 | 6 | ||||||||||||||||||
Europe | 863 | 110 | ||||||||||||||||||
Southeast Asia | 312 | 87 | ||||||||||||||||||
Total outside United States | 6,970 | 322 | ||||||||||||||||||
Consolidated total | $ | 8,719 | $ | 988 | ||||||||||||||||
The following companies accounted for at least 10 percent of Applied’s net sales in fiscal 2014, 2013, or 2012, which were for products in multiple reportable segments. | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Taiwan Semiconductor Manufacturing Company Limited | 21 | % | 27 | % | 16 | % | ||||||||||||||
Samsung Electronics Co., Ltd. | 12 | % | 13 | % | 20 | % |
Unaudited_Quarterly_Consolidat
Unaudited Quarterly Consolidated Financial Data | 12 Months Ended | |||||||||||||||||||
Oct. 26, 2014 | ||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||
Unaudited Quarterly Consolidated Financial Data | Unaudited Quarterly Consolidated Financial Data | |||||||||||||||||||
Fiscal Quarter | ||||||||||||||||||||
First | Second | Third | Fourth | Fiscal Year | ||||||||||||||||
(In millions, except per share amounts) | ||||||||||||||||||||
2014:00:00 | ||||||||||||||||||||
Net sales | $ | 2,190 | $ | 2,353 | $ | 2,265 | $ | 2,264 | $ | 9,072 | ||||||||||
Gross margin | $ | 891 | $ | 1,001 | $ | 992 | $ | 959 | $ | 3,843 | ||||||||||
Net income | $ | 253 | $ | 262 | $ | 301 | $ | 256 | $ | 1,072 | ||||||||||
Earnings per diluted share | $ | 0.21 | $ | 0.21 | $ | 0.24 | $ | 0.21 | $ | 0.87 | ||||||||||
2013:00:00 | ||||||||||||||||||||
Net sales | $ | 1,573 | $ | 1,973 | $ | 1,975 | $ | 1,988 | $ | 7,509 | ||||||||||
Gross margin | $ | 582 | $ | 808 | $ | 806 | $ | 795 | $ | 2,991 | ||||||||||
Net income (loss) | $ | 34 | $ | (129 | ) | $ | 168 | $ | 183 | $ | 256 | |||||||||
Earnings (loss) per diluted share | $ | 0.03 | $ | (0.11 | ) | $ | 0.14 | $ | 0.15 | $ | 0.21 | |||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |
Oct. 26, 2014 | ||
Accounting Policies [Abstract] | ||
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation | |
The consolidated financial statements include the accounts of Applied Materials, Inc. and its subsidiaries (Applied or the Company) after elimination of intercompany balances and transactions. All references to a fiscal year apply to Applied’s fiscal year which ends on the last Sunday in October. Fiscal 2014, 2013 and 2012 contained 52 weeks each. Each fiscal quarter of 2014, 2013 and 2012 contained 13 weeks. | ||
Use of Estimates | Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, Applied evaluates its estimates, including those related to accounts receivable and sales allowances, fair values of financial instruments, inventories, intangible assets and goodwill, useful lives of intangible assets and property and equipment, fair values of share-based awards, and income taxes, among others. Applied bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. | ||
Cash Equivalents | Cash Equivalents | |
All highly-liquid investments with a remaining maturity of three months or less at the time of purchase are considered to be cash equivalents. Cash equivalents consist primarily of investments in institutional money market funds. | ||
Investments | Investments | |
All of Applied’s investments, except equity investments held in privately-held companies, are classified as available-for-sale at the respective balance sheet dates. Investments classified as available-for-sale are recorded at fair value based upon quoted market prices, and any temporary difference between the cost and fair value of an investment is presented as a separate component of accumulated other comprehensive income (loss). The specific identification method is used to determine the gains and losses on investments. Interest earned on cash and investments, as well as realized gains and losses on sale of securities, are included in interest income in the accompanying Consolidated Statements of Operations. | ||
Equity investments in privately-held companies are generally accounted for under the cost method of accounting and are periodically assessed for other-than-temporary impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred. | ||
Applied regularly reviews its investment portfolio to identify and evaluate investments that have indications of possible impairment. Factors considered in determining whether an unrealized loss was considered to be temporary, or other-than-temporary and therefore impaired, include: the length of time and extent to which fair value has been lower than the cost basis; the financial condition, credit quality and near-term prospects of the investee; and whether it is more likely than not that Applied will be required to sell the security prior to recovery. Generally, the contractual terms of investments in marketable securities do not permit settlement at prices less than the amortized cost of the investments. | ||
Allowances for Doubtful Accounts | Allowance for Doubtful Accounts | |
Applied maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. This allowance is based on historical experience, credit evaluations, specific customer collection history and any customer-specific issues Applied has identified. Changes in circumstances, such as an unexpected material adverse change in a major customer’s ability to meet its financial obligation to Applied or its payment trends, may require Applied to further adjust its estimates of the recoverability of amounts due to Applied. Bad debt expense and any reversals are recorded in marketing and selling expense in the Consolidated Statement of Operations. | ||
Inventories | Inventories | |
Inventories are stated at the lower of cost or market, with cost determined on a first-in, first-out (FIFO) basis. Applied adjusts inventory carrying value for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. Applied fully reserves for inventories and noncancelable purchase orders for inventory deemed obsolete. Applied performs periodic reviews of inventory items to identify excess inventories on hand by comparing on-hand balances to anticipated usage using recent historical activity as well as anticipated or forecasted demand. If estimates of customer demand diminish further or market conditions become less favorable than those projected by Applied, additional inventory adjustments may be required. | ||
Property, Plant and Equipment | Property, Plant and Equipment | |
Property, plant and equipment is stated at cost. Depreciation is provided over the estimated useful lives of the assets using the straight-line method. Estimated useful lives for financial reporting purposes are as follows: buildings and improvements, 3 to 30 years; demonstration and manufacturing equipment, 3 to 5 years; software, 3 to 5 years; and furniture, fixtures and other equipment, 3 to 15 years. Land improvements are amortized over the shorter of 15 years or the estimated useful life. Leasehold improvements are amortized over the shorter of five years or the lease term. | ||
Intangible Assets | Intangible Assets | |
Goodwill and indefinite-lived assets are not amortized, but are reviewed for impairment annually during the fourth quarter of each fiscal year and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Purchased technology and other intangible assets are presented at cost, net of accumulated amortization, and are amortized over their estimated useful lives of 1 to 15 years using the straight-line method. | ||
Long-Lived Assets | Long-Lived Assets | |
Applied reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets or asset group may not be recoverable. Applied assesses these assets for impairment based on estimated future cash flows from these assets. | ||
Research, Development and Engineering Costs | Research, Development and Engineering Costs | |
Research, development and engineering costs are expensed as incurred. | ||
Sales and Value Added Taxes | Sales and Value Added Taxes | |
Taxes collected from customers and remitted to governmental authorities are presented on a net basis in the accompanying Consolidated Statements of Operations. | ||
Warranty | Warranty | |
Applied provides for the estimated cost of warranty when revenue is recognized. Estimated warranty costs are determined by analyzing specific product, current and historical configuration statistics and regional warranty support costs. Applied's warranty obligation is affected by product and component failure rates, material usage and labor costs incurred in correcting product failures during the warranty period. If actual warranty costs differ substantially from Applied's estimates, revisions to the estimated warranty liability would be required. | ||
Income Taxes | Income Taxes | |
Income tax expense is based on pretax earnings. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the book and tax bases of recorded assets and liabilities, net operating losses and tax credit carryforwards. | ||
Restructuring | Restructuring | |
From time to time, Applied initiates restructuring activities to appropriately align its cost structure relative to prevailing economic and industry conditions and associated customer demand as well as in connection with certain acquisitions. Costs associated with restructuring actions can include termination benefits and related charges in addition to facility closure, contract termination and other related activities. Costs associated with restructuring activities are included in restructuring charges and asset impairments in the Consolidated Statements of Operations. | ||
Revenue Recognition | Revenue Recognition | |
Applied recognizes revenue when all four revenue recognition criteria have been met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; seller’s price to buyer is fixed or determinable; and collectability is probable. Applied’s shipping terms are customarily FOB Applied shipping point or equivalent terms. Applied’s revenue recognition policy generally results in revenue recognition at the following points: (1) for all transactions where legal title passes to the customer upon shipment or delivery, Applied recognizes revenue upon passage of title for all products that have been demonstrated to meet product specifications prior to shipment; the portion of revenue associated with certain installation-related tasks is deferred, and that revenue is recognized upon completion of the installation-related tasks; (2) for products that have not been demonstrated to meet product specifications prior to shipment, revenue is recognized at customer technical acceptance; (3) for transactions where legal title does not pass at shipment or delivery, revenue is recognized when legal title passes to the customer, which is generally at customer technical acceptance; and (4) for arrangements containing multiple elements, the revenue relating to the undelivered elements is deferred using the relative selling price method utilizing estimated sales prices until delivery of the deferred elements. Applied limits the amount of revenue recognition for delivered elements to the amount that is not contingent on the future delivery of products or services, future performance obligations or subject to customer-specified return or adjustment. In cases where Applied has sold products that have been demonstrated to meet product specifications prior to shipment, Applied believes that at the time of delivery, it has an enforceable claim to amounts recognized as revenue. Spare parts revenue is generally recognized upon shipment, and services revenue is generally recognized over the period that the services are provided. | ||
When a sales arrangement contains multiple elements, such as hardware and services and/or software products, Applied allocates revenue to each element based on a selling price hierarchy. The selling price for a deliverable is based on its vendor specific objective evidence (VSOE) if available, third party evidence (TPE) if VSOE is not available, or estimated selling price (ESP) if neither VSOE nor TPE is available. Applied generally utilizes the ESP due to the nature of its products. In multiple element arrangements where more-than-incidental software deliverables are included, revenue is allocated to each separate unit of accounting for each of the non-software deliverables and to the software deliverables as a group using the relative selling prices of each of the deliverables in the arrangement based on the aforementioned selling price hierarchy. If the arrangement contains more than one software deliverable, the arrangement consideration allocated to the software deliverables as a group is then allocated to each software deliverable using the guidance for recognizing software revenue. | ||
Derivative Financial Instruments | Derivative Financial Instruments | |
Applied uses financial instruments, such as forward exchange and currency option contracts, to hedge a portion of, but not all, existing and anticipated foreign currency denominated transactions typically expected to occur within 24 months. The terms of currency instruments used for hedging purposes are generally consistent with the timing of the transactions being hedged. The purpose of Applied’s foreign currency management is to mitigate the effect of exchange rate fluctuations on certain foreign currency denominated revenues, costs and eventual cash flows. All of Applied’s derivative financial instruments are recorded at fair value based upon quoted market prices for comparable instruments. For derivative instruments designated and qualifying as cash flow hedges of anticipated foreign currency denominated transactions, the effective portion of the gain or loss on these hedges is reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity, and is reclassified into earnings when the hedged transaction affects earnings. If the transaction being hedged fails to occur, or if a portion of any derivative is ineffective, the gain or loss on the associated financial instrument is recorded promptly in earnings. For derivative instruments used to hedge existing foreign currency denominated assets or liabilities, the gain or loss on these hedges is recorded promptly in earnings to offset the changes in the fair value of the assets or liabilities being hedged. Applied does not use derivative financial instruments for trading or speculative purposes. | ||
Derivative Financial Instruments | ||
Applied conducts business in a number of foreign countries, with certain transactions denominated in local currencies, such as the Japanese yen, euro, Israeli shekel, Taiwanese dollar and Swiss franc. Applied uses derivative financial instruments, such as forward exchange contracts and currency option contracts, to hedge certain forecasted foreign currency denominated transactions expected to occur typically within the next 24 months. The purpose of Applied’s foreign currency management is to mitigate the effect of exchange rate fluctuations on certain foreign currency denominated revenues, costs and eventual cash flows. The terms of currency instruments used for hedging purposes are generally consistent with the timing of the transactions being hedged. Applied does not use derivative financial instruments for trading or speculative purposes. | ||
Derivative instruments and hedging activities, including foreign currency exchange contracts, are recognized on the balance sheet at fair value. Changes in the fair value of derivatives that do not qualify for hedge treatment, as well as the ineffective portion of any hedges, are recognized currently in earnings. All of Applied’s derivative financial instruments are recorded at their fair value in other current assets or in accounts payable and accrued expenses. | ||
Hedges related to anticipated transactions are designated and documented at the inception of the hedge as cash flow hedges and are typically entered into once per month. Cash flow hedges are evaluated for effectiveness quarterly. The effective portion of the gain or loss on these hedges is reported as a component of accumulated other comprehensive income or loss (AOCI) in stockholders’ equity and is reclassified into earnings when the hedged transaction affects earnings. The majority of the after-tax net income or loss related to derivative instruments included in AOCI at October 26, 2014 is expected to be reclassified into earnings within 12 months. Changes in the fair value of currency forward exchange and option contracts due to changes in time value are excluded from the assessment of effectiveness. Both ineffective hedge amounts and hedge components excluded from the assessment of effectiveness are recognized in earnings. If the transaction being hedged is no longer probable to occur, or if a portion of any derivative is deemed to be ineffective, Applied promptly recognizes the gain or loss on the associated financial instrument in general and administrative expenses. The amount recognized due to discontinuance of cash flow hedges that were probable not to occur by the end of the originally specified time period was not significant for fiscal 2014, 2013 or 2012. | ||
Additionally, forward exchange contracts are generally used to hedge certain foreign currency denominated assets or liabilities. These derivatives are typically entered into once per month and are not designated for hedge accounting treatment. Accordingly, changes in the fair value of these hedges are recorded in earnings to offset the changes in the fair value of the assets or liabilities being hedged. | ||
Foreign Currencies | Foreign Currencies | |
As of October 26, 2014, primarily all of Applied’s subsidiaries use the United States dollar as their functional currency. Accordingly, assets and liabilities of these subsidiaries are remeasured using exchange rates in effect at the end of the period, except for non-monetary assets, such as inventories and property, plant and equipment, which are remeasured using historical exchange rates. Foreign currency-denominated revenues and costs are remeasured using average exchange rates for the period, except for costs related to those balance sheet items that are remeasured using historical exchange rates. The resulting remeasurement gains and losses are included in general and administrative expenses in the Consolidated Statements of Operations as incurred. | ||
Concentrations of Credit Risk | Concentrations of Credit Risk | |
Financial instruments that potentially subject Applied to significant concentrations of credit risk consist principally of cash equivalents, investments, trade accounts receivable and derivative financial instruments used in hedging activities. Applied invests in a variety of financial instruments, such as, but not limited to, certificates of deposit, corporate and municipal bonds, United States Treasury and agency securities, and asset-backed and mortgage-backed securities, and, by policy, limits the amount of credit exposure with any one financial institution or commercial issuer. Applied performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral to secure accounts receivable. Applied maintains an allowance reserve for potentially uncollectible accounts receivable based on its assessment of the collectability of accounts receivable. Applied regularly reviews the allowance by considering factors such as historical experience, credit quality, age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. In addition, Applied utilizes letters of credit to mitigate credit risk when considered appropriate. Applied is exposed to credit-related losses in the event of nonperformance by counterparties to derivative financial instruments, but does not expect any counterparties to fail to meet their obligations. In some instances, Applied has entered into security arrangements which require the counterparties to post collateral to further mitigate credit exposure. | ||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board (FASB) issued authoritative guidance that requires revenue recognition to depict the transfer of promised goods or services to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This new standard will supersede most current revenue recognition guidance, including industry-specific guidance. The guidance becomes effective for Applied in the first quarter of fiscal 2018, and can be applied either retrospectively or as a cumulative-effect adjustment as of the date of adoption. Early adoption is prohibited. Applied is currently evaluating the effect of this new guidance on Applied's financial position, results of operations and its ongoing financial reporting, including the selection of a transition method. | ||
