Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Oct. 31, 2021 | Dec. 10, 2021 | May 02, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Oct. 31, 2021 | ||
Current Fiscal Year End Date | --10-31 | ||
Document Transition Report | false | ||
Entity File Number | 000-06920 | ||
Entity Registrant Name | APPLIED MATERIALS INC /DE | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 94-1655526 | ||
Entity Address, Address Line One | 3050 Bowers Avenue | ||
Entity Address, Address Line Two | P.O. Box 58039 | ||
Entity Address, City or Town | Santa Clara | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 95052-8039 | ||
City Area Code | 408 | ||
Local Phone Number | 727-5555 | ||
Title of 12(b) Security | Common Stock, par value $.01 per share | ||
Trading Symbol | AMAT | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 120,888,771,285 | ||
Entity Common Stock, Shares Outstanding | 888,513,248 | ||
Documents Incorporated by Reference | Portions of Part III will be provided in accordance with Instruction G(3) to Form 10-K no later than February 28, 2022. | ||
Entity Central Index Key | 0000006951 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Income Statement [Abstract] | |||
Net sales | $ 23,063 | $ 17,202 | $ 14,608 |
Cost of products sold | 12,149 | 9,510 | 8,222 |
Gross profit | 10,914 | 7,692 | 6,386 |
Operating expenses: | |||
Research, development and engineering | 2,485 | 2,234 | 2,054 |
Marketing and selling | 609 | 526 | 521 |
General and administrative | 620 | 567 | 461 |
Severance and related charges | 157 | 0 | 0 |
Deal termination fee | 154 | 0 | 0 |
Total operating expenses | 4,025 | 3,327 | 3,036 |
Income from operations | 6,889 | 4,365 | 3,350 |
Interest expense | 236 | 240 | 237 |
Interest and other income, net | 118 | 41 | 156 |
Income before income taxes | 6,771 | 4,166 | 3,269 |
Provision for income taxes | 883 | 547 | 563 |
Net income | $ 5,888 | $ 3,619 | $ 2,706 |
Earnings per share: | |||
Basic (in dollars per share) | $ 6.47 | $ 3.95 | $ 2.89 |
Diluted (in dollars per share) | $ 6.40 | $ 3.92 | $ 2.86 |
Weighted average number of shares: | |||
Basic (in shares) | 910 | 916 | 937 |
Diluted (in shares) | 919 | 923 | 945 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 5,888 | $ 3,619 | $ 2,706 |
Other comprehensive income (loss), net of tax: | |||
Change in unrealized gain (loss) on available-for-sale investments | (21) | 9 | 21 |
Change in unrealized net loss on derivative instruments | 30 | (117) | |
Change in unrealized net loss on derivative instruments | (7) | ||
Change in defined and postretirement benefit plans | 30 | (11) | (51) |
Change in cumulative translation adjustments | 0 | 0 | (1) |
Other comprehensive income (loss), net of tax | 39 | (119) | (38) |
Comprehensive income | $ 5,927 | $ 3,500 | $ 2,668 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Oct. 31, 2021 | Oct. 25, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 4,995 | $ 5,351 |
Short-term investments | 464 | 387 |
Accounts receivable, net | 4,953 | 2,963 |
Inventories | 4,309 | 3,904 |
Other current assets | 1,386 | 764 |
Total current assets | 16,107 | 13,369 |
Long-term investments | 2,055 | 1,538 |
Property, plant and equipment, net | 1,934 | 1,604 |
Goodwill | 3,479 | 3,466 |
Purchased technology and other intangible assets, net | 104 | 153 |
Deferred income taxes and other assets | 2,146 | 2,223 |
Total assets | 25,825 | 22,353 |
Current liabilities: | ||
Accounts payable and accrued expenses | 4,268 | 3,138 |
Contract liabilities | 2,076 | 1,321 |
Total current liabilities | 6,344 | 4,459 |
Long-term debt | 5,452 | 5,448 |
Income taxes payable | 1,090 | 1,206 |
Other | 692 | 662 |
Total liabilities | 13,578 | 11,775 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock: $0.01 par value per share; 1 shares authorized; no shares issued | 0 | 0 |
Common stock: $0.01 par value per share; 2,500 shares authorized; 892 and 914 shares outstanding at 2021 and 2020, respectively | 9 | 9 |
Additional paid-in capital | 8,247 | 7,904 |
Retained earnings | 32,246 | 27,209 |
Treasury stock: 1,119 and 1,091 shares at 2021 and 2020, respectively | (27,995) | (24,245) |
Accumulated other comprehensive loss | (260) | (299) |
Total stockholders’ equity | 12,247 | 10,578 |
Total liabilities and stockholders’ equity | $ 25,825 | $ 22,353 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Oct. 31, 2021 | Oct. 25, 2020 |
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 | 892,000,000 | 914,000,000 |
Treasury stock, shares | 1,119,000,000 | 1,091,000,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | [1] | Common Stock | Additional Paid-In Capital | Retained Earnings | [2] | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | [1],[2] | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss)Cumulative Effect, Period of Adoption, Adjustment | [1] |
Beginning Balance (in shares) at Oct. 28, 2018 | 967 | (1,019) | |||||||||||
Beginning Balance at Oct. 28, 2018 | $ 6,845 | $ 1,553 | $ 10 | $ 7,274 | $ 20,880 | $ 1,570 | $ (21,194) | $ (125) | $ (17) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net income | 2,706 | 2,706 | |||||||||||
Other comprehensive income (loss), net of tax | (38) | (38) | |||||||||||
Dividends declared | (770) | (770) | |||||||||||
Share-based compensation | 263 | 263 | |||||||||||
Issuance under stock plans (in shares) | 9 | ||||||||||||
Issuance under stock plans | $ 58 | 58 | |||||||||||
Common stock repurchases, (in shares) | (60) | (60) | (60) | ||||||||||
Common stock repurchases | $ (2,403) | $ (1) | $ (2,402) | ||||||||||
Ending Balance (in shares) at Oct. 27, 2019 | 916 | (1,079) | |||||||||||
Ending Balance at Oct. 27, 2019 | 8,214 | $ 9 | 7,595 | 24,386 | $ (23,596) | (180) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net income | 3,619 | 3,619 | |||||||||||
Other comprehensive income (loss), net of tax | (119) | (119) | |||||||||||
Dividends declared | (796) | (796) | |||||||||||
Share-based compensation | 307 | 307 | |||||||||||
Issuance under stock plans (in shares) | 10 | ||||||||||||
Issuance under stock plans | $ 2 | 2 | |||||||||||
Common stock repurchases, (in shares) | (12) | (12) | (12) | ||||||||||
Common stock repurchases | $ (649) | $ 0 | $ (649) | ||||||||||
Ending Balance (in shares) at Oct. 25, 2020 | 914 | (1,091) | |||||||||||
Ending Balance at Oct. 25, 2020 | 10,578 | $ 9 | 7,904 | 27,209 | $ (24,245) | (299) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net income | 5,888 | 5,888 | |||||||||||
Other comprehensive income (loss), net of tax | 39 | 39 | |||||||||||
Dividends declared | (851) | (851) | |||||||||||
Share-based compensation | 346 | 346 | |||||||||||
Issuance under stock plans (in shares) | 6 | ||||||||||||
Issuance under stock plans | $ (3) | (3) | |||||||||||
Common stock repurchases, (in shares) | (28) | (28) | (28) | ||||||||||
Common stock repurchases | $ (3,750) | $ (3,750) | |||||||||||
Ending Balance (in shares) at Oct. 31, 2021 | 892 | (1,119) | |||||||||||
Ending Balance at Oct. 31, 2021 | $ 12,247 | $ 9 | $ 8,247 | $ 32,246 | $ (27,995) | $ (260) | |||||||
[1] | Represents the adjustment related to the adoption of Accounting Standard Update (ASU) 2016-01 Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities and ASU 2016-16 Income Tax (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . | ||||||||||||
[2] | Retained earnings balance as of October 28, 2018 included an increase of $6 million related to the adoption of the standard related to revenue recognition. |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||||
Oct. 31, 2021 | Aug. 01, 2021 | May 02, 2021 | Jan. 31, 2021 | Oct. 25, 2020 | Jul. 26, 2020 | Apr. 26, 2020 | Jan. 26, 2020 | Oct. 27, 2019 | Jul. 28, 2019 | Apr. 28, 2019 | Jan. 27, 2019 | Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | Oct. 28, 2018 | |
Cash dividend declared (usd per share) | $ 0.24 | $ 0.24 | $ 0.24 | $ 0.22 | $ 0.22 | $ 0.22 | $ 0.22 | $ 0.21 | $ 0.21 | $ 0.21 | $ 0.21 | $ 0.20 | $ 0.94 | $ 0.87 | $ 0.83 | |
Retained earnings | $ 32,246 | $ 27,209 | $ 32,246 | $ 27,209 | ||||||||||||
Cumulative Effect, Period of Adoption, Adjustment | ||||||||||||||||
Retained earnings | $ 6 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Cash flows from operating activities: | |||
Net income | $ 5,888 | $ 3,619 | $ 2,706 |
Adjustments required to reconcile net income to cash provided by operating activities: | |||
Depreciation and amortization | 394 | 376 | 363 |
Severance and related charges | 148 | 0 | 0 |
Deferred income taxes | 80 | 80 | 49 |
Other | (70) | 60 | (19) |
Share-based compensation | 346 | 307 | 263 |
Changes in operating assets and liabilities, net of amounts acquired: | |||
Accounts receivable | (1,989) | (427) | (207) |
Inventories | (405) | (421) | 248 |
Other current and non-current assets | (602) | (161) | (86) |
Accounts payable and accrued expenses | 465 | 327 | (247) |
Contract liabilities | 755 | (16) | 135 |
Income taxes payable | 396 | (10) | 44 |
Other liabilities | 36 | 70 | (2) |
Cash provided by operating activities | 5,442 | 3,804 | 3,247 |
Cash flows from investing activities: | |||
Capital expenditures | (668) | (422) | (441) |
Cash paid for acquisitions, net of cash acquired | (12) | (107) | (28) |
Proceeds from sales and maturities of investments | 1,471 | 1,754 | 1,940 |
Purchases of investments | (2,007) | (1,355) | (1,914) |
Cash used in investing activities | (1,216) | (130) | (443) |
Cash flows from financing activities: | |||
Debt borrowings, net of issuance costs | 0 | 2,979 | 0 |
Debt repayments | 0 | (2,882) | 0 |
Proceeds from common stock issuances | 175 | 174 | 145 |
Common stock repurchases | (3,750) | (649) | (2,403) |
Tax withholding payments for vested equity awards | (178) | (172) | (86) |
Payments of dividends to stockholders | (838) | (787) | (771) |
Cash used in financing activities | (4,591) | (1,337) | (3,115) |
Increase (decrease) in cash and cash equivalents | (365) | 2,337 | (311) |
Cash and cash equivalents - beginning of year | 5,466 | 3,129 | 3,440 |
Cash and cash equivalents - end of year | 5,101 | 5,466 | 3,129 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |||
Cash and cash equivalents | 4,995 | 5,351 | 3,129 |
Restricted cash equivalents included in deferred income taxes and other assets | 106 | 115 | 0 |
Total cash, cash equivalents, and restricted cash equivalents | 5,101 | 5,466 | 3,129 |
Supplemental cash flow information: | |||
Cash payments for income taxes | 851 | 542 | 522 |
Cash refunds from income taxes | 27 | 68 | 22 |
Cash payments for interest | $ 205 | $ 219 | $ 219 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Oct. 31, 2021 | |
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 2021, 2020 and 2019 contained 53, 52 and 52 weeks, respectively. The first fiscal quarter of 2021 contained 14 weeks, while the second, third and fourth quarters of fiscal 2021 contained 13 weeks. Each fiscal quarter of 2020 and 2019 contained 13 weeks. 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 standalone selling price (SSP) related to revenue recognition, 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. As of October 31, 2021, the COVID-19 pandemic and worldwide response remains fluid. As a result, many of Applied’s estimates and assumptions are subject to increased judgment and volatility. These estimates may differ materially in future periods as the pandemic continues to evolve and additional information becomes available. 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, are classified as available-for-sale at the respective balance sheet dates. Investments classified as available-for-sale are measured and recorded in the Consolidated Balance Sheets at fair value, and unrealized gains and losses, net of tax, is reported as a separate component of other comprehensive income. 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 Consolidated Statements of Operations. Applied’s equity investments with readily determinable values consist of publicly traded equity securities. These investments are measured at fair value using quoted prices for identical assets in an active market. Privately-held equity investments without readily determinable fair value are measured at cost, less impairment, adjusted by observable price changes. Adjustments resulting from impairments and observable prices changes are recorded in the Consolidated Statements of Operations. Allowance for Credit Losses Applied maintains an allowance for credit losses 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 net realizable value, 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 net realizable 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 5 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. Revenue Recognition from Contracts with Customers Applied recognizes revenue when promised goods or services are transferred to a customer in an amount that reflects the consideration to which Applied expects to be entitled in exchange for those goods or services. Applied determines revenue recognition through the following five steps: (1) identification of the contract(s) with customers, (2) identification of the performance obligations in the contract, (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligations in the contract, and (5) recognition of revenue when, or as, a performance obligation is satisfied. Identifying the contract(s) with customers. Applied sells manufacturing equipment, services, and spare parts directly to its customers in the semiconductor, display, and related industries. The Company generally considers written documentation including, but not limited to, signed purchase orders, master agreements, and sales orders as contracts provided that collection is probable. Collectability is assessed based on the customer’s creditworthiness determined by reviewing the customer’s published credit and financial information, historical payment experience, as well as other relevant factors. Identifying the performance obligations. Applied’s performance obligations include delivery of manufacturing equipment, service agreements, spare parts, installation, extended warranty and training. Applied’s service agreements are considered one performance obligation and may include multiple goods and services that Applied provides to the customer to deliver against a performance metric. Judgment is used to determine whether multiple promised goods or services in a contract should be accounted for separately or as a group. Determine the transaction price. The transaction price for Applied’s contracts with customers may include fixed and variable consideration. Applied includes variable consideration in the transaction price to the extent that it is probable that a significant reversal of revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Allocate the transaction price to the performance obligations . A contract’s transaction price is allocated to each distinct performance obligation identified within the contract. Applied generally estimates the standalone selling price of a distinct performance obligation based on historical cost plus an appropriate margin. For contracts with multiple performance obligations, Applied allocates the contract’s transaction price to each performance obligation using the relative standalone selling price of each distinct good or service in the contract. Recognizing the revenue as performance obligations are satisfied. Applied recognizes revenue from equipment and spares parts at a point in time when Applied has satisfied its performance obligation by transferring control of the goods to the customer which typically occurs at shipment or delivery. Revenue from service agreements is recognized over time, typically within 12 months, as customers receive the benefits of services. The incremental costs to obtain a contract are not material. Payment Terms. Payment terms vary by contract. Generally, the majority of payments are due within a certain number of days from shipment of goods or performance of service. The remainder is typically due upon customer technical acceptance. 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. Applied’s payment terms do not generally contain a significant financing component. Shipping and Handling Costs Applied accounts for shipping and handling activities related to contracts with customers as costs to fulfill our promise to transfer the associated products. Accordingly, amounts billed for shipping and handling costs are recorded as a component of net sales and costs as a component of cost of products sold. 