Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Oct. 29, 2017 | Dec. 08, 2017 | Apr. 28, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | APPLIED MATERIALS INC /DE | ||
Entity Central Index Key | 6,951 | ||
Current Fiscal Year End Date | --10-29 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Oct. 29, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 1,056,340,714 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 43,552,849,133 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Income Statement [Abstract] | |||
Net sales | $ 14,537 | $ 10,825 | $ 9,659 |
Cost of products sold | 8,005 | 6,314 | 5,707 |
Gross profit | 6,532 | 4,511 | 3,952 |
Operating expenses: | |||
Research, development and engineering | 1,774 | 1,540 | 1,451 |
Marketing and selling | 456 | 429 | 428 |
General and administrative | 434 | 390 | 469 |
Gain on derivatives associated with terminated business combination | 0 | 0 | (89) |
Total operating expenses | 2,664 | 2,359 | 2,259 |
Income from operations | 3,868 | 2,152 | 1,693 |
Interest expense | 198 | 155 | 103 |
Interest and other income, net | 61 | 16 | 8 |
Income before income taxes | 3,731 | 2,013 | 1,598 |
Provision for income taxes | 297 | 292 | 221 |
Net income | $ 3,434 | $ 1,721 | $ 1,377 |
Earnings per share: | |||
Basic (in dollars per share) | $ 3.20 | $ 1.56 | $ 1.13 |
Diluted (in dollars per share) | $ 3.17 | $ 1.54 | $ 1.12 |
Weighted average number of shares: | |||
Basic (in shares) | 1,073 | 1,107 | 1,214 |
Diluted (in shares) | 1,084 | 1,116 | 1,226 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 3,434 | $ 1,721 | $ 1,377 |
Other comprehensive income (loss), net of tax: | |||
Change in unrealized net gain on investments | 23 | 16 | (10) |
Change in unrealized net loss on derivative instruments | 7 | (3) | (15) |
Change in defined and postretirement benefit plans | 21 | (36) | 0 |
Change in cumulative translation adjustments | 0 | 0 | 9 |
Other comprehensive income (loss), net of tax | 51 | (23) | (16) |
Comprehensive income | $ 3,485 | $ 1,698 | $ 1,361 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 5,010 | $ 3,406 |
Short-term investments | 2,266 | 343 |
Accounts receivable, net | 2,338 | 2,279 |
Inventories | 2,930 | 2,050 |
Other current assets | 374 | 275 |
Total current assets | 12,918 | 8,353 |
Long-term investments | 1,143 | 929 |
Property, plant and equipment, net | 1,066 | 937 |
Goodwill | 3,368 | 3,316 |
Purchased technology and other intangible assets, net | 412 | 575 |
Deferred income taxes and other assets | 512 | 460 |
Total assets | 19,419 | 14,570 |
Current liabilities: | ||
Accounts payable, notes payable and accrued expenses | 2,450 | 2,256 |
Customer deposits and deferred revenue | 1,665 | 1,376 |
Total current liabilities | 4,115 | 3,632 |
Long-term debt | 5,304 | 3,125 |
Other liabilities | 651 | 596 |
Total liabilities | 10,070 | 7,353 |
Commitments and contingencies (Note 14) | ||
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; 1,060 and 1,078 shares outstanding at 2017 and 2016, respectively | 11 | 11 |
Additional paid-in capital | 7,056 | 6,809 |
Retained earnings | 18,258 | 15,252 |
Treasury stock: 917 and 889 shares at 2017 and 2016, respectively | (15,912) | (14,740) |
Accumulated other comprehensive loss | (64) | (115) |
Total stockholders’ equity | 9,349 | 7,217 |
Total liabilities and stockholders’ equity | $ 19,419 | $ 14,570 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Oct. 29, 2017 | Oct. 30, 2016 |
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 | 1,060,000,000 | 1,078,000,000 |
Treasury stock, shares | 917,000,000 | 889,000,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) |
Beginning Balance, (in shares) at Oct. 26, 2014 | 1,221 | 717 | ||||
Beginning Balance at Oct. 26, 2014 | $ 7,868 | $ 12 | $ 6,384 | $ 13,072 | $ (11,524) | $ (76) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 1,377 | 1,377 | ||||
Other comprehensive income (loss), net of tax | (16) | (16) | ||||
Dividends | (482) | (482) | ||||
Share-based compensation | 187 | 187 | ||||
Issuance under stock plans, net of a tax benefit, (in shares) | 15 | |||||
Issuance under stock plans, net of a tax benefit $55, $23 and $55 for 2017, 2016 and 2015, respectively | $ 4 | 4 | ||||
Common stock repurchases, (in shares) | (76) | (76) | (76) | |||
Common stock repurchases | $ (1,325) | $ (1) | $ (1,324) | |||
Ending Balance, (in shares) at Oct. 25, 2015 | 1,160 | 793 | ||||
Ending Balance at Oct. 25, 2015 | 7,613 | $ 11 | 6,575 | 13,967 | $ (12,848) | (92) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 1,721 | 1,721 | ||||
Other comprehensive income (loss), net of tax | (23) | (23) | ||||
Dividends | (436) | (436) | ||||
Share-based compensation | 201 | 201 | ||||
Issuance under stock plans, net of a tax benefit, (in shares) | 14 | |||||
Issuance under stock plans, net of a tax benefit $55, $23 and $55 for 2017, 2016 and 2015, respectively | $ 33 | 33 | ||||
Common stock repurchases, (in shares) | (96) | (96) | (96) | |||
Common stock repurchases | $ (1,892) | $ 0 | $ (1,892) | |||
Ending Balance, (in shares) at Oct. 30, 2016 | 1,078 | 889 | ||||
Ending Balance at Oct. 30, 2016 | 7,217 | $ 11 | 6,809 | 15,252 | $ (14,740) | (115) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 3,434 | 3,434 | ||||
Other comprehensive income (loss), net of tax | 51 | 51 | ||||
Dividends | (428) | (428) | ||||
Share-based compensation | 220 | 220 | ||||
Issuance under stock plans, net of a tax benefit, (in shares) | 10 | |||||
Issuance under stock plans, net of a tax benefit $55, $23 and $55 for 2017, 2016 and 2015, respectively | $ 27 | 27 | ||||
Common stock repurchases, (in shares) | (28) | (28) | (28) | |||
Common stock repurchases | $ (1,172) | $ 0 | $ (1,172) | |||
Ending Balance, (in shares) at Oct. 29, 2017 | 1,060 | 917 | ||||
Ending Balance at Oct. 29, 2017 | $ 9,349 | $ 11 | $ 7,056 | $ 18,258 | $ (15,912) | $ (64) |
Consolidated Statements of Sto7
Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Statement of Stockholders' Equity [Abstract] | |||
Tax benefit included in issuance under stock plans | $ 55 | $ 23 | $ 55 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 3,434 | $ 1,721 | $ 1,377 |
Adjustments required to reconcile net income to cash provided by operating activities: | |||
Depreciation and amortization | 407 | 389 | 371 |
Excess tax benefits from share-based compensation | (55) | (23) | (56) |
Deferred income taxes | (11) | 21 | (134) |
Other | (9) | 38 | 53 |
Share-based compensation | 220 | 201 | 187 |
Changes in operating assets and liabilities, net of amounts acquired: | |||
Accounts receivable | (37) | (542) | (61) |
Inventories | (879) | (216) | (266) |
Other current and non-current assets | (157) | 30 | 26 |
Accounts payable and accrued expenses | 245 | 107 | (133) |
Customer deposits and deferred revenue | 289 | 611 | (175) |
Income taxes payable | 121 | 173 | (24) |
Other liabilities | 41 | (44) | (2) |
Cash provided by operating activities | 3,609 | 2,466 | 1,163 |
Cash flows from investing activities: | |||
Capital expenditures | (345) | (253) | (215) |
Cash paid for acquisitions, net of cash acquired | (68) | (16) | (4) |
Proceeds from sales and maturities of investments | 2,743 | 1,234 | 1,100 |
Purchases of investments | (4,856) | (1,390) | (1,162) |
Cash used in investing activities | (2,526) | (425) | (281) |
Cash flows from financing activities: | |||
Debt borrowings, net of issuance costs | 2,176 | 0 | 2,581 |
Debt repayments | (205) | (1,207) | 0 |
Proceeds from common stock issuances | 97 | 88 | 88 |
Common stock repurchases | (1,172) | (1,892) | (1,325) |
Payments of dividends to stockholders | (430) | (444) | (487) |
Excess tax benefits from share-based compensation | 55 | 23 | 56 |
Cash provided by (used in) financing activities | 521 | (3,432) | 913 |
Increase (decrease) in cash and cash equivalents | 1,604 | (1,391) | 1,795 |
Cash and cash equivalents — beginning of year | 3,406 | 4,797 | 3,002 |
Cash and cash equivalents — end of year | 5,010 | 3,406 | 4,797 |
Supplemental cash flow information: | |||
Cash payments for income taxes | 194 | 157 | 407 |
Cash refunds from income taxes | 61 | 113 | 12 |
Cash payments for interest | $ 186 | $ 151 | $ 92 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Oct. 29, 2017 | |
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 2017 , 2016 and 2015 contained 52, 53, and 52 weeks, respectively. Each fiscal quarter of 2017 and 2015 contained 13 weeks. The first fiscal quarter of 2016 contained 14 weeks, while the second, third and fourth quarters of fiscal 2016 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 and other income, net 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 expenses 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 writes down 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 Applied recognizes a current tax liability for the estimated amount of income tax payable on tax returns for the current fiscal year. Deferred tax assets and liabilities are recognized for the estimated future tax effects of temporary differences between the book and tax bases of assets and liabilities. Deferred tax assets are also recognized for net operating loss and tax credit carryovers. Deferred tax assets are offset by a valuation allowance to the extent it is more likely than not that they are not expected to be realized. Applied recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized from such positions are estimated based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Any changes in judgment related to uncertain tax positions are recognized in the Consolidated Statement of Operations in the quarter in which such change occurs. Interest and penalties related to uncertain tax positions are recognized in Applied’s provision for income taxes. 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 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. In certain cases, Applied also uses interest rate swap or lock agreements to hedge against the variability of cash flows due to changes in the benchmark interest rate of fixed rate debt. The terms of derivative financial instruments used for hedging purposes are generally consistent with the timing of the transactions being hedged. 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, 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 29, 2017 , 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 Accounting Standards Adopted Debt Issuance Costs. In April 2015, the Financial Accounting Standard Board (FASB) issued authoritative guidance that requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts. Effective in the first quarter of fiscal 2017, Applied adopted the authoritative guidance retrospectively. The adoption of this guidance did not have a significant impact on Applied’s consolidated financial statements. See Note 10 of Notes to Consolidated Financial Statements for additional discussion. Fair Value Disclosures. In May 2015, the FASB issued authoritative guidance to remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The new guidance also removes the requirement of certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. The guidance became effective for Applied in the first quarter of fiscal 2017, with retrospective application. The adoption of this guidance only impacts disclosures in Applied’s annual consolidated financial statements. Intangibles: Internal-Use Software. In April 2015, the FASB issued authoritative guidance for customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. This guidance did not change accounting for service contracts. Applied adopted this guidance effective in the first quarter of fiscal 2017 prospectively to all arrangements entered into or materially modified after the effective date. The adoption of this guidance did not have a significant impact on Applied’s consolidated financial statements. Accounting Standards Not Yet Adopted Derivatives and Hedging. In August 2017, the FASB issued authoritative guidance that modifies the recognition and presentation of hedge accounting to better align an entity’s risk management strategies and financial reporting for hedging relationships. The authoritative guidance expands the application of hedge accounting for non-financial and financial risk components and eases certain hedge effectiveness assessment requirements. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2020, with early adoption permitted. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. Share-Based Compensation: Modification Accounting. In May 2017, the FASB issued an update to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award changes as a result of the change in terms or conditions. This authoritative guidance will be applied prospectively to awards modified following adoption and will be effective for Applied in the first quarter of fiscal 2019 with early adoption permitted. The impact of the adoption of this guidance will depend on whether the Company makes any future modifications of share-based payment awards. Receivables: Nonrefundable Fees and Other Costs. In March 2017, the FASB issued authoritative guidance that will shorten the amortization period for certain callable debt securities held at a premium to the earliest call date to more closely align with expectations incorporated in market pricing. This authoritative guidance will be effective for Applied in the first quarter of fiscal 2020 on a modified retrospective basis, with early adoption permitted. Applied is currently evaluating the impact of adopting this new accounting guidance on Applied’s consolidated financial statements. Retirement Benefits. In March 2017, the FASB issued authoritative guidance which requires companies to present the service cost component of net benefit cost in the same line items in which they report compensation cost. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2019 on a retrospective basis, with early adoption permitted. The adoption of this guidance is only expected to result in reclassification of other components of net benefit costs outside of income from operations and is not expected to have a significant impact on Applied’s consolidated financial statements. Goodwill Impairment. In January 2017, the FASB issued authoritative guidance that simplifies the process required to test goodwill for impairment. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2021. Early adoption is permitted. The adoption of this guidance is not expected to have a significant impact on Applied’s consolidated financial statements. Business Combinations. In January 2017, the FASB issued authoritative guidance that clarifies the definition of a business to help companies evaluate whether acquisition or disposal transactions should be accounted for as asset groups or as businesses. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2019 on a prospective basis, with early adoption permitted. The impact of the adoption depends on the facts and circumstances of future acquisition or disposal transactions. Income Taxes: Intra-Entity Asset Transfers. In October 2016, the FASB issued authoritative guidance that requires entities to recognize at the transaction date the income tax consequences of intercompany asset transfers other than inventory. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2019, with early adoption permitted. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. Classification of Certain Cash Receipts and Cash Payments. In August 2016, the FASB issued authoritative guidance which addresses classification of certain cash receipts and cash payments related to the statement of cash flows. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2019. The adoption of this guidance is not expected to have a significant impact on Applied’s consolidated financial statements. Financial Instruments: Credit Losses. In June 2016, the FASB issued authoritative guidance that modifies the impairment model for certain financial assets by requiring use of an expected loss methodology, which will result in more timely recognition of credit losses. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2021. Early adoption is permitted beginning in the first quarter of fiscal 2020. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. Share-Based Compensation. In March 2016, the FASB issued authoritative guidance that simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Applied plans to adopt the authoritative guidance effective in the first quarter of fiscal 2018. Upon adoption, Applied will elect to continue to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period. The new standard will result in the recognition of excess tax benefits in provision for income taxes rather than paid-in capital prospectively, which is expected to increase volatility in Applied’s results of operations. Applied will elect to apply the presentation requirements for cash flows related to excess tax benefits retrospectively. The presentation requirements for cash flows related to employee taxes paid for withheld shares will be presented as a financing activity retrospectively, as required. Applied expects cash flow from operations to increase, with a corresponding decrease in cash flow from financing activity as a result of the changes in the cash flow presentation. Leases. In February 2016, the FASB issued authoritative guidance for lease accounting, which requires lessees to recognize lease assets and liabilities on the balance sheet for certain lease arrangements that are classified as operating leases under the previous standard, and to provide for enhanced disclosures. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2020 and should be applied using a modified retrospective approach. Early adoption is permitted. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. Financial Instruments: Classification and Measurement. In January 2016, the FASB issued authoritative guidance that requires equity investments that do not result in consolidation, and are not accounted for under the equity method, to be measured at fair value, and requires recognition of any changes in fair value in net income unless the investments qualify for a new practicability exception. For financial liabilities measured at fair value, the change in fair value caused by a change in instrument-specific credit risk will be required to be presented separately in other comprehensive income. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2019. Early adoption is permitted only for the provisions related to the recognition of changes in fair value of financial liabilities caused by instrument-specific credit risk. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. Inventory Measurement. In July 2015, the FASB issued authoritative guidance that requires inventory to be measured at the lower of cost and net realizable value instead of at lower of cost or market. This guidance does not apply to inventory that is measured using last-in, first out (LIFO) or the retail inventory method but applies to all other inventory including those measured using first-in, first-out (FIFO) or the average cost method. Applied will adopt this authoritative guidance in the first quarter of fiscal 2018 prospectively to measurement of inventory after the effective date. The adoption of this guidance is not expected to have a significant impact on Applied’s consolidated financial statements. Revenue Recognition. In May 2014, the 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, and requires certain additional disclosures. This new standard will supersede most current revenue recognition guidance, including industry-specific guidance. Entities will have the option of using either a full retrospective or modified retrospective approach to adopting the guidance. In August 2015, the FASB issued an amendment to defer the effective date by one year and allow entities to early adopt no earlier than the original effective date. With this amendment, the guidance will be effective for Applied in the first quarter of fiscal 2019, which is the Company’s planned adoption date. Applied currently anticipates adopting this new guidance using the full retrospective approach, although this continues to be assessed as part of the overall evaluation. In fiscal 2016, Applied established a project steering committee and cross-functional implementation team to identify potential differences that would result from applying the requirements of the new standard to Applied’s revenue contracts. In addition, the implementation team is also responsible for identifying and implementing changes to business processes, systems and controls to support recognition and disclosure under the new standard. While the Company’s evaluation of the impact of this new guidance is not complete, Applied currently expects the timing of revenue recognition for certain products to be earlier than under current revenue recognition guidance. Applied will continue to complete its evaluation of the effect of this new guidance on Applied’s financial position, results of operations and its ongoing financial reporting, and its preliminary assessments are subject to change. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Oct. 29, 2017 | |
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. Fiscal Year 2017 2016 2015 (In millions, except per share amounts) Numerator: Net income $ 3,434 $ 1,721 $ 1,377 Denominator: Weighted average common shares outstanding 1,073 1,107 1,214 Effect of dilutive stock options, restricted stock units and employee stock purchase plan shares 11 9 12 Denominator for diluted earnings per share 1,084 1,116 1,226 Basic earnings per share $ 3.20 $ 1.56 $ 1.13 Diluted earnings per share $ 3.17 $ 1.54 $ 1.12 Potentially dilutive securities — — — Potentially dilutive securities attributable to outstanding stock options and restricted stock units are excluded from the calculation of diluted earnings per share where the combined exercise price, average unamortized fair value and assumed tax benefits upon the exercise of options and the vesting of restricted stock units are greater than the average market price of Applied common stock, and therefore their inclusion would be anti-dilutive. |