In April 2014, the FASB issued authoritative guidance that raises the threshold for a disposal transaction to qualify as a discontinued operation and requires additional disclosures about discontinued operations and disposals of individually significant components that do not qualify as discontinued operations. The authoritative guidance becomes effective prospectively for Applied in the first quarter of fiscal 2016. Early adoption is permitted, but only for disposals that have not been reported in financial statements previously issued. | ||
In July 2013, the FASB issued authoritative guidance that will require an unrecognized tax benefit to be presented as a reduction of a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward, with certain exceptions. The authoritative guidance becomes effective for Applied in the first quarter of fiscal 2015, with early adoption permitted. The guidance is not expected to have a significant impact on Applied's financial position. | ||
Fair Value Measurements | Applied’s financial assets are measured and recorded at fair value, except for equity investments in privately-held companies. These equity investments are generally accounted for under the cost method of accounting and are periodically assessed for other-than-temporary impairment when events or circumstances indicate that an other-than-temporary decline in value may have occurred. Applied’s nonfinancial assets, such as goodwill, intangible assets, and property, plant and equipment, are recorded at cost and are assessed for impairment when events or circumstances indicate that an other-than-temporary decline in value may have occurred. | |
Fair Value Hierarchy | ||
Applied uses the following fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: | ||
• | Level 1 — Quoted prices in active markets for identical assets or liabilities; | |
• | Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and | |
• | Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | |
Applied’s investments consist primarily of debt securities that are classified as available-for-sale and recorded at their fair values. In determining the fair value of investments, Applied uses pricing information from pricing services that value securities based on quoted market prices and models that utilize observable market inputs. In the event a fair value estimate is unavailable from a pricing service, Applied generally obtains non-binding price quotes from brokers. Applied then reviews the information provided by the pricing services or brokers to determine the fair value of its short-term and long-term investments. In addition, to validate pricing information obtained from pricing services, Applied periodically performs supplemental analysis on a sample of securities. Applied reviews any significant unanticipated differences identified through this analysis to determine the appropriate fair value. | ||
Investments with remaining effective maturities of 12 months or less from the balance sheet date are classified as short-term investments. Investments with remaining effective maturities of more than 12 months from the balance sheet date are classified as long-term investments. As of October 26, 2014, substantially all of Applied’s available-for-sale, short-term and long-term investments were recognized at fair value that was determined based upon observable inputs. | ||
Cost Method Investments | Equity investments in privately-held companies are generally accounted for under the cost method of accounting and are periodically assessed for other-than-temporary impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred. If Applied determines that an other-than-temporary impairment has occurred, the investment will be written down to its estimated fair value based on available information, such as pricing in recent rounds of financing, current cash positions, earnings and cash flow forecasts, recent operational performance and any other readily available market data. | |
Goodwill and Purchased Intangible Assets | Goodwill and Purchased Intangible Assets | |
Applied’s methodology for allocating the purchase price relating to purchase acquisitions is determined through established and generally accepted valuation techniques. Goodwill is measured as the excess of the purchase price over the sum of the amounts assigned to tangible and identifiable intangible assets acquired less liabilities assumed. Applied assigns assets acquired (including goodwill) and liabilities assumed to one or more reporting units as of the date of acquisition. Typically, acquisitions relate to a single reporting unit and thus do not require the allocation of goodwill to multiple reporting units. If the products obtained in an acquisition are assigned to multiple reporting units, the goodwill is distributed to the respective reporting units as part of the purchase price allocation process. | ||
Goodwill and purchased intangible assets with indefinite useful lives are not amortized, but are reviewed for impairment annually during the fourth quarter of each fiscal year and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The process of evaluating the potential impairment of goodwill and intangible assets requires significant judgment, especially in emerging markets. Applied regularly monitors current business conditions and considers other factors including, but not limited to, adverse industry or economic trends, restructuring actions and lower projections of profitability that may impact future operating results. | ||
To test goodwill for impairment, Applied first performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, Applied then performs the two-step goodwill impairment test. Otherwise, the two-step goodwill impairment test is not required. Under the two-step goodwill impairment test, Applied would, in the first step, compare the estimated fair value of each reporting unit to its carrying value. Applied determines the fair value of each of its reporting units based on a weighting of income and market approaches. If the carrying value of a reporting unit exceeds its fair value, Applied would then perform the second step of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. If Applied determines that the carrying value of a reporting unit’s goodwill exceeds its implied fair value, Applied would record an impairment charge equal to the difference. Applied’s reporting units are consistent with the reportable segments identified in Note 16, Industry Segment Operations, which are based on the manner in which Applied operates its business and the nature of those operations. | ||
Finite-Lived Purchased Intangible Assets | Finite-Lived Purchased Intangible Assets | |
Applied amortizes purchased intangible assets with finite lives using the straight-line method over the estimated economic lives of the assets, ranging from 1 to 15 years. | ||
Applied evaluates long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset group may not be recoverable. Applied assesses the fair value of the assets based on the amount of the undiscounted future cash flow that the assets are expected to generate and recognizes an impairment loss when estimated undiscounted future cash flow expected to result from the use of the asset, plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When Applied identifies an impairment, Applied reduces the carrying value of the group of assets to comparable market values, when available and appropriate, or to its estimated fair value based on a discounted cash flow approach. | ||
Intangible assets, such as purchased technology, are generally recorded in connection with a business acquisition. The value assigned to intangible assets is usually based on estimates and judgments regarding expectations for the success and life cycle of products and technology acquired. Applied evaluates the useful lives of its intangible assets each reporting period to determine whether events and circumstances require revising the remaining period of amortization. In addition, Applied reviews intangible assets for impairment when events or changes in circumstances indicate their carrying value may not be recoverable. Management considers such indicators as significant differences in actual product acceptance from the estimates, changes in the competitive and economic environments, technological advances, and changes in cost structure. | ||
Treasury Stock, Policy | Applied records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon reissuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid in capital. If Applied reissues treasury stock at an amount below its acquisition cost and additional paid in capital associated with prior treasury stock transactions is insufficient to cover the difference between the acquisition cost and the reissue price, this difference is recorded against retained earnings. | |
Deferred Tax Liabilities | Current deferred tax liabilities are included in accounts payable and accrued expenses on the Consolidated Balance Sheets and non-current deferred tax liabilities are included in other liabilities on the Consolidated Balance Sheets. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | |||||||||||
Oct. 26, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Elements used in computing both basic and diluted net earnings per share | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(In millions, except per share amounts) | ||||||||||||
Numerator: | ||||||||||||
Net income | $ | 1,072 | $ | 256 | $ | 109 | ||||||
Denominator: | ||||||||||||
Weighted average common shares outstanding | 1,215 | 1,202 | 1,266 | |||||||||
Effect of dilutive stock options, restricted stock units and employee stock purchase plan shares | 16 | 17 | 11 | |||||||||
Denominator for diluted earnings per share | 1,231 | 1,219 | 1,277 | |||||||||
Basic earnings per share | $ | 0.88 | $ | 0.21 | $ | 0.09 | ||||||
Diluted earnings per share | $ | 0.87 | $ | 0.21 | $ | 0.09 | ||||||
Potentially dilutive securities | 1 | 2 | 9 | |||||||||
Cash_Cash_Equivalents_and_Inve1
Cash, Cash Equivalents and Investments (Tables) | 12 Months Ended | |||||||||||||||
Oct. 26, 2014 | ||||||||||||||||
Cash and Cash Equivalents [Abstract] | ||||||||||||||||
Summary of cash, cash equivalents and investments | The following tables summarize Applied’s cash, cash equivalents and investments by security type: | |||||||||||||||
October 26, 2014 | Cost | Gross | Gross | Estimated | ||||||||||||
Unrealized | Unrealized | Fair Value | ||||||||||||||
Gains | Losses | |||||||||||||||
(In millions) | ||||||||||||||||
Cash | $ | 508 | $ | — | $ | — | $ | 508 | ||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | 2,494 | — | — | 2,494 | ||||||||||||
Total Cash equivalents | 2,494 | — | — | 2,494 | ||||||||||||
Total Cash and Cash equivalents | $ | 3,002 | $ | — | $ | — | $ | 3,002 | ||||||||
Short-term and long-term investments: | ||||||||||||||||
U.S. Treasury and agency securities | $ | 62 | $ | — | $ | — | $ | 62 | ||||||||
Non-U.S. government securities* | 14 | — | — | 14 | ||||||||||||
Municipal securities | 391 | 2 | — | 393 | ||||||||||||
Commercial paper, corporate bonds and medium-term notes | 223 | 1 | — | 224 | ||||||||||||
Asset-backed and mortgage-backed securities | 287 | 1 | 2 | 286 | ||||||||||||
Total fixed income securities | 977 | 4 | 2 | 979 | ||||||||||||
Publicly traded equity securities | 19 | 31 | — | 50 | ||||||||||||
Equity investments in privately-held companies | 66 | — | — | 66 | ||||||||||||
Total short-term and long-term investments | $ | 1,062 | $ | 35 | $ | 2 | $ | 1,095 | ||||||||
Total Cash, Cash equivalents and Investments | $ | 4,064 | $ | 35 | $ | 2 | $ | 4,097 | ||||||||
_________________________ | ||||||||||||||||
* Includes agency debt securities guaranteed by non-U.S. governments, which consist of Germany and Canada. | ||||||||||||||||
October 27, 2013 | Cost | Gross | Gross | Estimated | ||||||||||||
Unrealized | Unrealized | Fair Value | ||||||||||||||
Gains | Losses | |||||||||||||||
(In millions) | ||||||||||||||||
Cash | $ | 611 | $ | — | $ | — | $ | 611 | ||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | 1,095 | — | — | 1,095 | ||||||||||||
Municipal securities | 5 | — | — | 5 | ||||||||||||
Total Cash equivalents | 1,100 | — | — | 1,100 | ||||||||||||
Total Cash and Cash equivalents | $ | 1,711 | $ | — | $ | — | $ | 1,711 | ||||||||
Short-term and long-term investments: | ||||||||||||||||
U.S. Treasury and agency securities | $ | 170 | $ | — | $ | — | $ | 170 | ||||||||
Non-U.S. government securities | 11 | — | — | 11 | ||||||||||||
Municipal securities | 379 | 2 | — | 381 | ||||||||||||
Commercial paper, corporate bonds and medium-term notes | 218 | 2 | 1 | 219 | ||||||||||||
Asset-backed and mortgage-backed securities | 268 | 2 | 2 | 268 | ||||||||||||
Total fixed income securities | 1,046 | 6 | 3 | 1,049 | ||||||||||||
Publicly traded equity securities | 27 | 33 | — | 60 | ||||||||||||
Equity investments in privately-held companies | 76 | — | — | 76 | ||||||||||||
Total short-term and long-term investments | $ | 1,149 | $ | 39 | $ | 3 | $ | 1,185 | ||||||||
Total Cash, Cash equivalents and Investments | $ | 2,860 | $ | 39 | $ | 3 | $ | 2,896 | ||||||||
Contractual maturities of investments | The following table summarizes the contractual maturities of Applied’s investments at October 26, 2014: | |||||||||||||||
Cost | Estimated | |||||||||||||||
Fair Value | ||||||||||||||||
(In millions) | ||||||||||||||||
Due in one year or less | $ | 151 | $ | 151 | ||||||||||||
Due after one through five years | 539 | 542 | ||||||||||||||
No single maturity date** | 372 | 402 | ||||||||||||||
$ | 1,062 | $ | 1,095 | |||||||||||||
_________________________ | ||||||||||||||||
** Securities with no single maturity date include publicly-traded and privately-held equity securities, and asset-backed and mortgage-backed securities. | ||||||||||||||||
Schedule of gross realized gains and losses on sales of investments | Gross realized gains and losses on sales of investments during fiscal 2014, 2013, and 2012 were as follows: | |||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
(In millions) | ||||||||||||||||
Gross realized gains | $ | 27 | $ | 7 | $ | 3 | ||||||||||
Gross realized losses | $ | 2 | $ | 2 | $ | 3 | ||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | |||||||||||||||||||||||
Oct. 26, 2014 | ||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||
Financial assets/liabilities measured at fair value on a recurring basis | Financial assets (excluding cash balances) measured at fair value on a recurring basis are summarized below as of October 26, 2014 and October 27, 2013: | |||||||||||||||||||||||
October 26, 2014 | October 27, 2013 | |||||||||||||||||||||||
Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Money market funds | $ | 2,494 | $ | — | $ | 2,494 | $ | 1,095 | $ | — | $ | 1,095 | ||||||||||||
U.S. Treasury and agency securities | 43 | 19 | 62 | 66 | 104 | 170 | ||||||||||||||||||
Non-U.S. government securities | — | 14 | 14 | — | 11 | 11 | ||||||||||||||||||
Municipal securities | — | 393 | 393 | — | 386 | 386 | ||||||||||||||||||
Commercial paper, corporate bonds and medium-term notes | — | 224 | 224 | — | 219 | 219 | ||||||||||||||||||
Asset-backed and mortgage-backed securities | — | 286 | 286 | — | 268 | 268 | ||||||||||||||||||
Publicly traded equity securities | 50 | — | 50 | 60 | — | 60 | ||||||||||||||||||
Foreign exchange derivative assets | — | 52 | 52 | — | 20 | 20 | ||||||||||||||||||
Total | $ | 2,587 | $ | 988 | $ | 3,575 | $ | 1,221 | $ | 1,008 | $ | 2,229 | ||||||||||||
Derivative_Instruments_and_Hed1
Derivative Instruments and Hedging Activities (Tables) | 12 Months Ended | |||||||||||||||||||||||||
Oct. 26, 2014 | ||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||
Effect of derivative instruments on the consolidated statement of operations | The effects of derivative instruments on the Consolidated Statements of Operations for fiscal 2014 and 2013 were as follows: | |||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Effective Portion | Ineffective Portion and Amount | Effective Portion | Ineffective Portion and Amount | |||||||||||||||||||||||
Excluded from | Excluded from | |||||||||||||||||||||||||
Effectiveness | Effectiveness | |||||||||||||||||||||||||
Testing | Testing | |||||||||||||||||||||||||
Location of Gain or | Gain or | Gain or (Loss) | Gain or (Loss) | Gain or | Gain or (Loss) | Gain or (Loss) | ||||||||||||||||||||
(Loss) Reclassified | (Loss) | Reclassified | Recognized in | (Loss) | Reclassified | Recognized in | ||||||||||||||||||||
from AOCI into | Recognized | from AOCI into | Income | Recognized | from AOCI into | Income | ||||||||||||||||||||
Income | in AOCI | Income | in AOCI | Income | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationships | ||||||||||||||||||||||||||
Foreign exchange contracts | Cost of products sold | $ | 7 | $ | 8 | $ | (2 | ) | $ | 29 | $ | 21 | $ | (3 | ) | |||||||||||
Foreign exchange contracts | General and administrative | — | 1 | (2 | ) | — | 7 | (1 | ) | |||||||||||||||||
Total | $ | 7 | $ | 9 | $ | (4 | ) | $ | 29 | $ | 28 | $ | (4 | ) | ||||||||||||
Derivatives not designated as hedging instruments in statement of operations | ||||||||||||||||||||||||||
Amount of Gain or (Loss) | ||||||||||||||||||||||||||
Recognized in Income | ||||||||||||||||||||||||||
Location of Gain or | 2014 | 2013 | ||||||||||||||||||||||||
(Loss) Recognized | ||||||||||||||||||||||||||
in Income | ||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Derivatives Not Designated as Hedging Instruments | ||||||||||||||||||||||||||
Foreign exchange contracts | General and | $ | 49 | $ | 19 | |||||||||||||||||||||
administrative | ||||||||||||||||||||||||||
Total | $ | 49 | $ | 19 | ||||||||||||||||||||||
Accounts_Receivable_Net_Tables
Accounts Receivable, Net (Tables) | 12 Months Ended | |||||||||||
Oct. 26, 2014 | ||||||||||||
Receivables [Abstract] | ||||||||||||
Sale and discounting of accounts receivable | Details of discounted letters of credit, factored accounts receivable and discounted promissory notes for fiscal years ended October 26, 2014, October 27, 2013 and October 28, 2012 were as follows: | |||||||||||
2014 | 2013 | 2012 | ||||||||||
(In millions) | ||||||||||||
Discounted letters of credit | $ | 29 | $ | — | $ | — | ||||||