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. Applied also sells extended warranty contracts to its customers which provide an extension of the standard warranty coverage period of up to 2 years. Applied receives payment at the inception of the contract and recognizes revenue ratably over the extended warranty coverage period, as the customer simultaneously receives and consumes the benefits of the extended warranty. Sales and Value Added Taxes Taxes collected from customers and remitted to governmental authorities are presented on a net basis in the Consolidated Statements of Operations. Research, Development and Engineering Costs Research, development and engineering costs are expensed as incurred. 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 Applied’s provision for income taxes 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. 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. Applied’s derivative financial instruments are recorded as assets or liabilities at fair value. For derivative instruments designated and qualifying as cash flow hedges, the gain or loss 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. Any portion excluded from the assessment of effectiveness is recognized in the same line as the hedged transaction but may be recognized in a different manner, e.g. amortized. If a hedged transaction becomes probable of not occurring according to the original strategy, the hedge relationship is discontinued and the gain or loss on the associated derivative is recorded promptly in earnings. For hedges of existing foreign currency denominated assets or liabilities, the gain or loss is recorded promptly in earnings to offset the changes in the fair value of the assets or liabilities being hedged. Foreign Currency As of October 31, 2021, 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 the non-monetary assets and liabilities, which are remeasured using historical exchange rates. The resulting remeasurement gains and losses are included in interest and other income, net 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, commercial paper, 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 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. 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 deposits and/or letters of credit to mitigate credit risk when considered appropriate. Recent Accounting Pronouncements Accounting Standards Adopted Leases. In February 2016, the Financial Accounting Standard Board (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. Applied adopted this guidance in the first quarter of fiscal 2020 using the modified retrospective transition method which required applying the new standard as of the beginning of the period of adoption with no adjustment to comparative prior periods. Applied elected the package of practical expedients permitted under the transition guidance, which allow Applied not to reassess whether a contract contains a lease, initial direct costs and lease classification for leases existing prior to adoption. Applied also elected to combine the lease and non-lease components as a single lease component and not to use hindsight in determining the lease term. Upon adoption, Applied recognized right-of-use assets of $160 million, net of deferred rent of $4 million and lease liabilities of $164 million. Retirement Benefits: Changes to the Disclosure Requirements for Defined Benefit and other Postretirement Plans. In August 2018, the Financial Accounting Standard Board (FASB) issued authoritative guidance that adds, removes, and clarifies disclosure requirements for defined benefit and other postretirement plans. Applied adopted this guidance in the first quarter of fiscal 2021 on a retrospective basis. The adoption of this guidance did not have a significant impact on Applied’s defined benefit and other postretirement disclosures. Goodwill Impairment. In January 2017, the FASB issued authoritative guidance that simplifies the process required to test goodwill for impairment. Applied adopted this guidance in the first quarter of fiscal 2021. The adoption of this guidance did not have a significant impact on Applied’s consolidated condensed 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. Applied adopted this guidance in the first quarter of fiscal 2021 on a modified retrospective basis. The adoption of this guidance did not have a significant impact on Applied’s consolidated condensed financial statements. Accounting Standards Not Yet Adopted Simplifying the Accounting for Income Taxes. In December 2019, the FASB issued an accounting standard update to simplify the accounting for income taxes (Topic 740). This amendment removes certain exceptions and improves consistent application of accounting principles for certain areas in Topic 740. Applied will adopt this authoritative guidance in the first quarter of fiscal 2022. The adoption of this guidance is not expected to have a significant impact on Applied’s consolidated financial statements. Contract Assets and Contract Liabilities from Revenue Contracts with Customers in a Business Combination. In October 2021, the FASB issued an accounting standard update to improve the accounting for contract assets and contract liabilities from revenue contracts with customers in a business combination (Topic 805). This amendment improves comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. This authoritative guidance will be effective for Applied in the first quarter of fiscal 2024, with early adoption permitted. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Oct. 31, 2021 | |
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 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 2021 2020 2019 (In millions, except per share amounts) Numerator: Net income $ 5,888 $ 3,619 $ 2,706 Denominator: Weighted average common shares outstanding 910 916 937 Effect of weighted dilutive stock options, restricted stock units and employee stock purchase plan shares 9 7 8 Denominator for diluted earnings per share 919 923 945 Basic earnings per share $ 6.47 $ 3.95 $ 2.89 Diluted earnings per share $ 6.40 $ 3.92 $ 2.86 Potentially weighted dilutive securities — — 3 |
Cash, Cash Equivalents and Inve
Cash, Cash Equivalents and Investments | 12 Months Ended |
Oct. 31, 2021 | |
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 31, 2021 Cost Gross Gross Estimated (In millions) Cash $ 1,407 $ — $ — $ 1,407 Cash equivalents: Money market funds 3,556 — — 3,556 Municipal securities 22 — — 22 Commercial paper, corporate bonds and medium-term notes 10 — — 10 Total Cash equivalents 3,588 — — 3,588 Total Cash and Cash equivalents $ 4,995 $ — $ — $ 4,995 Short-term and long-term investments: U.S. Treasury and agency securities $ 314 $ — $ — $ 314 Non-U.S. government securities* 5 — — 5 Municipal securities 367 3 1 369 Commercial paper, corporate bonds and medium-term notes 587 2 2 587 Asset-backed and mortgage-backed securities 555 3 1 557 Total fixed income securities 1,828 8 4 1,832 Publicly traded equity securities 22 39 3 58 Equity investments in privately-held companies 561 82 14 629 Total equity investments 583 121 17 687 Total short-term and long-term investments $ 2,411 $ 129 $ 21 $ 2,519 Total Cash, Cash equivalents and Investments $ 7,406 $ 129 $ 21 $ 7,514 _________________________ * Includes Canadian provincial government debt October 25, 2020 Cost Gross Gross Estimated (In millions) Cash $ 1,136 $ — $ — $ 1,136 Cash equivalents: Money market funds 4,209 — — 4,209 Municipal securities 6 — — 6 Total Cash equivalents 4,215 — — 4,215 Total Cash and Cash equivalents $ 5,351 $ — $ — $ 5,351 Short-term and long-term investments: U.S. Treasury and agency securities $ 394 $ 4 $ — $ 398 Municipal securities 359 6 — 365 Commercial paper, corporate bonds and medium-term notes 492 8 1 499 Asset-backed and mortgage-backed securities 470 9 — 479 Total fixed income securities 1,715 27 1 1,741 Publicly traded equity securities 11 36 2 45 Equity investments in privately-held companies 121 25 7 139 Total equity investments 132 61 9 184 Total short-term and long-term investments $ 1,847 $ 88 $ 10 $ 1,925 Total Cash, Cash equivalents and Investments $ 7,198 $ 88 $ 10 $ 7,276 ________________________ Maturities of Investments The following table summarizes the contractual maturities of Applied’s investments at October 31, 2021: Cost Estimated Fair Value (In millions) Due in one year or less $ 393 $ 395 Due after one through five years 878 878 Due after five years 2 2 No single maturity date** 1,138 1,244 Total $ 2,411 $ 2,519 _________________________ ** 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 At October 31, 2021, gross unrealized losses related to Applied’s debt investment portfolio were not material. Applied regularly reviews its debt investment portfolio to identify and evaluate investments that have indications of possible impairment from credit losses or other factors. Factors considered in determining whether an unrealized loss is considered to be a credit loss include: the significance of the decline in value compared to 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. Credit losses related to available-for-sale debt securities are recorded as an allowance for credit losses through interest and other income, net. Any additional changes in fair value that are not related to credit losses are recognized in accumulated other comprehensive income. During fiscal 2021, with the adoption of credit losses authoritative guidance, Applied did not recognize significant credit losses and the ending allowance for credit losses was not material. Applied determined that the gross unrealized losses on its marketable fixed-income securities at October 25, 2020 and October 27, 2019 were temporary in nature and therefore it did not recognize any impairment of its marketable fixed-income securities for fiscal 2020 or 2019. During fiscal 2021, 2020 and 2019, impairment charges on equity investments in privately-held companies were not material. These impairment charges are included in interest and other income, net in the Consolidated Statement of Operations. The components of gain (loss) on equity investments for each fiscal year were as follows: 2021 2020 2019 (In millions) Publicly traded equity securities Unrealized gain $ 14 $ 14 $ 28 Unrealized loss (11) (17) (5) Realized gain on sales 2 1 2 Equity investments in privately-held companies Unrealized gain 65 18 13 Unrealized loss (12) (7) (6) Realized gain on sales 48 8 5 Realized loss on sales or impairment (7) (8) (1) Total gain (loss) on equity investments, net $ 99 $ 9 $ 36 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Oct. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Applied’s financial assets are measured and recorded at fair value on a recurring basis, except for equity investments in privately-held companies. These equity investments are generally accounted for under the measurement alternative, defined as cost, less impairments, adjusted for subsequent observable price changes and are periodically assessed for impairment when events or circumstances indicate that a 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. As of October 31, 2021, 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. Applied’s equity investments with readily determinable values consist of publicly traded equity securities. These investments are measured at fair value using quoted prices for identical assets in an active market and the changes in fair value of these equity investments are recognized in the consolidated statements of operations. 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. 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 31, 2021 October 25, 2020 Level 1 Level 2 Total Level 1 Level 2 Total (In millions) Assets: Available-for-sale debt security investments Money market funds* $ 3,662 $ — $ 3,662 $ 4,324 $ — $ 4,324 U.S. Treasury and agency securities 296 18 314 375 23 398 Non-U.S. government securities — 5 5 — — — Municipal securities — 391 391 — 371 371 Commercial paper, corporate bonds and medium-term notes — 597 597 — 499 499 Asset-backed and mortgage-backed securities — 557 557 — 479 479 Total available-for-sale debt security investments $ 3,958 $ 1,568 $ 5,526 $ 4,699 $ 1,372 $ 6,071 Equity investments with readily determinable values Publicly traded equity securities $ 58 $ — $ 58 $ 45 $ — $ 45 Total equity investments with readily determinable values $ 58 $ — $ 58 $ 45 $ — $ 45 Total $ 4,016 $ 1,568 $ 5,584 $ 4,744 $ 1,372 $ 6,116 _________________________ * Amounts as of October 31, 2021 and October 25, 2020 include $106 million and $115 million, respectively, invested in money market funds related to deferred compensation plans. Due to restrictions on the distribution of these funds, they are classified as restricted cash equivalents and are included in deferred income taxes and other assets in the Consolidated Condensed Balance Sheets. Applied did not have any financial assets measured at fair value on a recurring basis within Level 3 fair value measurements as of October 31, 2021 or October 25, 2020. Assets and Liabilities without Readily Determinable Values Measured on a Non-recurring Basis Applied’s equity investments without readily determinable values consist of equity investments in privately-held companies. Applied elected the measurement alternative, defined as cost, less impairments, adjusted for subsequent observable price changes on a prospective basis for certain equity investments without readily determinable fair values and is required to account for any subsequent observable changes in fair value within the statements of operations. These investments are classified as Level 3 within the fair value hierarchy and periodically assessed for impairment when an event or circumstance indicates that a decline in value may have occurred. During fiscal 2021, 2020 and 2019, impairment charges on equity investments in privately-held companies were not material. Other The carrying amounts of Applied’s financial instruments, including cash and cash equivalents, restricted cash equivalents, accounts receivable, notes payable - short term, and accounts payable and accrued expenses, approximate fair value due to their short maturities. At October 31, 2021, the aggregate principal amount of long-term senior unsecured notes was $5.5 billion, and the estimated fair value was $6.4 billion. At October 25, 2020, the aggregate principal amount of long-term senior unsecured notes was $5.5 billion and the estimated fair value was $6.6 billion. The estimated fair value of long-term senior unsecured notes is determined by Level 2 inputs and is based primarily on quoted market prices for the same or similar issues. See Note 11 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. 31, 2021 | |