Cash, Cash Equivalents and Inve
Cash, Cash Equivalents and Investments | 12 Months Ended |
Oct. 29, 2017 | |
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 29, 2017 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In millions) Cash $ 1,346 $ — $ — $ 1,346 Cash equivalents: Money market funds 2,658 — — 2,658 U.S. Treasury and agency securities 15 — — 15 Non-U.S. government securities* 55 — — 55 Municipal securities 341 — — 341 Commercial paper, corporate bonds and medium-term notes 595 — — 595 Total Cash equivalents 3,664 — — 3,664 Total Cash and Cash equivalents $ 5,010 $ — $ — $ 5,010 Short-term and long-term investments: U.S. Treasury and agency securities $ 667 $ — $ 1 $ 666 Non-U.S. government securities* 161 — — 161 Municipal securities 1,007 — — 1,007 Commercial paper, corporate bonds and medium-term notes 1,024 1 1 1,024 Asset-backed and mortgage-backed securities 379 — 1 378 Total fixed income securities 3,238 1 3 3,236 Publicly traded equity securities 22 78 1 99 Equity investments in privately-held companies 74 — — 74 Total short-term and long-term investments $ 3,334 $ 79 $ 4 $ 3,409 Total Cash, Cash equivalents and Investments $ 8,344 $ 79 $ 4 $ 8,419 _________________________ * Includes agency debt securities guaranteed by non-U.S. governments, which consist of Canada and Germany. October 30, 2016 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In millions) Cash $ 1,103 $ — $ — $ 1,103 Cash equivalents: Money market funds 1,889 — — 1,889 U.S. Treasury and agency securities 10 — — 10 Non-U.S. government securities 10 — — 10 Municipal securities 253 — — 253 Commercial paper, corporate bonds and medium-term notes 141 — — 141 Total Cash equivalents $ 2,303 $ — $ — $ 2,303 Total Cash and Cash equivalents $ 3,406 $ — $ — $ 3,406 Short-term and long-term investments: U.S. Treasury and agency securities $ 195 $ — $ — $ 195 Non-U.S. government securities* 5 — — 5 Municipal securities 408 — — 408 Commercial paper, corporate bonds and medium-term notes 273 1 — 274 Asset-backed and mortgage-backed securities 253 1 1 253 Total fixed income securities 1,134 2 1 1,135 Publicly traded equity securities 26 44 3 67 Equity investments in privately-held companies 70 — — 70 Total short-term and long-term investments $ 1,230 $ 46 $ 4 $ 1,272 Total Cash, Cash equivalents and Investments $ 4,636 $ 46 $ 4 $ 4,678 ________________________ * Includes agency debt securities guaranteed by non-U.S. governments, which consist of Canada and Germany. Maturities of Investments The following table summarizes the contractual maturities of Applied’s investments at October 29, 2017 : Cost Estimated Fair Value (In millions) Due in one year or less $ 2,219 $ 2,219 Due after one through five years 640 640 No single maturity date** 475 550 $ 3,334 $ 3,409 _________________________ ** 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 for each fiscal year were as follows: 2017 2016 2015 (In millions) Gross realized gains $ 14 $ 10 $ 9 Gross realized losses $ 1 $ 2 $ 3 At October 29, 2017 , 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 is 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 fixed income securities at October 29, 2017 , October 30, 2016 and October 25, 2015 were temporary in nature and therefore it did not recognize any impairment of its marketable fixed income securities for fiscal 2017 , 2016 or 2015 . During fiscal 2017 , 2016 and 2015 , Applied determined that certain of its equity investments were other-than-temporarily impaired and, accordingly, recognized impairment charges of $10 million , $8 million and $9 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. 29, 2017 | |
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 whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. 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 29, 2017 , 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: October 29, 2017 October 30, 2016 Level 1 Level 2 Total Level 1 Level 2 Total (In millions) Assets: Money market funds $ 2,658 $ — $ 2,658 $ 1,889 $ — $ 1,889 U.S. Treasury and agency securities 192 489 681 107 98 205 Non-U.S. government securities — 216 216 — 15 15 Municipal securities — 1,348 1,348 — 661 661 Commercial paper, corporate bonds and medium-term notes — 1,619 1,619 — 415 415 Asset-backed and mortgage-backed securities — 378 378 — 253 253 Publicly traded equity securities 99 — 99 67 — 67 Total $ 2,949 $ 4,050 $ 6,999 $ 2,063 $ 1,442 $ 3,505 There were no transfers between Level 1 and Level 2 fair value measurements during fiscal 2017 and 2016 , 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 29, 2017 or October 30, 2016 . 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 $74 million at October 29, 2017 , of which $65 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 $70 million at October 30, 2016 , of which $62 million of investments were accounted for under the cost method of accounting and $8 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 2017 , 2016 and 2015 , Applied determined that certain of its equity investments were other-than-temporarily impaired and, accordingly, recognized impairment charges of $10 million , $8 million and $9 million , respectively. Other The carrying amounts of Applied’s financial instruments, including cash and cash equivalents, accounts receivable, notes payable - short term, and accounts payable and accrued expenses, approximate fair value due to their short maturities. At October 29, 2017 , the carrying amount of long-term debt was $5.3 billion , and the estimated fair value was $5.8 billion . At October 30, 2016 , the carrying amount of long-term debt was $3.1 billion , and the estimated fair value was $3.5 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. See Note 10 of the Notes to the Consolidated Financial Statements for further detail of existing debt. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 12 Months Ended |
Oct. 29, 2017 | |
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 and Taiwanese dollar. 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. During fiscal 2015, Applied entered into and settled a series of forward-starting interest rate swap agreements, with a total notional amount of $600 million , to hedge against the variability of benchmark interest rates prior to the issuance of the debt. These instruments were designated as cash flow hedges at inception and settled in conjunction with the issuance of debt in September 2015. The $20 million loss from the settlement of the interest rate swap agreement, which was included in accumulated other comprehensive income (AOCI) in stockholders’ equity, is being amortized to interest expense over the term of the senior unsecured 10 -year notes issued in September 2015. During fiscal 2017, Applied entered into and settled interest rate lock agreements, with a total notional amount of $700 million to hedge against the variability of benchmark interest rates prior to the issuance of the debt. These instruments were designated as cash flow hedges at inception and settled in conjunction with the issuance of debt in March 2017. The $14 million loss from the settlement of the interest rate lock agreement, which was included in AOCI in stockholders’ equity, is being amortized to interest expense over the term of the senior unsecured 10 -year notes issued in March 2017. Applied does not use derivative financial instruments for trading or speculative purposes. Derivative instruments and hedging activities, including foreign currency exchange and interest rate 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 foreign exchange derivatives 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 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 foreign exchange derivative instruments included in AOCI at October 29, 2017 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 earnings. 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 a loss of $8 million for fiscal 2016 and were not significant for fiscal years 2017 and 2015 . 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. In September 2013, Applied and Tokyo Electron Limited (TEL) entered into a Business Combination Agreement. Applied purchased foreign exchange option contracts to limit its foreign exchange risk associated with the then-anticipated business combination. These derivatives did not qualify for hedge accounting treatment and were marked to market at the end of each reporting period with gains and losses recorded as part of operating expenses. Due to the termination of the then-anticipated business combination with TEL on April 26, 2015, these foreign exchange option contracts were sold during the third quarter of fiscal 2015. Applied recorded a gain of $89 million in fiscal 2015, related to these contracts. The cash flow impacts of these derivatives have been classified as operating cash flows in the Consolidated Statements of Cash Flows. The fair values of foreign exchange derivative instruments at October 29, 2017 and October 30, 2016 were not material. The effects of derivative instruments and hedging activities on the Consolidated Statements of Operations were as follows: Effective Portion Ineffective Portion and Amount Derivatives in Cash Flow Hedging Relationships Location of Gain or Gain or Gain or (Loss) Gain or (Loss) (In millions) 2017 Foreign exchange contracts AOCI $ 35 $ — $ — Foreign exchange contracts Cost of products sold — 7 (3 ) Foreign exchange contracts General and administrative — 7 (2 ) Interest rate swaps AOCI (14 ) — — Interest rate swaps Interest expense — (3 ) — Total $ 21 $ 11 $ (5 ) 2016 Foreign exchange contracts AOCI $ (53 ) $ — $ — Foreign exchange contracts Cost of products sold — (46 ) 2 Foreign exchange contracts General and administrative — — (11 ) Interest rate swaps Interest expense — (2 ) — Total $ (53 ) $ (48 ) $ (9 ) 2015 Foreign exchange contracts AOCI $ 6 $ — $ — Foreign exchange contracts Cost of products sold — 15 (4 ) Foreign exchange contracts General and administrative — (6 ) (2 ) Interest rate swaps AOCI (20 ) — — Total $ (14 ) $ 9 $ (6 ) Amount of Gain or (Loss) Recognized in Income Derivatives Not Designated as Hedging Instruments Location of Gain or 2017 2016 2015 (In millions) Foreign exchange contracts Gain (loss) on derivatives associated with terminated business combination $ — $ — $ 89 Foreign exchange contracts General and administrative 39 (75 ) 21 Total $ 39 $ (75 ) $ 110 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 29, 2017 and October 30, 2016 . Entering into derivative 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. 29, 2017 | |
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. Applied sold $746 million and $75 million of accounts receivable during fiscal 2017 and 2016, respectively. There was no accounts receivable sold during fiscal 2015. Applied did not discount letters of credit issued by customers or discount promissory notes during fiscal 2017, 2016 or 2015. 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 $34 million and $51 million at October 29, 2017 and October 30, 2016 , respectively. Changes in allowance for doubtful accounts in each fiscal year were as follows: 2017 2016 2015 (In millions) Beginning balance $ 51 $ 49 $ 58 Provision — 3 — Deductions 1 (17 ) (1 ) (9 ) Ending balance $ 34 $ 51 $ 49 _____________________________ 1 Fiscal 2017 , 2016 and 2015 deductions primarily represent releases of allowance for doubtful accounts credited to expense as a result of an overall lower risk profile of Applied’s customers and cash collections. Applied sells its products principally to manufacturers within the semiconductor and display industries. While Applied believes that its allowance for doubtful accounts is adequate and represents its best estimate as of October 29, 2017 , it continues to closely monitor customer liquidity and industry and economic conditions, which may result in changes to Applied’s estimates. |
Balance Sheet Detail
Balance Sheet Detail | 12 Months Ended |
Oct. 29, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Detail | Balance Sheet Detail October 29, October 30, (In millions) Inventories Customer service spares $ 595 $ 452 Raw materials 603 474 Work-in-process 468 393 Finished goods 1,264 731 $ 2,930 $ 2,050 Included in finished goods inventory is $331 million at October 29, 2017 and $190 million at October 30, 2016 , 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 $281 million and $197 million of evaluation inventory at October 29, 2017 and October 30, 2016 , respectively. October 29, October 30, (In millions) Other Current Assets Prepaid income taxes and income taxes receivable $ 57 $ 87 Prepaid expenses and other 317 188 $ 374 $ 275 Useful Life October 29, October 30, (In years) (In millions) Property, Plant and Equipment, Net Land and improvements $ 160 $ 159 Buildings and improvements 3-30 1,315 1,261 Demonstration and manufacturing equipment 3-5 1,129 992 Furniture, fixtures and other equipment 3-15 572 547 Construction in progress 135 84 Gross property, plant and equipment 3,311 3,043 Accumulated depreciation (2,245 ) (2,106 ) $ 1,066 $ 937 Depreciation expense was $214 million , $200 million and $185 million for fiscal 2017 , 2016 and 2015 respectively. In November 2017, Applied acquired additional property for $100 million in cash to support the Company’s growth. October 29, October 30, (In millions) Accounts Payable, Notes Payable and Accrued Expenses Accounts payable $ 945 $ 813 Notes payable, short-term — 200 Compensation and employee benefits 666 517 Warranty 199 153 Dividends payable 106 108 Income taxes payable 112 101 Other accrued taxes 70 50 Interest payable 38 31 Other 314 283 $ 2,450 $ 2,256 October 29, October 30, (In millions) Customer Deposits and Deferred Revenue Customer deposits $ 381 $ 471 Deferred revenue 1,284 905 $ 1,665 $ 1,376 Applied typically receives deposits on future deliverables from customers in the Display and Adjacent Markets segment and, in certain instances, may also receive deposits from customers in the Applied Global Services segment. October 29, October 30, (In millions) Other Liabilities Income taxes payable $ 392 $ 337 Defined and postretirement benefit plans 160 182 Other 99 77 $ 651 $ 596 |
Business Combinations
Business Combinations | 12 Months Ended |
Oct. 29, 2017 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations During fiscal 2017, Applied completed three acquisitions to complement Applied’s existing product offerings and to provide opportunities for future growth within Applied’s Display and Adjacent Markets and Applied Global Services segments. Pro forma results of operations for these acquisitions have not been presented because they are not material to Applied’s consolidated results of operations. The acquired businesses are included in the results for the Display and Adjacent Markets and Applied Global Services segments. The following table represents the preliminary aggregated purchase price allocation for acquisitions completed in fiscal year 2017: Estimated Fair Values (In millions) Fair value of net assets acquired $ 23 Goodwill 55 Purchased technology 31 Purchase price allocated $ 109 Intangible assets are being amortized on a straight-line basis over an estimated weighted-average useful life of 3.5 years . Total transaction costs related to these acquisitions were not material and were expensed as incurred in general and administrative expenses in the Consolidated Statement of Operations. |
Goodwill, Purchased Technology
Goodwill, Purchased Technology and Other Intangible Assets | 12 Months Ended |
Oct. 29, 2017 | |
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. As of October 29, 2017, Applied’s reporting units included Transistor and Interconnect Group, Patterning and Packaging Group, and Imaging and Process Control Group, which combined to form the Semiconductor Systems reporting segment, Applied Global Services, and Display and Adjacent Markets. There were no changes in Applied’s reporting units during fiscal 2017. In the fourth quarter of fiscal 2017 , Applied performed a 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. 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 29, 2017 October 30, 2016 Goodwill Other Intangible Assets Total Goodwill Other Intangible Assets Total (In millions) Semiconductor Systems $ 2,151 $ — $ 2,151 $ 2,151 $ — $ 2,151 Applied Global Services 1,018 — 1,018 1,010 5 1,015 Display and Adjacent Markets 199 — 199 155 20 175 Carrying amount $ 3,368 $ — $ 3,368 $ 3,316 $ 25 $ 3,341 From time to time, Applied makes acquisitions of and investments in companies related to existing or new markets for Applied. During fiscal 2017 , goodwill and other indefinite lived intangible assets increased by $27 million primarily due to acquisitions in the Display and Adjacent Markets and Applied Global Services segments, partially offset by decreases in indefinite-lived intangible assets due to commercialization of in-process technologies in the Display and Applied Global Services segments. See Note 8 , Business Combinations, for further details. 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. A summary of Applied’s purchased technology and intangible assets is set forth below: October 29, October 30, (In millions) Purchased technology, net $ 288 $ 409 Intangible assets - finite-lived, net 124 141 Intangible assets - indefinite-lived — 25 Total $ 412 $ 575 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 29, 2017 October 30, 2016 Purchased Technology Other Intangible Assets Total Purchased Technology Other Intangible Assets Total (In millions) Gross carrying amount: Semiconductor Systems $ 1,449 $ 252 $ 1,701 $ 1,449 $ 252 $ 1,701 Applied Global Services 33 44 77 28 44 72 Display and Adjacent Markets 163 38 201 115 36 151 Corporate and Other — 9 9 1 9 10 Gross carrying amount $ 1,645 $ 343 $ 1,988 $ 1,593 $ 341 $ 1,934 Accumulated amortization: Semiconductor Systems $ (1,210 ) $ (131 ) $ (1,341 ) $ (1,043 ) $ (113 ) $ (1,156 ) Applied Global Services (28 ) (44 ) (72 ) (27 ) (44 ) (71 ) Display and Adjacent Markets (119 ) (35 ) (154 ) (113 ) (34 ) (147 ) Corporate and Other — (9 ) (9 ) (1 ) (9 ) (10 ) Accumulated amortization $ (1,357 ) $ (219 ) $ (1,576 ) $ (1,184 ) $ (200 ) $ (1,384 ) Carrying amount $ 288 $ 124 $ 412 $ 409 $ 141 $ 550 Details of amortization expense for each fiscal year by segment were as follows: 2017 2016 2015 (In millions) Semiconductor Systems $ 185 $ 185 $ 179 Applied Global Services 1 1 1 Display and Adjacent Markets 7 — 3 Corporate and Other — 3 3 Total $ 193 $ 189 $ 186 Amortization expense for each fiscal year was charged to the following categories: 2017 2016 2015 (In millions) Cost of products sold $ 173 $ 167 $ 163 Research, development and engineering 1 2 1 Marketing and selling 19 20 20 General and administrative — — 2 Total $ 193 $ 189 $ 186 As of October 29, 2017 , future estimated amortization expense is expected to be as follows: Amortization Expense (In millions) 2018 198 2019 57 2020 52 2021 40 2022 65 Total $ 412 |
Borrowing Facilities and Debt
Borrowing Facilities and Debt | 12 Months Ended |
Oct. 29, 2017 | |
Debt Disclosure [Abstract] | |
Borrowing Facilities and Debt | Borrowing Facilities and 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 September 2021 . This agreement provides for borrowings in United States dollars at interest rates keyed to one of various benchmark rates selected by Applied for each advance, plus a margin based on Applied’s public debt rating and includes financial and other covenants. Remaining credit facilities in the amount of approximately $70 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 29, 2017 and October 30, 2016 , and Applied has not utilized these credit facilities. In fiscal 2011, Applied established a short-term commercial paper program of up to $1.5 billion . At October 29, 2017 and October 30, 2016 , Applied did not have any commercial paper outstanding. In March 2017, Applied issued senior unsecured notes in the aggregate principal amount of $2.2 billion and in May 2017, used a portion of the net proceeds to redeem the outstanding $200 million in principal amount of its 7.125% senior notes due in October 2017. Debt outstanding as of October 29, 2017 and October 30, 2016 was as follows: Principal Amount October 29, October 30, Effective Interest Rate Interest Pay Dates (In millions) Short-term debt: 7.125% Senior Notes Due 2017 $ — $ 200 7.190% April 15, October 15 Total short-term debt — 200 Long-term debt: 2.625% Senior Notes Due 2020 600 600 2.640% April 1, October 1 4.300% Senior Notes Due 2021 750 750 4.326% June 15, December 15 3.900% Senior Notes Due 2025 700 700 3.944% April 1, October 1 3.300% Senior Notes Due 2027 1,200 — 3.342% April 1, October 1 5.100% Senior Notes Due 2035 500 500 5.127% April 1, October 1 5.850% Senior Notes Due 2041 600 600 5.879% June 15, December 15 4.350% Senior Notes Due 2047 1,000 — 4.361% April 1, October 1 5,350 3,150 Total unamortized discount (12 ) (7 ) Total unamortized debt issuance costs 1 (34 ) (18 ) Total long-term debt 5,304 3,125 Total debt $ 5,304 $ 3,325 __________________________________________ 1 Balances reflect the effects of the retrospective adoption of the authoritative guidance in the first quarter of fiscal 2017, which required debt issuance costs to be presented as a direct reduction from the carrying amount of the related debt liability. These amounts for fiscal 2016 were originally recorded under Other Assets. |