Factored accounts receivable and discounted promissory notes | 45 | — | 93 | |||||||||
Total | $ | 74 | $ | — | $ | 93 | ||||||
Changes in allowance for doubtful accounts | Changes in allowance for doubtful accounts were as follows: | |||||||||||
2014 | 2013 | 2012 | ||||||||||
(In millions) | ||||||||||||
Beginning balance | $ | 74 | $ | 87 | $ | 73 | ||||||
Provision | — | — | 14 | |||||||||
Deductions1 | (16 | ) | (13 | ) | — | |||||||
Ending balance | $ | 58 | $ | 74 | $ | 87 | ||||||
_____________________________ | ||||||||||||
1 Fiscal 2014 and 2013 deductions represent releases of allowance for doubtful accounts credited to expense as a result of an overall lower risk profile of Applied's customers. |
Balance_Sheet_Detail_Tables
Balance Sheet Detail (Tables) | 12 Months Ended | |||||||||
Oct. 26, 2014 | ||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||
Inventories | ||||||||||
October 26, | October 27, | |||||||||
2014 | 2013 | |||||||||
(In millions) | ||||||||||
Inventories | ||||||||||
Customer service spares | $ | 316 | $ | 283 | ||||||
Raw materials | 405 | 361 | ||||||||
Work-in-process | 316 | 292 | ||||||||
Finished goods | 530 | 477 | ||||||||
$ | 1,567 | $ | 1,413 | |||||||
Other current assets | ||||||||||
October 26, | October 27, | |||||||||
2014 | 2013 | |||||||||
(In millions) | ||||||||||
Other Current Assets | ||||||||||
Deferred income taxes, net | $ | 232 | $ | 323 | ||||||
Prepaid expenses | 172 | 135 | ||||||||
Prepaid income taxes and income taxes receivable | 79 | 178 | ||||||||
Other | 85 | 69 | ||||||||
$ | 568 | $ | 705 | |||||||
Property, plant and equipment, net | ||||||||||
Useful Life | October 26, | October 27, | ||||||||
2014 | 2013 | |||||||||
(In years) | (In millions) | |||||||||
Property, Plant and Equipment, Net | ||||||||||
Land and improvements | $ | 156 | $ | 167 | ||||||
Buildings and improvements | 30-Mar | 1,227 | 1,217 | |||||||
Demonstration and manufacturing equipment | 5-Mar | 829 | 792 | |||||||
Furniture, fixtures and other equipment | 15-Mar | 575 | 589 | |||||||
Construction in progress | 61 | 52 | ||||||||
Gross property, plant and equipment | 2,848 | 2,817 | ||||||||
Accumulated depreciation | (1,987 | ) | (1,967 | ) | ||||||
$ | 861 | $ | 850 | |||||||
Accounts payable and accrued expenses | ||||||||||
October 26, | October 27, | |||||||||
2014 | 2013 | |||||||||
(In millions) | ||||||||||
Accounts Payable and Accrued Expenses | ||||||||||
Accounts payable | $ | 613 | $ | 582 | ||||||
Compensation and employee benefits | 524 | 417 | ||||||||
Warranty | 113 | 102 | ||||||||
Income taxes payable | 142 | 73 | ||||||||
Dividends payable | 122 | 121 | ||||||||
Other accrued taxes | 51 | 41 | ||||||||
Interest payable | 30 | 30 | ||||||||
Restructuring reserve | 9 | 39 | ||||||||
Other | 279 | 244 | ||||||||
$ | 1,883 | $ | 1,649 | |||||||
Customer deposits and deferred revenue | ||||||||||
October 26, | October 27, | |||||||||
2014 | 2013 | |||||||||
(In millions) | ||||||||||
Customer Deposits and Deferred Revenue | ||||||||||
Customer deposits | $ | 286 | $ | 175 | ||||||
Deferred revenue | 654 | 619 | ||||||||
$ | 940 | $ | 794 | |||||||
Other liabilities | ||||||||||
October 26, | October 27, | |||||||||
2014 | 2013 | |||||||||
(In millions) | ||||||||||
Other Liabilities | ||||||||||
Deferred income taxes | $ | 32 | $ | 71 | ||||||
Income taxes payable | 225 | 174 | ||||||||
Defined and postretirement benefit plans | 208 | 193 | ||||||||
Other | 71 | 128 | ||||||||
$ | 536 | $ | 566 | |||||||
Business_Combinations_Tables
Business Combinations (Tables) (Varian Semiconductor Equipment Associates Inc [Member]) | 12 Months Ended | |||||
Oct. 26, 2014 | ||||||
Varian Semiconductor Equipment Associates Inc [Member] | ||||||
Business Combination [Line Items] | ||||||
Allocation of assets acquired and liabilities assumed | The following table summarizes the allocation of the assets acquired and liabilities assumed at the acquisition date: | |||||
Estimated Fair Values | ||||||
(In millions) | ||||||
Fair value of net tangible assets acquired | $ | 892 | ||||
Goodwill | 2,604 | |||||
Purchased intangible assets | 1,365 | |||||
Purchase price allocated | $ | 4,861 | ||||
Intangible assets acquired as part of a business combination | The following table presents details of the purchase price allocated to purchased intangible assets of Varian at the acquisition date: | |||||
Useful | Purchased | |||||
Life | Intangible Assets | |||||
(In years) | (In millions) | |||||
Developed technology | 7-Jan | $ | 987 | |||
Customer relationships | 15 | 150 | ||||
In-process technology | 142 | |||||
Patents and trademarks | 10 | 69 | ||||
Backlog | 1 | 7 | ||||
Covenant not to compete | 2 | 10 | ||||
Total purchased intangible assets | $ | 1,365 | ||||
Goodwill_Purchased_Technology_1
Goodwill, Purchased Technology and Other Intangible Assets (Tables) | 12 Months Ended | |||||||||||||||||||||||
Oct. 26, 2014 | ||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||
Indefinite-lived intangible assets | Details of goodwill and other indefinite-lived intangible assets were as follows: | |||||||||||||||||||||||
October 26, 2014 | October 27, 2013 | |||||||||||||||||||||||
Goodwill | Other | Total | Goodwill | Other | Total | |||||||||||||||||||
Intangible | Intangible | |||||||||||||||||||||||
Assets | Assets | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Silicon Systems Group | $ | 2,151 | $ | 103 | $ | 2,254 | $ | 2,151 | $ | 142 | $ | 2,293 | ||||||||||||
Applied Global Services | 1,027 | 6 | 1,033 | 1,027 | — | 1,027 | ||||||||||||||||||
Display | 126 | 18 | 144 | 116 | — | 116 | ||||||||||||||||||
Carrying amount | $ | 3,304 | $ | 127 | $ | 3,431 | $ | 3,294 | $ | 142 | $ | 3,436 | ||||||||||||
Summary of purchased technology and intangible assets | A summary of Applied's purchased technology and intangible assets is set forth below: | |||||||||||||||||||||||
October 26, | October 27, | |||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Purchased technology, net | $ | 636 | $ | 748 | ||||||||||||||||||||
Intangible assets - finite-lived, net | 188 | 213 | ||||||||||||||||||||||
Intangible assets - indefinite-lived | 127 | 142 | ||||||||||||||||||||||
Total | $ | 951 | $ | 1,103 | ||||||||||||||||||||
Finite-lived intangible assets | Details of finite-lived intangible assets were as follows: | |||||||||||||||||||||||
October 26, 2014 | October 27, 2013 | |||||||||||||||||||||||
Purchased | Other | Total | Purchased | Other | Total | |||||||||||||||||||
Technology | Intangible | Technology | Intangible | |||||||||||||||||||||
Assets | Assets | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Gross carrying amount: | ||||||||||||||||||||||||
Silicon Systems Group | $ | 1,346 | $ | 252 | $ | 1,598 | $ | 1,301 | $ | 252 | $ | 1,553 | ||||||||||||
Applied Global Services | 28 | 44 | 72 | 28 | 44 | 72 | ||||||||||||||||||
Display | 110 | 33 | 143 | 110 | 33 | 143 | ||||||||||||||||||
Energy and Environmental Solutions | 5 | 17 | 22 | 5 | 15 | 20 | ||||||||||||||||||
Gross carrying amount | $ | 1,489 | $ | 346 | $ | 1,835 | $ | 1,444 | $ | 344 | $ | 1,788 | ||||||||||||
Accumulated amortization: | ||||||||||||||||||||||||
Silicon Systems Group | $ | (716 | ) | $ | (77 | ) | $ | (793 | ) | $ | (562 | ) | $ | (58 | ) | $ | (620 | ) | ||||||
Applied Global Services | (24 | ) | (44 | ) | (68 | ) | (23 | ) | (42 | ) | (65 | ) | ||||||||||||
Display | (110 | ) | (31 | ) | (141 | ) | (110 | ) | (29 | ) | (139 | ) | ||||||||||||
Energy and Environmental Solutions | (3 | ) | (6 | ) | (9 | ) | (1 | ) | (2 | ) | (3 | ) | ||||||||||||
Accumulated amortization | $ | (853 | ) | $ | (158 | ) | $ | (1,011 | ) | $ | (696 | ) | $ | (131 | ) | $ | (827 | ) | ||||||
Carrying amount | $ | 636 | $ | 188 | $ | 824 | $ | 748 | $ | 213 | $ | 961 | ||||||||||||
Summary of amortization expense | Details of amortization expense by segment for fiscal 2014, 2013 and 2012 were as follows: | |||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Silicon Systems Group | $ | 173 | $ | 172 | $ | 183 | ||||||||||||||||||
Applied Global Services | 3 | 5 | 9 | |||||||||||||||||||||
Display | 2 | 6 | 7 | |||||||||||||||||||||
Energy and Environmental Solutions | 6 | 16 | 25 | |||||||||||||||||||||
Total | $ | 184 | $ | 199 | $ | 224 | ||||||||||||||||||
Schedule of categories amortization expense was charged to | For fiscal 2014, 2013 and 2012, amortization expense was charged to the following categories: | |||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Cost of products sold | $ | 159 | $ | 166 | $ | 185 | ||||||||||||||||||
Research, development and engineering | 1 | 1 | 1 | |||||||||||||||||||||
Marketing and selling | 21 | 26 | 30 | |||||||||||||||||||||
General and administrative | 3 | 6 | 8 | |||||||||||||||||||||
Total | $ | 184 | $ | 199 | $ | 224 | ||||||||||||||||||
Future estimated amortization expense | As of October 26, 2014, future estimated amortization expense is expected to be as follows: | |||||||||||||||||||||||
Amortization | ||||||||||||||||||||||||
Expense | ||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
2015 | 182 | |||||||||||||||||||||||
2016 | 175 | |||||||||||||||||||||||
2017 | 171 | |||||||||||||||||||||||
2018 | 170 | |||||||||||||||||||||||
2019 | 30 | |||||||||||||||||||||||
Thereafter | 96 | |||||||||||||||||||||||
Total | $ | 824 | ||||||||||||||||||||||
Borrowing_Facilities_and_LongT1
Borrowing Facilities and Long-Term Debt (Tables) | 12 Months Ended | |||||||||||
Oct. 26, 2014 | ||||||||||||
Debt Disclosure [Abstract] | ||||||||||||
Long Term Debt Outstanding | Long-term debt outstanding as of October 26, 2014 and October 27, 2013 was as follows: | |||||||||||
Principal Amount | ||||||||||||
October 26, | October 27, | Effective | Interest | |||||||||
2014 | 2013 | Interest Rate | Pay Dates | |||||||||
(In millions) | ||||||||||||
2.650% Senior Notes Due 2016 | $ | 400 | $ | 400 | 2.67% | June 15, December 15 | ||||||
7.125% Senior Notes Due 2017 | 200 | 200 | 7.19% | April 15, October 15 | ||||||||
4.300% Senior Notes Due 2021 | 750 | 750 | 4.33% | June 15, December 15 | ||||||||
5.850% Senior Notes Due 2041 | 600 | 600 | 5.88% | June 15, December 15 | ||||||||
1,950 | 1,950 | |||||||||||
Total unamortized discount | (3 | ) | (4 | ) | ||||||||
Total long-term debt | $ | 1,947 | $ | 1,946 | ||||||||
Restructuring_Charges_and_Asse1
Restructuring Charges and Asset Impairments (Tables) | 12 Months Ended | |||||||||||||||||||||||
Oct. 26, 2014 | ||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||
Components of the restructuring and asset impairment | The following table summarizes major components of the restructuring and asset impairment charges during fiscal 2014, 2013 and 2012: | |||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
2012 Global Restructuring Plan | ||||||||||||||||||||||||
Severance and other employee-related costs | $ | 5 | $ | 39 | $ | 106 | ||||||||||||||||||
2012 EES Restructuring Plan | ||||||||||||||||||||||||
Severance and other employee-related costs | — | 8 | 27 | |||||||||||||||||||||
Contract cancellation and other costs | — | 6 | 1 | |||||||||||||||||||||
Asset impairments | — | 12 | 20 | |||||||||||||||||||||
Others | ||||||||||||||||||||||||
Severance and other employee-related costs | — | 2 | 14 | |||||||||||||||||||||
Contract cancellation and other costs | — | (4 | ) | — | ||||||||||||||||||||
$ | 5 | $ | 63 | $ | 168 | |||||||||||||||||||
Restructuring and asset impairment charges by segment | Restructuring and asset impairment charges were recorded as follows: | |||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Silicon Systems Group | $ | — | $ | 1 | $ | 4 | ||||||||||||||||||
Applied Global Services | — | 2 | 15 | |||||||||||||||||||||
Energy and Environmental Solutions | — | 25 | 38 | |||||||||||||||||||||
Corporate Unallocated | 5 | 35 | 111 | |||||||||||||||||||||
Total | $ | 5 | $ | 63 | $ | 168 | ||||||||||||||||||
Changes in restructuring reserves related to other restructuring plans and facilities realignment | Changes in restructuring reserves for fiscal 2014, 2013, and 2012 were as follows: | |||||||||||||||||||||||
2012 Global Restructuring Plan | 2012 EES Restructuring Plan | Others | ||||||||||||||||||||||
Severance and Other Employee-Related Costs | Severance and Other Employee-Related Costs | Contract Cancellation and Other Costs | Severance and Other Employee-Related Costs | Contract Cancellation and Other Costs | Total | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Balance, October 30, 2011 | $ | — | $ | — | $ | — | $ | 6 | $ | 5 | $ | 11 | ||||||||||||
Provision for restructuring reserves | 106 | 27 | 1 | 14 | — | 148 | ||||||||||||||||||
Consumption of reserves | — | (11 | ) | — | (15 | ) | — | (26 | ) | |||||||||||||||
Balance, October 28, 2012 | $ | 106 | $ | 16 | $ | 1 | $ | 5 | $ | 5 | $ | 133 | ||||||||||||
Provision for restructuring reserves | 35 | 7 | 8 | 2 | — | 52 | ||||||||||||||||||
Consumption of reserves | (111 | ) | (18 | ) | (2 | ) | (5 | ) | — | (136 | ) | |||||||||||||
Adjustment of restructuring reserves | (4 | ) | — | (2 | ) | — | (4 | ) | (10 | ) | ||||||||||||||
Balance, October 27, 2013 | $ | 26 | $ | 5 | $ | 5 | $ | 2 | $ | 1 | $ | 39 | ||||||||||||
Provision for restructuring reserves | 7 | — | — | — | — | 7 | ||||||||||||||||||
Consumption of reserves | (27 | ) | (5 | ) | (1 | ) | (2 | ) | — | (35 | ) | |||||||||||||
Adjustment of restructuring reserves | (2 | ) | — | — | — | — | (2 | ) | ||||||||||||||||
Balance, October 26, 2014 | $ | 4 | — | 4 | $ | — | $ | 1 | $ | 9 | ||||||||||||||
Stockholders_Equity_Comprehens1
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Tables) | 12 Months Ended | |||||||||||||||||||||||
Oct. 26, 2014 | ||||||||||||||||||||||||
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 on Derivative Instruments Qualifying as Cash Flow Hedges | Defined and Postretirement Benefit Plans | Cumulative Translation Adjustments | Total | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Balance at October 27, 2013 | $ | 25 | $ | 2 | $ | (72 | ) | $ | 7 | $ | (38 | ) | ||||||||||||
Other comprehensive income (loss) before reclassifications | 8 | 4 | (36 | ) | (2 | ) | (26 | ) | ||||||||||||||||
Amounts reclassified out of AOCI | (9 | ) | (6 | ) | 3 | — | (12 | ) | ||||||||||||||||
Other comprehensive loss, net of tax | (1 | ) | (2 | ) | (33 | ) | (2 | ) | (38 | ) | ||||||||||||||
Balance at October 26, 2014 | $ | 24 | $ | — | $ | (105 | ) | $ | 5 | $ | (76 | ) | ||||||||||||
Summary of stock repurchases | The following table summarizes Applied’s stock repurchases for fiscal 2013 and 2012: | |||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||
(In millions, except per share amounts) | ||||||||||||||||||||||||
Shares of common stock repurchased | 18 | 126 | ||||||||||||||||||||||
Cost of stock repurchased | $ | 245 | $ | 1,416 | ||||||||||||||||||||
Average price paid per share | $ | 13.6 | $ | 11.22 | ||||||||||||||||||||
Total share-based compensation and related tax benefits | Total share-based compensation and related tax benefits were as follows: | |||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Share-based compensation | $ | 177 | $ | 162 | $ | 182 | ||||||||||||||||||
Tax benefit recognized | $ | 50 | $ | 45 | $ | 52 | ||||||||||||||||||
Effect of share-based compensation on the results of operations | The effect of share-based compensation on the results of operations for fiscal 2014, 2013, and 2012 was as follows: | |||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Cost of products sold | $ | 53 | $ | 50 | $ | 54 | ||||||||||||||||||
Research, development, and engineering | 66 | 53 | 54 | |||||||||||||||||||||
Marketing and selling | 23 | 20 | 22 | |||||||||||||||||||||
General and administrative | 35 | 34 | 52 | |||||||||||||||||||||
Restructuring charge | — | 5 | — | |||||||||||||||||||||
Total | $ | 177 | $ | 162 | $ | 182 | ||||||||||||||||||
Weighted average assumptions used for stock options assumed | The weighted average assumptions used in the model for the stock options granted and assumed are outlined below: | |||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||
Stock Options: | ||||||||||||||||||||||||
Dividend yield | 2.7 | % | 2.6 | % | ||||||||||||||||||||
Expected volatility | 29.5 | % | 38.7 | % | ||||||||||||||||||||
Risk-free interest rate | 1.44 | % | 0.52 | % | ||||||||||||||||||||
Expected life (in years) | 4.5 | 3.3 | ||||||||||||||||||||||
Information with repsect to stock options | Information with respect to stock options is as follows: | |||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Aggregate intrinsic value of outstanding stock options | $ | 19 | $ | 49 | $ | 43 | ||||||||||||||||||
Total intrinsic value of stock options exercised | $ | 39 | $ | 63 | $ | 21 | ||||||||||||||||||
Total fair value of stock options vested | $ | 1 | $ | 4 | $ | 41 | ||||||||||||||||||
Cash received from stock option exercises | $ | 29 | $ | 88 | $ | 33 | ||||||||||||||||||
Actual tax benefit realized from options exercised | $ | 12 | $ | 19 | $ | 7 | ||||||||||||||||||
Stock option activity | Stock option activity for fiscal 2014, 2013 and 2012 was as follows: | |||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
Shares | Weighted | Shares | Weighted | Shares | Weighted | |||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||
Exercise | Exercise | Exercise | ||||||||||||||||||||||
Price | Price | Price | ||||||||||||||||||||||
(In millions, except per share amounts) | ||||||||||||||||||||||||
Outstanding, beginning of year | 6 | $ | 9.12 | 21 | $ | 10.53 | 30 | $ | 13.05 | |||||||||||||||
Granted and assumed in Varian acquisition | — | $ | — | 1 | $ | 15.06 | 5 | $ | 4.85 | |||||||||||||||
Exercised | (4 | ) | $ | 7.85 | (11 | ) | $ | 8.16 | (4 | ) | $ | 7.3 | ||||||||||||
Canceled and forfeited | — | $ | — | (5 | ) | $ | 17.62 | (10 | ) | $ | 16.76 | |||||||||||||
Outstanding, end of year | 2 | $ | 10.87 | 6 | $ | 9.12 | 21 | $ | 10.53 | |||||||||||||||
Exercisable, end of year | 1 | $ | 7.97 | 5 | $ | 7.9 | 20 | $ | 10.71 | |||||||||||||||
Options outstanding and exercisable | The following table summarizes information with respect to options outstanding and exercisable at October 26, 2014: | |||||||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||||||
Range of | Number of | Weighted | Weighted | Aggregate | Number of | Weighted | Aggregate | |||||||||||||||||
Exercise Prices | Shares | Average | Average | Intrinsic | Shares | Average | Intrinsic | |||||||||||||||||
Exercise | Remaining | Value | Exercise | Value | ||||||||||||||||||||
Price | Contractual | Price | ||||||||||||||||||||||
Life | ||||||||||||||||||||||||
(In millions) | (In years) | (In millions) | (In millions) | (In millions) | ||||||||||||||||||||
$3.36 — $9.99 | 1 | $ | 5.31 | 1.81 | $ | 12 | 1 | $ | 5.3 | $ | 12 | |||||||||||||
$10.00 — $15.06 | 1 | $ | 14.96 | 5.59 | 7 | — | $ | 14.71 | 2 | |||||||||||||||
2 | $ | 10.87 | 3.99 | $ | 19 | 1 | $ | 7.97 | $ | 14 | ||||||||||||||
Options exercisable and expected to become exercisable | 2 | $ | 10.87 | 3.99 | $ | 19 | ||||||||||||||||||
Restricted stock units and restricted stock activity | A summary of the changes in restricted stock units, restricted stock, performance shares and performance units outstanding under Applied’s equity compensation plans during fiscal 2014, 2013 and 2012 are presented below: | |||||||||||||||||||||||
Shares | Weighted | Weighted | Aggregate | |||||||||||||||||||||