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, Israeli shekel, euro 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 accounting treatment 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 31, 2021 is expected to be reclassified into earnings within 12 months. Changes in fair value caused by changes in time value of option contracts designated as cash flow hedges are excluded from the assessment of effectiveness. The initial value of this excluded component is amortized on a straight-line basis over the life of the hedging instrument and recognized in the financial statement line item to which the hedge relates. If the transaction being hedged is probable not to occur, Applied promptly recognizes the gain or loss on the associated financial instrument in the consolidated condensed statement of operations. The amount recognized due to discontinuance of cash flow hedges that were probable of not occurring by the end of the originally specified time period was not significant for fiscal years 2021, 2020 or 2019. Foreign currency forward contracts are generally used to hedge certain foreign currency denominated assets or liabilities. 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. As of October 31, 2021 and October 25, 2020, the total outstanding notional amount of foreign exchange contracts was $2.1 billion and $1.6 billion, respectively. The fair values of foreign exchange derivative instruments at October 31, 2021 and October 25, 2020 were not material. Applied is also exposed to interest rate risk associated with its potential future borrowings. During fiscal 2020, Applied entered into a series of interest rate contracts to hedge against the variability of cash flows due to changes in the benchmark interest rate of fixed rate debt. These instruments were designated as cash flow hedges at inception and were settled in conjunction with the issuance of debt in May 2020. The gain (loss) on derivatives in cash flow hedging relationships recognized in AOCI for derivatives designated as hedging instruments for the indicated periods were as follows: Derivatives in Cash Flow Hedging Relationships 2021 2020 2019 (In millions) Foreign exchange contracts $ 36 $ 3 $ (14) Interest rate contracts — (151) — Total $ 36 $ (148) $ (14) The effects of derivative instruments and hedging activities on the Consolidated Statements of Operations were as follows: Derivatives in Cash Flow Hedging Relationships Total Amount Presented in the Consolidated Statement of Operations in which the Effects of Cash Flow Hedges are Recorded Amount of Gain or (Loss) Amounts of Gain (Loss) Excluded from Effectiveness Testing (In millions) 2021 Foreign Exchange Contracts: Net Sales $ 23,063 $ 4 $ — Cost of products sold $ 12,149 2 (2) Research, development and engineering $ 2,485 3 — General and administrative $ 620 1 — Interest Rate Contracts: Interest expense $ 236 (13) — $ (3) $ (2) 2020 Foreign Exchange Contracts: Net Sales $ 17,202 $ (2) $ 4 Cost of products sold $ 9,510 6 (3) Research, development and engineering $ 2,234 4 — General and administrative $ 567 1 — Interest Rate Contracts: Interest expense $ 240 (7) — $ 2 $ 1 2019 Foreign Exchange Contracts: Cost of products sold $ 8,222 $ 2 $ 15 General and administrative $ 461 (3) (6) Interest Rate Contracts: Interest expense $ 237 (3) — $ (4) $ 9 Amount of Gain or (Loss) Location of Gain or (Loss) Recognized in Consolidated Statement of Operations 2021 2020 2019 (In millions) Derivatives Not Designated as Hedging Instruments Foreign exchange contracts General and administrative $ — $ — $ (8) Foreign exchange contracts Interest and other income, net 29 (10) — Total return swaps - deferred compensation Cost of products sold 3 1 — Total return swaps - deferred compensation Operating expenses 29 6 — Total return swaps - deferred compensation Interest and other income, net (1) (1) — Total $ 60 $ (4) $ (8) 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 31, 2021 and October 25, 2020. 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. 31, 2021 | |
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 generally 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 $1.3 billion, $1.2 billion and $1.5 billion of accounts receivable during fiscal 2021, 2020 and 2019, respectively. Applied did not discount letters of credit issued by customers in fiscal 2021. Applied discounted letters of credit issued by customers of $105 million and $48 million in fiscal 2020 and 2019, respectively. There was no discounting of promissory notes in each of fiscal 2021, 2020 and 2019. 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 credit losses of $29 million and $30 million at October 31, 2021 and October 25, 2020, respectively. Changes in allowance for credit losses in each fiscal year were as follows: 2021 2020 2019 (In millions) Beginning balance $ 30 $ 30 $ 33 Provision — — — Deductions 1 (1) — (3) Ending balance $ 29 $ 30 $ 30 _____________________________ 1 Deductions primarily represent releases of credit losses 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 credit losses is adequate and represents its best estimate as of October 31, 2021, it continues to closely monitor customer liquidity and industry and economic conditions, which may result in changes to Applied’s estimates. |
Contract Balances
Contract Balances | 12 Months Ended |
Oct. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Contract Balances | Contract Balances Contract assets primarily result from receivables for goods transferred to customers where payment is conditional upon technical sign off and not just the passage of time. Contract liabilities consist of unsatisfied performance obligations related to advance payments received and billings in excess of revenue recognized. Applied’s contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Contract assets are generally classified as current and are included in Other Current Assets in the Consolidated Balance Sheets. Contract liabilities are classified as current or non-current based on the timing of when performance obligations will be satisfied and associated revenue is expected to be recognized. Contract balances at the end of each reporting period were as follows: October 31, 2021 October 25, 2020 (In millions) Contract assets $ 201 $ 148 Contract liabilities $ 2,076 $ 1,321 The increase in contract assets during fiscal 2021, was primarily due to goods transferred to customers where payment was conditional upon technical sign off, offset by the reclassification of contract assets to net accounts receivable upon meeting conditions to the right to payment. During fiscal 2021, Applied recognized revenue of approximately $1.0 billion related to contract liabilities at October 25, 2020. This reduction in contract liabilities was offset by new billings for products and services for which there were unsatisfied performance obligations to customers and revenue had not yet been recognized as of October 31, 2021. There were no credit losses recognized on Applied’s accounts receivables and contract assets during fiscal 2021 and 2020. As of October 31, 2021, the amount of remaining unsatisfied performance obligations on contracts with an original estimated duration of one year or more was approximately $779 million, of which approximately 43% is expected to be recognized within 12 months and the remainder is expected to be recognized within the following 24 months thereafter. Applied has elected the available practical expedient to exclude the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less. |
Balance Sheet Detail
Balance Sheet Detail | 12 Months Ended |
Oct. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Detail | Balance Sheet Detail October 31, October 25, (In millions) Inventories Customer service spares $ 1,251 $ 1,270 Raw materials 1,136 870 Work-in-process 873 624 Finished goods 1,049 1,140 $ 4,309 $ 3,904 Included in finished goods inventory are $58 million at October 31, 2021 and $16 million at October 25, 2020, 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 $380 million and $416 million of evaluation inventory at October 31, 2021 and October 25, 2020, respectively. October 31, October 25, (In millions) Other Current Assets Prepaid income taxes and income taxes receivable $ 593 $ 162 Prepaid expenses and other 793 602 $ 1,386 $ 764 Useful Life October 31, October 25, (In years) (In millions) Property, Plant and Equipment, Net Land and improvements $ 334 $ 256 Buildings and improvements 3-30 1,780 1,655 Demonstration and manufacturing equipment 3-5 1,820 1,586 Furniture, fixtures and other equipment 3-5 720 646 Construction in progress 326 237 Gross property, plant and equipment 4,980 4,380 Accumulated depreciation (3,046) (2,776) $ 1,934 $ 1,604 Depreciation expense was $345 million, $320 million and $306 million for fiscal 2021, 2020 and 2019 respectively. October 31, October 25, (In millions) Deferred Income Taxes and Other Assets Non-current deferred income taxes $ 1,623 $ 1,711 Operating lease right-of-use assets 294 252 Income tax receivables and other assets 229 260 $ 2,146 $ 2,223 October 31, October 25, (In millions) Accounts Payable and Accrued Expenses Accounts payable $ 1,472 $ 1,124 Compensation and employee benefits 924 800 Warranty 242 201 Dividends payable 214 201 Income taxes payable 734 222 Other accrued taxes 24 33 Interest payable 39 36 Operating lease liabilities, current 73 64 Other 546 457 $ 4,268 $ 3,138 October 31, October 25, (In millions) Other Liabilities Defined and postretirement benefit plans $ 193 $ 241 Operating lease liabilities, non-current 228 195 Other 271 226 $ 692 $ 662 |
Business Combination
Business Combination | 12 Months Ended |
Oct. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combination | Business Combination Kokusai Electric Corporation On June 30, 2019, Applied entered into a Share Purchase Agreement (SPA) with Kokusai Electric Corporation (Kokusai Electric) and KKR HKE Investment L.P. (KKR) providing for Applied ’s acquisition of all outstanding shares of Kokusai Electric. The SPA, as subsequently amended, terminated as of March 19, 2021. Applied paid KKR a termination fee of $154 million during the second quarter of fiscal 2021. |
Goodwill, Purchased Technology
Goodwill, Purchased Technology and Other Intangible Assets | 12 Months Ended |
Oct. 31, 2021 | |
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. When reviewing 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. In performing a qualitative assessment, Applied considers business conditions and other factors including, but not limited to (i) adverse industry or economic trends, (ii) restructuring actions and lower projections that may impact future operating results, (iii) sustained decline in share price, and (iv) overall financial performance and other events affecting the reporting units. If Applied concludes that is more likely than not that the fair value of a reporting unit is less than its carrying amount, then a quantitative impairment test is performed by estimating the fair value of the reporting unit and comparing it to its carrying value. If the carrying value of a reporting unit exceeds its fair value, Applied would record an impairment charge equal to the excess of the carrying value of the reporting unit’s goodwill over its fair value. As of October 31, 2021, Applied’s reporting units include Semiconductor Products Group and Imaging and Process Control Group, which combine to form the Semiconductor Systems reporting segment, Applied Global Services, Display and Adjacent Markets and other reporting units recorded under Corporate and Other. In the fourth quarter of fiscal 2021, 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 quantitative 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 were as follows: October 31, October 25, 2020 (In millions) Semiconductor Systems $ 2,207 $ 2,208 Applied Global Services 1,032 1,018 Display and Adjacent Markets 199 199 Corporate and Other 41 41 Carrying amount $ 3,479 $ 3,466 From time to time, Applied makes acquisitions of companies related to existing or new markets for Applied. During fiscal 2021, goodwill increased by $13 million primarily due to an acquisition during the first quarter of fiscal 2021, which was not material to Applied’s results of operations. A summary of Applied’s purchased technology and intangible assets is set forth below: October 31, October 25, (In millions) Purchased technology, net $ 46 $ 75 Intangible assets - finite-lived, net 58 78 Total $ 104 $ 153 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 31, 2021 October 25, 2020 Purchased Other Total Purchased Other Total (In millions) Gross carrying amount: Semiconductor Systems $ 1,476 $ 256 $ 1,732 $ 1,476 $ 256 $ 1,732 Applied Global Services 35 44 79 35 44 79 Display and Adjacent Markets 163 38 201 163 38 201 Corporate and Other 13 16 29 13 16 29 Gross carrying amount $ 1,687 $ 354 $ 2,041 $ 1,687 $ 354 $ 2,041 Accumulated amortization: Semiconductor Systems $ (1,446) $ (203) $ (1,649) $ (1,423) $ (185) $ (1,608) Applied Global Services (32) (44) (76) (31) (44) (75) Display and Adjacent Markets (161) (38) (199) (157) (37) (194) Corporate and Other (2) (11) (13) (1) (10) (11) Accumulated amortization $ (1,641) $ (296) $ (1,937) $ (1,612) $ (276) $ (1,888) Carrying amount $ 46 $ 58 $ 104 $ 75 $ 78 $ 153 Details of amortization expense for each fiscal year by segment were as follows: 2021 2020 2019 (In millions) Semiconductor Systems $ 41 $ 40 $ 43 Applied Global Services 1 1 1 Display and Adjacent Markets 5 13 13 Corporate and Other 2 2 — Total $ 49 $ 56 $ 57 Amortization expense for each fiscal year was charged to the following categories: 2021 2020 2019 (In millions) Cost of products sold $ 29 $ 37 $ 38 Research, development and engineering 1 1 1 Marketing and selling 19 18 18 Total $ 49 $ 56 $ 57 As of October 31, 2021, future estimated amortization expense is expected to be as follows: Amortization (In millions) 2022 $ 33 2023 20 2024 17 2025 15 2026 15 Thereafter 4 Total $ 104 |
Borrowing Facilities and Debt
Borrowing Facilities and Debt | 12 Months Ended |
Oct. 31, 2021 | |
Debt Disclosure [Abstract] | |
Borrowing Facilities and Debt | Borrowing Facilities and Debt Revolving Credit Facilities In February 2020, Applied entered into a five-year $1.5 billion committed unsecured revolving credit agreement (Revolving Credit Agreement) with a group of banks. The Revolving Credit Agreement includes a provision under which Applied may request an increase in the amount of the facility of up to $500 million for a total commitment of no more than $2.0 billion, subject to the receipt of commitments from one or more lenders for any such increase and other customary conditions. The Revolving Credit Agreement is scheduled to expire in February 2025, unless extended as permitted under the Revolving Credit Agreement. The Revolving Credit Agreement provides for borrowings that bear interest for each advance at one of two rates selected by Applied, plus an applicable margin, which varies according to Applied’s public debt credit ratings. No amounts were outstanding under the Revolving Credit Agreement as of October 31, 2021 and October 25, 2020. In addition, Applied has revolving credit facilities with Japanese banks pursuant to which it may borrow up to approximately $70 million in aggregate at any time. 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. As of October 31, 2021 and October 25, 2020, no amounts were outstanding under these revolving credit facilities. Term Loan and Short-term Commercial Paper In August 2019, Applied entered into a term loan credit agreement (Term Loan Credit Agreement) with a group of lenders under which the lenders committed to make an unsecured term loan to Applied of up to $2.0 billion to finance in part Applied’s planned acquisition of all outstanding shares of Kokusai Electric, to pay related transaction fees and expenses and for general corporate purposes. In March 2021, the Term Loan Credit Agreement, as subsequently amended, terminated automatically in accordance with its terms upon the termination of the SPA. No amounts were borrowed under the Term Loan Credit Agreement. Applied has a short-term commercial paper program under which Applied may issue unsecured commercial paper notes of up to a total amount of $1.5 billion. At October 31, 2021 and October 25, 2020, Applied did not have any commercial paper outstanding. Senior Unsecured Notes In May 2020, Applied issued $750 million aggregate principal amount of 1.750% senior unsecured notes due 2030 and $750 million aggregate principal amount of 2.750% senior unsecured notes due 2050, in a registered public offering. In June 2020, Applied used a portion of the net proceeds from the offering to redeem the outstanding $600 million in aggregate principal amount of its 2.625% senior unsecured notes due October 1, 2020 and $750 million in aggregate principal amount of its 4.300% senior unsecured notes due June 15, 2021, at a total aggregate redemption price of $1.4 billion. As a result, Applied recognized a $33 million loss on early extinguishment of these senior unsecured notes during the third quarter of fiscal 2020. Debt outstanding as of October 31, 2021 and October 25, 2020 was as follows: Principal Amount October 31, October 25, Effective Interest (In millions) Long-term debt: 3.900% Senior Notes Due 2025 $ 700 $ 700 3.944% April 1, October 1 3.300% Senior Notes Due 2027 1,200 1,200 3.342% April 1, October 1 1.750% Senior Notes Due 2030 750 750 1.792% June 1, December 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 1,000 4.361% April 1, October 1 2.750% Senior Notes Due 2050 750 750 2.773% June 1, December 1 5,500 5,500 Total unamortized discount (14) (15) Total unamortized debt issuance costs (34) (37) Total long-term debt $ 5,452 $ 5,448 |
Leases
Leases | 12 Months Ended |
Oct. 31, 2021 | |
Leases [Abstract] | |