Stockholders' Equity, Comprehen
Stockholders' Equity, Comprehensive Income and Share-Based Compensation | 12 Months Ended |
Oct. 29, 2017 | |
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 (Loss) on Investments, Net Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges Defined and Postretirement Benefit Plans Cumulative Translation Adjustments Total (In millions) Balance at October 26, 2014 $ 24 $ — $ (105 ) $ 5 (76 ) Other comprehensive income (loss) before reclassifications (11 ) (9 ) (5 ) — (25 ) Amounts reclassified out of accumulated other comprehensive income 1 (6 ) 5 9 9 Other comprehensive income (loss), net of tax (10 ) (15 ) — 9 (16 ) Balance at October 25, 2015 $ 14 $ (15 ) $ (105 ) $ 14 $ (92 ) Other comprehensive income (loss) before reclassifications 14 (33 ) (42 ) — (61 ) Amounts reclassified out of AOCI 2 30 6 — 38 Other comprehensive income (loss), net of tax 16 (3 ) (36 ) — (23 ) Balance at October 30, 2016 $ 30 $ (18 ) $ (141 ) $ 14 $ (115 ) Other comprehensive income before reclassifications 24 13 29 — 66 Amounts reclassified out of AOCI (1 ) (6 ) (8 ) — (15 ) Other comprehensive income, net of tax 23 7 21 — 51 Balance at October 29, 2017 $ 53 $ (11 ) $ (120 ) $ 14 $ (64 ) The tax effects on net income of amounts reclassified from AOCI for fiscal 2016 was $22 million . The tax effects on net income of amounts reclassified from AOCI for the fiscal years 2017 and 2015, were not material. Stock Repurchase Programs In June 2016, Applied’s Board of Directors approved a common stock repurchase program authorizing up to $2.0 billion in repurchases, which followed the completion of a $3.0 billion common stock repurchase program approved in April 2015. In September 2017, Applied’s Board of Directors approved an additional common stock repurchase program authorizing up to an additional $3.0 billion in repurchases. At October 29, 2017 , $3.6 billion remained available for future stock repurchases under these repurchase programs. The following table summarizes Applied’s stock repurchases for each fiscal year: 2017 2016 2015 (In millions, except per share amounts) Shares of common stock repurchased 28 96 76 Cost of stock repurchased $ 1,172 $ 1,892 $ 1,325 Average price paid per share $ 42.08 $ 19.82 $ 17.33 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 each of fiscal 2017 , 2016 and 2015 , Applied’s Board of Directors declared quarterly cash dividends in the amount of $0.10 per share. Dividends paid during fiscal 2017 , 2016 and 2015 amounted to $430 million , $444 million and $487 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 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. Applied recognized share-based compensation expense related to stock options, ESPP shares, restricted stock, restricted stock units, performance shares and performance units, and related tax benefits for each fiscal year as follows: 2017 2016 2015 (In millions) Share-based compensation $ 220 $ 201 $ 187 Tax benefit recognized $ 60 $ 63 $ 52 The effect of share-based compensation on the results of operations for each fiscal year was as follows: 2017 2016 2015 (In millions) Cost of products sold $ 69 $ 62 $ 57 Research, development, and engineering 83 76 69 Marketing and selling 28 26 26 General and administrative 40 37 35 Total share-based compensation $ 220 $ 201 $ 187 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 29, 2017 , Applied had $324 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 2.4 years . At October 29, 2017 , there were 91 million shares available for grants of share-based awards under the Employee Stock Incentive Plan, and an additional 20 million shares available for issuance under the ESPP. Stock Options Stock options are rights to purchase, at future dates, shares of Applied common stock. 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. There were no stock options granted during fiscal 2017 , 2016 and 2015 . Outstanding stock options at the end of fiscal 2017 were not material to the consolidated financial statements. 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 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. Certain executive officers were granted awards that are subject to the achievement of specified performance goals (performance-based awards). These awards become eligible to vest only if performance goals are achieved and will vest only if the grantee remains employed by Applied through each applicable vesting date. The fair value of these awards is estimated on the date of grant. If the goals are achieved, the awards will vest, 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 is based on the awards that are probable to vest and is reflected over the service period and reduced for estimated forfeitures. For performance-based awards granted in fiscal 2017, certain awards require the achievement of positive adjusted operating profit and vest ratably over three years . Other awards require the achievement of targeted levels of adjusted operating profit margin and wafer fabrication equipment market share, and the number of shares that may vest in full after three years ranges from 0% to 200% of the target amount. Performance-based awards granted in fiscal 2016 and fiscal 2015 require the achievement of targeted levels of adjusted annual operating profit margin, and additional shares become eligible for time-based vesting if Applied achieves certain levels of total shareholder return 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. A summary of the changes in restricted stock units, restricted stock, performance shares and performance units outstanding under Applied’s equity compensation plans is presented below: Shares Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (In millions, except per share amounts) Non-vested restricted stock units, restricted stock, performance shares and performance units at October 26, 2014 33 $ 12.59 2.3 years $ 698 Granted 10 $ 22.60 Vested (15 ) $ 12.04 Canceled (1 ) $ 14.98 Non-vested restricted stock units, restricted stock, performance shares and performance units at October 25, 2015 27 $ 16.41 2.2 years $ 440 Granted 11 $ 18.54 Vested (11 ) $ 14.25 Canceled (2 ) $ 17.57 Non-vested restricted stock units, restricted stock, performance shares and performance units at October 30, 2016 25 $ 18.28 2.3 years $ 718 Granted 8 $ 31.79 Vested (10 ) $ 16.50 Canceled (1 ) $ 21.25 Non-vested restricted stock units, restricted stock, performance shares and performance units at October 29, 2017 22 $ 23.96 2.2 years $ 1,239 Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest 20 $ 23.30 2.0 years $ 1,107 At October 29, 2017 , 1 million additional performance-based awards could be earned based upon achievement of certain levels of specified performance goals. 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. Applied issued 3 million , 6 million and 5 million shares during fiscal 2017 , 2016 and 2015 , respectively, 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 are outlined in the following table: 2017 2016 2015 ESPP: Dividend yield 0.99 % 1.76 % 2.20 % Expected volatility 26.3 % 29.3 % 31.8 % Risk-free interest rate 0.92 % 0.47 % 0.19 % Expected life (in years) 0.5 0.5 0.5 Weighted average estimated fair value $9.14 $5.48 $4.55 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Oct. 29, 2017 | |
Retirement Benefits [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 for fiscal 2017 , 2016 and 2015 were $449 million , $312 million and $307 million , respectively. 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 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 became 100% vested in their Applied matching contribution account balances. Applied’s matching contributions under the 401(k) Plan were approximately $38 million for each of fiscal 2017 and 2016 , and $35 million , net of $1 million in forfeitures for fiscal 2015 . 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. Through December 31, 2017, Applied also sponsors a U.S. post-retirement plan that provides covered medical and vision benefits to certain 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 and who have elected coverage for 2017. 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, and will end entirely for all participants when the plan terminates on December 31, 2017. 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, were $1 million at each of October 29, 2017 and October 30, 2016 . A summary of the changes in benefit obligations and plan assets, which includes post-retirement benefits, for each fiscal year is presented below: 2017 2016 2015 (In millions, except percentages) Change in projected benefit obligation Beginning projected benefit obligation $ 495 $ 471 $ 479 Service cost 13 13 15 Interest cost 10 13 13 Plan participants’ contributions 2 1 1 Actuarial (gain) loss (35 ) 77 12 Curtailments, settlements and special termination benefits (1 ) (6 ) (1 ) Foreign currency exchange rate changes 34 (42 ) (39 ) Benefits paid (12 ) (10 ) (9 ) Plan amendments and business combinations — (22 ) — Ending projected benefit obligation $ 506 $ 495 $ 471 Ending accumulated benefit obligation $ 472 $ 460 $ 434 Range of assumptions to determine benefit obligations Discount rate 0.5% - 3.4% 0.5% - 3.1% 0.9% - 4.4% Rate of compensation increase 2.2% - 3.5% 1.6% - 3.6% 1.9% - 3.6% Change in plan assets Beginning fair value of plan assets $ 310 $ 281 $ 268 Return on plan assets 18 37 19 Employer contributions 16 50 21 Plan participants’ contributions 2 1 1 Foreign currency exchange rate changes 28 (45 ) (18 ) Divestitures, settlements and business combinations (1 ) (4 ) (1 ) Benefits paid (12 ) (10 ) (9 ) Ending fair value of plan assets $ 361 $ 310 $ 281 Funded status $ (145 ) $ (185 ) $ (190 ) Amounts recognized in the consolidated balance sheets Noncurrent asset $ 17 $ 11 $ 19 Current liability (1 ) (2 ) (3 ) Noncurrent liability (161 ) (194 ) (206 ) Total $ (145 ) $ (185 ) $ (190 ) Estimated amortization from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal period Actuarial loss $ 6 $ 6 $ 6 Prior service credit (4 ) (16 ) (1 ) Total $ 2 $ (10 ) $ 5 Amounts recognized in accumulated other comprehensive loss Net actuarial loss $ 141 $ 186 $ 135 Prior service credit (4 ) (21 ) — Total $ 137 $ 165 $ 135 Plans with projected benefit obligations in excess of plan assets Projected benefit obligation $ 326 $ 341 $ 308 Fair value of plan assets $ 142 $ 145 $ 98 Plans with accumulated benefit obligations in excess of plan assets Accumulated benefit obligation $ 293 $ 307 $ 274 Fair value of plan assets $ 142 $ 145 $ 98 2017 2016 Plan assets — allocation Equity securities 47 % 42 % Debt securities 39 % 40 % Insurance contracts 11 % 12 % Other investments 3 % 4 % Cash — % 2 % The following table presents a summary of the ending fair value of the plan assets: October 29, 2017 October 30, 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total (In millions) Equity securities $ 83 $ — $ — $ 83 $ 59 $ — $ — $ 59 Debt securities 16 — — 16 12 — — 12 Insurance contracts — — 38 38 — — 38 38 Other investments — 13 — 13 — 12 — 12 Cash 2 — — 2 8 — — 8 Total assets at fair value 101 13 38 152 79 12 38 129 Assets measured at net asset value 1 209 181 Total $ 361 $ 310 1 Balances reflect the investments that are measured at fair value using the net asset value per share practical expedient and have not been categorized in the fair value hierarchy. Certain prior year amounts were reclassified to conform to current year presentation. The following table presents the activity in Level 3 instruments for each fiscal year: 2017 2016 (In millions) Balance, beginning of year $ 38 $ 40 Actual return on plan assets: Relating to assets still held at reporting date (3 ) (1 ) Purchases, sales, settlements, net 1 — Currency impact 2 (1 ) Balance, end of year $ 38 $ 38 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 calculations for each fiscal year is presented below: 2017 2016 2015 (In millions, except percentages) Components of net periodic benefit cost Service cost $ 13 $ 13 $ 15 Interest cost 10 13 13 Expected return on plan assets (18 ) (14 ) (15 ) Amortization of actuarial loss and prior service credit (10 ) 3 7 Settlement and curtailment loss — (5 ) (1 ) Net periodic benefit cost (income) $ (5 ) $ 10 $ 19 Weighted average assumptions Discount rate 1.88 % 2.82 % 3.00 % Expected long-term return on assets 5.38 % 5.38 % 5.62 % Rate of compensation increase 2.69 % 2.71 % 2.74 % 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) 2018 $ 11 2019 11 2020 11 2021 12 2022 12 2023-2027 72 $ 129 Company contributions to these plans for fiscal 2018 are expected to be approximately $11 million . Executive Deferred Compensation Plans Applied sponsors two unfunded deferred compensation plans, the Executive Deferred Compensation Plan (Predecessor EDCP) and the 2016 Deferred Compensation Plan (2016 DCP) (formerly known as the 2005 Executive Deferred Compensation Plan), 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 2016 DCP was originally implemented by Applied effective as of January 1, 2005, and amended and restated as of October 12, 2015, and is intended to comply with the requirements of Section 409A of the Code. 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 $63 million and $40 million at October 29, 2017 and October 30, 2016 , respectively, which were included in other liabilities in the Consolidated Balance Sheets. |
Income Taxes
Income Taxes | 12 Months Ended |
Oct. 29, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of income before income taxes for each fiscal year were as follows: 2017 2016 2015 (In millions) U.S. $ 514 $ 199 $ 629 Foreign 3,217 1,814 969 $ 3,731 $ 2,013 $ 1,598 The components of the provision for income taxes for each fiscal year were as follows: 2017 2016 2015 (In millions) Current: U.S. $ 67 $ (36 ) $ 134 Foreign 233 351 199 State 9 (2 ) 18 309 313 351 Deferred: U.S. (11 ) 55 (194 ) Foreign (7 ) (89 ) 69 State 6 13 (5 ) (12 ) (21 ) (130 ) $ 297 $ 292 $ 221 A reconciliation between the statutory U.S. federal income tax rate of 35 percent and Applied’s actual effective income tax rate for each fiscal year is presented below: 2017 2016 2015 Tax provision at U.S. statutory rate 35.0 % 35.0 % 35.0 % Resolutions of prior years’ income tax filings (1.9 ) 3.9 (4.9 ) Effect of foreign operations taxed at various rates (24.9 ) (24.1 ) (16.3 ) State income taxes, net of federal benefit 0.3 0.6 0.9 Research and other tax credits (0.7 ) (1.3 ) (0.2 ) U.S. domestic production deduction (0.2 ) (0.2 ) (0.6 ) Share-based compensation 0.4 0.4 0.8 Other — 0.2 (0.9 ) 8.0 % 14.5 % 13.8 % The effective tax rate for fiscal 2017 was lower than fiscal 2016 primarily due to the recognition of previously unrecognized foreign tax credits and changes in the geographical composition of income. In addition, the effective tax rate in fiscal 2016 included unfavorable resolutions and changes related to income tax liabilities for uncertain tax positions as well as the reinstatement of the U.S. federal R&D tax credit retroactive to its expiration in December of 2015, neither of which reoccurred in fiscal 2017. The effective tax rate for fiscal 2016 was higher than fiscal 2015 primarily due to resolutions and changes related to income tax liabilities for uncertain tax positions, partially offset by changes in the geographical composition of income. The effective tax rate for fiscal 2015 included an adjustment to decrease provision for income taxes of $28 million primarily to correct an error in the recognition of cost of sales in the U.S. related to intercompany sales. The impact of the adjustment to fiscal 2015 was determined to be immaterial on the originating periods and fiscal 2015. In the reconciliation between the statutory U.S. federal income tax rate and the effective income tax rate, 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 pre-tax income in jurisdictions with lower statutory tax rates. The foreign operations with the most significant effective tax rate impact are Singapore and Israel. The statutory tax rates for fiscal 2017 for Singapore and Israel are 17% and 24% , respectively. Applied has been granted conditional reduced tax rates for both jurisdictions that expire in fiscal 2026 and fiscal 2021, respectively, excluding potential renewals and subject to certain conditions with which Applied expects to comply. The tax benefit arising from these tax rates was $ 452 million for fiscal 2017 or $ 0.42 per diluted share. Deferred tax assets and liabilities are recognized for the estimated future tax effects of temporary differences between the book and tax bases of assets and liabilities. Deferred tax assets are also recognized for net operating loss and tax credit carryovers. Deferred tax assets are offset by a valuation allowance to the extent it is more likely than not that they are not expected to be realized. The components of deferred income tax assets and liabilities were as follows: October 29, October 30, (In millions) Deferred tax assets: Allowance for doubtful accounts $ 13 $ 20 Inventory reserves and basis difference 156 151 Installation and warranty reserves 1 3 Accrued liabilities 31 53 Deferred revenue 15 17 Tax credits 317 210 Deferred compensation 81 45 Share-based compensation 53 55 Other 67 176 Gross deferred tax assets 734 730 Valuation allowance (227 ) (207 ) Total deferred tax assets 507 523 Deferred tax liabilities: Fixed assets (36 ) (29 ) Intangible assets (76 ) (81 ) Undistributed foreign earnings (11 ) (42 ) Foreign exchange (4 ) — Total gross deferred tax liabilities (127 ) (152 ) Net deferred tax assets $ 380 $ 371 The following table presents a summary of non-current deferred tax assets and liabilities: October 29, October 30, (In millions) Non-current deferred tax asset $ 385 $ 372 Non-current deferred tax liability (5 ) (1 ) $ 380 $ 371 A valuation allowance is recorded to reflect the estimated amount of net deferred tax assets that may not be realized. Changes in the valuation allowance in each fiscal year were as follows: 2017 2016 2015 (In millions) Beginning balance $ 207 $ 207 $ 173 Increases 20 27 40 Decreases — (27 ) (6 ) Ending balance $ 227 $ 207 $ 207 For fiscal 2017 , U.S. income taxes have not been provided for approximately $ 8.2 billion of cumulative undistributed earnings of several foreign subsidiaries. Applied intends to indefinitely reinvest these earnings in foreign operations. If these earnings were distributed to the U.S. 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 29, 2017 , Applied has state research and development tax credit carryforwards of $221 million , including $199 million of credits that are carried over until exhausted and $22 million that are carried over for 15 years and begin to expire in fiscal 2025. Applied has net operating loss carryforwards in state jurisdictions of $3 million which begin to expire in fiscal 2018. Management believes it is more likely than not that all net operating loss and tax credit carryforwards at October 29, 2017 , net of valuation allowance, will be utilized. Applied’s income taxes payable have been reduced by the tax benefits associated with share-based compensation. These benefits, credited directly to additional paid-in capital with a corresponding reduction to taxes payable, amounted to $55 million , $23 million and $56 million for fiscal 2017 , 2016 and 2015 , respectively. 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. Gross unrecognized tax benefits are classified as non-current income taxes payable in other liabilities in the Consolidated Balance Sheets. A reconciliation of the beginning and ending balances of gross unrecognized tax benefits in each fiscal year is as follows: 2017 2016 2015 (In millions) Beginning balance of gross unrecognized tax benefits $ 320 $ 177 $ 134 Settlements with tax authorities (42 ) (25 ) (16 ) Lapses of statutes of limitation (15 ) (2 ) (1 ) Increases in tax positions for current year 95 62 43 Increases in tax positions for prior years 33 109 21 Decreases in tax positions for prior years — (1 ) (4 ) Ending balance of gross unrecognized tax benefits $ 391 $ 320 $ 177 In the provision for income taxes in the Consolidated Statements of Operations, a tax expense of $17 million , a tax expense of $24 million , and a tax benefit of $6 million , were realized in fiscal 2017 , 2016 and 2015 , respectively, related to interest and penalties on unrecognized tax benefits. The liability for interest and penalties for fiscal 2017 , 2016 and 2015 was $46 million , $33 million and $14 million , respectively, and was classified as non-current income taxes payable. Included in the balance of unrecognized tax benefits for fiscal 2017 , 2016 and 2015 are $284 million , $302 million , and $167 million , respectively, of tax benefits that, if recognized, would affect the effective tax rate. During the next twelve months, it is reasonably possible that existing liabilities for unrecognized tax benefits could be reduced by approximately $116 million as a result of negotiations with taxing authorities and the expiration of statutes of limitation. In fiscal 2017, Applied paid $29 million , including interest and penalties, as a result of a settlement of fiscal 2011 in Italy. This settlement resulted in the recognition of a tax expense of $6 million . In fiscal 2016, Applied accrued $25 million , including interest and penalties, as a result of a settlement of fiscal 2011 through fiscal 2015 in Switzerland. This settlement resulted in the recognition of a tax expense of $19 million . In fiscal 2015, Applied paid $19 million , including interest and penalties, as a result of a settlement of fiscal 2009 through fiscal 2011 in Italy and paid $2 million , including interest, as a result of a settlement of fiscal 2013 in Switzerland related to Varian. These settlements resulted in the recognition of a tax benefit of $10 million . A number of Applied’s tax returns remain subject to examination by taxing authorities. These include U.S. returns for fiscal 2010 and later years , and foreign tax returns for fiscal 2009 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 fluctuations in Applied’s financial condition and results of operations. Applied continues to have ongoing negotiations with various taxing authorities throughout the year. |