Average | Average | Intrinsic | ||||||||||||||||||||||
Grant Date | Remaining | Value | ||||||||||||||||||||||
Fair Value | Contractual Term | |||||||||||||||||||||||
(In millions, except per share amounts) | ||||||||||||||||||||||||
Non-vested restricted stock units, restricted stock, performance shares and performance units at October 30, 2011 | 28 | $ | 12.64 | 2.8 years | $ | 345 | ||||||||||||||||||
Granted | 19 | $ | 10.61 | |||||||||||||||||||||
Vested | (9 | ) | $ | 12.87 | ||||||||||||||||||||
Canceled | (2 | ) | $ | 12.26 | ||||||||||||||||||||
Non-vested restricted stock units, restricted stock, performance shares and performance units at October 28, 2012 | 36 | $ | 11.53 | 2.6 years | $ | 376 | ||||||||||||||||||
Granted | 19 | $ | 10.55 | |||||||||||||||||||||
Vested | (11 | ) | $ | 11.44 | ||||||||||||||||||||
Canceled | (6 | ) | $ | 11.28 | ||||||||||||||||||||
Non-vested restricted stock units, restricted stock, performance shares and performance units at October 27, 2013 | 38 | $ | 11.11 | 2.4 years | $ | 662 | ||||||||||||||||||
Granted | 11 | $ | 16.58 | |||||||||||||||||||||
Vested | (13 | ) | $ | 11.13 | ||||||||||||||||||||
Canceled | (3 | ) | $ | 11.72 | ||||||||||||||||||||
Non-vested restricted stock units, restricted stock, performance shares and performance units at October 26, 2014 | 33 | $ | 12.59 | 2.3 years | $ | 698 | ||||||||||||||||||
Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest | 30 | $ | 12.47 | 2.1 years | $ | 630 | ||||||||||||||||||
Significant valuation assumptions in relation to ESPP | Underlying assumptions used in the model for fiscal 2014, 2013 and 2012 are outlined in the following table: | |||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
ESPP: | ||||||||||||||||||||||||
Dividend yield | 1.96 | % | 2.8 | % | 3.01 | % | ||||||||||||||||||
Expected volatility | 26.3 | % | 24.8 | % | 29.6 | % | ||||||||||||||||||
Risk-free interest rate | 0.06 | % | 0.09 | % | 0.13 | % | ||||||||||||||||||
Expected life (in years) | 0.5 | 0.5 | 0.5 | |||||||||||||||||||||
Employee_Benefit_Plans_Tables
Employee Benefit Plans (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||
Oct. 26, 2014 | ||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||||||||||
Changes in benefit obligations and plan assets including post-retirement benefits | A summary of the changes in benefit obligations and plan assets, which includes post-retirement benefits, for fiscal October 26, 2014 and October 27, 2013 is presented below. | |||||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||||||
(In millions, except percentages) | ||||||||||||||||||||||||||||||||
Change in projected benefit obligation | ||||||||||||||||||||||||||||||||
Beginning projected benefit obligation | $ | 445 | $ | 434 | ||||||||||||||||||||||||||||
Service cost | 17 | 20 | ||||||||||||||||||||||||||||||
Interest cost | 17 | 15 | ||||||||||||||||||||||||||||||
Plan participants’ contributions | 1 | 1 | ||||||||||||||||||||||||||||||
Actuarial (gain) loss | 62 | (16 | ) | |||||||||||||||||||||||||||||
Curtailments, settlements and special termination benefits | (26 | ) | (8 | ) | ||||||||||||||||||||||||||||
Foreign currency exchange rate changes | (22 | ) | 10 | |||||||||||||||||||||||||||||
Benefits paid | (12 | ) | (10 | ) | ||||||||||||||||||||||||||||
Plan amendments and business combinations | (3 | ) | (1 | ) | ||||||||||||||||||||||||||||
Ending projected benefit obligation | $ | 479 | $ | 445 | ||||||||||||||||||||||||||||
Ending accumulated benefit obligation | $ | 446 | $ | 409 | ||||||||||||||||||||||||||||
Range of assumptions to determine benefit obligations | ||||||||||||||||||||||||||||||||
Discount rate | 1.0% - 4.4% | 1.1% - 4.5% | ||||||||||||||||||||||||||||||
Rate of compensation increase | 2.0% - 4.0% | 2.0% - 4.7% | ||||||||||||||||||||||||||||||
Change in plan assets | ||||||||||||||||||||||||||||||||
Beginning fair value of plan assets | $ | 248 | $ | 214 | ||||||||||||||||||||||||||||
Return on plan assets | 20 | 18 | ||||||||||||||||||||||||||||||
Employer contributions | 48 | 24 | ||||||||||||||||||||||||||||||
Plan participants’ contributions | 1 | 1 | ||||||||||||||||||||||||||||||
Foreign currency exchange rate changes | (11 | ) | 8 | |||||||||||||||||||||||||||||
Divestitures, settlements and business combinations | (26 | ) | (7 | ) | ||||||||||||||||||||||||||||
Benefits paid | (12 | ) | (10 | ) | ||||||||||||||||||||||||||||
Ending fair value of plan assets | $ | 268 | $ | 248 | ||||||||||||||||||||||||||||
Funded status | $ | (211 | ) | $ | (197 | ) | ||||||||||||||||||||||||||
Amounts recognized in the consolidated balance sheets | ||||||||||||||||||||||||||||||||
Noncurrent asset | $ | 17 | $ | 9 | ||||||||||||||||||||||||||||
Current liability | (3 | ) | (4 | ) | ||||||||||||||||||||||||||||
Noncurrent liability | (225 | ) | (202 | ) | ||||||||||||||||||||||||||||
Total | $ | (211 | ) | $ | (197 | ) | ||||||||||||||||||||||||||
Estimated amortization from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year | ||||||||||||||||||||||||||||||||
Actuarial loss | $ | 6 | $ | 4 | ||||||||||||||||||||||||||||
Prior service cost (credit) | — | — | ||||||||||||||||||||||||||||||
Total | $ | 6 | $ | 4 | ||||||||||||||||||||||||||||
Amounts recognized in accumulated other comprehensive loss | ||||||||||||||||||||||||||||||||
Net actuarial loss | $ | 134 | $ | 91 | ||||||||||||||||||||||||||||
Prior service cost (credit) | (1 | ) | 2 | |||||||||||||||||||||||||||||
Total | $ | 133 | $ | 93 | ||||||||||||||||||||||||||||
Plans with projected benefit obligations in excess of plan assets | ||||||||||||||||||||||||||||||||
Projected benefit obligation | $ | 326 | $ | 438 | ||||||||||||||||||||||||||||
Fair value of plan assets | $ | 98 | $ | 233 | ||||||||||||||||||||||||||||
Plans with accumulated benefit obligations in excess of plan assets | ||||||||||||||||||||||||||||||||
Accumulated benefit obligation | $ | 297 | $ | 269 | ||||||||||||||||||||||||||||
Fair value of plan assets | $ | 98 | $ | 99 | ||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||||||
Plan assets — allocation | ||||||||||||||||||||||||||||||||
Equity securities | 39 | % | 37 | % | ||||||||||||||||||||||||||||
Debt securities | 38 | % | 36 | % | ||||||||||||||||||||||||||||
Insurance contracts | 15 | % | 19 | % | ||||||||||||||||||||||||||||
Other investments | 5 | % | 5 | % | ||||||||||||||||||||||||||||
Cash | 3 | % | 3 | % | ||||||||||||||||||||||||||||
Summary of ending fair value of the plan assets | The following table presents a summary of the ending fair value of the plan assets: | |||||||||||||||||||||||||||||||
October 26, 2014 | October 27, 2013 | |||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Equity securities | $ | 38 | $ | 66 | $ | — | $ | 104 | $ | 27 | $ | 65 | $ | — | $ | 92 | ||||||||||||||||
Debt securities | 8 | 94 | — | 102 | 6 | 84 | — | 90 | ||||||||||||||||||||||||
Insurance contracts | — | — | 41 | 41 | — | — | 47 | 47 | ||||||||||||||||||||||||
Other investments | — | 12 | — | 12 | — | 12 | — | 12 | ||||||||||||||||||||||||
Cash | 9 | — | — | 9 | 7 | — | — | 7 | ||||||||||||||||||||||||
Total | $ | 55 | $ | 172 | $ | 41 | $ | 268 | $ | 40 | $ | 161 | $ | 47 | $ | 248 | ||||||||||||||||
Activity in Level 3 instruments | The following table presents the activity in Level 3 instruments during fiscal 2014 and 2013: | |||||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Balance, beginning of year | $ | 47 | $ | 49 | ||||||||||||||||||||||||||||
Actual return on plan assets: | ||||||||||||||||||||||||||||||||
Relating to assets still held at reporting date | — | (1 | ) | |||||||||||||||||||||||||||||
Purchases, sales, settlements, net | (2 | ) | (4 | ) | ||||||||||||||||||||||||||||
Currency impact | (4 | ) | 3 | |||||||||||||||||||||||||||||
Balance, end of year | $ | 41 | $ | 47 | ||||||||||||||||||||||||||||
Schedule of net benefit costs and assumptions used | A summary of the components of net periodic benefit costs and the weighted average assumptions used for net periodic benefit cost and benefit obligation calculations for fiscal 2014, 2013 and 2012 is presented below. | |||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||
(In millions, except percentages) | ||||||||||||||||||||||||||||||||
Components of net periodic benefit cost | ||||||||||||||||||||||||||||||||
Service cost | $ | 17 | $ | 20 | $ | 16 | ||||||||||||||||||||||||||
Interest cost | 17 | 15 | 14 | |||||||||||||||||||||||||||||
Expected return on plan assets | (14 | ) | (12 | ) | (11 | ) | ||||||||||||||||||||||||||
Amortization of actuarial loss and prior service credit | 4 | 6 | — | |||||||||||||||||||||||||||||
Settlement and curtailment loss | 3 | — | 6 | |||||||||||||||||||||||||||||
Net periodic benefit cost | $ | 27 | $ | 29 | $ | 25 | ||||||||||||||||||||||||||
Weighted average assumptions | ||||||||||||||||||||||||||||||||
Discount rate | 3.68 | % | 3.46 | % | 4.53 | % | ||||||||||||||||||||||||||
Expected long-term return on assets | 5.64 | % | 5.38 | % | 5.91 | % | ||||||||||||||||||||||||||
Rate of compensation increase | 3.29 | % | 3.07 | % | 3.09 | % | ||||||||||||||||||||||||||
Schedule of expected benefit payments | Future expected benefit payments for the pension plans and the post-retirement plan over the next ten fiscal years are as follows: | |||||||||||||||||||||||||||||||
Benefit Payments | ||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
2015 | $ | 12 | ||||||||||||||||||||||||||||||
2016 | 13 | |||||||||||||||||||||||||||||||
2017 | 13 | |||||||||||||||||||||||||||||||
2018 | 14 | |||||||||||||||||||||||||||||||
2019 | 14 | |||||||||||||||||||||||||||||||
2020-2024 | 81 | |||||||||||||||||||||||||||||||
$ | 147 | |||||||||||||||||||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||||
Oct. 26, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Components of income from operations before income taxes | The components of income before income taxes for fiscal 2014, 2013 and 2012 were as follows: | |||||||||||
2014 | 2013 | 2012 | ||||||||||
(In millions) | ||||||||||||
U.S. | $ | 612 | $ | 194 | $ | 381 | ||||||
Foreign | 836 | 156 | (65 | ) | ||||||||
$ | 1,448 | $ | 350 | $ | 316 | |||||||
Components of the provision for income taxes | The components of the provision for income taxes for fiscal 2014, 2013 and 2012 were as follows: | |||||||||||
2014 | 2013 | 2012 | ||||||||||
(In millions) | ||||||||||||
Current: | ||||||||||||
U.S. | $ | 270 | $ | 3 | $ | 74 | ||||||
Foreign | 97 | 72 | 75 | |||||||||
State | 27 | 2 | 8 | |||||||||
394 | 77 | 157 | ||||||||||
Deferred: | ||||||||||||
U.S. | (9 | ) | 34 | 52 | ||||||||
Foreign | (3 | ) | (19 | ) | (4 | ) | ||||||
State | (6 | ) | 2 | 2 | ||||||||
(18 | ) | 17 | 50 | |||||||||
$ | 376 | $ | 94 | $ | 207 | |||||||
Effective income tax rate continuing operations tax rate reconciliation | A reconciliation between the statutory U.S. federal income tax rate of 35 percent and Applied’s actual effective income tax rate for fiscal 2014, 2013 and 2012 is presented below: | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Tax provision at U.S. statutory rate | 35 | % | 35 | % | 35 | % | ||||||
Resolutions from prior years’ income tax filings | 2 | (4.7 | ) | (6.0 | ) | |||||||
Effect of foreign operations taxed at various rates | (10.9 | ) | (21.1 | ) | (8.5 | ) | ||||||
State income taxes, net of federal benefit | 1 | 0.8 | 2 | |||||||||
Research and other tax credits | (0.3 | ) | (5.4 | ) | (1.0 | ) | ||||||
Production benefit | (1.3 | ) | (1.0 | ) | (8.0 | ) | ||||||
Acquisition costs | 0.8 | — | — | |||||||||
Goodwill impairment | — | 22.5 | 47 | |||||||||
Share-based compensation | 0.4 | 2.2 | 4 | |||||||||
Other | (0.7 | ) | (1.4 | ) | 1 | |||||||
26 | % | 26.9 | % | 65.5 | % | |||||||
Components of deferred income tax assets and liabilities | The components of deferred income tax assets and liabilities were as follows: | |||||||||||
October 26, | October 27, | |||||||||||
2014 | 2013 | |||||||||||
(In millions) | ||||||||||||
Deferred tax assets: | ||||||||||||
Allowance for doubtful accounts | $ | 26 | $ | 27 | ||||||||
Inventory reserves and basis difference | 128 | 134 | ||||||||||
Installation and warranty reserves | 18 | 14 | ||||||||||
Accrued liabilities | 123 | 138 | ||||||||||
Deferred revenue | 32 | 27 | ||||||||||
Tax credits and net operating losses | 160 | 182 | ||||||||||
Deferred compensation | 44 | 33 | ||||||||||
Share-based compensation | 57 | 60 | ||||||||||
Fixed assets | 16 | (34 | ) | |||||||||
Other | 27 | 13 | ||||||||||
Gross deferred tax assets | 631 | 594 | ||||||||||
Valuation allowance | (173 | ) | (116 | ) | ||||||||
Total deferred tax assets | 458 | 478 | ||||||||||
Deferred tax liabilities: | ||||||||||||
Intangible assets | (92 | ) | (82 | ) | ||||||||
Undistributed foreign earnings | (87 | ) | (75 | ) | ||||||||
Foreign exchange | (12 | ) | (18 | ) | ||||||||
Total gross deferred tax liabilities | (191 | ) | (175 | ) | ||||||||
Net deferred tax assets | $ | 267 | $ | 303 | ||||||||
The following table presents the breakdown between current and non-current net deferred tax assets and liabilities: | ||||||||||||
October 26, | October 27, | |||||||||||
2014 | 2013 | |||||||||||
(In millions) | ||||||||||||
Current deferred tax asset | $ | 232 | $ | 323 | ||||||||
Non-current deferred tax asset | 67 | 53 | ||||||||||
Current deferred tax liability | — | (2 | ) | |||||||||
Non-current deferred tax liability | (32 | ) | (71 | ) | ||||||||
$ | 267 | $ | 303 | |||||||||
A reconciliation of gross unrecognized tax benefits | A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows: | |||||||||||
2014 | 2013 | |||||||||||
(In millions) | ||||||||||||
Beginning balance of gross unrecognized tax benefits | $ | 194 | $ | 174 | ||||||||
Settlements with tax authorities | (143 | ) | (15 | ) | ||||||||
Lapses of statutes of limitation | (2 | ) | (15 | ) | ||||||||
Increases in tax positions for current year | 52 | 48 | ||||||||||
Increases in tax positions for prior years | 42 | 2 | ||||||||||
Decreases in tax positions for prior years | (9 | ) | — | |||||||||
Ending balance of gross unrecognized tax benefits | $ | 134 | $ | 194 | ||||||||
Warranty_Guarantees_Commitment1
Warranty, Guarantees, Commitments and Contingencies (Tables) | 12 Months Ended | |||||||
Oct. 26, 2014 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||
Future minimum lease payments | As of October 26, 2014, future minimum lease payments are expected to be as follows: | |||||||
Lease Payments | ||||||||
(In millions) | ||||||||
2015 | $ | 28 | ||||||
2016 | 18 | |||||||
2017 | 10 | |||||||
2018 | 6 | |||||||
2019 | 3 | |||||||
Thereafter | 5 | |||||||
$ | 70 | |||||||
Changes in the warranty reserves | Changes in the warranty reserves during fiscal 2014 and 2013 were as follows: | |||||||
2014 | 2013 | |||||||
(In millions) | ||||||||
Beginning balance | $ | 102 | $ | 119 | ||||
Provisions for warranty | 115 | 103 | ||||||
Consumption of reserves | (104 | ) | (120 | ) | ||||
Ending balance | $ | 113 | $ | 102 | ||||
Industry_Segment_Operations_Ta
Industry Segment Operations (Tables) | 12 Months Ended | |||||||||||||||||||
Oct. 26, 2014 | ||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||
Net sales and operating income (loss) for each reportable segment | Information for each reportable segment as of October 26, 2014, October 27, 2013 and October 28, 2012 and for the fiscal years then ended, is as follows: | |||||||||||||||||||
Net Sales | Operating | Depreciation/ | Capital | Segment | ||||||||||||||||
Income (Loss) | Amortization | Expenditures | Assets | |||||||||||||||||
(In millions) | ||||||||||||||||||||
2014:00:00 | ||||||||||||||||||||
Silicon Systems Group | $ | 5,978 | $ | 1,391 | $ | 268 | $ | 134 | $ | 5,508 | ||||||||||
Applied Global Services | 2,200 | 573 | 11 | 7 | 2,042 | |||||||||||||||
Display | 615 | 129 | 5 | 4 | 423 | |||||||||||||||
Energy and Environmental Solutions | 279 | 15 | 9 | 1 | 173 | |||||||||||||||
Total Segment | $ | 9,072 | $ | 2,108 | $ | 293 | $ | 146 | $ | 8,146 | ||||||||||
2013:00:00 | ||||||||||||||||||||
Silicon Systems Group | $ | 4,775 | $ | 876 | $ | 260 | $ | 118 | $ | 5,525 | ||||||||||
Applied Global Services | 2,023 | 436 | 13 | 7 | 1,958 | |||||||||||||||
Display | 538 | 74 | 8 | 6 | 293 | |||||||||||||||
Energy and Environmental Solutions | 173 | (433 | ) | 22 | 1 | 183 | ||||||||||||||
Total Segment | $ | 7,509 | $ | 953 | $ | 303 | $ | 132 | $ | 7,959 | ||||||||||
2012:00:00 | ||||||||||||||||||||
Silicon Systems Group | $ | 5,536 | $ | 1,243 | $ | 256 | $ | 71 | $ | 5,106 | ||||||||||
Applied Global Services | 2,285 | 502 | 17 | 8 | 2,035 | |||||||||||||||
Display | 473 | 25 | 8 | 1 | 278 | |||||||||||||||
Energy and Environmental Solutions | 425 | (668 | ) | 38 | 6 | 513 | ||||||||||||||
Total Segment | $ | 8,719 | $ | 1,102 | $ | 319 | $ | 86 | $ | 7,932 | ||||||||||
Reconciliations of total segment operating income to Applied's consolidated operating income | Reconciliations of segment operating results to Applied consolidated totals for fiscal 2014, 2013 and 2012 are as follows: | |||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
(In millions) | ||||||||||||||||||||
Total segment operating income | $ | 2,108 | $ | 953 | $ | 1,102 | ||||||||||||||
Corporate and unallocated costs | (540 | ) | (462 | ) | (580 | ) | ||||||||||||||
Restructuring charges and asset impairments | (5 | ) | (35 | ) | (111 | ) | ||||||||||||||
Certain items associated with announced business combination | (73 | ) | (17 | ) | — | |||||||||||||||
Gain (loss) on derivative associated with announced business combination | 30 | (7 | ) | — | ||||||||||||||||
Income from operations | $ | 1,520 | $ | 432 | $ | 411 | ||||||||||||||
Reconciliations of depreciation and amortization expense to Applied's consolidated totals | Reconciliations of depreciation and amortization expense to Applied consolidated totals for fiscal 2014, 2013 and 2012 are as follows: | |||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
(In millions) | ||||||||||||||||||||
Total segment depreciation and amortization | $ | 293 | $ | 303 | $ | 319 | ||||||||||||||
Depreciation on shared facilities and information technology assets | 82 | 107 | 103 | |||||||||||||||||
Consolidated depreciation and amortization | $ | 375 | $ | 410 | $ | 422 | ||||||||||||||
Reconciliation of capital expenditures to Applied's consolidated totals | Reconciliations of capital expenditures to Applied consolidated totals for fiscal 2014, 2013 and 2012 are as follows: | |||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
(In millions) | ||||||||||||||||||||
Total segment capital expenditures | $ | 146 | $ | 132 | $ | 86 | ||||||||||||||
Shared facilities and information technology assets | 95 | 65 | 76 | |||||||||||||||||
Consolidated capital expenditures | $ | 241 | $ | 197 | $ | 162 | ||||||||||||||
Reconciliation of segment assets to Applied's consolidated totals | Reconciliations of segment assets to Applied consolidated totals as of October 26, 2014, and October 27, 2013 are as follows: | |||||||||||||||||||
October 26, | October 27, | |||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
(In millions) | ||||||||||||||||||||
Total segment assets | $ | 8,146 | $ | 7,959 | ||||||||||||||||
Cash and investments | 4,060 | 2,896 | ||||||||||||||||||
Allowance for bad debts | (58 | ) | (74 | ) | ||||||||||||||||
Deferred income taxes | 299 | 376 | ||||||||||||||||||