Leases | Leases A contract contains a lease when Applied has the right to control the use of an identified asset for a period of time in exchange for consideration. Applied leases certain facilities, vehicles and equipment under non-cancelable operating leases, many of which include options to renew. Options that are reasonably certain to be exercised are included in the calculation of the right-of-use asset and lease liability. Applied’s leases do not contain residual value guarantees or significant restrictions that impact the accounting for leases. As implicit rates are not available for the leases, Applied uses the incremental borrowing rate as of the lease commencement date in order to measure the right-of-use asset and liability. Operating lease expense is generally recognized on a straight-line basis over the lease term. Applied elected the practical expedient to account for lease and non-lease components as a single lease component for all leases. For leases with a term of one year or less, Applied elected not to record a right-of-use asset or lease liability and to account for the associated lease payments as they become due. The components of lease expense and supplemental information were as follows: 2021 2020 (In millions, except percentage) Operating lease cost $ 79 $ 69 Weighted-average remaining lease term (in years) 5.1 5.2 Weighted-average discount rate 1.7 % 1.8 % Total rent expense for fiscal 2019 was $51 million. Supplemental cash flow information related to leases are as follows: 2021 2020 (In millions) Operating cash flows paid for operating leases $ 79 $ 70 Right-of-use assets obtained in exchange for operating lease liabilities $ 123 $ 156 As of October 31, 2021, the maturities of lease liabilities are as follows: Operating Leases Fiscal (In millions) 2022 $ 78 2023 71 2024 61 2025 48 2026 18 Thereafter 39 Total lease payments 315 Less imputed interest (14) Total $ 301 |
Severance and Related Charges
Severance and Related Charges | 12 Months Ended |
Oct. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Severance and Related Charges | Severance and Related Charges Fiscal 2021 Severance Plan In the first quarter of fiscal 2021, Applied enacted a severance plan to realign its workforce. Under this plan, Applied implemented a one-time voluntary retirement program and other workforce reduction actions. The voluntary retirement program was available to certain U.S. employees who met minimum age and length of service requirements, as well as other business-specific criteria. The payments under this plan are paid at the time of termination and the related costs were not allocated to the segments. In addition, Applied implemented other workforce reduction actions globally across the Display and Adjacent Markets business. These costs were recorded under the Display and Adjacent Markets segment. During fiscal 2021, Applied recognized $157 million of severance and related charges in connection with the Fiscal 2021 Severance Plan, of which $17 million remains outstanding as of October 31, 2021. Severance and related charges by segment were as follows: 2021 (In millions) Display and Adjacent Markets $ 8 Corporate and Other 149 Total $ 157 Changes in severance and related charges reserves related to the Fiscal 2021 Severance Plan described above were as follows: Severance and Related Charges Reserves (In millions) Balance as of October 25, 2020 $ — Provision for severance 158 Adjustment to provision for severance (1) Consumption of reserves (140) Balance as of October 31, 2021 $ 17 |
Stockholders' Equity, Comprehen
Stockholders' Equity, Comprehensive Income and Share-Based Compensation | 12 Months Ended |
Oct. 25, 2020 | |
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 accumulated other comprehensive income (AOCI), net of tax, were as follows: Unrealized Gain (Loss) on Investments, Net Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges Defined and Postretirement Benefit Plans Cumulative Translation Adjustments Total (In millions) Balance at October 28, 2018 $ 7 $ (9) $ (137) $ 14 (125) Adoption of new accounting standards (a) (17) — — — (17) Other comprehensive income (loss) before reclassifications 22 (10) (57) (1) (46) Amounts reclassified out of AOCI (1) 3 6 — 8 Other comprehensive income (loss), net of tax 21 (7) (51) (1) (38) Balance at October 27, 2019 $ 11 $ (16) $ (188) $ 13 $ (180) Other comprehensive income (loss) before reclassifications 16 (115) (21) — (120) Amounts reclassified out of AOCI (7) (2) 10 — 1 Other comprehensive income, net of tax 9 (117) (11) — (119) Balance at October 25, 2020 $ 20 $ (133) $ (199) $ 13 $ (299) Other comprehensive income (loss) before reclassifications (14) 28 20 — 34 Amounts reclassified out of AOCI (7) 2 10 — 5 Other comprehensive income (loss), net of tax (21) 30 30 — 39 Balance at October 31, 2021 $ (1) $ (103) $ (169) $ 13 $ (260) (a) - Represents the reclassification adjustment related to the adoption of Accounting Standard Update (ASU) 2016-01 Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . The tax effects on the unrealized loss on derivative instruments qualifying as cash flow hedges for fiscal 2020 was $33 million. The tax effects on net income of amounts reclassified from AOCI for the fiscal years 2021, 2020 and 2019 were not material. Stock Repurchase Program In March 2021, Applied’s Board of Directors approved a common stock repurchase program authorizing $7.5 billion in repurchases, which supplemented the previously existing $6.0 billion authorization approved in February 2018. At October 31, 2021, approximately $5.0 billion remained available for future stock repurchases under the repurchase program. The following table summarizes Applied’s stock repurchases for each fiscal year: 2021 2020 2019 (In millions, except per share amounts) Shares of common stock repurchased 28 12 60 Cost of stock repurchased $ 3,750 $ 649 $ 2,403 Average price paid per share $ 134.03 $ 56.32 $ 39.86 Applied records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon reissuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid in capital. If Applied reissues treasury stock at an amount below its acquisition cost and additional paid in capital associated with prior treasury stock transactions is insufficient to cover the difference between the acquisition cost and the reissue price, this difference is recorded against retained earnings. Dividends During fiscal 2021, Applied's Board of Directors declared one quarterly cash dividend of $0.22 per share and three quarterly cash dividends of $0.24 per share. During fiscal 2020, Applied's Board of Directors declared one quarterly cash dividend of $0.21 per share and three quarterly cash dividends of $0.22 per share. During fiscal 2019, Applied’s Board of Directors declared one quarterly cash dividend of $0.20 per share and three quarterly cash dividends in the amount of $0.21 per share. Dividends paid during fiscal 2021, 2020 and 2019 amounted to $838 million, $787 million and $771 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 (ESIP), which permits grants to employees of share-based awards, including stock options, stock appreciation rights, restricted stock, restricted stock units, performance share units 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. On March 11, 2021, Applied’s shareholders approved an amendment and restatement of the ESIP to, among other changes, add 10 million shares to the number of shares of Applied common stock authorized for issuance. In addition, prior to September 1, 2021, Applied had two Employee Stock Purchase Plans (ESPP), one generally for United States employees (U.S. ESPP) and a second for employees of international subsidiaries (Offshore ESPP), which enable eligible employees to purchase Applied common stock. On March 11, 2021, Applied’s shareholders approved an amendment and restatement of the U.S. ESPP (as amended, the Omnibus ESPP). The Omnibus ESPP became effective on September 1, 2021 (the Effective Date) in accordance with its terms, and amended the U.S. ESPP to, among other changes, (i) incorporate the Offshore ESPP as a sub-plan, and (ii) add 11.3 million shares to the number of shares of Applied common stock authorized for issuance. The Offshore ESPP was terminated as an independent plan on the Effective Date. Applied recognized share-based compensation expense related to equity awards and ESPP shares. The effect of share-based compensation on the results of operations and the related tax benefits for each fiscal year were as follows: 2021 2020 2019 (In millions) Cost of products sold $ 118 $ 103 $ 89 Research, development, and engineering 129 116 99 Marketing and selling 43 36 31 General and administrative 56 52 44 Total share-based compensation $ 346 $ 307 $ 263 Income tax benefits recognized $ 43 $ 39 $ 37 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. Share-based awards granted to certain executive officers allow partial accelerated vesting in the event of a qualifying retirement based on age and years of service. The cost associated with performance-based equity awards, which include both performance and market goals, is recognized for each tranche over the service period. The cost of equity awards related to performance goals is based on an assessment of the likelihood that the applicable performance goals will be achieved. For the equity awards based on market goals, the cost is recognized based upon the assumption of 100% achievement of the goal. At October 31, 2021, Applied had $512 million in total unrecognized compensation expense, net of estimated forfeitures, related to grants of share-based awards and shares issued under Applied’s ESPP, which will be recognized over a weighted average period of 2.5 years. At October 31, 2021, there were 35 million shares available for grant of share-based awards under the ESIP, and an additional 16 million shares available for issuance under the Omnibus 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 Restricted Stock Units, Restricted Stock, Performance Share Units 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 share units 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 share units and performance units typically vest over three During fiscal 2021, 2020 and 2019, certain executive officers were granted awards that are subject to the achievement of certain levels specified performance goals. Certain awards are subject to the achievement of targeted levels of adjusted operating margin and targeted levels of total shareholder return (TSR) relative to a peer group, comprised of companies in the Standard & Poor's 500 Index. Each metric will be weighted 50% and will be measured over a three-year period. The number of shares that may vest in full after three years ranges from 0% to 200% of the target amount. The 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, subject to a qualifying retirement based on age and years of service. The awards provide for a partial payout based on actual performance at the conclusion of the three-year performance period in the event of a qualifying retirement. During fiscal 2021, certain executive officers were also granted non-recurring long-term performance-based awards that are subject to the achievement of targeted levels of Applied’s absolute TSR. The awards become eligible to vest only if targeted levels of TSR are achieved during the five-year performance period and will vest only if the grantee remains employed by Applied through the vesting date in October 2025, except in the event of involuntary termination of employment without cause, death or following a change of control. The number of shares that may vest in full after five years ranges from 0% to 200% of the target amount. The fair value of the portion of the awards subject to targeted levels of adjusted operating margin is estimated on the date of grant. 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 portion of the awards that is probable to vest and is reflected over the service period and reduced for estimated forfeitures. The fair value of the portion of the awards subject to targeted levels of relative TSR or absolute TSR is estimated on the date of grant using a Monte Carlo simulation model. Compensation expense is recognized based upon the assumption of 100% achievement of the TSR goal and will not be reversed even if the threshold level of TSR is never achieved, and is reflected over the service period and reduced for estimated forfeitures. A summary of the changes in restricted stock units, restricted stock, performance shares and performance units outstanding under Applied’s equity compensation plans is presented below: Shares Weighted Weighted Aggregate (In millions, except per share amounts) Non-vested restricted stock units, restricted stock, performance shares and performance units at October 28, 2018 18 $ 32.64 2.0 years $ 600 Granted 8 $ 36.00 Vested (7) $ 28.41 Canceled (1) $ 34.59 Non-vested restricted stock units, restricted stock, performance shares and performance units at October 27, 2019 18 $ 35.78 2.1 years $ 985 Granted 6 $ 53.89 Vested (8) $ 31.25 Canceled (1) $ 42.61 Non-vested restricted stock units, restricted stock, performance shares and performance units at October 25, 2020 15 $ 45.36 2.2 years $ 914 Granted 5 $ 92.04 Vested (6) $ 43.11 Canceled (1) $ 59.41 Non-vested restricted stock units, restricted stock, performance shares and performance units at October 31, 2021 13 $ 63.29 2.2 years $ 1,752 Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest 13 $ 63.37 2.0 years $ 1,724 At October 31, 2021, 1.2 million additional performance-based awards could be earned based upon achievement of certain levels of specified performance goals. Employee Stock Purchase Plans Under the Omnibus 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 shares in fiscal 2021, 3 million shares in fiscal 2020 and 4 million shares in fiscal 2019, 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: 2021 2020 2019 ESPP: Dividend yield 0.72 % 1.41 % 1.99 % Expected volatility 41.3 % 48.2 % 35.5 % Risk-free interest rate 0.05 % 0.58 % 2.21 % Expected life (in years) 0.5 0.5 0.5 Weighted average estimated fair value $33.77 $17.30 $10.61 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Oct. 31, 2021 | |