Warranty, Guarantees, Commitmen
Warranty, Guarantees, Commitments and Contingencies | 12 Months Ended |
Oct. 29, 2017 | |
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 for fiscal 2017 , 2016 and 2015 , was $34 million , $38 million and $32 million , respectively. As of October 29, 2017 , future minimum lease payments are expected to be as follows: Lease Payments Fiscal (In millions) 2018 $ 33 2019 24 2020 16 2021 10 2022 7 Thereafter 11 $ 101 Warranty Changes in the warranty reserves during each fiscal year were as follows: 2017 2016 2015 (In millions) Beginning balance $ 153 $ 126 $ 113 Provisions for warranty 166 135 127 Changes in reserves related to preexisting warranty 1 (12 ) (10 ) Consumption of reserves (121 ) (96 ) (104 ) Ending balance $ 199 $ 153 $ 126 Applied products are generally sold with a warranty for a 12-month 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 29, 2017 , the maximum potential amount of future payments that Applied could be required to make under these guarantee agreements was approximately $57 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 29, 2017 , Applied has provided parent guarantees to banks for approximately $140 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. Following appeal, on November 14, 2017, the Korean Supreme Court affirmed the decision of the High Court, and no further proceedings are expected on this matter. 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. 29, 2017 | |
Segment Reporting [Abstract] | |
Industry Segment Operations | Industry Segment Operations Applied’s three reportable segments are: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. 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 29, 2017 and the distinctive nature of each segment. Future changes to this internal financial structure may result in changes to Applied’s reportable segments. The Semiconductor Systems reportable segment is comprised primarily of 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 provides integrated solutions to optimize equipment and fab performance and productivity, including spares, upgrades, services, certain remanufactured earlier generation equipment and factory automation software for semiconductor, display and other products. The Display and Adjacent Markets segment includes products for manufacturing liquid crystal displays (LCDs), organic light-emitting diodes (OLEDs), equipment upgrades and flexible coating systems and other display technologies for TVs, personal computers, smart phones, and other consumer-oriented devices. Each operating 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. The chief operating decision-maker does not evaluate operating segments using total asset information. 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. The Corporate and Other category includes revenues from products, as well as costs of products sold, for fabricating solar photovoltaic cells and modules, and certain operating expenses that are not allocated to its reportable segments and are managed separately at the corporate level. These operating expenses 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 also 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. Information for each reportable segment for and as of the end of each fiscal year were as follows: Net Sales Operating Income (Loss) Depreciation/ Amortization Capital Accounts Receivable Inventories (In millions) 2017: Semiconductor Systems $ 9,517 $ 3,173 $ 286 $ 150 $ 1,626 $ 1,760 Applied Global Services 3,017 817 15 21 564 762 Display and Adjacent Markets 1,900 502 12 17 190 367 Corporate and Other 103 (624 ) 94 157 (42 ) 41 Total $ 14,537 $ 3,868 $ 407 $ 345 $ 2,338 $ 2,930 2016: Semiconductor Systems $ 6,873 $ 1,807 $ 277 $ 114 $ 1,524 $ 1,188 Applied Global Services 2,589 682 12 14 559 594 Display and Adjacent Markets 1,206 245 5 6 238 215 Corporate and Other 157 (582 ) 95 119 (42 ) 53 Total $ 10,825 $ 2,152 $ 389 $ 253 $ 2,279 $ 2,050 2015: Semiconductor Systems $ 6,135 $ 1,410 $ 268 $ 115 $ 1,160 $ 1,079 Applied Global Services 2,447 630 10 12 483 555 Display and Adjacent Markets 944 191 6 13 129 176 Corporate and Other 133 (538 ) 87 75 (33 ) 23 Total $ 9,659 $ 1,693 $ 371 $ 215 $ 1,739 $ 1,833 The reconciling items included in Corporate and Other were as follows: 2017 2016 2015 (In millions) Unallocated net sales $ 103 $ 157 $ 133 Unallocated cost of products sold and expenses (507 ) (538 ) (523 ) Share-based compensation (220 ) (201 ) (187 ) Certain items associated with terminated business combination — — (50 ) Gain on derivatives associated with terminated business combination — — 89 Total $ (624 ) $ (582 ) $ (538 ) 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 are attributed to the geographic location in which they are located. Net sales and long-lived assets by geographic region for and as of each fiscal year were as follows: 2017 2016 2015 (In millions) Net sales: United States $ 1,474 $ 1,143 $ 1,630 Korea 4,052 1,883 1,654 Taiwan 3,291 2,843 2,600 China 2,746 2,259 1,623 Japan 1,518 1,279 1,078 Europe 816 615 642 Southeast Asia 640 803 432 Total outside United States 13,063 9,682 8,029 Consolidated total $ 14,537 $ 10,825 $ 9,659 October 29, October 30, (In millions) Long-lived assets: United States $ 915 $ 798 Korea 21 12 Taiwan 50 34 China 47 44 Japan 8 8 Europe 47 34 Southeast Asia 98 85 Total outside United States 271 217 Consolidated total $ 1,186 $ 1,015 The following customers accounted for at least 10 percent of Applied’s net sales in each fiscal year, which were for products and services in multiple reportable segments: 2017 2016 2015 Samsung Electronics Co., Ltd. 23 % 13 % 18 % Taiwan Semiconductor Manufacturing Company Limited 15 % 16 % 15 % Intel Corporation * 11 % * Micron Technology, Inc. * 11 % * ______________________________ * Less than 10% |
Unaudited Quarterly Consolidate
Unaudited Quarterly Consolidated Financial Data | 12 Months Ended |
Oct. 29, 2017 | |
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) 2017: Net sales $ 3,278 $ 3,546 $ 3,744 $ 3,969 $ 14,537 Gross profit $ 1,445 $ 1,600 $ 1,700 $ 1,787 $ 6,532 Net income $ 703 $ 824 $ 925 $ 982 $ 3,434 Earnings per diluted share $ 0.65 $ 0.76 $ 0.85 $ 0.91 $ 3.17 2016: Net sales $ 2,257 $ 2,450 $ 2,821 $ 3,297 $ 10,825 Gross profit $ 916 $ 1,004 $ 1,192 $ 1,399 $ 4,511 Net income $ 286 $ 320 $ 505 $ 610 $ 1,721 Earnings per diluted share $ 0.25 $ 0.29 $ 0.46 $ 0.56 $ 1.54 |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Oct. 29, 2017 | |
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 2017 , 2016 and 2015 contained 52, 53, and 52 weeks, respectively. Each fiscal quarter of 2017 and 2015 contained 13 weeks. The first fiscal quarter of 2016 contained 14 weeks, while the second, third and fourth quarters of fiscal 2016 contained 13 weeks. Certain prior year amounts have been reclassified to conform to current year presentation. |
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 and other income, net 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 is 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 expenses 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 writes down 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 Applied recognizes a current tax liability for the estimated amount of income tax payable on tax returns for the current fiscal year. Deferred tax assets and liabilities are recognized for the estimated future tax effects of temporary differences between the book and tax bases of assets and liabilities. Deferred tax assets are also recognized for net operating loss and tax credit carryovers. Deferred tax assets are offset by a valuation allowance to the extent it is more likely than not that they are not expected to be realized. Applied recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized from such positions are estimated based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Any changes in judgment related to uncertain tax positions are recognized in the Consolidated Statement of Operations in the quarter in which such change occurs. Interest and penalties related to uncertain tax positions are recognized in Applied’s provision for income taxes. |
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 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. In certain cases, Applied also uses interest rate swap or lock agreements to hedge against the variability of cash flows due to changes in the benchmark interest rate of fixed rate debt. The terms of derivative financial instruments used for hedging purposes are generally consistent with the timing of the transactions being hedged. 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, 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. Applied conducts business in a number of foreign countries, with certain transactions denominated in local currencies, such as the Japanese yen, euro, Israeli shekel and Taiwanese dollar. 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 and interest rate 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 foreign exchange derivatives 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 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 foreign exchange derivative instruments included in AOCI at October 29, 2017 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 earnings. 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 a loss of $8 million for fiscal 2016 and were not significant for fiscal years 2017 and 2015 . 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 29, 2017 , 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 Accounting Standards Adopted Debt Issuance Costs. In April 2015, the Financial Accounting Standard Board (FASB) issued authoritative guidance that requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts. Effective in the first quarter of fiscal 2017, Applied adopted the authoritative guidance retrospectively. The adoption of this guidance did not have a significant impact on Applied’s consolidated financial statements. See Note 10 of Notes to Consolidated Financial Statements for additional discussion. Fair Value Disclosures. In May 2015, the FASB issued authoritative guidance to remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The new guidance also removes the requirement of certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. The guidance became effective for Applied in the first quarter of fiscal 2017, with retrospective application. The adoption of this guidance only impacts disclosures in Applied’s annual consolidated financial statements. Intangibles: Internal-Use Software. In April 2015, the FASB issued authoritative guidance for customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. This guidance did not change accounting for service contracts. Applied adopted this guidance effective in the first quarter of fiscal 2017 prospectively to all arrangements entered into or materially modified after the effective date. The adoption of this guidance did not have a significant impact on Applied’s consolidated financial statements. Accounting Standards Not Yet Adopted Derivatives and Hedging. In August 2017, the FASB issued authoritative guidance that modifies the recognition and presentation of hedge accounting to better align an entity’s risk management strategies and financial reporting for hedging relationships. The authoritative guidance expands the application of hedge accounting for non-financial and financial risk components and eases certain hedge effectiveness assessment requirements. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2020, with early adoption permitted. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. Share-Based Compensation: Modification Accounting. In May 2017, the FASB issued an update to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award changes as a result of the change in terms or conditions. This authoritative guidance will be applied prospectively to awards modified following adoption and will be effective for Applied in the first quarter of fiscal 2019 with early adoption permitted. The impact of the adoption of this guidance will depend on whether the Company makes any future modifications of share-based payment awards. Receivables: Nonrefundable Fees and Other Costs. In March 2017, the FASB issued authoritative guidance that will shorten the amortization period for certain callable debt securities held at a premium to the earliest call date to more closely align with expectations incorporated in market pricing. This authoritative guidance will be effective for Applied in the first quarter of fiscal 2020 on a modified retrospective basis, with early adoption permitted. Applied is currently evaluating the impact of adopting this new accounting guidance on Applied’s consolidated financial statements. Retirement Benefits. In March 2017, the FASB issued authoritative guidance which requires companies to present the service cost component of net benefit cost in the same line items in which they report compensation cost. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2019 on a retrospective basis, with early adoption permitted. The adoption of this guidance is only expected to result in reclassification of other components of net benefit costs outside of income from operations and is not expected to have a significant impact on Applied’s consolidated financial statements. Goodwill Impairment. In January 2017, the FASB issued authoritative guidance that simplifies the process required to test goodwill for impairment. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2021. Early adoption is permitted. The adoption of this guidance is not expected to have a significant impact on Applied’s consolidated financial statements. Business Combinations. In January 2017, the FASB issued authoritative guidance that clarifies the definition of a business to help companies evaluate whether acquisition or disposal transactions should be accounted for as asset groups or as businesses. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2019 on a prospective basis, with early adoption permitted. The impact of the adoption depends on the facts and circumstances of future acquisition or disposal transactions. Income Taxes: Intra-Entity Asset Transfers. In October 2016, the FASB issued authoritative guidance that requires entities to recognize at the transaction date the income tax consequences of intercompany asset transfers other than inventory. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2019, with early adoption permitted. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. Classification of Certain Cash Receipts and Cash Payments. In August 2016, the FASB issued authoritative guidance which addresses classification of certain cash receipts and cash payments related to the statement of cash flows. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2019. The adoption of this guidance is not expected to have a significant impact on Applied’s consolidated financial statements. Financial Instruments: Credit Losses. In June 2016, the FASB issued authoritative guidance that modifies the impairment model for certain financial assets by requiring use of an expected loss methodology, which will result in more timely recognition of credit losses. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2021. Early adoption is permitted beginning in the first quarter of fiscal 2020. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. Share-Based Compensation. In March 2016, the FASB issued authoritative guidance that simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Applied plans to adopt the authoritative guidance effective in the first quarter of fiscal 2018. Upon adoption, Applied will elect to continue to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period. The new standard will result in the recognition of excess tax benefits in provision for income taxes rather than paid-in capital prospectively, which is expected to increase volatility in Applied’s results of operations. Applied will elect to apply the presentation requirements for cash flows related to excess tax benefits retrospectively. The presentation requirements for cash flows related to employee taxes paid for withheld shares will be presented as a financing activity retrospectively, as required. Applied expects cash flow from operations to increase, with a corresponding decrease in cash flow from financing activity as a result of the changes in the cash flow presentation. Leases. In February 2016, the FASB issued authoritative guidance for lease accounting, which requires lessees to recognize lease assets and liabilities on the balance sheet for certain lease arrangements that are classified as operating leases under the previous standard, and to provide for enhanced disclosures. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2020 and should be applied using a modified retrospective approach. Early adoption is permitted. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. Financial Instruments: Classification and Measurement. In January 2016, the FASB issued authoritative guidance that requires equity investments that do not result in consolidation, and are not accounted for under the equity method, to be measured at fair value, and requires recognition of any changes in fair value in net income unless the investments qualify for a new practicability exception. For financial liabilities measured at fair value, the change in fair value caused by a change in instrument-specific credit risk will be required to be presented separately in other comprehensive income. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2019. Early adoption is permitted only for the provisions related to the recognition of changes in fair value of financial liabilities caused by instrument-specific credit risk. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. Inventory Measurement. In July 2015, the FASB issued authoritative guidance that requires inventory to be measured at the lower of cost and net realizable value instead of at lower of cost or market. This guidance does not apply to inventory that is measured using last-in, first out (LIFO) or the retail inventory method but applies to all other inventory including those measured using first-in, first-out (FIFO) or the average cost method. Applied will adopt this authoritative guidance in the first quarter of fiscal 2018 prospectively to measurement of inventory after the effective date. The adoption of this guidance is not expected to have a significant impact on Applied’s consolidated financial statements. Revenue Recognition. In May 2014, the 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, and requires certain additional disclosures. This new standard will supersede most current revenue recognition guidance, including industry-specific guidance. Entities will have the option of using either a full retrospective or modified retrospective approach to adopting the guidance. In August 2015, the FASB issued an amendment to defer the effective date by one year and allow entities to early adopt no earlier than the original effective date. With this amendment, the guidance will be effective for Applied in the first quarter of fiscal 2019, which is the Company’s planned adoption date. Applied currently anticipates adopting this new guidance using the full retrospective approach, although this continues to be assessed as part of the overall evaluation. In fiscal 2016, Applied established a project steering committee and cross-functional implementation team to identify potential differences that would result from applying the requirements of the new standard to Applied’s revenue contracts. In addition, the implementation team is also responsible for identifying and implementing changes to business processes, systems and controls to support recognition and disclosure under the new standard. While the Company’s evaluation of the impact of this new guidance is not complete, Applied currently expects the timing of revenue recognition for certain products to be earlier than under current revenue recognition guidance. Applied will continue to complete its evaluation of the effect of this new guidance on Applied’s financial position, results of operations and its ongoing financial reporting, and its preliminary assessments are subject to change. |
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 whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. 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 29, 2017 , 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. |
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. |
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 | 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. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Earnings Per Share [Abstract] | |
Elements used in computing both basic and diluted net earnings per share | 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. Fiscal Year 2017 2016 2015 (In millions, except per share amounts) Numerator: Net income $ 3,434 $ 1,721 $ 1,377 Denominator: Weighted average common shares outstanding 1,073 1,107 1,214 Effect of dilutive stock options, restricted stock units and employee stock purchase plan shares 11 9 12 Denominator for diluted earnings per share 1,084 1,116 1,226 Basic earnings per share $ 3.20 $ 1.56 $ 1.13 Diluted earnings per share $ 3.17 $ 1.54 $ 1.12 Potentially dilutive securities — — — |