Other current assets | 147 | 203 | ||||||||||||||||||
Common property, plant and equipment | 522 | 541 | ||||||||||||||||||
Other assets | 58 | 142 | ||||||||||||||||||
Consolidated total assets | $ | 13,174 | $ | 12,043 | ||||||||||||||||
Net sales and long-lived assets by geographic region | Net sales and long-lived assets by geographic region were as follows: | |||||||||||||||||||
Net Sales | Long-lived | |||||||||||||||||||
Assets | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
2014:00:00 | ||||||||||||||||||||
United States | $ | 1,966 | $ | 636 | ||||||||||||||||
Taiwan | 2,702 | 34 | ||||||||||||||||||
China | 1,608 | 61 | ||||||||||||||||||
Korea | 965 | 12 | ||||||||||||||||||
Japan | 817 | 5 | ||||||||||||||||||
Europe | 658 | 99 | ||||||||||||||||||
Southeast Asia | 356 | 77 | ||||||||||||||||||
Total outside United States | 7,106 | 288 | ||||||||||||||||||
Consolidated total | $ | 9,072 | $ | 924 | ||||||||||||||||
2013:00:00 | ||||||||||||||||||||
United States | $ | 1,473 | $ | 620 | ||||||||||||||||
Taiwan | 2,640 | 37 | ||||||||||||||||||
China | 787 | 65 | ||||||||||||||||||
Korea | 924 | 8 | ||||||||||||||||||
Japan | 685 | 4 | ||||||||||||||||||
Europe | 680 | 99 | ||||||||||||||||||
Southeast Asia | 320 | 81 | ||||||||||||||||||
Total outside United States | 6,036 | 294 | ||||||||||||||||||
Consolidated total | $ | 7,509 | $ | 914 | ||||||||||||||||
2012:00:00 | ||||||||||||||||||||
United States | $ | 1,749 | $ | 666 | ||||||||||||||||
Taiwan | 2,411 | 36 | ||||||||||||||||||
China | 783 | 74 | ||||||||||||||||||
Korea | 1,897 | 9 | ||||||||||||||||||
Japan | 704 | 6 | ||||||||||||||||||
Europe | 863 | 110 | ||||||||||||||||||
Southeast Asia | 312 | 87 | ||||||||||||||||||
Total outside United States | 6,970 | 322 | ||||||||||||||||||
Consolidated total | $ | 8,719 | $ | 988 | ||||||||||||||||
Companies accounted for at least 10 percent of Applied's net sales | The following companies accounted for at least 10 percent of Applied’s net sales in fiscal 2014, 2013, or 2012, which were for products in multiple reportable segments. | |||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Taiwan Semiconductor Manufacturing Company Limited | 21 | % | 27 | % | 16 | % | ||||||||||||||
Samsung Electronics Co., Ltd. | 12 | % | 13 | % | 20 | % |
Unaudited_Quarterly_Consolidat1
Unaudited Quarterly Consolidated Financial Data (Tables) | 12 Months Ended | |||||||||||||||||||
Oct. 26, 2014 | ||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||
Unaudited Quarterly Consolidated Financial Data | ||||||||||||||||||||
Fiscal Quarter | ||||||||||||||||||||
First | Second | Third | Fourth | Fiscal Year | ||||||||||||||||
(In millions, except per share amounts) | ||||||||||||||||||||
2014:00:00 | ||||||||||||||||||||
Net sales | $ | 2,190 | $ | 2,353 | $ | 2,265 | $ | 2,264 | $ | 9,072 | ||||||||||
Gross margin | $ | 891 | $ | 1,001 | $ | 992 | $ | 959 | $ | 3,843 | ||||||||||
Net income | $ | 253 | $ | 262 | $ | 301 | $ | 256 | $ | 1,072 | ||||||||||
Earnings per diluted share | $ | 0.21 | $ | 0.21 | $ | 0.24 | $ | 0.21 | $ | 0.87 | ||||||||||
2013:00:00 | ||||||||||||||||||||
Net sales | $ | 1,573 | $ | 1,973 | $ | 1,975 | $ | 1,988 | $ | 7,509 | ||||||||||
Gross margin | $ | 582 | $ | 808 | $ | 806 | $ | 795 | $ | 2,991 | ||||||||||
Net income (loss) | $ | 34 | $ | (129 | ) | $ | 168 | $ | 183 | $ | 256 | |||||||||
Earnings (loss) per diluted share | $ | 0.03 | $ | (0.11 | ) | $ | 0.14 | $ | 0.15 | $ | 0.21 | |||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) | 3 Months Ended | 12 Months Ended | |||||||||||||
Oct. 26, 2014 | Jul. 27, 2014 | Apr. 27, 2014 | Jan. 26, 2014 | Oct. 27, 2013 | Jul. 28, 2013 | Apr. 28, 2013 | Jan. 27, 2013 | Oct. 28, 2012 | Jul. 29, 2012 | Apr. 29, 2012 | Jan. 29, 2012 | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 | |
Property, Plant and Equipment [Line Items] | |||||||||||||||
Operating cycle | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 364 days | 364 days | 364 days |
Minimum [Member] | |||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||
Useful Life | 1 year | ||||||||||||||
Maximum [Member] | |||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||
Useful Life | 15 years | ||||||||||||||
Building and improvements [Member] | Minimum [Member] | |||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||
Property, Plant and Equipment, useful life | 3 years | ||||||||||||||
Building and improvements [Member] | Maximum [Member] | |||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||
Property, Plant and Equipment, useful life | 30 years | ||||||||||||||
Demonstration and manufacturing equipment [Member] | Minimum [Member] | |||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||
Property, Plant and Equipment, useful life | 3 years | ||||||||||||||
Demonstration and manufacturing equipment [Member] | Maximum [Member] | |||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||
Property, Plant and Equipment, useful life | 5 years | ||||||||||||||
Software [Member] | Minimum [Member] | |||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||
Property, Plant and Equipment, useful life | 3 years | ||||||||||||||
Software [Member] | Maximum [Member] | |||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||
Property, Plant and Equipment, useful life | 5 years | ||||||||||||||
Furniture, fixtures and other equipment [Member] | Minimum [Member] | |||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||
Property, Plant and Equipment, useful life | 3 years | ||||||||||||||
Furniture, fixtures and other equipment [Member] | Maximum [Member] | |||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||
Property, Plant and Equipment, useful life | 15 years | ||||||||||||||
Land improvements [Member] | Maximum [Member] | |||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||
Term of amortization | 15 years | ||||||||||||||
Leasehold improvements [Member] | Maximum [Member] | |||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||
Term of amortization | 5 years |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Oct. 26, 2014 | Jul. 27, 2014 | Apr. 27, 2014 | Jan. 26, 2014 | Oct. 27, 2013 | Jul. 28, 2013 | Apr. 28, 2013 | Jan. 27, 2013 | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Numerator: | |||||||||||
Net income (in dollars) | $256 | $301 | $262 | $253 | $183 | $168 | ($129) | $34 | $1,072 | $256 | $109 |
Denominator: | |||||||||||
Weighted average common shares outstanding | 1,215 | 1,202 | 1,266 | ||||||||
Effect of dilutive stock options, restricted stock units and employee stock purchase plan shares | 16 | 17 | 11 | ||||||||
Denominator for diluted earnings per share | 1,231 | 1,219 | 1,277 | ||||||||
Basic earnings per share (in dollars per share) | $0.88 | $0.21 | $0.09 | ||||||||
Diluted earnings per share (in dollars per share) | $0.21 | $0.24 | $0.21 | $0.21 | $0.15 | $0.14 | ($0.11) | $0.03 | $0.87 | $0.21 | $0.09 |
Potentially dilutive securities | 1 | 2 | 9 |
Cash_Cash_Equivalents_and_Inve2
Cash, Cash Equivalents and Investments (Cash, Cash Equivalents and Investments by Security Type) (Details) (USD $) | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 | Oct. 30, 2011 | |
In Millions, unless otherwise specified | |||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||
Cash | $508 | $611 | |||
Cash equivalents: | |||||
Money market funds | 2,494 | 1,095 | |||
Municipal securities | 5 | ||||
Total Cash equivalents | 2,494 | 1,100 | |||
Total Cash and Cash equivalents | 3,002 | 1,711 | 1,392 | 5,960 | |
Short-term and long-term investments: | |||||
Cost | 1,062 | 1,149 | |||
Gross Unrealized Gains | 35 | 39 | |||
Gross Unrealized Losses | 2 | 3 | |||
Estimated Fair Value | 1,095 | 1,185 | |||
Equity investments in privately-held companies | 66 | 76 | |||
Total Cash, Cash equivalents and Investments | |||||
Cost | 4,064 | 2,860 | |||
Gross Unrealized Gains | 35 | 39 | |||
Gross Unrealized Losses | 2 | 3 | |||
Estimated Fair Value | 4,097 | 2,896 | |||
Total fixed income securities [Member] | |||||
Short-term and long-term investments: | |||||
Cost | 977 | 1,046 | |||
Gross Unrealized Gains | 4 | 6 | |||
Gross Unrealized Losses | 2 | 3 | |||
Estimated Fair Value | 979 | 1,049 | |||
U.S. Treasury and agency securities [Member] | |||||
Short-term and long-term investments: | |||||
Cost | 62 | 170 | |||
Gross Unrealized Gains | 0 | 0 | |||
Gross Unrealized Losses | 0 | 0 | |||
Estimated Fair Value | 62 | 170 | |||
Non-US government securities [Member] | |||||
Short-term and long-term investments: | |||||
Cost | 14 | [1] | 11 | ||
Gross Unrealized Gains | 0 | [1] | 0 | ||
Gross Unrealized Losses | 0 | [1] | 0 | ||
Estimated Fair Value | 14 | [1] | 11 | ||
Municipal securities [Member] | |||||
Short-term and long-term investments: | |||||
Cost | 391 | 379 | |||
Gross Unrealized Gains | 2 | 2 | |||
Gross Unrealized Losses | 0 | 0 | |||
Estimated Fair Value | 393 | 381 | |||
Commercial paper, corporate bonds and medium-term notes [Member] | |||||
Short-term and long-term investments: | |||||
Cost | 223 | 218 | |||
Gross Unrealized Gains | 1 | 2 | |||
Gross Unrealized Losses | 0 | 1 | |||
Estimated Fair Value | 224 | 219 | |||
Asset-backed and mortgage-backed securities [Member] | |||||
Short-term and long-term investments: | |||||
Cost | 287 | 268 | |||
Gross Unrealized Gains | 1 | 2 | |||
Gross Unrealized Losses | 2 | 2 | |||
Estimated Fair Value | 286 | 268 | |||
Publicly traded equity securities [Member] | |||||
Short-term and long-term investments: | |||||
Cost | 19 | 27 | |||
Gross Unrealized Gains | 31 | 33 | |||
Gross Unrealized Losses | 0 | 0 | |||
Estimated Fair Value | $50 | $60 | |||
[1] | Includes agency debt securities guaranteed by non-U.S. governments, which consist of Germany and Canada. |
Cash_Cash_Equivalents_and_Inve3
Cash, Cash Equivalents and Investments (Contractual Maturities) (Details) (USD $) | Oct. 26, 2014 | |
In Millions, unless otherwise specified | ||
Cash and Cash Equivalents [Abstract] | ||
Due in one year or less, Cost | $151 | |
Due after one through five years, Cost | 539 | |
No single maturity date, Cost | 372 | [1] |
Investments maturities amortized, Cost | 1,062 | |
Due in one year or less, Estimated Fair Value | 151 | |
Due after one through five years, Estimated Fair Value | 542 | |
No single maturity date, Estimated Fair Value | 402 | [1] |
Investments maturities, Estimated Fair Value | $1,095 | |
[1] | Securities with no single maturity date include publicly-traded and privately-held equity securities, and asset-backed and mortgage-backed securities. |
Cash_Cash_Equivalents_and_Inve4
Cash, Cash Equivalents and Investments (Gains and Losses on Investments) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Gains and Losses on Investments | |||
Gross realized gains | $27 | $7 | $3 |
Gross realized losses | $2 | $2 | $3 |
Cash_Cash_Equivalents_and_Inve5
Cash, Cash Equivalents and Investments (Narrative) (Details) (USD $) | 12 Months Ended | ||
Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 | |
Marketable securities [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Impairments of investments | $0 | $0 | $0 |
Equity investments in privately-held companies [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Impairments of investments | $15,000,000 | $6,000,000 | $17,000,000 |
Fair_Value_Measurements_Assets
Fair Value Measurements (Assets Measured at Fair Value on a Recurring Basis) (Details) (Fair Value, Measurements, Recurring [Member], USD $) | Oct. 26, 2014 | Oct. 27, 2013 |
In Millions, unless otherwise specified | ||
Assets: | ||
Foreign exchange derivative assets | $52 | $20 |
Total assets | 3,575 | 2,229 |
Money market funds [Member] | ||
Assets: | ||
Investment securities | 2,494 | 1,095 |
U.S. Treasury and agency securities [Member] | ||
Assets: | ||
Investment securities | 62 | 170 |
Non-U.S. government securities [Member] | ||
Assets: | ||
Investment securities | 14 | 11 |
Municipal securities [Member] | ||
Assets: | ||
Investment securities | 393 | 386 |
Commercial paper, corporate bonds and medium-term notes [Member] | ||
Assets: | ||
Investment securities | 224 | 219 |
Asset-backed and mortgage-backed securities [Member] | ||
Assets: | ||
Investment securities | 286 | 268 |
Publicly traded equity securities [Member] | ||
Assets: | ||
Investment securities | 50 | 60 |
Level 1 [Member] | ||
Assets: | ||
Foreign exchange derivative assets | 0 | 0 |
Total assets | 2,587 | 1,221 |
Level 1 [Member] | Money market funds [Member] | ||
Assets: | ||
Investment securities | 2,494 | 1,095 |
Level 1 [Member] | U.S. Treasury and agency securities [Member] | ||
Assets: | ||
Investment securities | 43 | 66 |
Level 1 [Member] | Non-U.S. government securities [Member] | ||
Assets: | ||
Investment securities | 0 | 0 |
Level 1 [Member] | Municipal securities [Member] | ||
Assets: | ||
Investment securities | 0 | 0 |
Level 1 [Member] | Commercial paper, corporate bonds and medium-term notes [Member] | ||
Assets: | ||
Investment securities | 0 | 0 |
Level 1 [Member] | Asset-backed and mortgage-backed securities [Member] | ||
Assets: | ||
Investment securities | 0 | 0 |
Level 1 [Member] | Publicly traded equity securities [Member] | ||
Assets: | ||
Investment securities | 50 | 60 |
Level 2 [Member] | ||
Assets: | ||
Foreign exchange derivative assets | 52 | 20 |
Total assets | 988 | 1,008 |
Level 2 [Member] | Money market funds [Member] | ||
Assets: | ||
Investment securities | 0 | 0 |
Level 2 [Member] | U.S. Treasury and agency securities [Member] | ||
Assets: | ||
Investment securities | 19 | 104 |
Level 2 [Member] | Non-U.S. government securities [Member] | ||
Assets: | ||
Investment securities | 14 | 11 |
Level 2 [Member] | Municipal securities [Member] | ||
Assets: | ||
Investment securities | 393 | 386 |
Level 2 [Member] | Commercial paper, corporate bonds and medium-term notes [Member] | ||
Assets: | ||
Investment securities | 224 | 219 |
Level 2 [Member] | Asset-backed and mortgage-backed securities [Member] | ||
Assets: | ||
Investment securities | 286 | 268 |
Level 2 [Member] | Publicly traded equity securities [Member] | ||
Assets: | ||
Investment securities | $0 | $0 |
Fair_Value_Measurements_Narrat
Fair Value Measurements (Narrative) (Details) (USD $) | 12 Months Ended | ||
Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 | |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Fair value of level one and level two transfers amount | $0 | $0 | |
Fair Value, Measurements, Nonrecurring [Member] | Level 3 [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Equity investments in privately-held companies measured on non-recurring basis | 9,000,000 | 10,000,000 | |
Equity Investments In Privately Held Companies [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Impairments of investments | 15,000,000 | 6,000,000 | 17,000,000 |
Reported Value Measurement [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Long-term debt, carrying value | 1,900,000,000 | 1,900,000,000 | |
Reported Value Measurement [Member] | Short Term And Long Term Investments [Member] | Equity Investments In Privately Held Companies [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Equity investments in privately-held companies measured on non-recurring basis | 66,000,000 | 76,000,000 | |
Portion at Other than Fair Value Measurement [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Equity investments in privately-held companies measured on non-recurring basis | 57,000,000 | 66,000,000 | |
Estimate of Fair Value Measurement [Member] | Level 2 [Member] | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Long-term debt, carrying value | $2,200,000,000 | $2,100,000,000 |
Derivative_Instruments_and_Hed2
Derivative Instruments and Hedging Activities (Narrative) (Details) (USD $) | 12 Months Ended | 3 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 26, 2014 | Oct. 27, 2013 |
Derivative [Line Items] | |||
Time period for hedging of foreign currency transactions | 24 months | ||
Time period over which majority of after tax gain loss related to derivatives to be reclassified into earnings | 12 months | ||
Tokyo Electron Limited [Member] | Foreign exchange contracts [Member] | |||
Derivative [Line Items] | |||
Derivative instruments not designated as hedging instruments, Loss | $12 | $7 | |
Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value Measurement [Member] | Tokyo Electron Limited [Member] | Foreign exchange contracts [Member] | |||
Derivative [Line Items] | |||
Derivative assets | 52 | 52 | 17 |
Gain on sale of derivatives | 42 | $51 |
Derivative_Instruments_and_Hed3
Derivative Instruments and Hedging Activities (Derivatives in Cash Flow Hedging Relationships) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain or (Loss) Recognized in AOCI | $7 | $29 |
Gain or (Loss) Reclassified from AOCI into Income | 9 | 28 |
Gain or (Loss) Recognized in Income | -4 | -4 |
Foreign exchange contracts [Member] | Cost of products sold [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain or (Loss) Recognized in AOCI | 7 | 29 |
Gain or (Loss) Reclassified from AOCI into Income | 8 | 21 |
Gain or (Loss) Recognized in Income | -2 | -3 |
Foreign exchange contracts [Member] | General and administrative [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain or (Loss) Recognized in AOCI | 0 | 0 |
Gain or (Loss) Reclassified from AOCI into Income | 1 | 7 |
Gain or (Loss) Recognized in Income | ($2) | ($1) |
Derivative_Instruments_and_Hed4
Derivative Instruments and Hedging Activities (Derivatives Not Designated as Hedging Instruments) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Location of Gain or (Loss) Recognized in Income | $49 | $19 |
Foreign exchange contracts [Member] | General and administrative [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Location of Gain or (Loss) Recognized in Income | $49 | $19 |
Accounts_Receivable_Net_Detail
Accounts Receivable, Net (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 | |||
Receivables [Abstract] | ||||||
Discounted letters of credit | $29 | $0 | $0 | |||
Factored accounts receivable and discounted promissory notes | 45 | 0 | 93 | |||
Total | 74 | 0 | 93 | |||
Accounts Receivable, Net (Textual) [Abstract] | ||||||
Allowance for doubtful accounts | 58 | 74 | ||||
Changes in allowance for doubtful accounts | ||||||
Beginning balance | 74 | 87 | 73 | |||
Provision | 0 | 0 | 14 | |||
Deductions | -16 | [1] | -13 | [1] | 0 | [1] |
Ending balance | $58 | $74 | $87 | |||
[1] | Fiscal 2014 and 2013 deductions represent releases of allowance for doubtful accounts credited to expense as a result of an overall lower risk profile of Applied's customers. |
Balance_Sheet_Detail_Details
Balance Sheet Detail (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Inventories | |||
Customer service spares | $316 | $283 | |
Raw materials | 405 | 361 | |
Work-in-process | 316 | 292 | |
Finished goods | 530 | 477 | |
Total Inventories | 1,567 | 1,413 | |
Inventory at customer locations included in finished goods | 104 | 136 | |
Evaluation inventory | 192 | 177 | |
Other Current Assets | |||
Deferred income taxes, net | 232 | 323 | |
Prepaid expenses | 172 | 135 | |
Prepaid income taxes and income taxes receivable | 79 | 178 | |
Other | 85 | 69 | |
Total Other Current Assets | 568 | 705 | |
Property, Plant and Equipment, Net | |||
Gross property, plant and equipment | 2,848 | 2,817 | |
Accumulated depreciation | -1,987 | -1,967 | |
Net property, plant and equipment | 861 | 850 | |
Depreciation | 191 | 211 | 198 |