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 2021, 2020 and 2019 were $631 million, $471 million and $292 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 $61 million for fiscal 2021, $52 million for fiscal 2020 and $49 million for fiscal 2019. Defined Benefit Pension Plans of Foreign Subsidiaries and Other Postretirement 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 the 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. A summary of the changes in benefit obligations and plan assets, which includes post-retirement benefits, for each fiscal year is presented below: 2021 2020 2019 (In millions, except percentages) Change in projected benefit obligation Beginning projected benefit obligation $ 674 $ 617 $ 524 Service cost 15 13 11 Interest cost 8 8 10 Plan participants’ contributions 1 1 1 Actuarial (gain) loss (1) 6 84 Settlements — — (1) Foreign currency exchange rate changes 3 33 (5) Benefits paid (15) (10) (8) Plan amendments and other adjustments — 6 1 Ending projected benefit obligation $ 685 $ 674 $ 617 Ending accumulated benefit obligation $ 626 $ 627 $ 578 Range of assumptions to determine benefit obligations Discount rate 0.6% - 6.6% 0.4% - 6.5% 0.5% - 3.1% Rate of compensation increase 2.4% - 10.0% 2.3% - 10.0% 2.3% - 3.6% Change in plan assets Beginning fair value of plan assets $ 431 $ 409 $ 365 Return on plan assets 49 — 30 Employer contributions 22 12 27 Plan participants’ contributions 1 1 1 Foreign currency exchange rate changes 3 19 (5) Settlements — — (1) Benefits paid (15) (10) (8) Ending fair value of plan assets $ 491 $ 431 $ 409 Funded status $ (194) $ (243) $ (208) Amounts recognized in the consolidated balance sheets Noncurrent asset $ 1 $ — $ 5 Current liability (2) (2) (1) Noncurrent liability (193) (241) (212) Total $ (194) $ (243) $ (208) Estimated amortization from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal period Actuarial loss $ 11 $ 14 $ 12 Prior service credit — — — Total $ 11 $ 14 $ 12 Amounts recognized in accumulated other comprehensive loss Net actuarial loss $ 200 $ 242 $ 226 Prior service credit 1 — — Total $ 201 $ 242 $ 226 Plans with projected benefit obligations in excess of plan assets Projected benefit obligation $ 472 $ 674 $ 424 Fair value of plan assets $ 277 $ 431 $ 211 Plans with accumulated benefit obligations in excess of plan assets Accumulated benefit obligation $ 413 $ 627 $ 385 Fair value of plan assets $ 277 $ 431 $ 211 2021 2020 Plan assets — allocation Equity securities 35 % 38 % Debt securities 33 % 43 % Insurance contracts 23 % 9 % Other investments 9 % 10 % The following table presents a summary of the ending fair value of the plan assets: October 31, 2021 October 25, 2020 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total (In millions) Equity securities $ 137 $ — $ — $ 137 $ 103 $ — $ — $ 103 Debt securities 79 — — 79 72 — — 72 Insurance contracts — — 110 110 — — 39 39 Other investments — 17 — 17 — 16 — 16 Cash 2 — — 2 2 — — 2 Total assets at fair value $ 218 $ 17 $ 110 345 $ 177 $ 16 $ 39 232 Assets measured at net asset value 146 199 Total $ 491 $ 431 The following table presents the activity in Level 3 instruments for each fiscal year: 2021 2020 (In millions) Balance, beginning of year $ 39 $ 36 Purchases, sales, settlements, net 72 1 Currency impact (1) 2 Balance, end of year $ 110 $ 39 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. 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: 2021 2020 2019 (In millions, except percentages) Components of net periodic benefit cost Service cost $ 15 $ 13 $ 11 Interest cost 8 8 10 Expected return on plan assets (21) (22) (20) Amortization of actuarial loss and prior service credit 14 12 7 Net periodic benefit cost $ 16 $ 11 $ 8 Weighted average assumptions Discount rate 1.18 % 1.23 % 1.98 % Expected long-term return on assets 4.80 % 5.10 % 5.40 % Rate of compensation increase 2.74 % 2.69 % 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 postretirement plan over the next ten fiscal years are as follows: Benefit Payments (In millions) 2022 $ 11 2023 13 2024 15 2025 14 2026 15 2027-2031 99 Total $ 167 Company contributions to these plans for fiscal 2022 are expected to be approximately $7 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 for all plans, including accrued deemed interest, totaled $206 million and $151 million at October 31, 2021 and October 25, 2020, respectively, which were included in other liabilities in the Consolidated Balance Sheets. |
Income Taxes
Income Taxes | 12 Months Ended |
Oct. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of income before income taxes for each fiscal year were as follows: 2021 2020 2019 (In millions) U.S. $ 512 $ 92 $ 363 Foreign 6,259 4,074 2,906 $ 6,771 $ 4,166 $ 3,269 The components of the provision for income taxes for each fiscal year were as follows: 2021 2020 2019 (In millions) Current: U.S. $ 462 $ 196 $ 240 Foreign 344 263 260 State 17 20 12 823 479 512 Deferred: U.S. (3) (3) 8 Foreign 67 76 46 State (4) (5) (3) 60 68 51 $ 883 $ 547 $ 563 A reconciliation between the statutory U.S. federal income tax rate and Applied’s actual effective income tax rate for each fiscal year is presented below: 2021 2020 2019 Tax provision at U.S. statutory rate 21.0 % 21.0 % 21.0 % Effect of foreign operations taxed at various rates (7.0) (5.9) (5.9) Changes in prior years’ unrecognized tax benefits 0.2 0.5 2.6 Resolutions of prior years’ income tax filings (0.1) (1.0) (0.1) Research and other tax credits (0.9) (1.3) (1.1) Other (0.2) (0.2) 0.7 13.0 % 13.1 % 17.2 % Before the Tax Act, U.S. income tax had not been provided for certain unrepatriated earnings that were considered indefinitely reinvested. Income tax is now provided for all unrepatriated earnings. Applied’s effective tax rate for fiscal 2021 was slightly lower than fiscal 2020 primarily due to higher proportion of pre-tax income in lower tax jurisdictions, partially offset by resolutions of prior years’ income tax filings. The effective tax rate for fiscal 2020 was lower than fiscal 2019 primarily due to a decline in the tax expense from changes to uncertain tax provisions year-over-year, an increased tax benefit from tax credits, and increased excess stock compensation tax benefits. This benefit was partly offset by an unfavorable settlement of an uncertain tax position in fiscal 2020. On June 14, 2019, the U.S. government released regulations that significantly affect how the global intangible low-taxed income (GILTI) provision of the Tax Cuts and Jobs Act (Tax Act) is interpreted. As a result, Applied reversed a tax benefit of $96 million in the third quarter of fiscal 2019 that had been realized in the first half of fiscal 2019. An accounting policy may be selected to treat GILTI temporary differences in taxable income either as a current-period expense when incurred (period cost method) or factor such amounts into the measurement of deferred taxes (deferred method). Applied has chosen the period cost method. 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 in Singapore. The statutory tax rate for fiscal 2021 for Singapore is 17%. Applied has been granted conditional reduced tax rates that expire in fiscal 2025, excluding potential renewal and subject to certain conditions with which Applied expects to comply. The tax benefits arising from these tax rates were $370 million or $0.40 per diluted share and $215 million or $0.23 per diluted share for fiscal 2021 and 2020, respectively. 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 31, October 25, (In millions) Deferred tax assets: Allowance for doubtful accounts $ 4 $ 4 Inventory reserves and basis difference 112 119 Installation and warranty reserves 29 14 Intangible assets 1,281 1,355 Accrued liabilities 31 24 Deferred revenue 25 32 Tax credits 369 326 Deferred compensation 133 130 Share-based compensation 34 30 Lease liability 61 55 Other 89 96 Gross deferred tax assets 2,168 2,185 Valuation allowance (361) (314) Total deferred tax assets 1,807 1,871 Deferred tax liabilities: Fixed assets (93) (76) Right of use assets (62) (54) Undistributed foreign earnings (37) (39) Total deferred tax liabilities (192) (169) Net deferred tax assets $ 1,615 $ 1,702 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: 2021 2020 2019 (In millions) Beginning balance $ 314 $ 257 $ 230 Increases 47 57 27 Decreases — — — Ending balance $ 361 $ 314 $ 257 At October 31, 2021, Applied has state research and development tax credit carryforwards of $369 million, including $345 million of credits that are carried over until exhausted and $20 million that are carried over for 15 years and begin to expire in fiscal 2033. It is more likely than not that all tax credit carryforwards, net of valuation allowance, will be utilized. Applied maintains liabilities for uncertain tax positions. These liabilities involve considerable judgment and estimation and are continuously monitored based on the best information available. Gross unrecognized tax benefits are classified as non-current income taxes payable or as a reduction in deferred tax assets. A reconciliation of the beginning and ending balances of gross unrecognized tax benefits in each fiscal year is as follows: 2021 2020 2019 (In millions) Beginning balance of gross unrecognized tax benefits $ 496 $ 845 $ 374 Settlements with tax authorities — (446) (1) Lapses of statutes of limitation (4) (3) (2) Increases in tax positions for current year 26 44 33 Increases in tax positions for prior years 23 91 441 Decreases in tax positions for prior years (4) (35) — Ending balance of gross unrecognized tax benefits $ 537 $ 496 $ 845 In fiscal 2020, Applied settled tax audits in Singapore related to fiscal 2012 through fiscal 2019 for additional tax payments of $72 million and a reduction of future tax deductions of $374 million. The tax expense impact of these settlements was $26 million. In fiscal 2019, Applied paid an immaterial amount as a result of settlements with tax authorities. The increases in tax positions for prior years of $441 million for fiscal 2019 include the effect of adoption of Accounting Standard Update 2016-16 Income Tax (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . Tax expense for interest and penalties on unrecognized tax benefits for fiscal 2021, 2020 and 2019 was $14 million, $24 million and $24 million, respectively. The income tax liability for interest and penalties for fiscal 2021, 2020 and 2019 was $88 million, $74 million and $50 million, respectively, and was classified as non-current income taxes payable. Included in the balance of unrecognized tax benefits for fiscal 2021, 2020 and 2019 are $442 million, $410 million, and $758 million, respectively, of tax benefits that, if recognized, would affect the effective tax rate. Applied’s tax returns remain subject to examination by taxing authorities. These include U.S. returns for fiscal 2015 and later years, and foreign tax returns for fiscal 2011 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. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Warranty, Guarantees, Commitments and Contingencies | Warranty, Guarantees, Commitments and Contingencies Warranty Changes in the warranty reserves during each fiscal year were as follows: 2021 2020 2019 (In millions) Beginning balance $ 201 $ 196 $ 208 Provisions for warranty 223 165 148 Changes in reserves related to preexisting warranty 9 2 7 Consumption of reserves (191) (162) (167) Ending balance $ 242 $ 201 $ 196 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 31, 2021, the maximum potential amount of future payments that Applied could be required to make under these guarantee agreements was approximately $500 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 31, 2021, Applied has provided parent guarantees to banks for approximately $144 million to cover these arrangements. Legal 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, regulatory investigations or inquires, 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. 31, 2021 | |
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 31, 2021 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 includes semiconductor capital equipment for etch, rapid thermal processing, deposition, chemical mechanical planarization, metrology and inspection, wafer packaging, and ion implantation. The Applied Global Services segment 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 other display technologies for TVs, monitors, laptops, 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, severance 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 Depreciation/ Capital Accounts Receivable Inventories (In millions) 2021: Semiconductor Systems $ 16,286 $ 6,311 $ 194 $ 228 $ 3,886 $ 2,586 Applied Global Services 5,013 1,508 32 29 922 1,561 Display and Adjacent Markets 1,634 314 27 32 207 153 Corporate and Other 130 (1,244) 141 379 (62) 9 Total $ 23,063 $ 6,889 $ 394 $ 668 $ 4,953 $ 4,309 2020: Semiconductor Systems $ 11,367 $ 3,714 $ 219 $ 226 $ 2,061 $ 2,139 Applied Global Services 4,155 1,127 34 30 764 1,545 Display and Adjacent Markets 1,607 291 31 29 179 195 Corporate and Other 73 (767) 92 137 (41) 25 Total $ 17,202 $ 4,365 $ 376 $ 422 $ 2,963 $ 3,904 2019: Semiconductor Systems $ 9,027 $ 2,464 $ 202 $ 168 $ 1,543 $ 1,703 Applied Global Services 3,854 1,101 25 47 790 1,535 Display and Adjacent Markets 1,651 294 22 43 246 214 Corporate and Other 76 (509) 114 183 (46) 22 Total $ 14,608 $ 3,350 $ 363 $ 441 $ 2,533 $ 3,474 Semiconductor Systems and Display and Adjacent Markets revenues are recognized at a point in time. Applied Global Services revenue is recognized at a point in time for tangible goods such as spare parts and equipment, and over time for service agreements. The majority of revenue recognized over time is recognized within 12 months of the contract inception. Operating income (loss) for fiscal 2021 included severance and related charges as discussed in Note 13, Severance and Related Charges and a deal termination fee as discussed in Note 9, Business Combination. Net sales for Semiconductor Systems by end use application for the periods indicated were as follows: 2021 2020 2019 Foundry, logic and other 60 % 59 % 52 % Dynamic random-access memory (DRAM) 19 % 20 % 22 % Flash memory 21 % 21 % 26 % 100 % 100 % 100 % The reconciling items included in Corporate and Other were as follows: 2021 2020 2019 (In millions) Unallocated net sales $ 130 $ 73 $ 76 Unallocated cost of products sold and expenses (725) (533) (322) Share-based compensation (346) (307) (263) Severance and related charges (149) — — Deal termination fee (154) — — Total $ (1,244) $ (767) $ (509) 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: 2021 2020 2019 (In millions) Net sales: United States $ 2,038 $ 1,619 $ 1,871 China 7,535 5,456 4,277 Korea 5,012 3,031 1,929 Taiwan 4,742 3,953 2,965 Japan 1,962 1,996 2,198 Europe 1,097 736 820 Southeast Asia 677 411 548 Total outside United States 21,025 15,583 12,737 Consolidated total $ 23,063 $ 17,202 $ 14,608 October 31, October 25, (In millions) Long-lived assets: United States $ 1,965 $ 1,628 China 10 14 Korea 16 21 Taiwan 62 59 Japan 9 16 Europe 12 21 Southeast Asia 13 18 Total outside United States 122 149 Consolidated total $ 2,087 $ 1,777 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: 2021 2020 2019 Samsung Electronics Co., Ltd. 20 % 18 % * Taiwan Semiconductor Manufacturing Company Limited 15 % 18 % 14 % Intel Corporation * * 12 % ______________________________ * Less than 10% |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Oct. 31, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of PresentationThe 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 2021, 2020 and 2019 contained 53, 52 and 52 weeks, respectively. The first fiscal quarter of 2021 contained 14 weeks, while the second, third and fourth quarters of fiscal 2021 contained 13 weeks. Each fiscal quarter of 2020 and 2019 contained 13 weeks. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, Applied evaluates its estimates, including those related to standalone selling price (SSP) related to revenue recognition, 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. As of October 31, 2021, the COVID-19 pandemic and worldwide response remains fluid. As a result, many of Applied’s estimates and assumptions are subject to increased judgment and volatility. These estimates may differ materially in future periods as the pandemic continues to evolve and additional information becomes available. |
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, are classified as available-for-sale at the respective balance sheet dates. Investments classified as available-for-sale are measured and recorded in the Consolidated Balance Sheets at fair value, and unrealized gains and losses, net of tax, is reported as a separate component of other comprehensive income. 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 Consolidated Statements of Operations. Applied’s equity investments with readily determinable values consist of publicly traded equity securities. These investments are measured at fair value using quoted prices for identical assets in an active market. Privately-held equity investments without readily determinable fair value are measured at cost, less impairment, adjusted by observable price changes. Adjustments resulting from impairments and observable prices changes are recorded in the Consolidated Statements of Operations. |
Allowance for Credit Losses | Allowance for Credit Losses Applied maintains an allowance for credit losses 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 net realizable value, 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 net realizable 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 5 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. |