Cash, Cash Equivalents and In27
Cash, Cash Equivalents and Investments (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
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 29, 2017 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In millions) Cash $ 1,346 $ — $ — $ 1,346 Cash equivalents: Money market funds 2,658 — — 2,658 U.S. Treasury and agency securities 15 — — 15 Non-U.S. government securities* 55 — — 55 Municipal securities 341 — — 341 Commercial paper, corporate bonds and medium-term notes 595 — — 595 Total Cash equivalents 3,664 — — 3,664 Total Cash and Cash equivalents $ 5,010 $ — $ — $ 5,010 Short-term and long-term investments: U.S. Treasury and agency securities $ 667 $ — $ 1 $ 666 Non-U.S. government securities* 161 — — 161 Municipal securities 1,007 — — 1,007 Commercial paper, corporate bonds and medium-term notes 1,024 1 1 1,024 Asset-backed and mortgage-backed securities 379 — 1 378 Total fixed income securities 3,238 1 3 3,236 Publicly traded equity securities 22 78 1 99 Equity investments in privately-held companies 74 — — 74 Total short-term and long-term investments $ 3,334 $ 79 $ 4 $ 3,409 Total Cash, Cash equivalents and Investments $ 8,344 $ 79 $ 4 $ 8,419 _________________________ * Includes agency debt securities guaranteed by non-U.S. governments, which consist of Canada and Germany. October 30, 2016 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In millions) Cash $ 1,103 $ — $ — $ 1,103 Cash equivalents: Money market funds 1,889 — — 1,889 U.S. Treasury and agency securities 10 — — 10 Non-U.S. government securities 10 — — 10 Municipal securities 253 — — 253 Commercial paper, corporate bonds and medium-term notes 141 — — 141 Total Cash equivalents $ 2,303 $ — $ — $ 2,303 Total Cash and Cash equivalents $ 3,406 $ — $ — $ 3,406 Short-term and long-term investments: U.S. Treasury and agency securities $ 195 $ — $ — $ 195 Non-U.S. government securities* 5 — — 5 Municipal securities 408 — — 408 Commercial paper, corporate bonds and medium-term notes 273 1 — 274 Asset-backed and mortgage-backed securities 253 1 1 253 Total fixed income securities 1,134 2 1 1,135 Publicly traded equity securities 26 44 3 67 Equity investments in privately-held companies 70 — — 70 Total short-term and long-term investments $ 1,230 $ 46 $ 4 $ 1,272 Total Cash, Cash equivalents and Investments $ 4,636 $ 46 $ 4 $ 4,678 ________________________ * Includes agency debt securities guaranteed by non-U.S. governments, which consist of Canada and Germany. |
Contractual maturities of investments | The following table summarizes the contractual maturities of Applied’s investments at October 29, 2017 : Cost Estimated Fair Value (In millions) Due in one year or less $ 2,219 $ 2,219 Due after one through five years 640 640 No single maturity date** 475 550 $ 3,334 $ 3,409 _________________________ ** 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 for each fiscal year were as follows: 2017 2016 2015 (In millions) Gross realized gains $ 14 $ 10 $ 9 Gross realized losses $ 1 $ 2 $ 3 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
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: October 29, 2017 October 30, 2016 Level 1 Level 2 Total Level 1 Level 2 Total (In millions) Assets: Money market funds $ 2,658 $ — $ 2,658 $ 1,889 $ — $ 1,889 U.S. Treasury and agency securities 192 489 681 107 98 205 Non-U.S. government securities — 216 216 — 15 15 Municipal securities — 1,348 1,348 — 661 661 Commercial paper, corporate bonds and medium-term notes — 1,619 1,619 — 415 415 Asset-backed and mortgage-backed securities — 378 378 — 253 253 Publicly traded equity securities 99 — 99 67 — 67 Total $ 2,949 $ 4,050 $ 6,999 $ 2,063 $ 1,442 $ 3,505 |
Derivative Instruments and He29
Derivative Instruments and Hedging Activities (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Effect of derivative instruments on the consolidated statement of operations | The effects of derivative instruments and hedging activities on the Consolidated Statements of Operations were as follows: Effective Portion Ineffective Portion and Amount Derivatives in Cash Flow Hedging Relationships Location of Gain or Gain or Gain or (Loss) Gain or (Loss) (In millions) 2017 Foreign exchange contracts AOCI $ 35 $ — $ — Foreign exchange contracts Cost of products sold — 7 (3 ) Foreign exchange contracts General and administrative — 7 (2 ) Interest rate swaps AOCI (14 ) — — Interest rate swaps Interest expense — (3 ) — Total $ 21 $ 11 $ (5 ) 2016 Foreign exchange contracts AOCI $ (53 ) $ — $ — Foreign exchange contracts Cost of products sold — (46 ) 2 Foreign exchange contracts General and administrative — — (11 ) Interest rate swaps Interest expense — (2 ) — Total $ (53 ) $ (48 ) $ (9 ) 2015 Foreign exchange contracts AOCI $ 6 $ — $ — Foreign exchange contracts Cost of products sold — 15 (4 ) Foreign exchange contracts General and administrative — (6 ) (2 ) Interest rate swaps AOCI (20 ) — — Total $ (14 ) $ 9 $ (6 ) |
Derivatives not designated as hedging instruments in statement of operations | Amount of Gain or (Loss) Recognized in Income Derivatives Not Designated as Hedging Instruments Location of Gain or 2017 2016 2015 (In millions) Foreign exchange contracts Gain (loss) on derivatives associated with terminated business combination $ — $ — $ 89 Foreign exchange contracts General and administrative 39 (75 ) 21 Total $ 39 $ (75 ) $ 110 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Receivables [Abstract] | |
Changes in allowance for doubtful accounts | Changes in allowance for doubtful accounts in each fiscal year were as follows: 2017 2016 2015 (In millions) Beginning balance $ 51 $ 49 $ 58 Provision — 3 — Deductions 1 (17 ) (1 ) (9 ) Ending balance $ 34 $ 51 $ 49 _____________________________ 1 Fiscal 2017 , 2016 and 2015 deductions primarily represent releases of allowance for doubtful accounts credited to expense as a result of an overall lower risk profile of Applied’s customers and cash collections. |
Balance Sheet Detail (Tables)
Balance Sheet Detail (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Inventories | October 29, October 30, (In millions) Inventories Customer service spares $ 595 $ 452 Raw materials 603 474 Work-in-process 468 393 Finished goods 1,264 731 $ 2,930 $ 2,050 |
Other current assets | October 29, October 30, (In millions) Other Current Assets Prepaid income taxes and income taxes receivable $ 57 $ 87 Prepaid expenses and other 317 188 $ 374 $ 275 |
Property, plant and equipment, net | Useful Life October 29, October 30, (In years) (In millions) Property, Plant and Equipment, Net Land and improvements $ 160 $ 159 Buildings and improvements 3-30 1,315 1,261 Demonstration and manufacturing equipment 3-5 1,129 992 Furniture, fixtures and other equipment 3-15 572 547 Construction in progress 135 84 Gross property, plant and equipment 3,311 3,043 Accumulated depreciation (2,245 ) (2,106 ) $ 1,066 $ 937 |
Accounts payable, notes payable and accrued expenses | October 29, October 30, (In millions) Accounts Payable, Notes Payable and Accrued Expenses Accounts payable $ 945 $ 813 Notes payable, short-term — 200 Compensation and employee benefits 666 517 Warranty 199 153 Dividends payable 106 108 Income taxes payable 112 101 Other accrued taxes 70 50 Interest payable 38 31 Other 314 283 $ 2,450 $ 2,256 |
Customer deposits and deferred revenue | October 29, October 30, (In millions) Customer Deposits and Deferred Revenue Customer deposits $ 381 $ 471 Deferred revenue 1,284 905 $ 1,665 $ 1,376 |
Other liabilities | October 29, October 30, (In millions) Other Liabilities Income taxes payable $ 392 $ 337 Defined and postretirement benefit plans 160 182 Other 99 77 $ 651 $ 596 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table represents the preliminary aggregated purchase price allocation for acquisitions completed in fiscal year 2017: Estimated Fair Values (In millions) Fair value of net assets acquired $ 23 Goodwill 55 Purchased technology 31 Purchase price allocated $ 109 |
Goodwill, Purchased Technolog33
Goodwill, Purchased Technology and Other Intangible Assets (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Indefinite-lived intangible assets | Details of goodwill and other indefinite-lived intangible assets were as follows: October 29, 2017 October 30, 2016 Goodwill Other Intangible Assets Total Goodwill Other Intangible Assets Total (In millions) Semiconductor Systems $ 2,151 $ — $ 2,151 $ 2,151 $ — $ 2,151 Applied Global Services 1,018 — 1,018 1,010 5 1,015 Display and Adjacent Markets 199 — 199 155 20 175 Carrying amount $ 3,368 $ — $ 3,368 $ 3,316 $ 25 $ 3,341 |
Summary of purchased technology and intangible assets | A summary of Applied’s purchased technology and intangible assets is set forth below: October 29, October 30, (In millions) Purchased technology, net $ 288 $ 409 Intangible assets - finite-lived, net 124 141 Intangible assets - indefinite-lived — 25 Total $ 412 $ 575 |
Finite-lived intangible assets | Details of finite-lived intangible assets were as follows: October 29, 2017 October 30, 2016 Purchased Technology Other Intangible Assets Total Purchased Technology Other Intangible Assets Total (In millions) Gross carrying amount: Semiconductor Systems $ 1,449 $ 252 $ 1,701 $ 1,449 $ 252 $ 1,701 Applied Global Services 33 44 77 28 44 72 Display and Adjacent Markets 163 38 201 115 36 151 Corporate and Other — 9 9 1 9 10 Gross carrying amount $ 1,645 $ 343 $ 1,988 $ 1,593 $ 341 $ 1,934 Accumulated amortization: Semiconductor Systems $ (1,210 ) $ (131 ) $ (1,341 ) $ (1,043 ) $ (113 ) $ (1,156 ) Applied Global Services (28 ) (44 ) (72 ) (27 ) (44 ) (71 ) Display and Adjacent Markets (119 ) (35 ) (154 ) (113 ) (34 ) (147 ) Corporate and Other — (9 ) (9 ) (1 ) (9 ) (10 ) Accumulated amortization $ (1,357 ) $ (219 ) $ (1,576 ) $ (1,184 ) $ (200 ) $ (1,384 ) Carrying amount $ 288 $ 124 $ 412 $ 409 $ 141 $ 550 |
Summary of amortization expense | Details of amortization expense for each fiscal year by segment were as follows: 2017 2016 2015 (In millions) Semiconductor Systems $ 185 $ 185 $ 179 Applied Global Services 1 1 1 Display and Adjacent Markets 7 — 3 Corporate and Other — 3 3 Total $ 193 $ 189 $ 186 |
Schedule of categories amortization expense was charged to | Amortization expense for each fiscal year was charged to the following categories: 2017 2016 2015 (In millions) Cost of products sold $ 173 $ 167 $ 163 Research, development and engineering 1 2 1 Marketing and selling 19 20 20 General and administrative — — 2 Total $ 193 $ 189 $ 186 |
Future estimated amortization expense | As of October 29, 2017 , future estimated amortization expense is expected to be as follows: Amortization Expense (In millions) 2018 198 2019 57 2020 52 2021 40 2022 65 Total $ 412 |
Borrowing Facilities and Debt (
Borrowing Facilities and Debt (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Debt Disclosure [Abstract] | |
Debt Outstanding | Debt outstanding as of October 29, 2017 and October 30, 2016 was as follows: Principal Amount October 29, October 30, Effective Interest Rate Interest Pay Dates (In millions) Short-term debt: 7.125% Senior Notes Due 2017 $ — $ 200 7.190% April 15, October 15 Total short-term debt — 200 Long-term debt: 2.625% Senior Notes Due 2020 600 600 2.640% April 1, October 1 4.300% Senior Notes Due 2021 750 750 4.326% June 15, December 15 3.900% Senior Notes Due 2025 700 700 3.944% April 1, October 1 3.300% Senior Notes Due 2027 1,200 — 3.342% April 1, October 1 5.100% Senior Notes Due 2035 500 500 5.127% April 1, October 1 5.850% Senior Notes Due 2041 600 600 5.879% June 15, December 15 4.350% Senior Notes Due 2047 1,000 — 4.361% April 1, October 1 5,350 3,150 Total unamortized discount (12 ) (7 ) Total unamortized debt issuance costs 1 (34 ) (18 ) Total long-term debt 5,304 3,125 Total debt $ 5,304 $ 3,325 __________________________________________ 1 Balances reflect the effects of the retrospective adoption of the authoritative guidance in the first quarter of fiscal 2017, which required debt issuance costs to be presented as a direct reduction from the carrying amount of the related debt liability. These amounts for fiscal 2016 were originally recorded under Other Assets. |
Stockholders' Equity, Compreh35
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
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 (Loss) on Investments, Net Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges Defined and Postretirement Benefit Plans Cumulative Translation Adjustments Total (In millions) Balance at October 26, 2014 $ 24 $ — $ (105 ) $ 5 (76 ) Other comprehensive income (loss) before reclassifications (11 ) (9 ) (5 ) — (25 ) Amounts reclassified out of accumulated other comprehensive income 1 (6 ) 5 9 9 Other comprehensive income (loss), net of tax (10 ) (15 ) — 9 (16 ) Balance at October 25, 2015 $ 14 $ (15 ) $ (105 ) $ 14 $ (92 ) Other comprehensive income (loss) before reclassifications 14 (33 ) (42 ) — (61 ) Amounts reclassified out of AOCI 2 30 6 — 38 Other comprehensive income (loss), net of tax 16 (3 ) (36 ) — (23 ) Balance at October 30, 2016 $ 30 $ (18 ) $ (141 ) $ 14 $ (115 ) Other comprehensive income before reclassifications 24 13 29 — 66 Amounts reclassified out of AOCI (1 ) (6 ) (8 ) — (15 ) Other comprehensive income, net of tax 23 7 21 — 51 Balance at October 29, 2017 $ 53 $ (11 ) $ (120 ) $ 14 $ (64 ) |
Summary of stock repurchases | The following table summarizes Applied’s stock repurchases for each fiscal year: 2017 2016 2015 (In millions, except per share amounts) Shares of common stock repurchased 28 96 76 Cost of stock repurchased $ 1,172 $ 1,892 $ 1,325 Average price paid per share $ 42.08 $ 19.82 $ 17.33 |
Total share-based compensation and related tax benefits | Applied recognized share-based compensation expense related to stock options, ESPP shares, restricted stock, restricted stock units, performance shares and performance units, and related tax benefits for each fiscal year as follows: 2017 2016 2015 (In millions) Share-based compensation $ 220 $ 201 $ 187 Tax benefit recognized $ 60 $ 63 $ 52 |
Effect of share-based compensation on the results of operations by expense type | The effect of share-based compensation on the results of operations for each fiscal year was as follows: 2017 2016 2015 (In millions) Cost of products sold $ 69 $ 62 $ 57 Research, development, and engineering 83 76 69 Marketing and selling 28 26 26 General and administrative 40 37 35 Total share-based compensation $ 220 $ 201 $ 187 |
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 is presented below: Shares Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (In millions, except per share amounts) Non-vested restricted stock units, restricted stock, performance shares and performance units at October 26, 2014 33 $ 12.59 2.3 years $ 698 Granted 10 $ 22.60 Vested (15 ) $ 12.04 Canceled (1 ) $ 14.98 Non-vested restricted stock units, restricted stock, performance shares and performance units at October 25, 2015 27 $ 16.41 2.2 years $ 440 Granted 11 $ 18.54 Vested (11 ) $ 14.25 Canceled (2 ) $ 17.57 Non-vested restricted stock units, restricted stock, performance shares and performance units at October 30, 2016 25 $ 18.28 2.3 years $ 718 Granted 8 $ 31.79 Vested (10 ) $ 16.50 Canceled (1 ) $ 21.25 Non-vested restricted stock units, restricted stock, performance shares and performance units at October 29, 2017 22 $ 23.96 2.2 years $ 1,239 Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest 20 $ 23.30 2.0 years $ 1,107 |
Significant valuation assumptions in relation to ESPP | Underlying assumptions used in the model are outlined in the following table: 2017 2016 2015 ESPP: Dividend yield 0.99 % 1.76 % 2.20 % Expected volatility 26.3 % 29.3 % 31.8 % Risk-free interest rate 0.92 % 0.47 % 0.19 % Expected life (in years) 0.5 0.5 0.5 Weighted average estimated fair value $9.14 $5.48 $4.55 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Retirement Benefits [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 each fiscal year is presented below: 2017 2016 2015 (In millions, except percentages) Change in projected benefit obligation Beginning projected benefit obligation $ 495 $ 471 $ 479 Service cost 13 13 15 Interest cost 10 13 13 Plan participants’ contributions 2 1 1 Actuarial (gain) loss (35 ) 77 12 Curtailments, settlements and special termination benefits (1 ) (6 ) (1 ) Foreign currency exchange rate changes 34 (42 ) (39 ) Benefits paid (12 ) (10 ) (9 ) Plan amendments and business combinations — (22 ) — Ending projected benefit obligation $ 506 $ 495 $ 471 Ending accumulated benefit obligation $ 472 $ 460 $ 434 Range of assumptions to determine benefit obligations Discount rate 0.5% - 3.4% 0.5% - 3.1% 0.9% - 4.4% Rate of compensation increase 2.2% - 3.5% 1.6% - 3.6% 1.9% - 3.6% Change in plan assets Beginning fair value of plan assets $ 310 $ 281 $ 268 Return on plan assets 18 37 19 Employer contributions 16 50 21 Plan participants’ contributions 2 1 1 Foreign currency exchange rate changes 28 (45 ) (18 ) Divestitures, settlements and business combinations (1 ) (4 ) (1 ) Benefits paid (12 ) (10 ) (9 ) Ending fair value of plan assets $ 361 $ 310 $ 281 Funded status $ (145 ) $ (185 ) $ (190 ) Amounts recognized in the consolidated balance sheets Noncurrent asset $ 17 $ 11 $ 19 Current liability (1 ) (2 ) (3 ) Noncurrent liability (161 ) (194 ) (206 ) Total $ (145 ) $ (185 ) $ (190 ) Estimated amortization from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal period Actuarial loss $ 6 $ 6 $ 6 Prior service credit (4 ) (16 ) (1 ) Total $ 2 $ (10 ) $ 5 Amounts recognized in accumulated other comprehensive loss Net actuarial loss $ 141 $ 186 $ 135 Prior service credit (4 ) (21 ) — Total $ 137 $ 165 $ 135 Plans with projected benefit obligations in excess of plan assets Projected benefit obligation $ 326 $ 341 $ 308 Fair value of plan assets $ 142 $ 145 $ 98 Plans with accumulated benefit obligations in excess of plan assets Accumulated benefit obligation $ 293 $ 307 $ 274 Fair value of plan assets $ 142 $ 145 $ 98 2017 2016 Plan assets — allocation Equity securities 47 % 42 % Debt securities 39 % 40 % Insurance contracts 11 % 12 % Other investments 3 % 4 % Cash — % 2 % |
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 29, 2017 October 30, 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total (In millions) Equity securities $ 83 $ — $ — $ 83 $ 59 $ — $ — $ 59 Debt securities 16 — — 16 12 — — 12 Insurance contracts — — 38 38 — — 38 38 Other investments — 13 — 13 — 12 — 12 Cash 2 — — 2 8 — — 8 Total assets at fair value 101 13 38 152 79 12 38 129 Assets measured at net asset value 1 209 181 Total $ 361 $ 310 1 Balances reflect the investments that are measured at fair value using the net asset value per share practical expedient and have not been categorized in the fair value hierarchy. Certain prior year amounts were reclassified to conform to current year presentation. |
Activity in Level 3 instruments | The following table presents the activity in Level 3 instruments for each fiscal year: 2017 2016 (In millions) Balance, beginning of year $ 38 $ 40 Actual return on plan assets: Relating to assets still held at reporting date (3 ) (1 ) Purchases, sales, settlements, net 1 — Currency impact 2 (1 ) Balance, end of year $ 38 $ 38 |
Schedule of net benefit costs and weighted average assumptions used | A summary of the components of net periodic benefit costs and the weighted average assumptions used for net periodic benefit cost calculations for each fiscal year is presented below: 2017 2016 2015 (In millions, except percentages) Components of net periodic benefit cost Service cost $ 13 $ 13 $ 15 Interest cost 10 13 13 Expected return on plan assets (18 ) (14 ) (15 ) Amortization of actuarial loss and prior service credit (10 ) 3 7 Settlement and curtailment loss — (5 ) (1 ) Net periodic benefit cost (income) $ (5 ) $ 10 $ 19 Weighted average assumptions Discount rate 1.88 % 2.82 % 3.00 % Expected long-term return on assets 5.38 % 5.38 % 5.62 % Rate of compensation increase 2.69 % 2.71 % 2.74 % |
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) 2018 $ 11 2019 11 2020 11 2021 12 2022 12 2023-2027 72 $ 129 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Income Tax Disclosure [Abstract] | |
Components of income from operations before income taxes | The components of income before income taxes for each fiscal year were as follows: 2017 2016 2015 (In millions) U.S. $ 514 $ 199 $ 629 Foreign 3,217 1,814 969 $ 3,731 $ 2,013 $ 1,598 |
Components of the provision for income taxes | The components of the provision for income taxes for each fiscal year were as follows: 2017 2016 2015 (In millions) Current: U.S. $ 67 $ (36 ) $ 134 Foreign 233 351 199 State 9 (2 ) 18 309 313 351 Deferred: U.S. (11 ) 55 (194 ) Foreign (7 ) (89 ) 69 State 6 13 (5 ) (12 ) (21 ) (130 ) $ 297 $ 292 $ 221 |
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 each fiscal year is presented below: 2017 2016 2015 Tax provision at U.S. statutory rate 35.0 % 35.0 % 35.0 % Resolutions of prior years’ income tax filings (1.9 ) 3.9 (4.9 ) Effect of foreign operations taxed at various rates (24.9 ) (24.1 ) (16.3 ) State income taxes, net of federal benefit 0.3 0.6 0.9 Research and other tax credits (0.7 ) (1.3 ) (0.2 ) U.S. domestic production deduction (0.2 ) (0.2 ) (0.6 ) Share-based compensation 0.4 0.4 0.8 Other — 0.2 (0.9 ) 8.0 % 14.5 % 13.8 % |