Restructuring charges and asset impairments | 5 | 63 | 168 |
Accounts Payable and Accrued Expenses | |||
Accounts payable | 613 | 582 | |
Compensation and employee benefits | 524 | 417 | |
Warranty | 113 | 102 | |
Income taxes payable | 142 | 73 | |
Dividends payable | 122 | 121 | |
Other accrued taxes | 51 | 41 | |
Interest payable | 30 | 30 | |
Restructuring reserve | 9 | 39 | |
Other | 279 | 244 | |
Total Accounts Payable and Accrued Expenses | 1,883 | 1,649 | |
Customer Deposits and Deferred Revenue | |||
Customer deposits | 286 | 175 | |
Deferred revenue | 654 | 619 | |
Total Customer Deposits and Deferred Revenue | 940 | 794 | |
Other Liabilities | |||
Deferred income taxes | 32 | 71 | |
Income taxes payable | 225 | 174 | |
Defined and postretirement benefit plans | 208 | 193 | |
Other | 71 | 128 | |
Total Other Liabilities | 536 | 566 | |
2012 EES Restructuring Plan [Member] | |||
Property, Plant and Equipment, Net | |||
Restructuring charges and asset impairments | 26 | 48 | |
2012 EES Restructuring Plan [Member] | Asset Impairments [Member] | |||
Property, Plant and Equipment, Net | |||
Restructuring charges and asset impairments | 12 | 20 | |
Land and improvements [Member] | |||
Property, Plant and Equipment, Net | |||
Gross property, plant and equipment | 156 | 167 | |
Building and improvements [Member] | |||
Property, Plant and Equipment, Net | |||
Gross property, plant and equipment | 1,227 | 1,217 | |
Building and improvements [Member] | Minimum [Member] | |||
Property, Plant and Equipment, Net | |||
Useful Life | 3 years | ||
Building and improvements [Member] | Maximum [Member] | |||
Property, Plant and Equipment, Net | |||
Useful Life | 30 years | ||
Demonstration and manufacturing equipment [Member] | |||
Property, Plant and Equipment, Net | |||
Gross property, plant and equipment | 829 | 792 | |
Demonstration and manufacturing equipment [Member] | Minimum [Member] | |||
Property, Plant and Equipment, Net | |||
Useful Life | 3 years | ||
Demonstration and manufacturing equipment [Member] | Maximum [Member] | |||
Property, Plant and Equipment, Net | |||
Useful Life | 5 years | ||
Furniture, fixtures and other equipment [Member] | |||
Property, Plant and Equipment, Net | |||
Gross property, plant and equipment | 575 | 589 | |
Furniture, fixtures and other equipment [Member] | Minimum [Member] | |||
Property, Plant and Equipment, Net | |||
Useful Life | 3 years | ||
Furniture, fixtures and other equipment [Member] | Maximum [Member] | |||
Property, Plant and Equipment, Net | |||
Useful Life | 15 years | ||
Construction in progress [Member] | |||
Property, Plant and Equipment, Net | |||
Gross property, plant and equipment | $61 | $52 |
Business_Combinations_Narrativ
Business Combinations (Narrative) (Details) (USD $) | 0 Months Ended | 12 Months Ended | |
Sep. 24, 2013 | Oct. 27, 2013 | Nov. 10, 2011 | |
Tokyo Electron Limited [Member] | |||
Business Acquisition [Line Items] | |||
Expected stock repurchase of resulting entity in the next fiscal year | 3,000,000,000 | ||
Termination fee | 400,000,000 | ||
Tokyo Electron Limited [Member] | Former Applied Materials Shareholders [Member] | |||
Business Acquisition [Line Items] | |||
Shares to be received as part of combination, conversion ratio | 1 | ||
Percentage of voting interests acquired | 68.00% | ||
Tokyo Electron Limited [Member] | Former TEL Shareholders [Member] | |||
Business Acquisition [Line Items] | |||
Shares to be issued as part of combination, conversion ratio | 3.25 | ||
Percentage of voting interests acquired | 32.00% | ||
Varian Semiconductor Equipment Associates, Inc [Member] | |||
Business Acquisition [Line Items] | |||
Purchase price, net of cash acquired | 4,200,000,000 | ||
Assumed equity awards | 27,000,000 | ||
Goodwill acquired | 2,600,000,000 | ||
Varian Semiconductor Equipment Associates, Inc [Member] | Silicon Systems Group [Member] | |||
Business Acquisition [Line Items] | |||
Goodwill acquired | $1,800,000,000 |
Business_Combinations_Allocati
Business Combinations (Allocation of the Assets Acquired and Liabilities Assumed) (Details) (USD $) | Oct. 26, 2014 | Oct. 27, 2013 | Nov. 10, 2011 |
In Millions, unless otherwise specified | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Goodwill | $3,304 | $3,294 | |
Varian Semiconductor Equipment Associates Inc [Member] | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Fair value of net tangible assets acquired | 892 | ||
Goodwill | 2,604 | ||
Purchased intangible assets | 1,365 | ||
Purchase price allocated | $4,861 |
Business_Combinations_Intangib
Business Combinations (Intangible Assets) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Oct. 26, 2014 | Nov. 10, 2011 |
Minimum [Member] | ||
Business Acquisition [Line Items] | ||
Useful Life | 1 year | |
Maximum [Member] | ||
Business Acquisition [Line Items] | ||
Useful Life | 15 years | |
Varian Semiconductor Equipment Associates Inc [Member] | ||
Business Acquisition [Line Items] | ||
Purchased Intangible Assets | $1,365 | |
Varian Semiconductor Equipment Associates Inc [Member] | Developed technology [Member] | ||
Business Acquisition [Line Items] | ||
Purchased Intangible Assets | 987 | |
Varian Semiconductor Equipment Associates Inc [Member] | Developed technology [Member] | Minimum [Member] | ||
Business Acquisition [Line Items] | ||
Useful Life | 1 year | |
Varian Semiconductor Equipment Associates Inc [Member] | Developed technology [Member] | Maximum [Member] | ||
Business Acquisition [Line Items] | ||
Useful Life | 7 years | |
Varian Semiconductor Equipment Associates Inc [Member] | Customer relationships [Member] | ||
Business Acquisition [Line Items] | ||
Useful Life | 15 years | |
Purchased Intangible Assets | 150 | |
Varian Semiconductor Equipment Associates Inc [Member] | In-process technology [Member] | ||
Business Acquisition [Line Items] | ||
Purchased Intangible Assets | 142 | |
Varian Semiconductor Equipment Associates Inc [Member] | Patents and trademarks [Member] | ||
Business Acquisition [Line Items] | ||
Useful Life | 10 years | |
Purchased Intangible Assets | 69 | |
Varian Semiconductor Equipment Associates Inc [Member] | Backlog [Member] | ||
Business Acquisition [Line Items] | ||
Useful Life | 1 year | |
Purchased Intangible Assets | 7 | |
Varian Semiconductor Equipment Associates Inc [Member] | Covenant not to compete [Member] | ||
Business Acquisition [Line Items] | ||
Useful Life | 2 years | |
Purchased Intangible Assets | $10 |
Goodwill_Purchased_Technology_2
Goodwill, Purchased Technology and Other Intangible Assets (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Schedule of Goodwill and Intangible Assets [Line Items] | |||
Change in gross carrying amount of the amortized intangible assets | ($5) | ||
Energy and Environmental Solutions [Member] | |||
Schedule of Goodwill and Intangible Assets [Line Items] | |||
Impairment of goodwill | 224 | 421 | |
Accumulated goodwill impairment | 645 | ||
Impairment of intangible assets (excluding goodwill) | $54 | ||
Minimum [Member] | |||
Schedule of Goodwill and Intangible Assets [Line Items] | |||
Useful Life | 1 year | ||
Maximum [Member] | |||
Schedule of Goodwill and Intangible Assets [Line Items] | |||
Useful Life | 15 years |
Goodwill_Purchased_Technology_3
Goodwill, Purchased Technology and Other Intangible Assets (Goodwill and Other Indefinite-lived Intangible Assets) (Details) (USD $) | Oct. 26, 2014 | Oct. 27, 2013 |
In Millions, unless otherwise specified | ||
Indefinite-lived intangible assets | ||
Goodwill | $3,304 | $3,294 |
Other Intangible Assets | 127 | 142 |
Total | 3,431 | 3,436 |
Silicon Systems Group [Member] | ||
Indefinite-lived intangible assets | ||
Goodwill | 2,151 | 2,151 |
Other Intangible Assets | 103 | 142 |
Total | 2,254 | 2,293 |
Applied Global Services [Member] | ||
Indefinite-lived intangible assets | ||
Goodwill | 1,027 | 1,027 |
Other Intangible Assets | 6 | 0 |
Total | 1,033 | 1,027 |
Display [Member] | ||
Indefinite-lived intangible assets | ||
Goodwill | 126 | 116 |
Other Intangible Assets | 18 | 0 |
Total | $144 | $116 |
Goodwill_Purchased_Technology_4
Goodwill, Purchased Technology and Other Intangible Assets (Purchased Technology and Intangible Assets) (Details) (USD $) | Oct. 26, 2014 | Oct. 27, 2013 |
In Millions, unless otherwise specified | ||
Summary of Purchased Technology and Intangible Assets [Line Items] | ||
Carrying amount | $824 | $961 |
Intangible assets - indefinite-lived | 127 | 142 |
Total | 951 | 1,103 |
Purchased Technology [Member] | ||
Summary of Purchased Technology and Intangible Assets [Line Items] | ||
Carrying amount | 636 | 748 |
Intangible Assets [Member] | ||
Summary of Purchased Technology and Intangible Assets [Line Items] | ||
Carrying amount | $188 | $213 |
Goodwill_Purchased_Technology_5
Goodwill, Purchased Technology and Other Intangible Assets (Finite-lived Intangible Assets) (Details) (USD $) | Oct. 26, 2014 | Oct. 27, 2013 |
In Millions, unless otherwise specified | ||
Amortized intangible assets | ||
Gross carrying amount | $1,835 | $1,788 |
Accumulated amortization | -1,011 | -827 |
Carrying amount | 824 | 961 |
Silicon Systems Group [Member] | ||
Amortized intangible assets | ||
Gross carrying amount | 1,598 | 1,553 |
Accumulated amortization | -793 | -620 |
Applied Global Services [Member] | ||
Amortized intangible assets | ||
Gross carrying amount | 72 | 72 |
Accumulated amortization | -68 | -65 |
Display [Member] | ||
Amortized intangible assets | ||
Gross carrying amount | 143 | 143 |
Accumulated amortization | -141 | -139 |
Energy and Environmental Solutions [Member] | ||
Amortized intangible assets | ||
Gross carrying amount | 22 | 20 |
Accumulated amortization | -9 | -3 |
Purchased Technology [Member] | ||
Amortized intangible assets | ||
Gross carrying amount | 1,489 | 1,444 |
Accumulated amortization | -853 | -696 |
Carrying amount | 636 | 748 |
Purchased Technology [Member] | Silicon Systems Group [Member] | ||
Amortized intangible assets | ||
Gross carrying amount | 1,346 | 1,301 |
Accumulated amortization | -716 | -562 |
Purchased Technology [Member] | Applied Global Services [Member] | ||
Amortized intangible assets | ||
Gross carrying amount | 28 | 28 |
Accumulated amortization | -24 | -23 |
Purchased Technology [Member] | Display [Member] | ||
Amortized intangible assets | ||
Gross carrying amount | 110 | 110 |
Accumulated amortization | -110 | -110 |
Purchased Technology [Member] | Energy and Environmental Solutions [Member] | ||
Amortized intangible assets | ||
Gross carrying amount | 5 | 5 |
Accumulated amortization | -3 | -1 |
Other [Member] | ||
Amortized intangible assets | ||
Gross carrying amount | 346 | 344 |
Accumulated amortization | -158 | -131 |
Carrying amount | 188 | 213 |
Other [Member] | Silicon Systems Group [Member] | ||
Amortized intangible assets | ||
Gross carrying amount | 252 | 252 |
Accumulated amortization | -77 | -58 |
Other [Member] | Applied Global Services [Member] | ||
Amortized intangible assets | ||
Gross carrying amount | 44 | 44 |
Accumulated amortization | -44 | -42 |
Other [Member] | Display [Member] | ||
Amortized intangible assets | ||
Gross carrying amount | 33 | 33 |
Accumulated amortization | -31 | -29 |
Other [Member] | Energy and Environmental Solutions [Member] | ||
Amortized intangible assets | ||
Gross carrying amount | 17 | 15 |
Accumulated amortization | ($6) | ($2) |
Goodwill_Purchased_Technology_6
Goodwill, Purchased Technology and Other Intangible Assets (Amortization Expense by Segment) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $184 | $199 | $224 |
Silicon Systems Group [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 173 | 172 | 183 |
Applied Global Services [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 3 | 5 | 9 |
Display [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 2 | 6 | 7 |
Energy and Environmental Solutions [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $6 | $16 | $25 |
Goodwill_Purchased_Technology_7
Goodwill, Purchased Technology and Other Intangible Assets (Amortization Expense by Category) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Indefinite Lived Intangible Assets By Category [Abstract] | |||
Amortization expense | $184 | $199 | $224 |
Cost of products sold [Member] | |||
Indefinite Lived Intangible Assets By Category [Abstract] | |||
Amortization expense | 159 | 166 | 185 |
Research, development and engineering [Member] | |||
Indefinite Lived Intangible Assets By Category [Abstract] | |||
Amortization expense | 1 | 1 | 1 |
Marketing and selling [Member] | |||
Indefinite Lived Intangible Assets By Category [Abstract] | |||
Amortization expense | 21 | 26 | 30 |
General and administrative [Member] | |||
Indefinite Lived Intangible Assets By Category [Abstract] | |||
Amortization expense | $3 | $6 | $8 |
Goodwill_Purchased_Technology_8
Goodwill, Purchased Technology and Other Intangible Assets (Future Estimated Amortization Expense) (Details) (USD $) | Oct. 26, 2014 | Oct. 27, 2013 |
In Millions, unless otherwise specified | ||
Future estimated amortization expense | ||
2015 | $182 | |
2016 | 175 | |
2017 | 171 | |
2018 | 170 | |
2019 | 30 | |
Thereafter | 96 | |
Carrying amount | $824 | $961 |
Borrowing_Facilities_and_LongT2
Borrowing Facilities and Long-Term Debt (Narrative) (Details) (USD $) | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 30, 2011 |
Line of Credit Facility [Line Items] | |||
Available revolving credit agreement | $1,600,000,000 | ||
Amount outstanding | 0 | 0 | |
Commercial paper program amount | 1,500,000,000 | ||
Revolving Credit [Member] | |||
Line of Credit Facility [Line Items] | |||
Available revolving credit agreement | 1,500,000,000 | ||
Foreign Line of Credit [Member] | |||
Line of Credit Facility [Line Items] | |||
Available revolving credit agreement | 75,000,000 | ||
Commercial Paper [Member] | |||
Line of Credit Facility [Line Items] | |||
Outstanding debt | $0 | $0 |
Borrowing_Facilities_and_LongT3
Borrowing Facilities and Long-Term Debt (Details) (USD $) | Oct. 26, 2014 | Oct. 27, 2013 |
In Millions, unless otherwise specified | ||
Schedule of Long term debt | ||
Total long-term debt | $1,947 | $1,946 |
Senior Notes [Member] | ||
Schedule of Long term debt | ||
Principal amount | 1,950 | 1,950 |
Total unamortized discount | -3 | -4 |
Total long-term debt | 1,947 | 1,946 |
Senior Notes [Member] | 2.650% Senior Notes Due 2016 [Member] | ||
Schedule of Long term debt | ||
Stated Interest Rate | 2.65% | 2.65% |
Effective Interest Rate | 2.67% | 2.67% |
Principal amount | 400 | 400 |
Senior Notes [Member] | 7.125% Senior Notes Due 2017 [Member] | ||
Schedule of Long term debt | ||
Stated Interest Rate | 7.13% | 7.13% |
Effective Interest Rate | 7.19% | 7.19% |
Principal amount | 200 | 200 |
Senior Notes [Member] | 4.300% Senior Notes Due 2021 [Member] | ||
Schedule of Long term debt | ||
Stated Interest Rate | 4.30% | 4.30% |
Effective Interest Rate | 4.33% | 4.33% |
Principal amount | 750 | 750 |
Senior Notes [Member] | 5.850% Senior Notes Due 2041 [Member] | ||
Schedule of Long term debt | ||
Stated Interest Rate | 5.85% | 5.85% |
Effective Interest Rate | 5.88% | 5.88% |
Principal amount | $600 | $600 |
Restructuring_Charges_and_Asse2
Restructuring Charges and Asset Impairments (Major Components of the Restructuring and Asset Impairment Charges) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges and asset impairments | $5 | $63 | $168 |
2012 Global Restructuring Plan [Member] | Severance and other employee-related costs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges and asset impairments | 5 | 39 | 106 |
2012 EES Restructuring Plan [Member] | Severance and other employee-related costs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges and asset impairments | 0 | 8 | 27 |
2012 EES Restructuring Plan [Member] | Contract cancellation and other costs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges and asset impairments | 0 | 6 | 1 |
2012 EES Restructuring Plan [Member] | Asset impairments [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges and asset impairments | 0 | 12 | 20 |
Others [Member] | Severance and other employee-related costs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges and asset impairments | 0 | 2 | 14 |
Others [Member] | Contract cancellation and other costs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges and asset impairments | $0 | ($4) | $0 |
Restructuring_Charges_and_Asse3
Restructuring Charges and Asset Impairments (Restructuring and Asset Impairment Charges) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges and asset impairments | $5 | $63 | $168 |
Silicon Systems Group [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges and asset impairments | 0 | 1 | 4 |
Applied Global Services [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges and asset impairments | 0 | 2 | 15 |
Energy and Environmental Solutions [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges and asset impairments | 0 | 25 | 38 |
Corporate Unallocated [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges and asset impairments | $5 | $35 | $111 |
Restructuring_Charges_and_Asse4
Restructuring Charges and Asset Impairments (Narrative) (Details) (USD $) | 12 Months Ended | 0 Months Ended | 16 Months Ended | 18 Months Ended | |||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 | Oct. 03, 2012 | Jan. 26, 2014 | Oct. 27, 2013 | Oct. 30, 2011 |
positions | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring charges and asset impairments | $5 | $63 | $168 | ||||
Restructuring reserve | 9 | 39 | 133 | 39 | 11 | ||
2012 Global Restructuring Plan [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of positions eliminated | 1,300 | ||||||
2012 Global Restructuring Plan [Member] | Severance and other employee-related costs [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring charges and asset impairments | 5 | 39 | 106 | ||||
Cost incurred to date | 150 | ||||||
Restructuring reserve | 4 | 26 | 106 | 26 | 0 | ||
2012 EES Restructuring Plan [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring charges and asset impairments | 26 | 48 | |||||
Cost incurred to date | 87 | ||||||
2012 EES Restructuring Plan [Member] | Maximum [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of positions eliminated | 300 | ||||||
2012 EES Restructuring Plan [Member] | Severance and other employee-related costs [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring reserve | 0 | 5 | 16 | 5 | 0 | ||
2012 EES Restructuring Plan [Member] | Inventory-related Charges [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Cost incurred to date | 13 | ||||||
Others [Member] | Severance and other employee-related costs [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring charges and asset impairments | 2 | 14 | |||||
Restructuring reserve | $0 | $2 | $5 | $2 | $6 |
Restructuring_Charges_and_Asse5
Restructuring Charges and Asset Impairments (Changes in Restructuring Reserves) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Restructuring Reserve [Roll Forward] | |||
Beginning Balance | $39 | $133 | $11 |
Provision for restructuring reserves | 7 | 52 | 148 |
Consumption of reserves | -35 | -136 | -26 |
Adjustment of restructuring reserves | -2 | -10 | |
Ending Balance | 9 | 39 | 133 |
2012 Global Restructuring Plan [Member] | Severance and other employee-related costs [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Beginning Balance | 26 | 106 | 0 |
Provision for restructuring reserves | 7 | 35 | 106 |