Revenue from Contract with Customer | Revenue Recognition from Contracts with Customers Applied recognizes revenue when promised goods or services are transferred to a customer in an amount that reflects the consideration to which Applied expects to be entitled in exchange for those goods or services. Applied determines revenue recognition through the following five steps: (1) identification of the contract(s) with customers, (2) identification of the performance obligations in the contract, (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligations in the contract, and (5) recognition of revenue when, or as, a performance obligation is satisfied. Identifying the contract(s) with customers. Applied sells manufacturing equipment, services, and spare parts directly to its customers in the semiconductor, display, and related industries. The Company generally considers written documentation including, but not limited to, signed purchase orders, master agreements, and sales orders as contracts provided that collection is probable. Collectability is assessed based on the customer’s creditworthiness determined by reviewing the customer’s published credit and financial information, historical payment experience, as well as other relevant factors. Identifying the performance obligations. Applied’s performance obligations include delivery of manufacturing equipment, service agreements, spare parts, installation, extended warranty and training. Applied’s service agreements are considered one performance obligation and may include multiple goods and services that Applied provides to the customer to deliver against a performance metric. Judgment is used to determine whether multiple promised goods or services in a contract should be accounted for separately or as a group. Determine the transaction price. The transaction price for Applied’s contracts with customers may include fixed and variable consideration. Applied includes variable consideration in the transaction price to the extent that it is probable that a significant reversal of revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Allocate the transaction price to the performance obligations . A contract’s transaction price is allocated to each distinct performance obligation identified within the contract. Applied generally estimates the standalone selling price of a distinct performance obligation based on historical cost plus an appropriate margin. For contracts with multiple performance obligations, Applied allocates the contract’s transaction price to each performance obligation using the relative standalone selling price of each distinct good or service in the contract. Recognizing the revenue as performance obligations are satisfied. Applied recognizes revenue from equipment and spares parts at a point in time when Applied has satisfied its performance obligation by transferring control of the goods to the customer which typically occurs at shipment or delivery. Revenue from service agreements is recognized over time, typically within 12 months, as customers receive the benefits of services. The incremental costs to obtain a contract are not material. Payment Terms. Payment terms vary by contract. Generally, the majority of payments are due within a certain number of days from shipment of goods or performance of service. The remainder is typically due upon customer technical acceptance. 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. Applied’s payment terms do not generally contain a significant financing component. Shipping and Handling Costs Applied accounts for shipping and handling activities related to contracts with customers as costs to fulfill our promise to transfer the associated products. Accordingly, amounts billed for shipping and handling costs are recorded as a component of net sales and costs as a component of cost of products sold. |
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. Applied also sells extended warranty contracts to its customers which provide an extension of the standard warranty coverage period of up to 2 years. Applied receives payment at the inception of the contract and recognizes revenue ratably over the extended warranty coverage period, as the customer simultaneously receives and consumes the benefits of the extended warranty. |
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 Consolidated Statements of Operations. |
Research, Development and Engineering Costs | Research, Development and Engineering Costs Research, development and engineering costs are expensed as incurred. |
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 Applied’s provision for income taxes 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. |
Derivative Financial Instruments | Derivative Financial InstrumentsApplied 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. Applied’s derivative financial instruments are recorded as assets or liabilities at fair value. For derivative instruments designated and qualifying as cash flow hedges, the gain or loss 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. Any portion excluded from the assessment of effectiveness is recognized in the same line as the hedged transaction but may be recognized in a different manner, e.g. amortized. If a hedged transaction becomes probable of not occurring according to the original strategy, the hedge relationship is discontinued and the gain or loss on the associated derivative is recorded promptly in earnings. For hedges of existing foreign currency denominated assets or liabilities, the gain or loss is recorded promptly in earnings to offset the changes in the fair value of the assets or liabilities being hedged. |
Foreign Currency | Foreign Currency As of October 31, 2021, 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 the non-monetary assets and liabilities, which are remeasured using historical exchange rates. The resulting remeasurement gains and losses are included in interest and other income, net in the Consolidated Statements of Operations as incurred. |
Concentrations of Credit Risk | Concentrations of Credit RiskFinancial 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, commercial paper, 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 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. 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 deposits and/or letters of credit to mitigate credit risk when considered appropriate. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Standards Adopted Leases. In February 2016, the Financial Accounting Standard Board (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. Applied adopted this guidance in the first quarter of fiscal 2020 using the modified retrospective transition method which required applying the new standard as of the beginning of the period of adoption with no adjustment to comparative prior periods. Applied elected the package of practical expedients permitted under the transition guidance, which allow Applied not to reassess whether a contract contains a lease, initial direct costs and lease classification for leases existing prior to adoption. Applied also elected to combine the lease and non-lease components as a single lease component and not to use hindsight in determining the lease term. Upon adoption, Applied recognized right-of-use assets of $160 million, net of deferred rent of $4 million and lease liabilities of $164 million. Retirement Benefits: Changes to the Disclosure Requirements for Defined Benefit and other Postretirement Plans. In August 2018, the Financial Accounting Standard Board (FASB) issued authoritative guidance that adds, removes, and clarifies disclosure requirements for defined benefit and other postretirement plans. Applied adopted this guidance in the first quarter of fiscal 2021 on a retrospective basis. The adoption of this guidance did not have a significant impact on Applied’s defined benefit and other postretirement disclosures. Goodwill Impairment. In January 2017, the FASB issued authoritative guidance that simplifies the process required to test goodwill for impairment. Applied adopted this guidance in the first quarter of fiscal 2021. The adoption of this guidance did not have a significant impact on Applied’s consolidated condensed 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. Applied adopted this guidance in the first quarter of fiscal 2021 on a modified retrospective basis. The adoption of this guidance did not have a significant impact on Applied’s consolidated condensed financial statements. Accounting Standards Not Yet Adopted Simplifying the Accounting for Income Taxes. In December 2019, the FASB issued an accounting standard update to simplify the accounting for income taxes (Topic 740). This amendment removes certain exceptions and improves consistent application of accounting principles for certain areas in Topic 740. Applied will adopt this authoritative guidance in the first quarter of fiscal 2022. The adoption of this guidance is not expected to have a significant impact on Applied’s consolidated financial statements. Contract Assets and Contract Liabilities from Revenue Contracts with Customers in a Business Combination. In October 2021, the FASB issued an accounting standard update to improve the accounting for contract assets and contract liabilities from revenue contracts with customers in a business combination (Topic 805). This amendment improves comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. This authoritative guidance will be effective for Applied in the first quarter of fiscal 2024, with early adoption permitted. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. |
Investment Impairment | Applied regularly reviews its debt investment portfolio to identify and evaluate investments that have indications of possible impairment from credit losses or other factors. Factors considered in determining whether an unrealized loss is considered to be a credit loss include: the significance of the decline in value compared to 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. Credit losses related to available-for-sale debt securities are recorded as an allowance for credit losses through interest and other income, net. Any additional changes in fair value that are not related to credit losses are recognized in accumulated other comprehensive income. |
Fair Value Measurements | Fair Value Measurements Applied’s financial assets are measured and recorded at fair value on a recurring basis, except for equity investments in privately-held companies. These equity investments are generally accounted for under the measurement alternative, defined as cost, less impairments, adjusted for subsequent observable price changes and are periodically assessed for impairment when events or circumstances indicate that a 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. As of October 31, 2021, 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. Applied’s equity investments with readily determinable values consist of publicly traded equity securities. These investments are measured at fair value using quoted prices for identical assets in an active market and the changes in fair value of these equity investments are recognized in the consolidated statements of operations. |
Equity Securities without Readily Determinable Fair Value | Assets and Liabilities without Readily Determinable Values Measured on a Non-recurring BasisApplied’s equity investments without readily determinable values consist of equity investments in privately-held companies. Applied elected the measurement alternative, defined as cost, less impairments, adjusted for subsequent observable price changes on a prospective basis for certain equity investments without readily determinable fair values and is required to account for any subsequent observable changes in fair value within the statements of operations. These investments are classified as Level 3 within the fair value hierarchy and periodically assessed for impairment when an event or circumstance indicates that a decline in value may have occurred. |
Derivative Financial Instruments | Applied conducts business in a number of foreign countries, with certain transactions denominated in local currencies, such as the Japanese yen, Israeli shekel, euro 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 accounting treatment 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 31, 2021 is expected to be reclassified into earnings within 12 months. Changes in fair value caused by changes in time value of option contracts designated as cash flow hedges are excluded from the assessment of effectiveness. The initial value of this excluded component is amortized on a straight-line basis over the life of the hedging instrument and recognized in the financial statement line item to which the hedge relates. If the transaction being hedged is probable not to occur, Applied promptly recognizes the gain or loss on the associated financial instrument in the consolidated condensed statement of operations. The amount recognized due to discontinuance of cash flow hedges that were probable of not occurring by the end of the originally specified time period was not significant for fiscal years 2021, 2020 or 2019. |
Contract Assets and Liabilities | Contract assets primarily result from receivables for goods transferred to customers where payment is conditional upon technical sign off and not just the passage of time. Contract liabilities consist of unsatisfied performance obligations related to advance payments received and billings in excess of revenue recognized. Applied’s contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Contract assets are generally classified as current and are included in Other Current Assets in the Consolidated Balance Sheets. Contract liabilities are classified as current or non-current based on the timing of when performance obligations will be satisfied and associated revenue is expected to be recognized. |
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. When reviewing 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. In performing a qualitative assessment, Applied considers business conditions and other factors including, but not limited to (i) adverse industry or economic trends, (ii) restructuring actions and lower projections that may impact future operating results, (iii) sustained decline in share price, and (iv) overall financial performance and other events affecting the reporting units. If Applied concludes that is more likely than not that the fair value of a reporting unit is less than its carrying amount, then a quantitative impairment test is performed by estimating the fair value of the reporting unit and comparing it to its carrying value. If the carrying value of a reporting unit exceeds its fair value, Applied would record an impairment charge equal to the excess of the carrying value of the reporting unit’s goodwill over its fair value. |
Leases | A contract contains a lease when Applied has the right to control the use of an identified asset for a period of time in exchange for consideration. Applied leases certain facilities, vehicles and equipment under non-cancelable operating leases, many of which include options to renew. Options that are reasonably certain to be exercised are included in the calculation of the right-of-use asset and lease liability. Applied’s leases do not contain residual value guarantees or significant restrictions that impact the accounting for leases. As implicit rates are not available for the leases, Applied uses the incremental borrowing rate as of the lease commencement date in order to measure the right-of-use asset and liability. Operating lease expense is generally recognized on a straight-line basis over the lease term. Applied elected the practical expedient to account for lease and non-lease components as a single lease component for all leases. For leases with a term of one year or less, Applied elected not to record a right-of-use asset or lease liability and to account for the associated lease payments as they become due. |
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. |
Share-based Compensation | 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. Share-based awards granted to certain executive officers allow partial accelerated vesting in the event of a qualifying retirement based on age and years of service. The cost associated with performance-based equity awards, which include both performance and market goals, is recognized for each tranche over the service period. The cost of equity awards related to performance goals is based on an assessment of the likelihood that the applicable performance goals will be achieved. For the equity awards based on market goals, the cost is recognized based upon the assumption of 100% achievement of the goal. |