Components of deferred income tax assets and liabilities | The components of deferred income tax assets and liabilities were as follows: October 29, October 30, (In millions) Deferred tax assets: Allowance for doubtful accounts $ 13 $ 20 Inventory reserves and basis difference 156 151 Installation and warranty reserves 1 3 Accrued liabilities 31 53 Deferred revenue 15 17 Tax credits 317 210 Deferred compensation 81 45 Share-based compensation 53 55 Other 67 176 Gross deferred tax assets 734 730 Valuation allowance (227 ) (207 ) Total deferred tax assets 507 523 Deferred tax liabilities: Fixed assets (36 ) (29 ) Intangible assets (76 ) (81 ) Undistributed foreign earnings (11 ) (42 ) Foreign exchange (4 ) — Total gross deferred tax liabilities (127 ) (152 ) Net deferred tax assets $ 380 $ 371 The following table presents a summary of non-current deferred tax assets and liabilities: October 29, October 30, (In millions) Non-current deferred tax asset $ 385 $ 372 Non-current deferred tax liability (5 ) (1 ) $ 380 $ 371 |
Summary of valuation allowance | A valuation allowance is recorded to reflect the estimated amount of net deferred tax assets that may not be realized. Changes in the valuation allowance in each fiscal year were as follows: 2017 2016 2015 (In millions) Beginning balance $ 207 $ 207 $ 173 Increases 20 27 40 Decreases — (27 ) (6 ) Ending balance $ 227 $ 207 $ 207 |
A reconciliation of gross unrecognized tax benefits | A reconciliation of the beginning and ending balances of gross unrecognized tax benefits in each fiscal year is as follows: 2017 2016 2015 (In millions) Beginning balance of gross unrecognized tax benefits $ 320 $ 177 $ 134 Settlements with tax authorities (42 ) (25 ) (16 ) Lapses of statutes of limitation (15 ) (2 ) (1 ) Increases in tax positions for current year 95 62 43 Increases in tax positions for prior years 33 109 21 Decreases in tax positions for prior years — (1 ) (4 ) Ending balance of gross unrecognized tax benefits $ 391 $ 320 $ 177 |
Warranty, Guarantees, Commitm38
Warranty, Guarantees, Commitments and Contingencies (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum lease payments | As of October 29, 2017 , future minimum lease payments are expected to be as follows: Lease Payments Fiscal (In millions) 2018 $ 33 2019 24 2020 16 2021 10 2022 7 Thereafter 11 $ 101 |
Changes in the warranty reserves | Changes in the warranty reserves during each fiscal year were as follows: 2017 2016 2015 (In millions) Beginning balance $ 153 $ 126 $ 113 Provisions for warranty 166 135 127 Changes in reserves related to preexisting warranty 1 (12 ) (10 ) Consumption of reserves (121 ) (96 ) (104 ) Ending balance $ 199 $ 153 $ 126 |
Industry Segment Operations (Ta
Industry Segment Operations (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
Segment Reporting [Abstract] | |
Net sales and operating income (loss) for each reportable segment | Information for each reportable segment for and as of the end of each fiscal year were as follows: Net Sales Operating Income (Loss) Depreciation/ Amortization Capital Accounts Receivable Inventories (In millions) 2017: Semiconductor Systems $ 9,517 $ 3,173 $ 286 $ 150 $ 1,626 $ 1,760 Applied Global Services 3,017 817 15 21 564 762 Display and Adjacent Markets 1,900 502 12 17 190 367 Corporate and Other 103 (624 ) 94 157 (42 ) 41 Total $ 14,537 $ 3,868 $ 407 $ 345 $ 2,338 $ 2,930 2016: Semiconductor Systems $ 6,873 $ 1,807 $ 277 $ 114 $ 1,524 $ 1,188 Applied Global Services 2,589 682 12 14 559 594 Display and Adjacent Markets 1,206 245 5 6 238 215 Corporate and Other 157 (582 ) 95 119 (42 ) 53 Total $ 10,825 $ 2,152 $ 389 $ 253 $ 2,279 $ 2,050 2015: Semiconductor Systems $ 6,135 $ 1,410 $ 268 $ 115 $ 1,160 $ 1,079 Applied Global Services 2,447 630 10 12 483 555 Display and Adjacent Markets 944 191 6 13 129 176 Corporate and Other 133 (538 ) 87 75 (33 ) 23 Total $ 9,659 $ 1,693 $ 371 $ 215 $ 1,739 $ 1,833 |
Reconciliations of total segment operating income to Applied's consolidated operating income | The reconciling items included in Corporate and Other were as follows: 2017 2016 2015 (In millions) Unallocated net sales $ 103 $ 157 $ 133 Unallocated cost of products sold and expenses (507 ) (538 ) (523 ) Share-based compensation (220 ) (201 ) (187 ) Certain items associated with terminated business combination — — (50 ) Gain on derivatives associated with terminated business combination — — 89 Total $ (624 ) $ (582 ) $ (538 ) |
Net sales and long-lived assets by geographic region | Net sales and long-lived assets by geographic region for and as of each fiscal year were as follows: 2017 2016 2015 (In millions) Net sales: United States $ 1,474 $ 1,143 $ 1,630 Korea 4,052 1,883 1,654 Taiwan 3,291 2,843 2,600 China 2,746 2,259 1,623 Japan 1,518 1,279 1,078 Europe 816 615 642 Southeast Asia 640 803 432 Total outside United States 13,063 9,682 8,029 Consolidated total $ 14,537 $ 10,825 $ 9,659 October 29, October 30, (In millions) Long-lived assets: United States $ 915 $ 798 Korea 21 12 Taiwan 50 34 China 47 44 Japan 8 8 Europe 47 34 Southeast Asia 98 85 Total outside United States 271 217 Consolidated total $ 1,186 $ 1,015 |
Companies accounted for at least 10 percent of Applied's net sales | The following customers accounted for at least 10 percent of Applied’s net sales in each fiscal year, which were for products and services in multiple reportable segments: 2017 2016 2015 Samsung Electronics Co., Ltd. 23 % 13 % 18 % Taiwan Semiconductor Manufacturing Company Limited 15 % 16 % 15 % Intel Corporation * 11 % * Micron Technology, Inc. * 11 % * ______________________________ * Less than 10% |
Unaudited Quarterly Consolida40
Unaudited Quarterly Consolidated Financial Data (Tables) | 12 Months Ended |
Oct. 29, 2017 | |
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) 2017: Net sales $ 3,278 $ 3,546 $ 3,744 $ 3,969 $ 14,537 Gross profit $ 1,445 $ 1,600 $ 1,700 $ 1,787 $ 6,532 Net income $ 703 $ 824 $ 925 $ 982 $ 3,434 Earnings per diluted share $ 0.65 $ 0.76 $ 0.85 $ 0.91 $ 3.17 2016: Net sales $ 2,257 $ 2,450 $ 2,821 $ 3,297 $ 10,825 Gross profit $ 916 $ 1,004 $ 1,192 $ 1,399 $ 4,511 Net income $ 286 $ 320 $ 505 $ 610 $ 1,721 Earnings per diluted share $ 0.25 $ 0.29 $ 0.46 $ 0.56 $ 1.54 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies (Property Plant and Equipment Useful Life) (Details) | 12 Months Ended |
Oct. 29, 2017 | |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Intangible assets estimated useful lives | 1 year |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Intangible assets estimated useful lives | 15 years |
Building and improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Building and improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 30 years |
Demonstration and manufacturing equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Demonstration and manufacturing equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Furniture, fixtures and other equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Furniture, fixtures and other equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 15 years |
Land improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Term of amortization | 15 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Term of amortization | 5 years |
Summary of Significant Accoun42
Summary of Significant Accounting Policies (Derivative Financial Instruments) (Details) | 12 Months Ended |
Oct. 29, 2017 | |
Accounting Policies [Abstract] | |
Time period for hedging of foreign currency transactions | 24 months |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 31, 2016 | Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Numerator: | |||||||||||
Net income | $ 982 | $ 925 | $ 824 | $ 703 | $ 610 | $ 505 | $ 320 | $ 286 | $ 3,434 | $ 1,721 | $ 1,377 |
Denominator: | |||||||||||
Weighted average common shares outstanding (in shares) | 1,073 | 1,107 | 1,214 | ||||||||
Effect of dilutive stock options, restricted stock units and employee stock purchase plan shares (in shares) | 11 | 9 | 12 | ||||||||
Denominator for diluted earnings per share (in shares) | 1,084 | 1,116 | 1,226 | ||||||||
Basic earnings per share (in dollars per share) | $ 3.20 | $ 1.56 | $ 1.13 | ||||||||
Diluted earnings per share (in dollars per share) | $ 0.91 | $ 0.85 | $ 0.76 | $ 0.65 | $ 0.56 | $ 0.46 | $ 0.29 | $ 0.25 | $ 3.17 | $ 1.54 | $ 1.12 |
Potentially dilutive securities (in shares) | 0 | 0 | 0 |
Cash, Cash Equivalents and In44
Cash, Cash Equivalents and Investments (Cash, Cash Equivalents and Investments by Security Type) (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | Oct. 26, 2014 |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Cash | $ 1,346 | $ 1,103 | ||
Total Cash equivalents | 3,664 | 2,303 | ||
Total Cash and Cash equivalents | 5,010 | 3,406 | $ 4,797 | $ 3,002 |
Short-term and long-term investments, Cost | 3,334 | 1,230 | ||
Short-term and long-term investments, Gross Unrealized Gains | 79 | 46 | ||
Short-term and long-term investments, Gross Unrealized Losses | 4 | 4 | ||
Short-term and long-term investments, Estimated Fair Value | 3,409 | 1,272 | ||
Equity investments in privately-held companies | 74 | 70 | ||
Cash, Cash Equivalents and Investments, Cost | 8,344 | 4,636 | ||
Cash, Cash Equivalents and Investments, Gross Unrealized Gains | 79 | 46 | ||
Cash, Cash Equivalents and Investments, Gross Unrealized Losses | 4 | 4 | ||
Cash, Cash Equivalents and Investments, Estimated Fair Value | 8,419 | 4,678 | ||
Total fixed income securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Short-term and long-term investments, Cost | 3,238 | 1,134 | ||
Short-term and long-term investments, Gross Unrealized Gains | 1 | 2 | ||
Short-term and long-term investments, Gross Unrealized Losses | 3 | 1 | ||
Short-term and long-term investments, Estimated Fair Value | 3,236 | 1,135 | ||
U.S. Treasury and agency securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Short-term and long-term investments, Cost | 667 | 195 | ||
Short-term and long-term investments, Gross Unrealized Gains | 0 | 0 | ||
Short-term and long-term investments, Gross Unrealized Losses | 1 | 0 | ||
Short-term and long-term investments, Estimated Fair Value | 666 | 195 | ||
Non-U.S. government securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Short-term and long-term investments, Cost | 161 | 5 | ||
Short-term and long-term investments, Gross Unrealized Gains | 0 | 0 | ||
Short-term and long-term investments, Gross Unrealized Losses | 0 | 0 | ||
Short-term and long-term investments, Estimated Fair Value | 161 | 5 | ||
Municipal securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Short-term and long-term investments, Cost | 1,007 | 408 | ||
Short-term and long-term investments, Gross Unrealized Gains | 0 | 0 | ||
Short-term and long-term investments, Gross Unrealized Losses | 0 | 0 | ||
Short-term and long-term investments, Estimated Fair Value | 1,007 | 408 | ||
Commercial paper, corporate bonds and medium-term notes | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Short-term and long-term investments, Cost | 1,024 | 273 | ||
Short-term and long-term investments, Gross Unrealized Gains | 1 | 1 | ||
Short-term and long-term investments, Gross Unrealized Losses | 1 | 0 | ||
Short-term and long-term investments, Estimated Fair Value | 1,024 | 274 | ||
Asset-backed and mortgage-backed securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Short-term and long-term investments, Cost | 379 | 253 | ||
Short-term and long-term investments, Gross Unrealized Gains | 0 | 1 | ||
Short-term and long-term investments, Gross Unrealized Losses | 1 | 1 | ||
Short-term and long-term investments, Estimated Fair Value | 378 | 253 | ||
Publicly traded equity securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Short-term and long-term investments, Cost | 22 | 26 | ||
Short-term and long-term investments, Gross Unrealized Gains | 78 | 44 | ||
Short-term and long-term investments, Gross Unrealized Losses | 1 | 3 | ||
Short-term and long-term investments, Estimated Fair Value | 99 | 67 | ||
Money market funds | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Total Cash equivalents | 2,658 | 1,889 | ||
U.S. Treasury and agency securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Total Cash equivalents | 15 | 10 | ||
Non-U.S. government securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Total Cash equivalents | 55 | 10 | ||
Municipal securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Total Cash equivalents | 341 | 253 | ||
Commercial paper, corporate bonds and medium-term notes | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Total Cash equivalents | $ 595 | $ 141 |
Cash, Cash Equivalents and In45
Cash, Cash Equivalents and Investments (Contractual Maturities) (Details) $ in Millions | Oct. 29, 2017USD ($) |
Cash and Cash Equivalents [Abstract] | |
Due in one year or less, Cost | $ 2,219 |
Due after one through five years, Cost | 640 |
No single maturity date, Cost | 475 |
Investments maturities amortized, Cost | 3,334 |
Due in one year or less, Estimated Fair Value | 2,219 |
Due after one through five years, Estimated Fair Value | 640 |
No single maturity date, Estimated Fair Value | 550 |
Investments maturities, Estimated Fair Value | $ 3,409 |
Cash, Cash Equivalents and In46
Cash, Cash Equivalents and Investments (Gains and Losses on Investments) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Gains and Losses on Investments | |||
Gross realized gains | $ 14 | $ 10 | $ 9 |
Gross realized losses | $ 1 | $ 2 | $ 3 |
Cash, Cash Equivalents and In47
Cash, Cash Equivalents and Investments (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Fixed income marketable securities | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Impairments of investments | $ 0 | $ 0 | $ 0 |
Equity investments in privately-held companies | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Impairments of investments | $ 10,000,000 | $ 8,000,000 | $ 9,000,000 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets Measured at Fair Value on a Recurring Basis) (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Assets: | ||
Investment securities | $ 6,999 | $ 3,505 |
Level 1 | ||
Assets: | ||
Investment securities | 2,949 | 2,063 |
Level 2 | ||
Assets: | ||
Investment securities | 4,050 | 1,442 |
Money market funds | ||
Assets: | ||
Investment securities | 2,658 | 1,889 |
Money market funds | Level 1 | ||
Assets: | ||
Investment securities | 2,658 | 1,889 |
Money market funds | Level 2 | ||
Assets: | ||
Investment securities | 0 | 0 |
U.S. Treasury and agency securities | ||
Assets: | ||
Investment securities | 681 | 205 |
U.S. Treasury and agency securities | Level 1 | ||
Assets: | ||
Investment securities | 192 | 107 |
U.S. Treasury and agency securities | Level 2 | ||
Assets: | ||
Investment securities | 489 | 98 |
Non-U.S. government securities | ||
Assets: | ||
Investment securities | 216 | 15 |
Non-U.S. government securities | Level 1 | ||
Assets: | ||
Investment securities | 0 | 0 |
Non-U.S. government securities | Level 2 | ||
Assets: | ||
Investment securities | 216 | 15 |
Municipal securities | ||
Assets: | ||
Investment securities | 1,348 | 661 |
Municipal securities | Level 1 | ||
Assets: | ||
Investment securities | 0 | 0 |
Municipal securities | Level 2 | ||
Assets: | ||
Investment securities | 1,348 | 661 |
Commercial paper, corporate bonds and medium-term notes | ||
Assets: | ||
Investment securities | 1,619 | 415 |
Commercial paper, corporate bonds and medium-term notes | Level 1 | ||
Assets: | ||
Investment securities | 0 | 0 |
Commercial paper, corporate bonds and medium-term notes | Level 2 | ||
Assets: | ||
Investment securities | 1,619 | 415 |
Asset-backed and mortgage-backed securities | ||
Assets: | ||
Investment securities | 378 | 253 |
Asset-backed and mortgage-backed securities | Level 1 | ||
Assets: | ||
Investment securities | 0 | 0 |
Asset-backed and mortgage-backed securities | Level 2 | ||
Assets: | ||
Investment securities | 378 | 253 |
Publicly traded equity securities | ||
Assets: | ||
Investment securities | 99 | 67 |
Publicly traded equity securities | Level 1 | ||
Assets: | ||
Investment securities | 99 | 67 |
Publicly traded equity securities | Level 2 | ||
Assets: | ||
Investment securities | $ 0 | $ 0 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Fair value of transfers from Level 1 to Level 2 | $ 0 | $ 0 | |
Fair value of transfers from Level 2 to Level 1 | 0 | 0 | |
Equity investments in privately-held companies | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Impairments of investments | 10,000,000 | 8,000,000 | $ 9,000,000 |
Reported Value Measurement | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Long-term debt value | 5,300,000,000 | 3,100,000,000 | |
Reported Value Measurement | Short Term And Long Term Investments | Equity investments in privately-held companies | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Equity investments in privately-held companies measured on non-recurring basis | 74,000,000 | 70,000,000 | |
Portion at Other than Fair Value Measurement | Short Term And Long Term Investments | Equity investments in privately-held companies | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Equity investments in privately-held companies measured on non-recurring basis | 65,000,000 | 62,000,000 | |
Estimate of Fair Value Measurement | Level 2 | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Long-term debt value | 5,800,000,000 | 3,500,000,000 | |
Estimate of Fair Value Measurement | Short Term And Long Term Investments | Equity investments in privately-held companies | Fair Value, Measurements, Nonrecurring | Level 3 | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Equity investments in privately-held companies measured on non-recurring basis | $ 9,000,000 | $ 8,000,000 |
Derivative Instruments and He50
Derivative Instruments and Hedging Activities (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Derivative [Line Items] | |||
Time period for hedging of foreign currency transactions | 24 months | ||
Gain or (Loss) | $ 21,000,000 | $ (53,000,000) | $ (14,000,000) |
Amortization period for the loss on settlement of interest rate swap agreement | 12 months | ||
Loss recognized due to discontinuance of cash flow hedges that were not probable | 8,000,000 | ||
Amount of Gain or (Loss) Recognized in Income | $ 0 | $ 0 | 89,000,000 |
Tokyo Electron Limited | Foreign exchange contracts | |||
Derivative [Line Items] | |||
Amount of Gain or (Loss) Recognized in Income | 89,000,000 | ||
Interest Rate Contract | |||
Derivative [Line Items] | |||
Gain or (Loss) | (14,000,000) | (20,000,000) | |
Cash Flow Hedging | Designated as Hedging Instrument | Interest Rate Swap | |||
Derivative [Line Items] | |||
Notional amount | 600,000,000 | ||
Cash Flow Hedging | Designated as Hedging Instrument | Interest Rate Contract | |||
Derivative [Line Items] | |||
Notional amount | 700,000,000 | ||
Gain or (Loss) | $ (14,000,000) | $ (20,000,000) | |
Senior Notes | Ten Year Senior Notes Issued September 2015 | |||
Derivative [Line Items] | |||
Debt instrument term | 10 years | ||
Senior Notes | Ten Year Senior Notes Issued March 2017 | |||
Derivative [Line Items] | |||
Debt instrument term | 10 years |
Derivative Instruments and He51
Derivative Instruments and Hedging Activities (Derivatives in Cash Flow Hedging Relationships) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain or (Loss) | $ 21 | $ (53) | $ (14) |
Gain or (Loss) Reclassified from AOCI into Income | 11 | (48) | 9 |
Gain or (Loss) Recognized in Income | (5) | (9) | (6) |
Foreign exchange contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain or (Loss) | 35 | (53) | 6 |
Gain or (Loss) Reclassified from AOCI into Income | 0 | 0 | 0 |
Gain or (Loss) Recognized in Income | 0 | 0 | 0 |
Foreign exchange contracts | Cost of products sold | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain or (Loss) | 0 | 0 | 0 |
Gain or (Loss) Reclassified from AOCI into Income | 7 | (46) | 15 |
Gain or (Loss) Recognized in Income | (3) | 2 | (4) |
Foreign exchange contracts | General and administrative | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain or (Loss) | 0 | 0 | 0 |
Gain or (Loss) Reclassified from AOCI into Income | 7 | 0 | (6) |
Gain or (Loss) Recognized in Income | (2) | (11) | (2) |
Interest Rate Contract | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain or (Loss) | (14) | (20) | |
Gain or (Loss) Reclassified from AOCI into Income | 0 | 0 | |
Gain or (Loss) Recognized in Income | 0 | $ 0 | |
Interest Rate Contract | Interest expense | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain or (Loss) | 0 | 0 | |
Gain or (Loss) Reclassified from AOCI into Income | (3) | (2) | |
Gain or (Loss) Recognized in Income | $ 0 | $ 0 |
Derivative Instruments and He52
Derivative Instruments and Hedging Activities (Derivatives Not Designated as Hedging Instruments) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain or (Loss) Recognized in Income | $ 0 | $ 0 | $ 89 |
Derivatives Not Designated as Hedging Instruments | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain or (Loss) Recognized in Income | 39 | (75) | 110 |
Foreign exchange contracts | Gain (loss) on derivatives associated with terminated business combination | Derivatives Not Designated as Hedging Instruments | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain or (Loss) Recognized in Income | 0 | 0 | 89 |
Foreign exchange contracts | General and administrative | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain or (Loss) Recognized in Income | $ 39 | ||
Foreign exchange contracts | General and administrative | Derivatives Not Designated as Hedging Instruments | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain or (Loss) Recognized in Income | $ (75) | $ 21 |
Accounts Receivable, Net (Narra
Accounts Receivable, Net (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | Oct. 26, 2014 | |
Receivables [Abstract] | ||||
Accounts receivable sold | $ 746,000,000 | $ 75,000,000 | $ 0 | |
Allowance for doubtful accounts | $ 34,000,000 | $ 51,000,000 | $ 49,000,000 | $ 58,000,000 |
Accounts Receivable, Net (Net o
Accounts Receivable, Net (Net of Allowance for Doubtful Accounts) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Changes in allowance for doubtful accounts | |||