Consumption of reserves | -27 | -111 | 0 |
Adjustment of restructuring reserves | -2 | -4 | |
Ending Balance | 4 | 26 | 106 |
2012 EES Restructuring Plan [Member] | Severance and other employee-related costs [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Beginning Balance | 5 | 16 | 0 |
Provision for restructuring reserves | 0 | 7 | 27 |
Consumption of reserves | -5 | -18 | -11 |
Adjustment of restructuring reserves | 0 | 0 | |
Ending Balance | 0 | 5 | 16 |
2012 EES Restructuring Plan [Member] | Contract cancellation and other costs [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Beginning Balance | 5 | 1 | 0 |
Provision for restructuring reserves | 0 | 8 | 1 |
Consumption of reserves | -1 | -2 | 0 |
Adjustment of restructuring reserves | 0 | -2 | |
Ending Balance | 4 | 5 | 1 |
Others [Member] | Severance and other employee-related costs [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Beginning Balance | 2 | 5 | 6 |
Provision for restructuring reserves | 0 | 2 | 14 |
Consumption of reserves | -2 | -5 | -15 |
Adjustment of restructuring reserves | 0 | 0 | |
Ending Balance | 0 | 2 | 5 |
Others [Member] | Contract cancellation and other costs [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Beginning Balance | 1 | 5 | 5 |
Provision for restructuring reserves | 0 | 0 | 0 |
Consumption of reserves | 0 | 0 | 0 |
Adjustment of restructuring reserves | 0 | -4 | |
Ending Balance | $1 | $1 | $5 |
Stockholders_Equity_Comprehens2
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | ($38) | ||
Other comprehensive income (loss) before reclassifications | -26 | ||
Amounts reclassified out of AOCI | -12 | ||
Other comprehensive loss, net of tax | -38 | 23 | -67 |
Ending balance | -76 | -38 | |
Unrealized Gain on Investments, Net [Member] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | 25 | ||
Other comprehensive income (loss) before reclassifications | 8 | ||
Amounts reclassified out of AOCI | -9 | ||
Other comprehensive loss, net of tax | -1 | ||
Ending balance | 24 | ||
Unrealized Gain on Derivative Instruments Qualifying as Cash Flow Hedges [Member] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | 2 | ||
Other comprehensive income (loss) before reclassifications | 4 | ||
Amounts reclassified out of AOCI | -6 | ||
Other comprehensive loss, net of tax | -2 | ||
Ending balance | 0 | ||
Defined and Postretirement Benefit Plans [Member] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | -72 | ||
Other comprehensive income (loss) before reclassifications | -36 | ||
Amounts reclassified out of AOCI | 3 | ||
Other comprehensive loss, net of tax | -33 | ||
Ending balance | -105 | ||
Cumulative Translation Adjustments [Member] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | 7 | ||
Other comprehensive income (loss) before reclassifications | -2 | ||
Amounts reclassified out of AOCI | 0 | ||
Other comprehensive loss, net of tax | -2 | ||
Ending balance | $5 |
Stockholders_Equity_Comprehens3
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Narrative) (Details) (USD $) | 0 Months Ended | 12 Months Ended | ||
Share data in Millions, except Per Share data, unless otherwise specified | Mar. 05, 2012 | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Plan | ||||
Stock Repurchase Program | ||||
Authorized amount | $3,000,000,000 | |||
Period in force | 3 years | |||
Remaining authorized repurchase amount | 1,600,000,000 | |||
Shares of common stock repurchased (in shares) | 0 | 18 | 126 | |
Dividends | ||||
Dividend declared, amount | 487,000,000 | 469,000,000 | 438,000,000 | |
Share-based Compensation | ||||
Number of employee stock purchase plans | 2 | |||
Stock Options | ||||
Options granted | 0 | 1 | 5 | |
Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | ||||
Additional performance-based awards to be earned upon certain levels of achievement | 1 | |||
First Quarter Dividend [Member] | ||||
Dividends | ||||
Cash dividend declared | $0.10 | $0.09 | $0.08 | |
Second Quarter Dividend [Member] | ||||
Dividends | ||||
Cash dividend declared | $0.10 | $0.10 | $0.09 | |
Third Quarter Dividend [Member] | ||||
Dividends | ||||
Cash dividend declared | $0.10 | $0.10 | $0.09 | |
Fourth Quarter Dividend [Member] | ||||
Dividends | ||||
Cash dividend declared | $0.10 | $0.10 | $0.09 | |
Employee Stock Purchase Plan [Member] | ||||
Share-based Compensation | ||||
Number of shares available for grant | 34 | |||
Employee Stock Purchase Plans | ||||
Purchase price of common stock, percent | 85.00% | |||
Purchase period | 6 months | |||
Weighted average estimated fair value of purchase rights under ESPP | $4.56 | $3.08 | $2.73 | |
Number of shares issued under the ESPP | 6 | 7 | 7 | |
Employee Stock [Member] | ||||
Share-based Compensation | ||||
Total unrecognized compensation expense | 241,000,000 | |||
Weighted average period for unrecognized compensation expense to be recognized | 2 years 6 months | |||
Number of shares available for grant | 176 | |||
Stock Options [Member] | ||||
Stock Options | ||||
Stock options scheduled to expire | 7 years | |||
Options granted | 0 | |||
Stock Options [Member] | Minimum [Member] | ||||
Stock Options | ||||
Stock options scheduled to be vested | 3 years | |||
Stock Options [Member] | Maximum [Member] | ||||
Stock Options | ||||
Stock options scheduled to be vested | 4 years | |||
Restricted Stock Awards [Member] | ||||
Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | ||||
Tax benefit realized | $61,000,000 | $42,000,000 | $27,000,000 | |
Restricted Stock [Member] | ||||
Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | ||||
Award conversion ratio to common stock | 1 | |||
Performance Shares/Performance Units [Member] | ||||
Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | ||||
Award conversion ratio to common stock | 1 | |||
Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units [Member] | ||||
Stock Options | ||||
Stock options scheduled to be vested | 4 years | |||
Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units [Member] | Minimum [Member] | Certain Executive Officers [Member] | ||||
Stock Options | ||||
Stock options scheduled to be vested | 3 years | |||
Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units [Member] | Maximum [Member] | Certain Executive Officers [Member] | ||||
Stock Options | ||||
Stock options scheduled to be vested | 4 years |
Stockholders_Equity_Comprehens4
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Stock Repurchases) (Details) (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Equity [Abstract] | |||
Shares of common stock repurchased (in shares) | 0 | 18 | 126 |
Cost of stock repurchased | $245 | $1,416 | |
Average price paid per share (in dollars per share) | $13.60 | $11.22 |
Stockholders_Equity_Comprehens5
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Share-based Compensation) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Total share-based compensation and related tax benefits | |||
Share-based compensation | $177 | $162 | $182 |
Tax benefit recognized | $50 | $45 | $52 |
Stockholders_Equity_Comprehens6
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Effect of Share-based Compensation) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation | $177 | $162 | $182 |
Cost of products sold [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation | 53 | 50 | 54 |
Research, development, and engineering [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation | 66 | 53 | 54 |
Marketing and selling [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation | 23 | 20 | 22 |
General and administrative [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation | 35 | 34 | 52 |
Restructuring charge [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation | $0 | $5 | $0 |
Stockholders_Equity_Comprehens7
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Weighted Average Assumptions) (Details) (Stock Options [Member]) | 12 Months Ended | |
Oct. 27, 2013 | Oct. 28, 2012 | |
Stock Options [Member] | ||
Weighted Average Assumptions Used For Stock Options Granted | ||
Dividend yield | 2.70% | 2.60% |
Expected volatility | 29.50% | 38.70% |
Risk-free interest rate | 1.44% | 0.52% |
Expected life (in years) | 4 years 6 months | 3 years 3 months 19 days |
Stockholders_Equity_Comprehens8
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Stock Options) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Equity [Abstract] | |||
Aggregate intrinsic value of outstanding stock options | $19 | $49 | $43 |
Total intrinsic value of stock options exercised | 39 | 63 | 21 |
Total fair value of stock options vested | 1 | 4 | 41 |
Cash received from stock option exercises | 29 | 88 | 33 |
Actual tax benefit realized from options exercised | $12 | $19 | $7 |
Stockholders_Equity_Comprehens9
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Stock Option Activity) (Details) (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Shares | |||
Beginning Balance | 6 | 21 | 30 |
Granted and assumed in Varian acquisition | 0 | 1 | 5 |
Exercised | -4 | -11 | -4 |
Canceled and forfeited | 0 | -5 | -10 |
Ending Balance | 2 | 6 | 21 |
Exercisable, Shares | 1 | 5 | 20 |
Weighted Average Exercise Price | |||
Beginning Balance (in dollars per share) | $9.12 | $10.53 | $13.05 |
Granted and assumed in Varian acquisition (in dollars per share) | $0 | $15.06 | $4.85 |
Exercised (in dollars per share) | $7.85 | $8.16 | $7.30 |
Canceled and forfeited (in dollars per share) | $0 | $17.62 | $16.76 |
Ending Balance (in dollars per share) | $10.87 | $9.12 | $10.53 |
Exercisable, Weighted Average Exercise Price (in dollars per share) | $7.97 | $7.90 | $10.71 |
Recovered_Sheet1
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Exercise Price) (Details) (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Options Outstanding | |||
Number of Shares | 2 | ||
Options exercisable and expected to become exercisable, Number of Shares | 2 | ||
Weighted Average Exercise Price (in dollar per share) | $10.87 | ||
Options exercisable and expected to become exercisable, Weighted Average Exercise Price (in dollars per share) | $10.87 | ||
Weighted Average Remaining Contractual Life | 3 years 11 months 26 days | ||
Options exercisable and expected to become exercisable, Weighted Average Remaining Contractual Life | 3 years 11 months 26 days | ||
Aggregate Intrinsic Value | $19 | $49 | $43 |
Options exercisable and expected to become exercisable, Aggregate Intrinsic Value | 19 | ||
Options Exercisable | |||
Number of Shares | 1 | ||
Weighted Average Exercise Price (in dollar per share) | $7.97 | ||
Aggregate Intrinsic Value | 14 | ||
Range $3.36 - $9.99 [Member] | |||
Options outstanding and exercisable | |||
Exercise price range, lower range limit (in dollar per share) | $3.36 | ||
Exercise price range, upper range limit (in dollar per share) | $9.99 | ||
Options Outstanding | |||
Number of Shares | 1 | ||
Weighted Average Exercise Price (in dollar per share) | $5.31 | ||
Weighted Average Remaining Contractual Life | 1 year 9 months 21 days | ||
Aggregate Intrinsic Value | 12 | ||
Options Exercisable | |||
Number of Shares | 1 | ||
Weighted Average Exercise Price (in dollar per share) | $5.30 | ||
Aggregate Intrinsic Value | 12 | ||
Range $10.00 - $15.06 [Member] | |||
Options outstanding and exercisable | |||
Exercise price range, lower range limit (in dollar per share) | $10 | ||
Exercise price range, upper range limit (in dollar per share) | $15.06 | ||
Options Outstanding | |||
Number of Shares | 1 | ||
Weighted Average Exercise Price (in dollar per share) | $14.96 | ||
Weighted Average Remaining Contractual Life | 5 years 7 months 2 days | ||
Aggregate Intrinsic Value | 7 | ||
Options Exercisable | |||
Number of Shares | 0 | ||
Weighted Average Exercise Price (in dollar per share) | $14.71 | ||
Aggregate Intrinsic Value | $2 |
Recovered_Sheet2
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units (Details) (Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units [Member], USD $) | 12 Months Ended | |||
In Millions, except Per Share data, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 | Oct. 30, 2011 |
Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units [Member] | ||||
Shares | ||||
Beginning Balance | 38 | 36 | 28 | |
Granted | 11 | 19 | 19 | |
Vested | -13 | -11 | -9 | |
Canceled | -3 | -6 | -2 | |
Ending Balance | 33 | 38 | 36 | 28 |
Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest | 30 | |||
Weighted Average Grant Date Fair Value | ||||
Beginning of Period (in dollars per share) | $11.11 | $11.53 | $12.64 | |
Granted (in dollars per share) | $16.58 | $10.55 | $10.61 | |
Vested (in dollars per share) | $11.13 | $11.44 | $12.87 | |
Canceled (in dollars per share) | $11.72 | $11.28 | $12.26 | |
Ending Balance (in dollars per share) | $12.59 | $11.11 | $11.53 | $12.64 |
Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest (in dollars per share) | $12.47 | |||
Weighted Average Remaining Contractual Term | ||||
Weighted average remaining contractual term | 2 years 3 months 18 days | 2 years 4 months 25 days | 2 years 7 months 6 days | 2 years 9 months 18 days |
Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest, Weighted Average Remaining Contractual Term | 2 years 1 month 6 days | |||
Aggregate Intrinsic Value | ||||
End of the period | $698 | $662 | $376 | $345 |
Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest, Aggregate Intrinsic Value | $630 |
Recovered_Sheet3
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (ESPP Fair Value Assumptions) (Details) (Employee Stock Purchase Plan [Member]) | 12 Months Ended | ||
Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 | |
Employee Stock Purchase Plan [Member] | |||
Weighted Average Assumptions Used For Stock Options Granted | |||
Dividend yield | 1.96% | 2.80% | 3.01% |
Expected volatility | 26.30% | 24.80% | 29.60% |
Risk-free interest rate | 0.06% | 0.09% | 0.13% |
Expected life (in years) | 6 months | 6 months | 6 months |
Employee_Benefit_Plans_Narrati
Employee Benefit Plans (Narrative) (Details) (USD $) | 9 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Jul. 28, 2013 | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Employee Bonus Plans | ||||
Charges to expense under Employee bonus plans | $290 | $269 | $271 | |
Defined Benefit Pension Plans of Foreign Subsidiaries and Other Post-Retirement Benefits | ||||
Liability under U.S. post retirement plan | 225 | 202 | ||
Estimated company contributions to pension plans and the post-retirement plan for fiscal 2015 | 9 | |||
Executive Deferred Compensation Plans | ||||
Number of unfunded plans | 2 | |||
Executive Deferred Compensation Plans [Member] | ||||
Executive Deferred Compensation Plans | ||||
Amounts payable under EDCP | 40 | 49 | ||
Executive Deferred Compensation Plans [Member] | Accounts Payable and Accrued Expenses [Member] | ||||
Executive Deferred Compensation Plans | ||||
Amounts payable under EDCP | 35 | |||
Executive Deferred Compensation Plans [Member] | Other Liabilities [Member] | ||||
Executive Deferred Compensation Plans | ||||
Amounts payable under EDCP | 5 | |||
Other Postretirement Benefit Plans, Defined Benefit [Member] | ||||
Defined Benefit Pension Plans of Foreign Subsidiaries and Other Post-Retirement Benefits | ||||
Minimum age limit for medical and vision benefits | 55 years | |||
Minimum years of service plus ages for medical and vision benefits | 65 years | |||
Liability under U.S. post retirement plan | 34 | 34 | ||
Savings and Retirement Plan [Member] | ||||
Employee Savings and Retirement Plan | ||||
Employer matching contribution, percent of match | 100.00% | |||
Employer matching contribution, percent of employees' gross pay | 3.00% | |||
Employer matching contribution, percent of match, second tier | 50.00% | |||
Percentage vested in matching contribution account for participants employed after January 1, 2010 | 100.00% | |||
Contribution under Employee Savings and Retirement Plan | 29 | 29 | 37 | |
Contributions under Employee Savings and Retirement Plan - forfeitures | $1 | $1 | ||
Savings and Retirement Plan [Member] | Minimum [Member] | ||||
Employee Savings and Retirement Plan | ||||
Employer matching contribution, percent of employees' gross pay, second tier | 4.00% | |||
Savings and Retirement Plan [Member] | Maximum [Member] | ||||
Employee Savings and Retirement Plan | ||||
Employer matching contribution, percent of employees' gross pay, second tier | 6.00% |
Employee_Benefit_Plans_Benefit
Employee Benefit Plans (Benefit Obligations and Plan Assets) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Change in projected benefit obligation | |||
Beginning projected benefit obligation | $445 | $434 | |
Service cost | 17 | 20 | 16 |
Interest cost | 17 | 15 | 14 |
Plan participants’ contributions | 1 | 1 | |
Actuarial (gain) loss | 62 | -16 | |
Curtailments, settlements and special termination benefits | -26 | -8 | |
Foreign currency exchange rate changes | -22 | 10 | |
Benefits paid | -12 | -10 | |
Plan amendments and business combinations | -3 | -1 | |
Ending projected benefit obligation | 479 | 445 | 434 |
Ending accumulated benefit obligation | 446 | 409 | |
Change in plan assets | |||
Beginning fair value of plan assets | 248 | 214 | |
Return on plan assets | 20 | 18 | |
Employer contributions | 48 | 24 | |
Plan participants’ contributions | 1 | 1 | |
Foreign currency exchange rate changes | -11 | 8 | |
Divestitures, settlements and business combinations | -26 | -7 | |
Benefits paid | -12 | -10 | |
Ending fair value of plan assets | 268 | 248 | 214 |
Funded status | -211 | -197 | |
Amounts recognized in the consolidated balance sheets | |||
Noncurrent asset | 17 | 9 | |
Current liability | -3 | -4 | |
Noncurrent liability | -225 | -202 | |
Total | -211 | -197 | |
Estimated amortization from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year | |||
Actuarial loss | 6 | 4 | |
Prior service cost (credit) | 0 | 0 | |
Total | 6 | 4 | |
Amounts recognized in accumulated other comprehensive loss | |||
Net actuarial loss | 134 | 91 | |
Prior service cost (credit) | -1 | 2 | |
Total | 133 | 93 | |
Plans with projected benefit obligations in excess of plan assets | |||
Projected benefit obligation | 326 | 438 | |
Fair value of plan assets | 98 | 233 | |
Plans with accumulated benefit obligations in excess of plan assets | |||
Accumulated benefit obligation | 297 | 269 | |
Fair value of plan assets | 98 | 99 | |
Equity securities [Member] | |||
Change in plan assets | |||
Beginning fair value of plan assets | 92 | ||
Ending fair value of plan assets | 104 | 92 | |
Plans with accumulated benefit obligations in excess of plan assets | |||
Plan assets — allocation | 39.00% | 37.00% | |
Debt securities [Member] | |||
Change in plan assets | |||
Beginning fair value of plan assets | 90 | ||
Ending fair value of plan assets | 102 | 90 | |
Plans with accumulated benefit obligations in excess of plan assets | |||
Plan assets — allocation | 38.00% | 36.00% | |
Insurance contracts [Member] | |||
Change in plan assets | |||
Beginning fair value of plan assets | 47 | ||
Ending fair value of plan assets | 41 | 47 | |
Plans with accumulated benefit obligations in excess of plan assets | |||
Plan assets — allocation | 15.00% | 19.00% | |
Other Investments [Member] | |||
Change in plan assets | |||
Beginning fair value of plan assets | 12 | ||
Ending fair value of plan assets | 12 | 12 | |
Plans with accumulated benefit obligations in excess of plan assets | |||
Plan assets — allocation | 5.00% | 5.00% | |