Performance based awards | Certain awards are subject to the achievement of targeted levels of adjusted operating margin and targeted levels of total shareholder return (TSR) relative to a peer group, comprised of companies in the Standard & Poor's 500 Index. Each metric will be weighted 50% and will be measured over a three-year period. The number of shares that may vest in full after three years ranges from 0% to 200% of the target amount. The 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, subject to a qualifying retirement based on age and years of service. The awards provide for a partial payout based on actual performance at the conclusion of the three-year performance period in the event of a qualifying retirement. During fiscal 2021, certain executive officers were also granted non-recurring long-term performance-based awards that are subject to the achievement of targeted levels of Applied’s absolute TSR. The awards become eligible to vest only if targeted levels of TSR are achieved during the five-year performance period and will vest only if the grantee remains employed by Applied through the vesting date in October 2025, except in the event of involuntary termination of employment without cause, death or following a change of control. The number of shares that may vest in full after five years ranges from 0% to 200% of the target amount. The fair value of the portion of the awards subject to targeted levels of adjusted operating margin is estimated on the date of grant. 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 portion of the awards that is probable to vest and is reflected over the service period and reduced for estimated forfeitures. The fair value of the portion of the awards subject to targeted levels of relative TSR or absolute TSR is estimated on the date of grant using a Monte Carlo simulation model. Compensation expense is recognized based upon the assumption of 100% achievement of the TSR goal and will not be reversed even if the threshold level of TSR is never achieved, and is reflected over the service period and reduced for estimated forfeitures. |
Warranty | 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. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
Earnings Per Share [Abstract] | |
Elements used in computing both basic and diluted net earnings per share | Fiscal Year 2021 2020 2019 (In millions, except per share amounts) Numerator: Net income $ 5,888 $ 3,619 $ 2,706 Denominator: Weighted average common shares outstanding 910 916 937 Effect of weighted dilutive stock options, restricted stock units and employee stock purchase plan shares 9 7 8 Denominator for diluted earnings per share 919 923 945 Basic earnings per share $ 6.47 $ 3.95 $ 2.89 Diluted earnings per share $ 6.40 $ 3.92 $ 2.86 Potentially weighted dilutive securities — — 3 |
Cash, Cash Equivalents and In_2
Cash, Cash Equivalents and Investments (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
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 31, 2021 Cost Gross Gross Estimated (In millions) Cash $ 1,407 $ — $ — $ 1,407 Cash equivalents: Money market funds 3,556 — — 3,556 Municipal securities 22 — — 22 Commercial paper, corporate bonds and medium-term notes 10 — — 10 Total Cash equivalents 3,588 — — 3,588 Total Cash and Cash equivalents $ 4,995 $ — $ — $ 4,995 Short-term and long-term investments: U.S. Treasury and agency securities $ 314 $ — $ — $ 314 Non-U.S. government securities* 5 — — 5 Municipal securities 367 3 1 369 Commercial paper, corporate bonds and medium-term notes 587 2 2 587 Asset-backed and mortgage-backed securities 555 3 1 557 Total fixed income securities 1,828 8 4 1,832 Publicly traded equity securities 22 39 3 58 Equity investments in privately-held companies 561 82 14 629 Total equity investments 583 121 17 687 Total short-term and long-term investments $ 2,411 $ 129 $ 21 $ 2,519 Total Cash, Cash equivalents and Investments $ 7,406 $ 129 $ 21 $ 7,514 _________________________ * Includes Canadian provincial government debt October 25, 2020 Cost Gross Gross Estimated (In millions) Cash $ 1,136 $ — $ — $ 1,136 Cash equivalents: Money market funds 4,209 — — 4,209 Municipal securities 6 — — 6 Total Cash equivalents 4,215 — — 4,215 Total Cash and Cash equivalents $ 5,351 $ — $ — $ 5,351 Short-term and long-term investments: U.S. Treasury and agency securities $ 394 $ 4 $ — $ 398 Municipal securities 359 6 — 365 Commercial paper, corporate bonds and medium-term notes 492 8 1 499 Asset-backed and mortgage-backed securities 470 9 — 479 Total fixed income securities 1,715 27 1 1,741 Publicly traded equity securities 11 36 2 45 Equity investments in privately-held companies 121 25 7 139 Total equity investments 132 61 9 184 Total short-term and long-term investments $ 1,847 $ 88 $ 10 $ 1,925 Total Cash, Cash equivalents and Investments $ 7,198 $ 88 $ 10 $ 7,276 ________________________ |
Contractual maturities of investments | The following table summarizes the contractual maturities of Applied’s investments at October 31, 2021: Cost Estimated Fair Value (In millions) Due in one year or less $ 393 $ 395 Due after one through five years 878 878 Due after five years 2 2 No single maturity date** 1,138 1,244 Total $ 2,411 $ 2,519 _________________________ ** Securities with no single maturity date include publicly-traded and privately-held equity securities, and asset-backed and mortgage-backed securities. |
Components of gain (loss) on equity investment | The components of gain (loss) on equity investments for each fiscal year were as follows: 2021 2020 2019 (In millions) Publicly traded equity securities Unrealized gain $ 14 $ 14 $ 28 Unrealized loss (11) (17) (5) Realized gain on sales 2 1 2 Equity investments in privately-held companies Unrealized gain 65 18 13 Unrealized loss (12) (7) (6) Realized gain on sales 48 8 5 Realized loss on sales or impairment (7) (8) (1) Total gain (loss) on equity investments, net $ 99 $ 9 $ 36 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
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 31, 2021 October 25, 2020 Level 1 Level 2 Total Level 1 Level 2 Total (In millions) Assets: Available-for-sale debt security investments Money market funds* $ 3,662 $ — $ 3,662 $ 4,324 $ — $ 4,324 U.S. Treasury and agency securities 296 18 314 375 23 398 Non-U.S. government securities — 5 5 — — — Municipal securities — 391 391 — 371 371 Commercial paper, corporate bonds and medium-term notes — 597 597 — 499 499 Asset-backed and mortgage-backed securities — 557 557 — 479 479 Total available-for-sale debt security investments $ 3,958 $ 1,568 $ 5,526 $ 4,699 $ 1,372 $ 6,071 Equity investments with readily determinable values Publicly traded equity securities $ 58 $ — $ 58 $ 45 $ — $ 45 Total equity investments with readily determinable values $ 58 $ — $ 58 $ 45 $ — $ 45 Total $ 4,016 $ 1,568 $ 5,584 $ 4,744 $ 1,372 $ 6,116 _________________________ |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The gain (loss) on derivatives in cash flow hedging relationships recognized in AOCI for derivatives designated as hedging instruments for the indicated periods were as follows: Derivatives in Cash Flow Hedging Relationships 2021 2020 2019 (In millions) Foreign exchange contracts $ 36 $ 3 $ (14) Interest rate contracts — (151) — Total $ 36 $ (148) $ (14) |
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: Derivatives in Cash Flow Hedging Relationships Total Amount Presented in the Consolidated Statement of Operations in which the Effects of Cash Flow Hedges are Recorded Amount of Gain or (Loss) Amounts of Gain (Loss) Excluded from Effectiveness Testing (In millions) 2021 Foreign Exchange Contracts: Net Sales $ 23,063 $ 4 $ — Cost of products sold $ 12,149 2 (2) Research, development and engineering $ 2,485 3 — General and administrative $ 620 1 — Interest Rate Contracts: Interest expense $ 236 (13) — $ (3) $ (2) 2020 Foreign Exchange Contracts: Net Sales $ 17,202 $ (2) $ 4 Cost of products sold $ 9,510 6 (3) Research, development and engineering $ 2,234 4 — General and administrative $ 567 1 — Interest Rate Contracts: Interest expense $ 240 (7) — $ 2 $ 1 2019 Foreign Exchange Contracts: Cost of products sold $ 8,222 $ 2 $ 15 General and administrative $ 461 (3) (6) Interest Rate Contracts: Interest expense $ 237 (3) — $ (4) $ 9 |
Derivatives not designated as hedging instruments in statement of operations | Amount of Gain or (Loss) Location of Gain or (Loss) Recognized in Consolidated Statement of Operations 2021 2020 2019 (In millions) Derivatives Not Designated as Hedging Instruments Foreign exchange contracts General and administrative $ — $ — $ (8) Foreign exchange contracts Interest and other income, net 29 (10) — Total return swaps - deferred compensation Cost of products sold 3 1 — Total return swaps - deferred compensation Operating expenses 29 6 — Total return swaps - deferred compensation Interest and other income, net (1) (1) — Total $ 60 $ (4) $ (8) |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
Receivables [Abstract] | |
Changes in allowance for doubtful accounts | Changes in allowance for credit losses in each fiscal year were as follows: 2021 2020 2019 (In millions) Beginning balance $ 30 $ 30 $ 33 Provision — — — Deductions 1 (1) — (3) Ending balance $ 29 $ 30 $ 30 _____________________________ 1 Deductions primarily represent releases of credit losses credited to expense as a result of an overall lower risk profile of Applied’s customers and cash collections. |
Contract Balances (Tables)
Contract Balances (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Asset and Liability | Contract balances at the end of each reporting period were as follows: October 31, 2021 October 25, 2020 (In millions) Contract assets $ 201 $ 148 Contract liabilities $ 2,076 $ 1,321 |
Balance Sheet Detail (Tables)
Balance Sheet Detail (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Inventories | October 31, October 25, (In millions) Inventories Customer service spares $ 1,251 $ 1,270 Raw materials 1,136 870 Work-in-process 873 624 Finished goods 1,049 1,140 $ 4,309 $ 3,904 |
Other current assets | October 31, October 25, (In millions) Other Current Assets Prepaid income taxes and income taxes receivable $ 593 $ 162 Prepaid expenses and other 793 602 $ 1,386 $ 764 |
Property, plant and equipment, net | Useful Life October 31, October 25, (In years) (In millions) Property, Plant and Equipment, Net Land and improvements $ 334 $ 256 Buildings and improvements 3-30 1,780 1,655 Demonstration and manufacturing equipment 3-5 1,820 1,586 Furniture, fixtures and other equipment 3-5 720 646 Construction in progress 326 237 Gross property, plant and equipment 4,980 4,380 Accumulated depreciation (3,046) (2,776) $ 1,934 $ 1,604 |
Deferred income taxes and other assets | October 31, October 25, (In millions) Deferred Income Taxes and Other Assets Non-current deferred income taxes $ 1,623 $ 1,711 Operating lease right-of-use assets 294 252 Income tax receivables and other assets 229 260 $ 2,146 $ 2,223 |
Accounts payable and accrued expenses | October 31, October 25, (In millions) Accounts Payable and Accrued Expenses Accounts payable $ 1,472 $ 1,124 Compensation and employee benefits 924 800 Warranty 242 201 Dividends payable 214 201 Income taxes payable 734 222 Other accrued taxes 24 33 Interest payable 39 36 Operating lease liabilities, current 73 64 Other 546 457 $ 4,268 $ 3,138 |
Other liabilities | October 31, October 25, (In millions) Other Liabilities Defined and postretirement benefit plans $ 193 $ 241 Operating lease liabilities, non-current 228 195 Other 271 226 $ 692 $ 662 |
Goodwill, Purchased Technolog_2
Goodwill, Purchased Technology and Other Intangible Assets (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Details of goodwill were as follows: October 31, October 25, 2020 (In millions) Semiconductor Systems $ 2,207 $ 2,208 Applied Global Services 1,032 1,018 Display and Adjacent Markets 199 199 Corporate and Other 41 41 Carrying amount $ 3,479 $ 3,466 |
Summary of purchased technology and intangible assets | A summary of Applied’s purchased technology and intangible assets is set forth below: October 31, October 25, (In millions) Purchased technology, net $ 46 $ 75 Intangible assets - finite-lived, net 58 78 Total $ 104 $ 153 |
Finite-lived intangible assets | Details of finite-lived intangible assets were as follows: October 31, 2021 October 25, 2020 Purchased Other Total Purchased Other Total (In millions) Gross carrying amount: Semiconductor Systems $ 1,476 $ 256 $ 1,732 $ 1,476 $ 256 $ 1,732 Applied Global Services 35 44 79 35 44 79 Display and Adjacent Markets 163 38 201 163 38 201 Corporate and Other 13 16 29 13 16 29 Gross carrying amount $ 1,687 $ 354 $ 2,041 $ 1,687 $ 354 $ 2,041 Accumulated amortization: Semiconductor Systems $ (1,446) $ (203) $ (1,649) $ (1,423) $ (185) $ (1,608) Applied Global Services (32) (44) (76) (31) (44) (75) Display and Adjacent Markets (161) (38) (199) (157) (37) (194) Corporate and Other (2) (11) (13) (1) (10) (11) Accumulated amortization $ (1,641) $ (296) $ (1,937) $ (1,612) $ (276) $ (1,888) Carrying amount $ 46 $ 58 $ 104 $ 75 $ 78 $ 153 |
Summary of amortization expense | Details of amortization expense for each fiscal year by segment were as follows: 2021 2020 2019 (In millions) Semiconductor Systems $ 41 $ 40 $ 43 Applied Global Services 1 1 1 Display and Adjacent Markets 5 13 13 Corporate and Other 2 2 — Total $ 49 $ 56 $ 57 |
Schedule of categories amortization expense was charged to | Amortization expense for each fiscal year was charged to the following categories: 2021 2020 2019 (In millions) Cost of products sold $ 29 $ 37 $ 38 Research, development and engineering 1 1 1 Marketing and selling 19 18 18 Total $ 49 $ 56 $ 57 |
Future estimated amortization expense | As of October 31, 2021, future estimated amortization expense is expected to be as follows: Amortization (In millions) 2022 $ 33 2023 20 2024 17 2025 15 2026 15 Thereafter 4 Total $ 104 |
Borrowing Facilities and Debt (
Borrowing Facilities and Debt (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt Outstanding | Debt outstanding as of October 31, 2021 and October 25, 2020 was as follows: Principal Amount October 31, October 25, Effective Interest (In millions) Long-term debt: 3.900% Senior Notes Due 2025 $ 700 $ 700 3.944% April 1, October 1 3.300% Senior Notes Due 2027 1,200 1,200 3.342% April 1, October 1 1.750% Senior Notes Due 2030 750 750 1.792% June 1, December 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 1,000 4.361% April 1, October 1 2.750% Senior Notes Due 2050 750 750 2.773% June 1, December 1 5,500 5,500 Total unamortized discount (14) (15) Total unamortized debt issuance costs (34) (37) Total long-term debt $ 5,452 $ 5,448 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
Leases [Abstract] | |
Lease, Cost | The components of lease expense and supplemental information were as follows: 2021 2020 (In millions, except percentage) Operating lease cost $ 79 $ 69 Weighted-average remaining lease term (in years) 5.1 5.2 Weighted-average discount rate 1.7 % 1.8 % Total rent expense for fiscal 2019 was $51 million. Supplemental cash flow information related to leases are as follows: 2021 2020 (In millions) Operating cash flows paid for operating leases $ 79 $ 70 Right-of-use assets obtained in exchange for operating lease liabilities $ 123 $ 156 |
Operating Lease, Liability, Maturity | As of October 31, 2021, the maturities of lease liabilities are as follows: Operating Leases Fiscal (In millions) 2022 $ 78 2023 71 2024 61 2025 48 2026 18 Thereafter 39 Total lease payments 315 Less imputed interest (14) Total $ 301 |
Severance and Related Charges (
Severance and Related Charges (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Severance and Related Charges by Segment | Severance and related charges by segment were as follows: 2021 (In millions) Display and Adjacent Markets $ 8 Corporate and Other 149 Total $ 157 |
Schedule of Changes in Severance and Related Charges Reserves | Changes in severance and related charges reserves related to the Fiscal 2021 Severance Plan described above were as follows: Severance and Related Charges Reserves (In millions) Balance as of October 25, 2020 $ — Provision for severance 158 Adjustment to provision for severance (1) Consumption of reserves (140) Balance as of October 31, 2021 $ 17 |
Stockholders' Equity, Compreh_2
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
Equity [Abstract] | |