Beginning balance | $ 51 | $ 49 | $ 58 |
Provision | 0 | 3 | 0 |
Decreases | (17) | (1) | (9) |
Ending balance | $ 34 | $ 51 | $ 49 |
Balance Sheet Detail (Inventory
Balance Sheet Detail (Inventory) (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 |
Inventories | |||
Customer service spares | $ 595 | $ 452 | |
Raw materials | 603 | 474 | |
Work-in-process | 468 | 393 | |
Finished goods | 1,264 | 731 | |
Total Inventories | 2,930 | 2,050 | $ 1,833 |
Inventory at customer locations included in finished goods | 331 | 190 | |
Evaluation inventory | $ 281 | $ 197 |
Balance Sheet Detail (Other Cur
Balance Sheet Detail (Other Current Assets) (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Other Current Assets | ||
Prepaid income taxes and income taxes receivable | $ 57 | $ 87 |
Prepaid expenses and other | 317 | 188 |
Total other current assets | $ 374 | $ 275 |
Balance Sheet Detail (Property,
Balance Sheet Detail (Property, Plant and Equipment) (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2017 | Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Property, Plant and Equipment, Net | ||||
Gross property, plant and equipment | $ 3,311 | $ 3,043 | ||
Accumulated depreciation | (2,245) | (2,106) | ||
Net property, plant and equipment | 1,066 | 937 | ||
Depreciation | 214 | 200 | $ 185 | |
Property, Plant and Equipment, Additions | 345 | 253 | $ 215 | |
Land and improvements | ||||
Property, Plant and Equipment, Net | ||||
Gross property, plant and equipment | 160 | 159 | ||
Building and improvements | ||||
Property, Plant and Equipment, Net | ||||
Gross property, plant and equipment | $ 1,315 | 1,261 | ||
Building and improvements | Minimum | ||||
Property, Plant and Equipment, Net | ||||
Useful life | 3 years | |||
Building and improvements | Maximum | ||||
Property, Plant and Equipment, Net | ||||
Useful life | 30 years | |||
Demonstration and manufacturing equipment | ||||
Property, Plant and Equipment, Net | ||||
Gross property, plant and equipment | $ 1,129 | 992 | ||
Demonstration and manufacturing equipment | Minimum | ||||
Property, Plant and Equipment, Net | ||||
Useful life | 3 years | |||
Demonstration and manufacturing equipment | Maximum | ||||
Property, Plant and Equipment, Net | ||||
Useful life | 5 years | |||
Furniture, fixtures and other equipment | ||||
Property, Plant and Equipment, Net | ||||
Gross property, plant and equipment | $ 572 | 547 | ||
Furniture, fixtures and other equipment | Minimum | ||||
Property, Plant and Equipment, Net | ||||
Useful life | 3 years | |||
Furniture, fixtures and other equipment | Maximum | ||||
Property, Plant and Equipment, Net | ||||
Useful life | 15 years | |||
Construction in progress | ||||
Property, Plant and Equipment, Net | ||||
Gross property, plant and equipment | $ 135 | $ 84 | ||
Subsequent Event | ||||
Property, Plant and Equipment, Net | ||||
Property, Plant and Equipment, Additions | $ 100 |
Balance Sheet Detail (Accounts
Balance Sheet Detail (Accounts Payable, Notes Payable and Accrued Expenses) (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Accounts Payable, Notes Payable and Accrued Expenses | ||
Accounts payable | $ 945 | $ 813 |
Notes payable, short-term | 0 | 200 |
Compensation and employee benefits | 666 | 517 |
Warranty | 199 | 153 |
Dividends payable | 106 | 108 |
Income taxes payable | 112 | 101 |
Other accrued taxes | 70 | 50 |
Interest payable | 38 | 31 |
Other | 314 | 283 |
Accounts payable and accrued expenses | $ 2,450 | $ 2,256 |
Balance Sheet Detail (Customer
Balance Sheet Detail (Customer Deposits) (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Customer Deposits and Deferred Revenue | ||
Customer deposits | $ 381 | $ 471 |
Deferred revenue | 1,284 | 905 |
Customer deposits and deferred revenue | $ 1,665 | $ 1,376 |
Balance Sheet Detail (Other Lia
Balance Sheet Detail (Other Liabilities) (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Other Liabilities | ||
Income taxes payable | $ 392 | $ 337 |
Defined and postretirement benefit plans | 160 | 182 |
Other | 99 | 77 |
Other liabilities | $ 651 | $ 596 |
Business Combinations Narrative
Business Combinations Narrative (Details) - 2017 Acquisitions $ in Millions | 12 Months Ended |
Oct. 29, 2017USD ($)acquisition | |
Business Acquisition [Line Items] | |
Number of acquisitions | acquisition | 3 |
Weighted average useful life (in years) | 3 years 6 months |
Transaction costs | $ | $ 0 |
Business Combinations Purchase
Business Combinations Purchase Price Allocation (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Business Acquisition [Line Items] | ||
Goodwill | $ 3,368 | $ 3,316 |
2017 Acquisitions | ||
Business Acquisition [Line Items] | ||
Fair value of net assets acquired | 23 | |
Goodwill | 55 | |
Purchased technology | 31 | |
Purchase price allocated | $ 109 |
Goodwill, Purchased Technolog63
Goodwill, Purchased Technology and Other Intangible Assets (Narrative) (Details) $ in Millions | 12 Months Ended |
Oct. 29, 2017USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Goodwill and other indefinite lived intangible assets acquired through acquisitions | $ 27 |
Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 1 year |
Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 15 years |
Goodwill, Purchased Technolog64
Goodwill, Purchased Technology and Other Intangible Assets (Goodwill and Other Indefinite-lived Intangible Assets) (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Indefinite-lived intangible assets | ||
Goodwill | $ 3,368 | $ 3,316 |
Other Intangible Assets | 0 | 25 |
Total | 3,368 | 3,341 |
Semiconductor Systems | ||
Indefinite-lived intangible assets | ||
Goodwill | 2,151 | 2,151 |
Other Intangible Assets | 0 | 0 |
Total | 2,151 | 2,151 |
Applied Global Services | ||
Indefinite-lived intangible assets | ||
Goodwill | 1,018 | 1,010 |
Other Intangible Assets | 0 | 5 |
Total | 1,018 | 1,015 |
Display and Adjacent Markets | ||
Indefinite-lived intangible assets | ||
Goodwill | 199 | 155 |
Other Intangible Assets | 0 | 20 |
Total | $ 199 | $ 175 |
Goodwill, Purchased Technolog65
Goodwill, Purchased Technology and Other Intangible Assets (Purchased Technology and Intangible Assets) (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Summary of Purchased Technology and Intangible Assets [Line Items] | ||
Carrying amount | $ 412 | $ 550 |
Intangible assets - indefinite-lived | 0 | 25 |
Total | 412 | 575 |
Purchased technology, net | ||
Summary of Purchased Technology and Intangible Assets [Line Items] | ||
Carrying amount | 288 | 409 |
Intangible Assets | ||
Summary of Purchased Technology and Intangible Assets [Line Items] | ||
Carrying amount | 124 | 141 |
Intangible assets - indefinite-lived | $ 0 | $ 25 |
Goodwill, Purchased Technolog66
Goodwill, Purchased Technology and Other Intangible Assets (Finite-lived Intangible Assets) (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Amortized intangible assets | ||
Gross carrying amount | $ 1,988 | $ 1,934 |
Accumulated amortization | (1,576) | (1,384) |
Carrying amount | 412 | 550 |
Purchased technology, net | ||
Amortized intangible assets | ||
Gross carrying amount | 1,645 | 1,593 |
Accumulated amortization | (1,357) | (1,184) |
Carrying amount | 288 | 409 |
Other Intangible Assets | ||
Amortized intangible assets | ||
Gross carrying amount | 343 | 341 |
Accumulated amortization | (219) | (200) |
Carrying amount | 124 | 141 |
Operating Segments | Semiconductor Systems | ||
Amortized intangible assets | ||
Gross carrying amount | 1,701 | 1,701 |
Accumulated amortization | (1,341) | (1,156) |
Operating Segments | Semiconductor Systems | Purchased technology, net | ||
Amortized intangible assets | ||
Gross carrying amount | 1,449 | 1,449 |
Accumulated amortization | (1,210) | (1,043) |
Operating Segments | Semiconductor Systems | Other Intangible Assets | ||
Amortized intangible assets | ||
Gross carrying amount | 252 | 252 |
Accumulated amortization | (131) | (113) |
Operating Segments | Applied Global Services | ||
Amortized intangible assets | ||
Gross carrying amount | 77 | 72 |
Accumulated amortization | (72) | (71) |
Operating Segments | Applied Global Services | Purchased technology, net | ||
Amortized intangible assets | ||
Gross carrying amount | 33 | 28 |
Accumulated amortization | (28) | (27) |
Operating Segments | Applied Global Services | Other Intangible Assets | ||
Amortized intangible assets | ||
Gross carrying amount | 44 | 44 |
Accumulated amortization | (44) | (44) |
Operating Segments | Display and Adjacent Markets | ||
Amortized intangible assets | ||
Gross carrying amount | 201 | 151 |
Accumulated amortization | (154) | (147) |
Operating Segments | Display and Adjacent Markets | Purchased technology, net | ||
Amortized intangible assets | ||
Gross carrying amount | 163 | 115 |
Accumulated amortization | (119) | (113) |
Operating Segments | Display and Adjacent Markets | Other Intangible Assets | ||
Amortized intangible assets | ||
Gross carrying amount | 38 | 36 |
Accumulated amortization | (35) | (34) |
Corporate and Other | ||
Amortized intangible assets | ||
Gross carrying amount | 9 | 10 |
Accumulated amortization | (9) | (10) |
Corporate and Other | Purchased technology, net | ||
Amortized intangible assets | ||
Gross carrying amount | 0 | 1 |
Accumulated amortization | 0 | (1) |
Corporate and Other | Other Intangible Assets | ||
Amortized intangible assets | ||
Gross carrying amount | 9 | 9 |
Accumulated amortization | $ (9) | $ (9) |
Goodwill, Purchased Technolog67
Goodwill, Purchased Technology and Other Intangible Assets (Amortization Expense) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 193 | $ 189 | $ 186 |
Cost of products sold | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 173 | 167 | 163 |
Research, development, and engineering | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 1 | 2 | 1 |
Marketing and selling | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 19 | 20 | 20 |
General and administrative | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 0 | 0 | 2 |
Operating Segments | Semiconductor Systems | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 185 | 185 | 179 |
Operating Segments | Applied Global Services | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 1 | 1 | 1 |
Operating Segments | Display and Adjacent Markets | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 7 | 0 | 3 |
Corporate and Other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 0 | $ 3 | $ 3 |
Goodwill, Purchased Technolog68
Goodwill, Purchased Technology and Other Intangible Assets (Future Estimated Amortization Expense) (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 |
Future estimated amortization expense | ||
2,018 | $ 198 | |
2,019 | 57 | |
2,020 | 52 | |
2,021 | 40 | |
2,022 | 65 | |
Carrying amount | $ 412 | $ 550 |
Borrowing Facilities and Debt69
Borrowing Facilities and Debt (Narrative) (Details) - USD ($) | 1 Months Ended | ||||
May 31, 2017 | Oct. 29, 2017 | Mar. 31, 2017 | Oct. 30, 2016 | 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 | ||||
Senior Notes | 3.300% Senior Notes Due 2027 and 4.350% Senior Notes due 2047 | |||||
Line of Credit Facility [Line Items] | |||||
Aggregate principal amount | $ 2,200,000,000 | ||||
Senior Notes | 7.125% Senior Notes Due 2017 | |||||
Line of Credit Facility [Line Items] | |||||
Debt redeemed | $ 200,000,000 | ||||
Stated interest rate | 7.125% | 7.125% | |||
Commercial paper, corporate bonds and medium-term notes | |||||
Line of Credit Facility [Line Items] | |||||
Commercial paper outstanding | $ 0 | $ 0 | |||
Revolving Credit | |||||
Line of Credit Facility [Line Items] | |||||
Available revolving credit agreement | 1,500,000,000 | ||||
Foreign Line of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Available revolving credit agreement | $ 70,000,000 |
Borrowing Facilities and Debt70
Borrowing Facilities and Debt (Debt Outstanding) (Details) - USD ($) $ in Millions | Oct. 29, 2017 | May 31, 2017 | Oct. 30, 2016 |
Schedule of debt | |||
Notes payable, short-term | $ 0 | $ 200 | |
Long-term debt principal amount | 5,350 | 3,150 | |
Total long-term debt | 5,304 | 3,125 | |
Total debt | 5,304 | 3,325 | |
Senior Notes | |||
Schedule of debt | |||
Total unamortized discount | (12) | (7) | |
Total unamortized debt issuance costs | (34) | (18) | |
Senior Notes | 7.125% Senior Notes Due 2017 | |||
Schedule of debt | |||
Notes payable, short-term | $ 0 | 200 | |
Effective Interest Rate | 7.19% | ||
Stated interest rate | 7.125% | 7.125% | |
Senior Notes | 2.625% Senior Notes Due 2020 | |||
Schedule of debt | |||
Long-term debt principal amount | $ 600 | 600 | |
Effective Interest Rate | 2.64% | ||
Stated interest rate | 2.625% | ||
Senior Notes | 4.300% Senior Notes Due 2021 | |||
Schedule of debt | |||
Long-term debt principal amount | $ 750 | 750 | |
Effective Interest Rate | 4.326% | ||
Stated interest rate | 4.30% | ||
Senior Notes | 3.900% Senior Notes Due 2025 | |||
Schedule of debt | |||
Long-term debt principal amount | $ 700 | 700 | |
Effective Interest Rate | 3.944% | ||
Stated interest rate | 3.90% | ||
Senior Notes | 3.300% Senior Notes Due 2027 | |||
Schedule of debt | |||
Long-term debt principal amount | $ 1,200 | 0 | |
Effective Interest Rate | 3.342% | ||
Stated interest rate | 3.30% | ||
Senior Notes | 5.100% Senior Notes Due 2035 | |||
Schedule of debt | |||
Long-term debt principal amount | $ 500 | 500 | |
Effective Interest Rate | 5.127% | ||
Stated interest rate | 5.10% | ||
Senior Notes | 5.850% Senior Notes Due 2041 | |||
Schedule of debt | |||
Long-term debt principal amount | $ 600 | 600 | |
Effective Interest Rate | 5.879% | ||
Stated interest rate | 5.85% | ||
Senior Notes | 4.350% Senior Notes Due 2047 | |||
Schedule of debt | |||
Long-term debt principal amount | $ 1,000 | $ 0 | |
Effective Interest Rate | 4.361% | ||
Stated interest rate | 4.35% |
Stockholders' Equity, Compreh71
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | $ 7,217 | $ 7,613 | $ 7,868 |
Other comprehensive income (loss) before reclassifications | 66 | (61) | (25) |
Amounts reclassified out of AOCI | (15) | 38 | 9 |
Other comprehensive income, net of tax | 51 | (23) | (16) |
Ending Balance | 9,349 | 7,217 | 7,613 |
Unrealized Gain (Loss) on Investments, Net | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | 30 | 14 | 24 |
Other comprehensive income (loss) before reclassifications | 24 | 14 | (11) |
Amounts reclassified out of AOCI | (1) | 2 | 1 |
Other comprehensive income, net of tax | 23 | 16 | (10) |
Ending Balance | 53 | 30 | 14 |
Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | (18) | (15) | 0 |
Other comprehensive income (loss) before reclassifications | 13 | (33) | (9) |
Amounts reclassified out of AOCI | (6) | 30 | (6) |
Other comprehensive income, net of tax | 7 | (3) | (15) |
Ending Balance | (11) | (18) | (15) |
Defined and Postretirement Benefit Plans | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | (141) | (105) | (105) |
Other comprehensive income (loss) before reclassifications | 29 | (42) | (5) |
Amounts reclassified out of AOCI | (8) | 6 | 5 |
Other comprehensive income, net of tax | 21 | (36) | 0 |
Ending Balance | (120) | (141) | (105) |
Cumulative Translation Adjustments | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | 14 | 14 | 5 |
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 |
Amounts reclassified out of AOCI | 0 | 0 | 9 |
Other comprehensive income, net of tax | 0 | 0 | 9 |
Ending Balance | 14 | 14 | 14 |
AOCI Attributable to Parent | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | (115) | (92) | (76) |
Other comprehensive income, net of tax | 51 | (23) | (16) |
Ending Balance | $ (64) | $ (115) | $ (92) |
Stockholders' Equity, Compreh72
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Narrative) (Details) | 12 Months Ended | |||||
Oct. 29, 2017USD ($)Plan$ / sharesshares | Oct. 30, 2016USD ($)$ / sharesshares | Oct. 25, 2015USD ($)$ / sharesshares | Sep. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Apr. 30, 2015USD ($) | |
Equity [Line Items] | ||||||
Tax effects on net income of amounts reclassified from AOCI | $ | $ 22,000,000 | |||||
Stock Repurchase Program | ||||||
Authorized amount | $ | $ 3,000,000,000 | $ 2,000,000,000 | $ 3,000,000,000 | |||
Remaining authorized repurchase amount | $ | $ 3,600,000,000 | |||||
Dividends | ||||||
Quarterly cash dividend declared (usd per share) | $ / shares | $ 0.10 | $ 0.10 | $ 0.10 | |||
Payments of dividends | $ | $ 430,000,000 | $ 444,000,000 | $ 487,000,000 | |||
Share-based Compensation | ||||||
Number of employee stock purchase plans | Plan | 2 | |||||
Employee Stock Purchase Plan | ||||||
Employee Stock Purchase Plans | ||||||
Purchase period | 6 months | |||||
Number of shares issued under the ESPP | shares | 3,000,000 | 6,000,000 | 5,000,000 | |||
Employee Stock | ||||||
Share-based Compensation | ||||||
Total unrecognized compensation expense | $ | $ 324,000,000 | |||||
Weighted average period for unrecognized compensation expense to be recognized | 2 years 4 months 25 days | |||||
Employee Stock Purchase Plans | ||||||
Purchase price of common stock, percent | 85.00% | |||||
Stock Options | ||||||
Stock Options, Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | ||||||
Stock options scheduled to expire | 7 years | |||||
Options granted (in shares) | shares | 0 | 0 | 0 | |||
Stock Options | Employee Stock Incentive Plan | ||||||
Share-based Compensation | ||||||
Number of shares available for grant | shares | 91,000,000 | |||||
Stock Options | Employee Stock Purchase Plan | ||||||
Share-based Compensation | ||||||
Number of shares available for grant | shares | 20,000,000 | |||||
Stock Options | Minimum | ||||||
Stock Options, Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | ||||||
Stock options scheduled to be vested | 3 years | |||||
Stock Options | Maximum | ||||||
Stock Options, Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | ||||||
Stock options scheduled to be vested | 4 years | |||||
Performance Shares/Performance Units | ||||||
Stock Options, Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | ||||||
Award measurement period | 3 years | |||||
Additional performance-based awards to be earned upon certain levels of achievement (in shares) | shares | 1,000,000 | |||||
Performance Shares/Performance Units | Minimum | ||||||
Stock Options, Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | ||||||
Award vesting rights as percentage of target amount | 0.00% | |||||
Performance Shares/Performance Units | Maximum | ||||||
Stock Options, Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | ||||||
Award vesting rights as percentage of target amount | 200.00% | |||||
Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | ||||||
Stock Options, Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | ||||||
Stock options scheduled to be vested | 4 years | |||||
Officer | Performance Shares/Performance Units | ||||||
Stock Options, Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | ||||||
Award measurement period | 2 years |
Stockholders' Equity, Compreh73
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Stock Repurchases) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Equity [Abstract] | |||
Shares of common stock repurchased (in shares) | 28 | 96 | 76 |
Cost of stock repurchased | $ 1,172 | $ 1,892 | $ 1,325 |
Average price paid per share (in dollars per share) | $ 42.08 | $ 19.82 | $ 17.33 |
Stockholders' Equity, Compreh74
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Share-based Compensation) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Total share-based compensation and related tax benefits | |||
Share-based compensation | $ 220 | $ 201 | $ 187 |
Tax benefit recognized | $ 60 | $ 63 | $ 52 |
Stockholders' Equity, Compreh75
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Effect of Share-based Compensation) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation | $ 220 | $ 201 | $ 187 |
Cost of products sold | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation | 69 | 62 | 57 |
Research, development, and engineering | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation | 83 | 76 | 69 |
Marketing and selling | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation | 28 | 26 | 26 |
General and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation | $ 40 | $ 37 | $ 35 |
Stockholders' Equity, Compreh76
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 - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | |||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | Oct. 26, 2014 | |
Shares | ||||
Beginning Balance (shares) | 25 | 27 | 33 | |
Granted (shares) | 8 | 11 | 10 | |
Vested (shares) | (10) | (11) | (15) | |
Canceled (shares) | (1) | (2) | (1) | |
Ending Balance (shares) | 22 | 25 | 27 | 33 |
Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest (in shares) | 20 | |||
Weighted Average Grant Date Fair Value | ||||
Beginning of Period (in dollars per share) | $ 18.28 | $ 16.41 | $ 12.59 | |
Granted (in dollars per share) | 31.79 | 18.54 | 22.60 | |
Vested (in dollars per share) | 16.50 | 14.25 | 12.04 | |
Canceled (in dollars per share) | 21.25 | 17.57 | 14.98 | |
Ending Balance (in dollars per share) | 23.96 | $ 18.28 | $ 16.41 | $ 12.59 |
Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest (in dollars per share) | $ 23.30 | |||
Weighted Average Remaining Contractual Term | ||||
Weighted average remaining contractual term | 2 years 2 months 18 days | 2 years 3 months 18 days | 2 years 2 months 12 days | 2 years 3 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 10 days | |||
Aggregate Intrinsic Value | ||||
Aggregate Intrinsic Value | $ 1,239 | $ 718 | $ 440 | $ 698 |
Expected to vest, Aggregate Intrinsic Value | $ 1,107 |
Stockholders' Equity, Compreh77