Cash [Member] | |||
Change in plan assets | |||
Beginning fair value of plan assets | 7 | ||
Ending fair value of plan assets | $9 | $7 | |
Plans with accumulated benefit obligations in excess of plan assets | |||
Plan assets — allocation | 3.00% | 3.00% | |
Minimum [Member] | |||
Range of assumptions to determine benefit obligations | |||
Discount rate | 1.00% | 1.10% | |
Rate of compensation increase | 2.00% | 2.00% | |
Maximum [Member] | |||
Range of assumptions to determine benefit obligations | |||
Discount rate | 4.40% | 4.50% | |
Rate of compensation increase | 4.00% | 4.70% |
Employee_Benefit_Plans_Fair_Va
Employee Benefit Plans (Fair Value of Plan Assets) (Details) (USD $) | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
In Millions, unless otherwise specified | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | $268 | $248 | $214 |
Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 55 | 40 | |
Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 172 | 161 | |
Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 41 | 47 | 49 |
Equity securities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 104 | 92 | |
Equity securities [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 38 | 27 | |
Equity securities [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 66 | 65 | |
Equity securities [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 0 | 0 | |
Debt securities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 102 | 90 | |
Debt securities [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 8 | 6 | |
Debt securities [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 94 | 84 | |
Debt securities [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 0 | 0 | |
Insurance contracts [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 41 | 47 | |
Insurance contracts [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 0 | 0 | |
Insurance contracts [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 0 | 0 | |
Insurance contracts [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 41 | 47 | |
Other Investments [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 12 | 12 | |
Other Investments [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 0 | 0 | |
Other Investments [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 12 | 12 | |
Other Investments [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 0 | 0 | |
Cash [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 9 | 7 | |
Cash [Member] | Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 9 | 7 | |
Cash [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | 0 | 0 | |
Cash [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan of assets | $0 | $0 |
Employee_Benefit_Plans_Level_3
Employee Benefit Plans (Level 3 Instruments) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 |
Change in plan assets | ||
Beginning fair value of plan assets | $248 | $214 |
Actual return on plan assets: | ||
Currency impact | -11 | 8 |
Ending fair value of plan assets | 268 | 248 |
Level 3 [Member] | ||
Change in plan assets | ||
Beginning fair value of plan assets | 47 | 49 |
Actual return on plan assets: | ||
Relating to assets still held at reporting date | 0 | -1 |
Purchases, sales, settlements, net | -2 | -4 |
Currency impact | -4 | 3 |
Ending fair value of plan assets | $41 | $47 |
Employee_Benefit_Plans_Net_Per
Employee Benefit Plans (Net Periodic Benefit Costs) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Components of net periodic benefit cost | |||
Service cost | $17 | $20 | $16 |
Interest cost | 17 | 15 | 14 |
Expected return on plan assets | -14 | -12 | -11 |
Amortization of actuarial loss and prior service credit | 4 | 6 | 0 |
Settlement and curtailment loss | 3 | 0 | 6 |
Net periodic benefit cost | $27 | $29 | $25 |
Weighted average assumptions | |||
Discount rate | 3.68% | 3.46% | 4.53% |
Expected long-term return on assets | 5.64% | 5.38% | 5.91% |
Rate of compensation increase | 3.29% | 3.07% | 3.09% |
Employee_Benefit_Plans_Future_
Employee Benefit Plans (Future Expected Benefit Payments) (Details) (USD $) | Oct. 26, 2014 |
In Millions, unless otherwise specified | |
Defined Benefit Plan, Estimated Future Benefit Payments [Abstract] | |
2015 | $12 |
2016 | 13 |
2017 | 13 |
2018 | 14 |
2019 | 14 |
2020-2024 | 81 |
Total | $147 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Components of income from operations before income taxes | |||
U.S. | $612 | $194 | $381 |
Foreign | 836 | 156 | -65 |
Income before income taxes | 1,448 | 350 | 316 |
Current: | |||
U.S. | 270 | 3 | 74 |
Foreign | 97 | 72 | 75 |
State | 27 | 2 | 8 |
Total current provision for income taxes | 394 | 77 | 157 |
Deferred: | |||
U.S. | -9 | 34 | 52 |
Foreign | -3 | -19 | -4 |
State | -6 | 2 | 2 |
Total deferred provision (benefit) for income taxes | -18 | 17 | 50 |
Provision for income taxes | 376 | 94 | 207 |
Reconciliation between the statutory U.S.federal income tax rate to actual effective income tax rate | |||
Tax provision at U.S. statutory rate | 35.00% | 35.00% | 35.00% |
Resolutions from prior years’ income tax filings | 2.00% | -4.70% | -6.00% |
Effect of foreign operations taxed at various rates | -10.90% | -21.10% | -8.50% |
State income taxes, net of federal benefit | 1.00% | 0.80% | 2.00% |
Research and other tax credits | -0.30% | -5.40% | -1.00% |
Production benefit | -1.30% | -1.00% | -8.00% |
Acquisition costs | 0.80% | 0.00% | 0.00% |
Goodwill impairment | 0.00% | 22.50% | 47.00% |
Share-based compensation | 0.40% | 2.20% | 4.00% |
Other | -0.70% | -1.40% | 1.00% |
Effective income tax rate | 26.00% | 26.90% | 65.50% |
Deferred tax assets: | |||
Allowance for doubtful accounts | 26 | 27 | |
Inventory reserves and basis difference | 128 | 134 | |
Installation and warranty reserves | 18 | 14 | |
Accrued liabilities | 123 | 138 | |
Deferred revenue | 32 | 27 | |
Tax credits and net operating losses | 160 | 182 | |
Deferred compensation | 44 | 33 | |
Share-based compensation | 57 | 60 | |
Fixed assets | 16 | -34 | |
Other | 27 | 13 | |
Gross deferred tax assets | 631 | 594 | |
Valuation allowance | -173 | -116 | |
Total deferred tax assets | 458 | 478 | |
Deferred tax liabilities: | |||
Intangible assets | -92 | -82 | |
Undistributed foreign earnings | -87 | -75 | |
Foreign exchange | -12 | -18 | |
Total gross deferred tax liabilities | -191 | -175 | |
Net deferred tax assets | 267 | 303 | |
Breakdown between current and non-current net deferred tax assets and liabilities | |||
Current deferred tax asset | 232 | 323 | |
Non-current deferred tax asset | 67 | 53 | |
Current deferred tax liability | 0 | -2 | |
Non-current deferred tax liability | -32 | -71 | |
Net deferred tax assets | 267 | 303 | |
Reconciliation of gross unrecognized tax benefits | |||
Beginning balance of gross unrecognized tax benefits | 194 | 174 | |
Settlements with tax authorities | -143 | -15 | |
Lapses of statutes of limitation | -2 | -15 | |
Increases in tax positions for current year | 52 | 48 | |
Increases in tax positions for prior years | 42 | 2 | |
Decreases in tax positions for prior years | -9 | 0 | |
Ending balance of gross unrecognized tax benefits | $134 | $194 | $174 |
Income_Taxes_Narrative_Details
Income Taxes (Narrative) (Details) (USD $) | 12 Months Ended | ||
Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 | |
Income Tax Examination [Line Items] | |||
Statutory rate | 35.00% | 35.00% | 35.00% |
Undistributed earnings from foregin subsidiaries | $2,700,000,000 | ||
Income tax benefits allocated directly to stockholders' equity | 27,000,000 | 11,000,000 | 2,000,000 |
Interest and penalties | 18,000,000 | -1,000,000 | |
Interest and penalties related to uncertain tax positions | 25,000,000 | 7,000,000 | |
Unrecognized tax benefits that would impact effective tax rate | 124,000,000 | 183,000,000 | |
Unrecognized tax benefits that would impact adjustment to other tax accounts | 9,000,000 | 10,000,000 | |
Income tax expense from settlement with tax authorities | 3,000,000 | 12,000,000 | 0 |
Internal Revenue Service [Member] | |||
Income Tax Examination [Line Items] | |||
Income tax refund | 17,000,000 | 31,000,000 | |
Payments for tax settlements | 14,000,000 | ||
State and Local Jurisdiction [Member] | |||
Income Tax Examination [Line Items] | |||
Net operating loss carryforwards | 45,000,000 | ||
Foreign Tax Authority [Member] | |||
Income Tax Examination [Line Items] | |||
Income tax refund | 18,000,000 | ||
Research [Member] | State and Local Jurisdiction [Member] | |||
Income Tax Examination [Line Items] | |||
Valuation allowance increase | 39,000,000 | ||
Tax credit carryforwards | 146,000,000 | ||
Research [Member] | Foreign Tax Authority [Member] | |||
Income Tax Examination [Line Items] | |||
Valuation allowance increase | 18,000,000 | ||
Research, carried over until exhausted [Member] | State and Local Jurisdiction [Member] | |||
Income Tax Examination [Line Items] | |||
Tax credit carryforwards | 112,000,000 | ||
Research, carried over the next fifteen years [Member] | State and Local Jurisdiction [Member] | |||
Income Tax Examination [Line Items] | |||
Tax credit carryforwards | 34,000,000 | ||
Tax credit carryforward, term | 15 years | ||
SINGAPORE | |||
Income Tax Examination [Line Items] | |||
Foreign statutory income tax rate | 17.00% | ||
ISRAEL | |||
Income Tax Examination [Line Items] | |||
Foreign statutory income tax rate | 26.50% | ||
Singapore and Israel [Member] | |||
Income Tax Examination [Line Items] | |||
Tax holiday benefit | $85,000,000 | ||
Tax holiday benefit per diluted share (in dollars per share) | $0.07 |
Warranty_Guarantees_Commitment2
Warranty, Guarantees, Commitments and Contingencies (Narrative) (Details) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 | Feb. 07, 2013 |
employee | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Total rent expense | $37 | $36 | $38 | |
Products warranty period, General | 12 months | |||
Maximum potential amount of future payments for letters of credit or other guarantee instruments | 46 | |||
Parent guarantees to banks | $102 | |||
Number of employees acquitted | 9 | |||
Number of employees found guilty | 1 |
Warranty_Guarantees_Commitment3
Warranty, Guarantees, Commitments and Contingencies (Future Minimum Lease Payments) (Details) (USD $) | Oct. 26, 2014 |
In Millions, unless otherwise specified | |
Future minimum lease payments | |
2015 | $28 |
2016 | 18 |
2017 | 10 |
2018 | 6 |
2019 | 3 |
Thereafter | 5 |
Total | $70 |
Warranty_Guarantees_Commitment4
Warranty, Guarantees, Commitments and Contingencies (Warrenty Reserves) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 |
Changes in the warranty reserves | ||
Beginning balance | $102 | $119 |
Provisions for warranty | 115 | 103 |
Consumption of reserves | -104 | -120 |
Ending balance | $113 | $102 |
Industry_Segment_Operations_Na
Industry Segment Operations (Narrative) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 28, 2012 |
Segment | ||
Segment Reporting Information [Line Items] | ||
Number of reportable segments | 4 | |
Corporate and unallocated costs [Member] | ||
Segment Reporting Information [Line Items] | ||
Deal costs and other acquisition related costs | $45 |
Industry_Segment_Operations_Re
Industry Segment Operations (Reportable Segment) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Oct. 26, 2014 | Jul. 27, 2014 | Apr. 27, 2014 | Jan. 26, 2014 | Oct. 27, 2013 | Jul. 28, 2013 | Apr. 28, 2013 | Jan. 27, 2013 | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Information for each reportable segment | |||||||||||
Net Sales | $2,264 | $2,265 | $2,353 | $2,190 | $1,988 | $1,975 | $1,973 | $1,573 | $9,072 | $7,509 | $8,719 |
Operating Income (Loss) | 1,520 | 432 | 411 | ||||||||
Depreciation/ Amortization | 375 | 410 | 422 | ||||||||
Capital Expenditures | 241 | 197 | 162 | ||||||||
Segment Assets | 13,174 | 12,043 | 13,174 | 12,043 | |||||||
Operating Segments [Member] | |||||||||||
Information for each reportable segment | |||||||||||
Net Sales | 9,072 | 7,509 | 8,719 | ||||||||
Operating Income (Loss) | 2,108 | 953 | 1,102 | ||||||||
Depreciation/ Amortization | 293 | 303 | 319 | ||||||||
Capital Expenditures | 146 | 132 | 86 | ||||||||
Segment Assets | 8,146 | 7,959 | 8,146 | 7,959 | 7,932 | ||||||
Operating Segments [Member] | Silicon Systems Group [Member] | |||||||||||
Information for each reportable segment | |||||||||||
Net Sales | 5,978 | 4,775 | 5,536 | ||||||||
Operating Income (Loss) | 1,391 | 876 | 1,243 | ||||||||
Depreciation/ Amortization | 268 | 260 | 256 | ||||||||
Capital Expenditures | 134 | 118 | 71 | ||||||||
Segment Assets | 5,508 | 5,525 | 5,508 | 5,525 | 5,106 | ||||||
Operating Segments [Member] | Applied Global Services [Member] | |||||||||||
Information for each reportable segment | |||||||||||
Net Sales | 2,200 | 2,023 | 2,285 | ||||||||
Operating Income (Loss) | 573 | 436 | 502 | ||||||||
Depreciation/ Amortization | 11 | 13 | 17 | ||||||||
Capital Expenditures | 7 | 7 | 8 | ||||||||
Segment Assets | 2,042 | 1,958 | 2,042 | 1,958 | 2,035 | ||||||
Operating Segments [Member] | Display [Member] | |||||||||||
Information for each reportable segment | |||||||||||
Net Sales | 615 | 538 | 473 | ||||||||
Operating Income (Loss) | 129 | 74 | 25 | ||||||||
Depreciation/ Amortization | 5 | 8 | 8 | ||||||||
Capital Expenditures | 4 | 6 | 1 | ||||||||
Segment Assets | 423 | 293 | 423 | 293 | 278 | ||||||
Operating Segments [Member] | Energy and Environmental Solutions [Member] | |||||||||||
Information for each reportable segment | |||||||||||
Net Sales | 279 | 173 | 425 | ||||||||
Operating Income (Loss) | 15 | -433 | -668 | ||||||||
Depreciation/ Amortization | 9 | 22 | 38 | ||||||||
Capital Expenditures | 1 | 1 | 6 | ||||||||
Segment Assets | $173 | $183 | $173 | $183 | $513 |
Industry_Segment_Operations_In
Industry Segment Operations (Income Loss by Segment) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Income from operations | $1,520 | $432 | $411 |
Total segment operating income [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Income from operations | 2,108 | 953 | 1,102 |
Corporate and unallocated costs [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Income from operations | -540 | -462 | -580 |
Restructuring charges and asset impairments [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Income from operations | -5 | -35 | -111 |
Certain Items Associated with Announced Business Combination [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Income from operations | -73 | -17 | 0 |
Gain (loss) on derivative associated with announced business combination [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Income from operations | $30 | ($7) | $0 |
Industry_Segment_Operations_De
Industry Segment Operations (Depreciation and Amortization Expense) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Depreciation and amortization | $375 | $410 | $422 |
Operating Segments [Member] | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Depreciation and amortization | 293 | 303 | 319 |
Shared facilities and information technology assets [Member] | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Depreciation and amortization | $82 | $107 | $103 |
Industry_Segment_Operations_Ca
Industry Segment Operations (Capital Expenditures) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Capital expenditures | $241 | $197 | $162 |
Operating Segments [Member] | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Capital expenditures | 146 | 132 | 86 |
Shared facilities and information technology assets [Member] | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Capital expenditures | $95 | $65 | $76 |
Industry_Segment_Operations_Se
Industry Segment Operations (Segment Assets) (Details) (USD $) | Oct. 26, 2014 | Oct. 27, 2013 |
In Millions, unless otherwise specified | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Allowance for bad debts | ($58) | ($74) |
Deferred income taxes | 458 | 478 |
Common property, plant and equipment | 861 | 850 |
Total assets | 13,174 | 12,043 |
Operating Segments [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 8,146 | 7,959 |
Unallocated Amount to Segment [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Cash and investments | 4,060 | 2,896 |
Allowance for bad debts | -58 | -74 |
Deferred income taxes | 299 | 376 |
Other current assets | 147 | 203 |
Common property, plant and equipment | 522 | 541 |
Other assets | $58 | $142 |
Industry_Segment_Operations_Ne
Industry Segment Operations (Net Sales and Long-lived Assets) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Oct. 26, 2014 | Jul. 27, 2014 | Apr. 27, 2014 | Jan. 26, 2014 | Oct. 27, 2013 | Jul. 28, 2013 | Apr. 28, 2013 | Jan. 27, 2013 | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | $2,264 | $2,265 | $2,353 | $2,190 | $1,988 | $1,975 | $1,973 | $1,573 | $9,072 | $7,509 | $8,719 |
Long-lived Assets | 924 | 914 | 924 | 914 | 988 | ||||||
United States [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 1,966 | 1,473 | 1,749 | ||||||||
Long-lived Assets | 636 | 620 | 636 | 620 | 666 | ||||||
Taiwan [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 2,702 | 2,640 | 2,411 | ||||||||
Long-lived Assets | 34 | 37 | 34 | 37 | 36 | ||||||
China [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 1,608 | 787 | 783 | ||||||||
Long-lived Assets | 61 | 65 | 61 | 65 | 74 | ||||||
Korea [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 965 | 924 | 1,897 | ||||||||
Long-lived Assets | 12 | 8 | 12 | 8 | 9 | ||||||
Japan [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 817 | 685 | 704 | ||||||||
Long-lived Assets | 5 | 4 | 5 | 4 | 6 | ||||||
Europe [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 658 | 680 | 863 | ||||||||
Long-lived Assets | 99 | 99 | 99 | 99 | 110 | ||||||
Southeast Asia [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 356 | 320 | 312 | ||||||||
Long-lived Assets | 77 | 81 | 77 | 81 | 87 | ||||||
Total outside United States [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 7,106 | 6,036 | 6,970 | ||||||||
Long-lived Assets | $288 | $294 | $288 | $294 | $322 |
Industry_Segment_Operations_Pe
Industry Segment Operations (Percentage by Customer) (Details) | 12 Months Ended | ||
Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 | |
Taiwan Semiconductor Manufacturing Company Limited [Member] | |||
Entity-Wide Revenue, Major Customer [Line Items] | |||
Entity-Wide Revenue, Major Customer, Percentage | 21.00% | 27.00% | 16.00% |
Samsung Electronics Co., Ltd. [Member] | |||
Entity-Wide Revenue, Major Customer [Line Items] | |||
Entity-Wide Revenue, Major Customer, Percentage | 12.00% | 13.00% | 20.00% |
Unaudited_Quarterly_Consolidat2
Unaudited Quarterly Consolidated Financial Data (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Oct. 26, 2014 | Jul. 27, 2014 | Apr. 27, 2014 | Jan. 26, 2014 | Oct. 27, 2013 | Jul. 28, 2013 | Apr. 28, 2013 | Jan. 27, 2013 | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 28, 2012 |
Unaudited Quarterly Consolidated Financial Data | |||||||||||
Net sales | $2,264 | $2,265 | $2,353 | $2,190 | $1,988 | $1,975 | $1,973 | $1,573 | $9,072 | $7,509 | $8,719 |
Gross margin | 959 | 992 | 1,001 | 891 | 795 | 806 | 808 | 582 | 3,843 | 2,991 | 3,313 |
Net income (loss) | $256 | $301 | $262 | $253 | $183 | $168 | ($129) | $34 | $1,072 | $256 | $109 |
Diluted earnings (loss) per share (in dollars per share) | $0.21 | $0.24 | $0.21 | $0.21 | $0.15 | $0.14 | ($0.11) | $0.03 | $0.87 | $0.21 | $0.09 |