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (ESPP Fair Value Assumptions) (Details) - Employee Stock Purchase Plan - $ / shares | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Weighted Average Assumptions Used for ESPP Granted | |||
Dividend yield | 0.99% | 1.76% | 2.20% |
Expected volatility | 26.30% | 29.30% | 31.80% |
Risk-free interest rate | 0.92% | 0.47% | 0.19% |
Expected life (in years) | 6 months | 6 months | 6 months |
Weighted average estimated fair value (in dollars per share) | $ 9.14 | $ 5.48 | $ 4.55 |
Employee Benefit Plans (Narrati
Employee Benefit Plans (Narrative) (Details) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017USD ($)Plan | Oct. 30, 2016USD ($) | Oct. 25, 2015USD ($) | |
Employee Bonus Plans | |||
Charges to expense under Employee bonus plans | $ 449 | $ 312 | $ 307 |
Defined Benefit Pension Plans of Foreign Subsidiaries and Other Post-Retirement Benefits | |||
Liability under other post retirement plan | 161 | 194 | 206 |
Company contributions expected for next fiscal year | $ 11 | ||
Executive Deferred Compensation Plans | |||
Number of unfunded plans | Plan | 2 | ||
Executive Deferred Compensation Plans | |||
Executive Deferred Compensation Plans | |||
Amounts payable under EDCP | $ 63 | 40 | |
Other Postretirement Benefit Plans, Defined Benefit | |||
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 other post retirement plan | $ 1 | 1 | |
Savings and Retirement Plan | |||
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 | 100.00% | ||
401(K) Matching contributions | $ 38 | $ 38 | 35 |
401(K) Matching contributions forfeited | $ 1 | ||
Savings and Retirement Plan | Minimum | |||
Employee Savings and Retirement Plan | |||
Employer matching contribution, percent of employees' gross pay, second tier | 4.00% | ||
Savings and Retirement Plan | Maximum | |||
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 ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Change in projected benefit obligation | |||
Beginning projected benefit obligation | $ 495 | $ 471 | $ 479 |
Service cost | 13 | 13 | 15 |
Interest cost | 10 | 13 | 13 |
Plan participants’ contributions | 2 | 1 | 1 |
Actuarial (gain) loss | (35) | 77 | 12 |
Curtailments, settlements and special termination benefits | (1) | (6) | (1) |
Foreign currency exchange rate changes | 34 | (42) | (39) |
Benefits paid | (12) | (10) | (9) |
Plan amendments and business combinations | 0 | (22) | 0 |
Ending projected benefit obligation | 506 | 495 | 471 |
Ending accumulated benefit obligation | 472 | 460 | 434 |
Change in plan assets | |||
Beginning fair value of plan assets | 310 | 281 | 268 |
Return on plan assets | 18 | 37 | 19 |
Employer contributions | 16 | 50 | 21 |
Plan participants’ contributions | 2 | 1 | 1 |
Foreign currency exchange rate changes | 28 | (45) | (18) |
Divestitures, settlements and business combinations | (1) | (4) | (1) |
Benefits paid | (12) | (10) | (9) |
Ending fair value of plan assets | 361 | 310 | 281 |
Funded status | (145) | (185) | (190) |
Amounts recognized in the consolidated balance sheets | |||
Noncurrent asset | 17 | 11 | 19 |
Current liability | (1) | (2) | (3) |
Noncurrent liability | (161) | (194) | (206) |
Total | (145) | (185) | (190) |
Estimated amortization from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal period | |||
Actuarial loss | 6 | 6 | 6 |
Prior service credit | (4) | (16) | (1) |
Total | 2 | (10) | 5 |
Amounts recognized in accumulated other comprehensive loss | |||
Net actuarial loss | 141 | 186 | 135 |
Prior service credit | (4) | (21) | 0 |
Total | 137 | 165 | 135 |
Plans with projected benefit obligations in excess of plan assets | |||
Projected benefit obligation | 326 | 341 | 308 |
Fair value of plan assets | 142 | 145 | 98 |
Plans with accumulated benefit obligations in excess of plan assets | |||
Accumulated benefit obligation | 293 | 307 | 274 |
Fair value of plan assets | $ 142 | $ 145 | $ 98 |
Minimum | |||
Range of assumptions to determine benefit obligations | |||
Discount rate | 0.50% | 0.50% | 0.90% |
Rate of compensation increase | 2.20% | 1.60% | 1.90% |
Maximum | |||
Range of assumptions to determine benefit obligations | |||
Discount rate | 3.40% | 3.10% | 4.40% |
Rate of compensation increase | 3.50% | 3.60% | 3.60% |
Employee Benefit Plans (Plan As
Employee Benefit Plans (Plan Assets Allocation) (Details) | Oct. 29, 2017 | Oct. 30, 2016 |
Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets — allocation | 47.00% | 42.00% |
Debt securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets — allocation | 39.00% | 40.00% |
Insurance contracts | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets — allocation | 11.00% | 12.00% |
Other investments | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets — allocation | 3.00% | 4.00% |
Cash | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets — allocation | 0.00% | 2.00% |
Employee Benefit Plans (Fair Va
Employee Benefit Plans (Fair Value of Plan Assets) (Details) - USD ($) $ in Millions | Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | Oct. 26, 2014 |
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | $ 361 | $ 310 | $ 281 | $ 268 |
Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 101 | 79 | ||
Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 13 | 12 | ||
Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 38 | 38 | $ 40 | |
Equity securities | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 83 | 59 | ||
Equity securities | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 83 | 59 | ||
Equity securities | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 0 | 0 | ||
Equity securities | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 0 | 0 | ||
Debt securities | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 16 | 12 | ||
Debt securities | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 16 | 12 | ||
Debt securities | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 0 | 0 | ||
Debt securities | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 0 | 0 | ||
Insurance contracts | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 38 | 38 | ||
Insurance contracts | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 0 | 0 | ||
Insurance contracts | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 0 | 0 | ||
Insurance contracts | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 38 | 38 | ||
Other investments | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 13 | 12 | ||
Other investments | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 0 | 0 | ||
Other investments | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 13 | 12 | ||
Other investments | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 0 | 0 | ||
Cash | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 2 | 8 | ||
Cash | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 2 | 8 | ||
Cash | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 0 | 0 | ||
Cash | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 0 | 0 | ||
Total assets at fair value | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 152 | 129 | ||
Assets measured at net asset value | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | $ 209 | $ 181 |
Employee Benefit Plans (Level 3
Employee Benefit Plans (Level 3 Instruments) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Change in plan assets | |||
Beginning fair value of plan assets | $ 310 | $ 281 | $ 268 |
Actual return on plan assets: | |||
Currency impact | 28 | (45) | (18) |
Ending fair value of plan assets | 361 | 310 | 281 |
Level 3 | |||
Change in plan assets | |||
Beginning fair value of plan assets | 38 | 40 | |
Actual return on plan assets: | |||
Relating to assets still held at reporting date | (3) | (1) | |
Purchases, sales, settlements, net | 1 | 0 | |
Currency impact | 2 | (1) | |
Ending fair value of plan assets | $ 38 | $ 38 | $ 40 |
Employee Benefit Plans (Net Per
Employee Benefit Plans (Net Periodic Benefit Costs) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Components of net periodic benefit cost | |||
Service cost | $ 13 | $ 13 | $ 15 |
Interest cost | 10 | 13 | 13 |
Expected return on plan assets | (18) | (14) | (15) |
Amortization of actuarial loss and prior service credit | (10) | 3 | 7 |
Settlement and curtailment loss | 0 | (5) | (1) |
Net periodic benefit cost (income) | $ (5) | $ 10 | $ 19 |
Weighted average assumptions | |||
Discount rate | 1.88% | 2.82% | 3.00% |
Expected long-term return on assets | 5.38% | 5.38% | 5.62% |
Rate of compensation increase | 2.69% | 2.71% | 2.74% |
Employee Benefit Plans (Future
Employee Benefit Plans (Future Expected Benefit Payments) (Details) $ in Millions | Oct. 29, 2017USD ($) |
Defined Benefit Plan, Estimated Future Benefit Payments [Abstract] | |
2,018 | $ 11 |
2,019 | 11 |
2,020 | 11 |
2,021 | 12 |
2,022 | 12 |
2023-2027 | 72 |
Total | $ 129 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Components of income from operations before income taxes | |||
U.S. | $ 514 | $ 199 | $ 629 |
Foreign | 3,217 | 1,814 | 969 |
Income before income taxes | 3,731 | 2,013 | 1,598 |
Current: | |||
U.S. | 67 | (36) | 134 |
Foreign | 233 | 351 | 199 |
State | 9 | (2) | 18 |
Total current provision for income taxes | 309 | 313 | 351 |
Deferred: | |||
U.S. | (11) | 55 | (194) |
Foreign | (7) | (89) | 69 |
State | 6 | 13 | (5) |
Total deferred provision (benefit) for income taxes | (12) | (21) | (130) |
Provision for income taxes | $ 297 | $ 292 | $ 221 |
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 of prior years’ income tax filings | (1.90%) | 3.90% | (4.90%) |
Effect of foreign operations taxed at various rates | (24.90%) | (24.10%) | (16.30%) |
State income taxes, net of federal benefit | 0.30% | 0.60% | 0.90% |
Research and other tax credits | (0.70%) | (1.30%) | (0.20%) |
U.S. domestic production deduction | (0.20%) | (0.20%) | (0.60%) |
Share-based compensation | 0.40% | 0.40% | 0.80% |
Other | 0.00% | 0.20% | (0.90%) |
Effective income tax rate | 8.00% | 14.50% | 13.80% |
Deferred tax assets: | |||
Allowance for doubtful accounts | $ 13 | $ 20 | |
Inventory reserves and basis difference | 156 | 151 | |
Installation and warranty reserves | 1 | 3 | |
Accrued liabilities | 31 | 53 | |
Deferred revenue | 15 | 17 | |
Tax credits | 317 | 210 | |
Deferred compensation | 81 | 45 | |
Share-based compensation | 53 | 55 | |
Other | 67 | 176 | |
Gross deferred tax assets | 734 | 730 | |
Valuation allowance | (227) | (207) | |
Total deferred tax assets | 507 | 523 | |
Deferred tax liabilities: | |||
Fixed assets | (36) | (29) | |
Intangible assets | (76) | (81) | |
Undistributed foreign earnings | (11) | (42) | |
Foreign exchange | (4) | 0 | |
Total gross deferred tax liabilities | (127) | (152) | |
Net deferred tax assets | 380 | 371 | |
Breakdown between current and non-current net deferred tax assets and liabilities | |||
Non-current deferred tax asset | 385 | 372 | |
Non-current deferred tax liability | (5) | (1) | |
Net deferred tax assets | 380 | 371 | |
Reconciliation of gross unrecognized tax benefits | |||
Beginning balance of gross unrecognized tax benefits | 320 | 177 | $ 134 |
Settlements with tax authorities | (42) | (25) | (16) |
Lapses of statutes of limitation | (15) | (2) | (1) |
Increases in tax positions for current year | 95 | 62 | 43 |
Increases in tax positions for prior years | 33 | 109 | 21 |
Decreases in tax positions for prior years | 0 | (1) | (4) |
Ending balance of gross unrecognized tax benefits | $ 391 | $ 320 | $ 177 |
Income Taxes (Valuation Allowan
Income Taxes (Valuation Allowance) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Increases | $ 0 | $ 3 | $ 0 |
Decreases | (17) | (1) | (9) |
Valuation Allowance of Deferred Tax Assets | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning balance | 207 | 207 | 173 |
Increases | 20 | 27 | 40 |
Decreases | 0 | (27) | (6) |
Ending balance | $ 227 | $ 207 | $ 207 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Income Tax Examination [Line Items] | |||
Statutory U.S. federal tax rate | 35.00% | 35.00% | 35.00% |
Adjustment to correct intercompany sales | $ 28 | ||
Tax holiday benefit | $ 452 | ||
Tax holiday benefit per diluted share (in dollars per share) | $ 0.42 | ||
Undistributed earnings from foreign subsidiaries | $ 8,200 | ||
Income tax effects allocated directly to equity | 55 | $ 23 | 56 |
Income tax penalties and interest expense (benefit) | 17 | 24 | (6) |
Unrecognized tax benefits that would impact effective tax rate | 284 | 302 | 167 |
Decrease in unrecognized tax benefits is reasonably possible | 116 | ||
Noncurrent Liabilities | |||
Income Tax Examination [Line Items] | |||
Interest and penalties related to uncertain tax positions | 46 | 33 | 14 |
State and Local Jurisdiction | |||
Income Tax Examination [Line Items] | |||
Operating loss carryforwards | 3 | ||
Foreign Tax Authority | |||
Income Tax Examination [Line Items] | |||
Income tax expense (benefit) from settlement with tax authorities | (10) | ||
Research Tax Credit Carryforward | State and Local Jurisdiction | |||
Income Tax Examination [Line Items] | |||
Tax credit carryforwards | 221 | ||
Research, carried over until exhausted | State and Local Jurisdiction | |||
Income Tax Examination [Line Items] | |||
Tax credit carryforwards | 199 | ||
Research, carried over the next fifteen years | State and Local Jurisdiction | |||
Income Tax Examination [Line Items] | |||
Tax credit carryforwards | $ 22 | ||
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 | 24.00% | ||
ITALY | Foreign Tax Authority | |||
Income Tax Examination [Line Items] | |||
Income tax paid or accrued | $ 29 | 19 | |
Income tax expense (benefit) from settlement with tax authorities | $ 6 | ||
SWITZERLAND | Foreign Tax Authority | |||
Income Tax Examination [Line Items] | |||
Income tax paid or accrued | 25 | $ 2 | |
Income tax expense (benefit) from settlement with tax authorities | $ 19 |
Warranty, Guarantees, Commitm88
Warranty, Guarantees, Commitments and Contingencies (Narrative) (Details) $ in Millions | 12 Months Ended | ||||
Oct. 29, 2017USD ($) | Oct. 30, 2016USD ($) | Oct. 25, 2015USD ($) | Jun. 20, 2014employee | Feb. 07, 2013employee | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Total rent expense | $ | $ 34 | $ 38 | $ 32 | ||
Products warranty period | 12 months | ||||
Maximum potential amount of future payments for letters of credit or other guarantee instruments | $ | $ 57 | ||||
Parent guarantees to banks | $ | $ 140 | ||||
Number of employees acquitted | employee | 9 | ||||
Number of employees found guilty | employee | 1 | ||||
Number of employees found not guilty | employee | 10 |
Warranty, Guarantees, Commitm89
Warranty, Guarantees, Commitments and Contingencies (Future Minimum Lease Payments) (Details) $ in Millions | Oct. 29, 2017USD ($) |
Future minimum lease payments | |
2,018 | $ 33 |
2,019 | 24 |
2,020 | 16 |
2,021 | 10 |
2,022 | 7 |
Thereafter | 11 |
Total | $ 101 |
Warranty, Guarantees, Commitm90
Warranty, Guarantees, Commitments and Contingencies (Warranty Reserves) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Changes in the warranty reserves | |||
Beginning balance | $ 153 | $ 126 | $ 113 |
Provisions for warranty | 166 | 135 | 127 |
Changes in reserves related to preexisting warranty | 1 | (12) | (10) |
Consumption of reserves | (121) | (96) | (104) |
Ending balance | $ 199 | $ 153 | $ 126 |
Industry Segment Operations (Na
Industry Segment Operations (Narrative) (Details) | 12 Months Ended |
Oct. 29, 2017segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Industry Segment Operations (Re
Industry Segment Operations (Reportable Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 31, 2016 | Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Information for each reportable segment | |||||||||||
Net Sales | $ 3,969 | $ 3,744 | $ 3,546 | $ 3,278 | $ 3,297 | $ 2,821 | $ 2,450 | $ 2,257 | $ 14,537 | $ 10,825 | $ 9,659 |
Operating Income (Loss) | 3,868 | 2,152 | 1,693 | ||||||||
Depreciation/ Amortization | 407 | 389 | 371 | ||||||||
Capital Expenditures | 345 | 253 | 215 | ||||||||
Accounts Receivable | 2,338 | 2,279 | 2,338 | 2,279 | 1,739 | ||||||
Inventories | 2,930 | 2,050 | 2,930 | 2,050 | 1,833 | ||||||
Operating Segments | Semiconductor Systems | |||||||||||
Information for each reportable segment | |||||||||||
Net Sales | 9,517 | 6,873 | 6,135 | ||||||||
Operating Income (Loss) | 3,173 | 1,807 | 1,410 | ||||||||
Depreciation/ Amortization | 286 | 277 | 268 | ||||||||
Capital Expenditures | 150 | 114 | 115 | ||||||||
Accounts Receivable | 1,626 | 1,524 | 1,626 | 1,524 | 1,160 | ||||||
Inventories | 1,760 | 1,188 | 1,760 | 1,188 | 1,079 | ||||||
Operating Segments | Applied Global Services | |||||||||||
Information for each reportable segment | |||||||||||
Net Sales | 3,017 | 2,589 | 2,447 | ||||||||
Operating Income (Loss) | 817 | 682 | 630 | ||||||||
Depreciation/ Amortization | 15 | 12 | 10 | ||||||||
Capital Expenditures | 21 | 14 | 12 | ||||||||
Accounts Receivable | 564 | 559 | 564 | 559 | 483 | ||||||
Inventories | 762 | 594 | 762 | 594 | 555 | ||||||
Operating Segments | Display and Adjacent Markets | |||||||||||
Information for each reportable segment | |||||||||||
Net Sales | 1,900 | 1,206 | 944 | ||||||||
Operating Income (Loss) | 502 | 245 | 191 | ||||||||
Depreciation/ Amortization | 12 | 5 | 6 | ||||||||
Capital Expenditures | 17 | 6 | 13 | ||||||||
Accounts Receivable | 190 | 238 | 190 | 238 | 129 | ||||||
Inventories | 367 | 215 | 367 | 215 | 176 | ||||||
Corporate And Reconciling Items [Member] | |||||||||||
Information for each reportable segment | |||||||||||
Net Sales | 103 | 157 | 133 | ||||||||
Operating Income (Loss) | (624) | (582) | (538) | ||||||||
Depreciation/ Amortization | 94 | 95 | 87 | ||||||||
Capital Expenditures | 157 | 119 | 75 | ||||||||
Accounts Receivable | (42) | (42) | (42) | (42) | (33) | ||||||
Inventories | $ 41 | $ 53 | $ 41 | $ 53 | $ 23 |
Industry Segment Operations (In
Industry Segment Operations (Income Loss by Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 31, 2016 | Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Unallocated net sales | $ 3,969 | $ 3,744 | $ 3,546 | $ 3,278 | $ 3,297 | $ 2,821 | $ 2,450 | $ 2,257 | $ 14,537 | $ 10,825 | $ 9,659 |
Share-based compensation | (220) | (201) | (187) | ||||||||
Gain on derivatives associated with terminated business combination | 0 | 0 | 89 | ||||||||
Income from operations | 3,868 | 2,152 | 1,693 | ||||||||
Corporate and Other | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Unallocated net sales | 103 | 157 | 133 | ||||||||
Unallocated cost of products sold and expenses | (507) | (538) | (523) | ||||||||
Share-based compensation | (220) | (201) | (187) | ||||||||
Certain items associated with terminated business combination | 0 | 0 | (50) | ||||||||
Gain on derivatives associated with terminated business combination | 0 | 0 | 89 | ||||||||
Income from operations | $ (624) | $ (582) | $ (538) |
Industry Segment Operations (Ne
Industry Segment Operations (Net Sales and Long-lived Assets) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 31, 2016 | Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | $ 3,969 | $ 3,744 | $ 3,546 | $ 3,278 | $ 3,297 | $ 2,821 | $ 2,450 | $ 2,257 | $ 14,537 | $ 10,825 | $ 9,659 |
Long-lived assets | 1,186 | 1,015 | 1,186 | 1,015 | |||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 1,474 | 1,143 | 1,630 | ||||||||
Long-lived assets | 915 | 798 | 915 | 798 | |||||||
Korea | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 4,052 | 1,883 | 1,654 | ||||||||
Long-lived assets | 21 | 12 | 21 | 12 | |||||||
Taiwan | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 3,291 | 2,843 | 2,600 | ||||||||
Long-lived assets | 50 | 34 | 50 | 34 | |||||||
China | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 2,746 | 2,259 | 1,623 | ||||||||
Long-lived assets | 47 | 44 | 47 | 44 | |||||||
Japan | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 1,518 | 1,279 | 1,078 | ||||||||
Long-lived assets | 8 | 8 | 8 | 8 | |||||||
Europe | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 816 | 615 | 642 | ||||||||
Long-lived assets | 47 | 34 | 47 | 34 | |||||||
Southeast Asia | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 640 | 803 | 432 | ||||||||
Long-lived assets | 98 | 85 | 98 | 85 | |||||||
Total outside United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 13,063 | 9,682 | $ 8,029 | ||||||||
Long-lived assets | $ 271 | $ 217 | $ 271 | $ 217 |
Industry Segment Operations (Pe
Industry Segment Operations (Percentage by Customer) (Details) - Sales Revenue, Net - Customer Concentration Risk | 12 Months Ended | ||
Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Samsung Electronics Co., Ltd. | |||
Entity-Wide Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 23.00% | 13.00% | 18.00% |
Taiwan Semiconductor Manufacturing Company Limited | |||
Entity-Wide Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 15.00% | 16.00% | 15.00% |
Intel Corporation | |||
Entity-Wide Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 11.00% | ||
Micron Technology, Inc. | |||
Entity-Wide Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 11.00% |
Unaudited Quarterly Consolida96
Unaudited Quarterly Consolidated Financial Data (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 31, 2016 | Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Unaudited Quarterly Consolidated Financial Data | |||||||||||
Net sales | $ 3,969 | $ 3,744 | $ 3,546 | $ 3,278 | $ 3,297 | $ 2,821 | $ 2,450 | $ 2,257 | $ 14,537 | $ 10,825 | $ 9,659 |
Gross profit | 1,787 | 1,700 | 1,600 | 1,445 | 1,399 | 1,192 | 1,004 | 916 | 6,532 | 4,511 | 3,952 |
Net income | $ 982 | $ 925 | $ 824 | $ 703 | $ 610 | $ 505 | $ 320 | $ 286 | $ 3,434 | $ 1,721 | $ 1,377 |
Diluted earnings per share (in dollars per share) | $ 0.91 | $ 0.85 | $ 0.76 | $ 0.65 | $ 0.56 | $ 0.46 | $ 0.29 | $ 0.25 | $ 3.17 | $ 1.54 | $ 1.12 |