Components of accumulated other comprehensive income, net of tax | Changes in the components of accumulated other comprehensive income (AOCI), net of tax, were as follows: Unrealized Gain (Loss) on Investments, Net Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges Defined and Postretirement Benefit Plans Cumulative Translation Adjustments Total (In millions) Balance at October 28, 2018 $ 7 $ (9) $ (137) $ 14 (125) Adoption of new accounting standards (a) (17) — — — (17) Other comprehensive income (loss) before reclassifications 22 (10) (57) (1) (46) Amounts reclassified out of AOCI (1) 3 6 — 8 Other comprehensive income (loss), net of tax 21 (7) (51) (1) (38) Balance at October 27, 2019 $ 11 $ (16) $ (188) $ 13 $ (180) Other comprehensive income (loss) before reclassifications 16 (115) (21) — (120) Amounts reclassified out of AOCI (7) (2) 10 — 1 Other comprehensive income, net of tax 9 (117) (11) — (119) Balance at October 25, 2020 $ 20 $ (133) $ (199) $ 13 $ (299) Other comprehensive income (loss) before reclassifications (14) 28 20 — 34 Amounts reclassified out of AOCI (7) 2 10 — 5 Other comprehensive income (loss), net of tax (21) 30 30 — 39 Balance at October 31, 2021 $ (1) $ (103) $ (169) $ 13 $ (260) (a) - Represents the reclassification adjustment related to the adoption of Accounting Standard Update (ASU) 2016-01 Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . |
Summary of stock repurchases | The following table summarizes Applied’s stock repurchases for each fiscal year: 2021 2020 2019 (In millions, except per share amounts) Shares of common stock repurchased 28 12 60 Cost of stock repurchased $ 3,750 $ 649 $ 2,403 Average price paid per share $ 134.03 $ 56.32 $ 39.86 |
Effect of share-based compensation on the results of operations by expense type | Applied recognized share-based compensation expense related to equity awards and ESPP shares. The effect of share-based compensation on the results of operations and the related tax benefits for each fiscal year were as follows: 2021 2020 2019 (In millions) Cost of products sold $ 118 $ 103 $ 89 Research, development, and engineering 129 116 99 Marketing and selling 43 36 31 General and administrative 56 52 44 Total share-based compensation $ 346 $ 307 $ 263 Income tax benefits recognized $ 43 $ 39 $ 37 |
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 Weighted Aggregate (In millions, except per share amounts) Non-vested restricted stock units, restricted stock, performance shares and performance units at October 28, 2018 18 $ 32.64 2.0 years $ 600 Granted 8 $ 36.00 Vested (7) $ 28.41 Canceled (1) $ 34.59 Non-vested restricted stock units, restricted stock, performance shares and performance units at October 27, 2019 18 $ 35.78 2.1 years $ 985 Granted 6 $ 53.89 Vested (8) $ 31.25 Canceled (1) $ 42.61 Non-vested restricted stock units, restricted stock, performance shares and performance units at October 25, 2020 15 $ 45.36 2.2 years $ 914 Granted 5 $ 92.04 Vested (6) $ 43.11 Canceled (1) $ 59.41 Non-vested restricted stock units, restricted stock, performance shares and performance units at October 31, 2021 13 $ 63.29 2.2 years $ 1,752 Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest 13 $ 63.37 2.0 years $ 1,724 |
Significant valuation assumptions in relation to ESPP | Underlying assumptions used in the model are outlined in the following table: 2021 2020 2019 ESPP: Dividend yield 0.72 % 1.41 % 1.99 % Expected volatility 41.3 % 48.2 % 35.5 % Risk-free interest rate 0.05 % 0.58 % 2.21 % Expected life (in years) 0.5 0.5 0.5 Weighted average estimated fair value $33.77 $17.30 $10.61 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
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: 2021 2020 2019 (In millions, except percentages) Change in projected benefit obligation Beginning projected benefit obligation $ 674 $ 617 $ 524 Service cost 15 13 11 Interest cost 8 8 10 Plan participants’ contributions 1 1 1 Actuarial (gain) loss (1) 6 84 Settlements — — (1) Foreign currency exchange rate changes 3 33 (5) Benefits paid (15) (10) (8) Plan amendments and other adjustments — 6 1 Ending projected benefit obligation $ 685 $ 674 $ 617 Ending accumulated benefit obligation $ 626 $ 627 $ 578 Range of assumptions to determine benefit obligations Discount rate 0.6% - 6.6% 0.4% - 6.5% 0.5% - 3.1% Rate of compensation increase 2.4% - 10.0% 2.3% - 10.0% 2.3% - 3.6% Change in plan assets Beginning fair value of plan assets $ 431 $ 409 $ 365 Return on plan assets 49 — 30 Employer contributions 22 12 27 Plan participants’ contributions 1 1 1 Foreign currency exchange rate changes 3 19 (5) Settlements — — (1) Benefits paid (15) (10) (8) Ending fair value of plan assets $ 491 $ 431 $ 409 Funded status $ (194) $ (243) $ (208) Amounts recognized in the consolidated balance sheets Noncurrent asset $ 1 $ — $ 5 Current liability (2) (2) (1) Noncurrent liability (193) (241) (212) Total $ (194) $ (243) $ (208) Estimated amortization from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal period Actuarial loss $ 11 $ 14 $ 12 Prior service credit — — — Total $ 11 $ 14 $ 12 Amounts recognized in accumulated other comprehensive loss Net actuarial loss $ 200 $ 242 $ 226 Prior service credit 1 — — Total $ 201 $ 242 $ 226 Plans with projected benefit obligations in excess of plan assets Projected benefit obligation $ 472 $ 674 $ 424 Fair value of plan assets $ 277 $ 431 $ 211 Plans with accumulated benefit obligations in excess of plan assets Accumulated benefit obligation $ 413 $ 627 $ 385 Fair value of plan assets $ 277 $ 431 $ 211 2021 2020 Plan assets — allocation Equity securities 35 % 38 % Debt securities 33 % 43 % Insurance contracts 23 % 9 % Other investments 9 % 10 % |
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 31, 2021 October 25, 2020 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total (In millions) Equity securities $ 137 $ — $ — $ 137 $ 103 $ — $ — $ 103 Debt securities 79 — — 79 72 — — 72 Insurance contracts — — 110 110 — — 39 39 Other investments — 17 — 17 — 16 — 16 Cash 2 — — 2 2 — — 2 Total assets at fair value $ 218 $ 17 $ 110 345 $ 177 $ 16 $ 39 232 Assets measured at net asset value 146 199 Total $ 491 $ 431 |
Activity in Level 3 instruments | The following table presents the activity in Level 3 instruments for each fiscal year: 2021 2020 (In millions) Balance, beginning of year $ 39 $ 36 Purchases, sales, settlements, net 72 1 Currency impact (1) 2 Balance, end of year $ 110 $ 39 |
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: 2021 2020 2019 (In millions, except percentages) Components of net periodic benefit cost Service cost $ 15 $ 13 $ 11 Interest cost 8 8 10 Expected return on plan assets (21) (22) (20) Amortization of actuarial loss and prior service credit 14 12 7 Net periodic benefit cost $ 16 $ 11 $ 8 Weighted average assumptions Discount rate 1.18 % 1.23 % 1.98 % Expected long-term return on assets 4.80 % 5.10 % 5.40 % Rate of compensation increase 2.74 % 2.69 % 2.74 % |
Schedule of expected benefit payments | Future expected benefit payments for the pension plans and the postretirement plan over the next ten fiscal years are as follows: Benefit Payments (In millions) 2022 $ 11 2023 13 2024 15 2025 14 2026 15 2027-2031 99 Total $ 167 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
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: 2021 2020 2019 (In millions) U.S. $ 512 $ 92 $ 363 Foreign 6,259 4,074 2,906 $ 6,771 $ 4,166 $ 3,269 |
Components of the provision for income taxes | The components of the provision for income taxes for each fiscal year were as follows: 2021 2020 2019 (In millions) Current: U.S. $ 462 $ 196 $ 240 Foreign 344 263 260 State 17 20 12 823 479 512 Deferred: U.S. (3) (3) 8 Foreign 67 76 46 State (4) (5) (3) 60 68 51 $ 883 $ 547 $ 563 |
Effective income tax rate continuing operations tax rate reconciliation | A reconciliation between the statutory U.S. federal income tax rate and Applied’s actual effective income tax rate for each fiscal year is presented below: 2021 2020 2019 Tax provision at U.S. statutory rate 21.0 % 21.0 % 21.0 % Effect of foreign operations taxed at various rates (7.0) (5.9) (5.9) Changes in prior years’ unrecognized tax benefits 0.2 0.5 2.6 Resolutions of prior years’ income tax filings (0.1) (1.0) (0.1) Research and other tax credits (0.9) (1.3) (1.1) Other (0.2) (0.2) 0.7 13.0 % 13.1 % 17.2 % |
Components of deferred income tax assets and liabilities | The components of deferred income tax assets and liabilities were as follows: October 31, October 25, (In millions) Deferred tax assets: Allowance for doubtful accounts $ 4 $ 4 Inventory reserves and basis difference 112 119 Installation and warranty reserves 29 14 Intangible assets 1,281 1,355 Accrued liabilities 31 24 Deferred revenue 25 32 Tax credits 369 326 Deferred compensation 133 130 Share-based compensation 34 30 Lease liability 61 55 Other 89 96 Gross deferred tax assets 2,168 2,185 Valuation allowance (361) (314) Total deferred tax assets 1,807 1,871 Deferred tax liabilities: Fixed assets (93) (76) Right of use assets (62) (54) Undistributed foreign earnings (37) (39) Total deferred tax liabilities (192) (169) Net deferred tax assets $ 1,615 $ 1,702 |
Summary of valuation allowance | Changes in the valuation allowance in each fiscal year were as follows: 2021 2020 2019 (In millions) Beginning balance $ 314 $ 257 $ 230 Increases 47 57 27 Decreases — — — Ending balance $ 361 $ 314 $ 257 |
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: 2021 2020 2019 (In millions) Beginning balance of gross unrecognized tax benefits $ 496 $ 845 $ 374 Settlements with tax authorities — (446) (1) Lapses of statutes of limitation (4) (3) (2) Increases in tax positions for current year 26 44 33 Increases in tax positions for prior years 23 91 441 Decreases in tax positions for prior years (4) (35) — Ending balance of gross unrecognized tax benefits $ 537 $ 496 $ 845 |
Warranty, Guarantees, Commitm_2
Warranty, Guarantees, Commitments and Contingencies (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Changes in the warranty reserves | Changes in the warranty reserves during each fiscal year were as follows: 2021 2020 2019 (In millions) Beginning balance $ 201 $ 196 $ 208 Provisions for warranty 223 165 148 Changes in reserves related to preexisting warranty 9 2 7 Consumption of reserves (191) (162) (167) Ending balance $ 242 $ 201 $ 196 |
Industry Segment Operations (Ta
Industry Segment Operations (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting | Information for each reportable segment for and as of the end of each fiscal year were as follows: Net Sales Operating Depreciation/ Capital Accounts Receivable Inventories (In millions) 2021: Semiconductor Systems $ 16,286 $ 6,311 $ 194 $ 228 $ 3,886 $ 2,586 Applied Global Services 5,013 1,508 32 29 922 1,561 Display and Adjacent Markets 1,634 314 27 32 207 153 Corporate and Other 130 (1,244) 141 379 (62) 9 Total $ 23,063 $ 6,889 $ 394 $ 668 $ 4,953 $ 4,309 2020: Semiconductor Systems $ 11,367 $ 3,714 $ 219 $ 226 $ 2,061 $ 2,139 Applied Global Services 4,155 1,127 34 30 764 1,545 Display and Adjacent Markets 1,607 291 31 29 179 195 Corporate and Other 73 (767) 92 137 (41) 25 Total $ 17,202 $ 4,365 $ 376 $ 422 $ 2,963 $ 3,904 2019: Semiconductor Systems $ 9,027 $ 2,464 $ 202 $ 168 $ 1,543 $ 1,703 Applied Global Services 3,854 1,101 25 47 790 1,535 Display and Adjacent Markets 1,651 294 22 43 246 214 Corporate and Other 76 (509) 114 183 (46) 22 Total $ 14,608 $ 3,350 $ 363 $ 441 $ 2,533 $ 3,474 |
Disaggregation of revenue | Net sales for Semiconductor Systems by end use application for the periods indicated were as follows: 2021 2020 2019 Foundry, logic and other 60 % 59 % 52 % Dynamic random-access memory (DRAM) 19 % 20 % 22 % Flash memory 21 % 21 % 26 % 100 % 100 % 100 % |
Segment reconciling items in corporate and other | The reconciling items included in Corporate and Other were as follows: 2021 2020 2019 (In millions) Unallocated net sales $ 130 $ 73 $ 76 Unallocated cost of products sold and expenses (725) (533) (322) Share-based compensation (346) (307) (263) Severance and related charges (149) — — Deal termination fee (154) — — Total $ (1,244) $ (767) $ (509) |
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: 2021 2020 2019 (In millions) Net sales: United States $ 2,038 $ 1,619 $ 1,871 China 7,535 5,456 4,277 Korea 5,012 3,031 1,929 Taiwan 4,742 3,953 2,965 Japan 1,962 1,996 2,198 Europe 1,097 736 820 Southeast Asia 677 411 548 Total outside United States 21,025 15,583 12,737 Consolidated total $ 23,063 $ 17,202 $ 14,608 October 31, October 25, (In millions) Long-lived assets: United States $ 1,965 $ 1,628 China 10 14 Korea 16 21 Taiwan 62 59 Japan 9 16 Europe 12 21 Southeast Asia 13 18 Total outside United States 122 149 Consolidated total $ 2,087 $ 1,777 |
Companies accounted for at least 10 percent of 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: 2021 2020 2019 Samsung Electronics Co., Ltd. 20 % 18 % * Taiwan Semiconductor Manufacturing Company Limited 15 % 18 % 14 % Intel Corporation * * 12 % ______________________________ * Less than 10% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Property Plant and Equipment Useful Life) (Details) | 12 Months Ended |
Oct. 31, 2021 | |
Buildings and improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Buildings 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 | 5 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 Accoun_4
Summary of Significant Accounting Policies (Intangible Assets) (Details) | 12 Months Ended |
Oct. 31, 2021 | |
Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets estimated useful lives | 1 year |
Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets estimated useful lives | 15 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Warranty) (Details) | 12 Months Ended |
Oct. 31, 2021 | |
Accounting Policies [Abstract] | |
Extended product warranty period | 2 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Derivative Financial Instruments) (Details) | 12 Months Ended |
Oct. 31, 2021 | |
Accounting Policies [Abstract] | |
Time period for hedging of foreign currency transactions | 24 months |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Recent Accounting Pronouncements) (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Oct. 25, 2020 | Oct. 28, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 294 | $ 252 | |
Operating lease liability | $ 301 | ||
Revision of Prior Period, Accounting Standards Update, Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 160 | ||
Deferred rent, net | 4 | ||
Operating lease liability | $ 164 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Numerator: | |||
Net income | $ 5,888 | $ 3,619 | $ 2,706 |
Denominator: | |||
Weighted average common shares outstanding (in shares) | 910 | 916 | 937 |
Effect of dilutive stock options, restricted stock units and employee stock purchase plan shares (in shares) | 9 | 7 | 8 |
Denominator for diluted earnings per share (in shares) | 919 | 923 | 945 |
Earnings per share: basic (in dollars per share) | $ 6.47 | $ 3.95 | $ 2.89 |
Diluted earnings per share (in dollars per share) | $ 6.40 | $ 3.92 | $ 2.86 |
Potentially dilutive securities (in shares) | 0 | 0 | 3 |
Cash, Cash Equivalents and In_3
Cash, Cash Equivalents and Investments - Summary of Cash, Cash Equivalents and Investments (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 |
Summary of Cash, Cash Equivalents and Investments | |||
Cash | $ 1,407 | $ 1,136 | |
Total Cash equivalents | 3,588 | 4,215 | |
Total Cash and Cash equivalents | 4,995 | 5,351 | $ 3,129 |
Cost of fixed income securities | 2,411 | ||
Estimated fair value of fixed income securities | 5,526 | 6,071 | |
Equity investments cost | 583 | 132 | |
Equity investments unrealized gain | 121 | 61 | |
Publicly traded equity securities, gross unrealized losses | 17 | 9 | |
Equity investments estimated fair value | 687 | 184 | |
Total short-term and long-term investments cost | 2,411 | 1,847 | |
Total short-term and long-term investments, gross unrealized gains | 129 | 88 | |
Total short-term and long-term investments, gross unrealized losses | 21 | 10 | |
Total short-term and long-term investments | 2,519 | 1,925 | |
Cash, cash equivalents and investments, cost | 7,406 | 7,198 | |
Cash, cash equivalents and investments, gross unrealized gains | 129 | 88 | |
Cash, cash equivalents and investments, gross unrealized losses | 21 | 10 | |
Cash, cash equivalents and investments, estimated fair value | 7,514 | 7,276 | |
Total fixed income securities | |||
Summary of Cash, Cash Equivalents and Investments | |||
Cost of fixed income securities | 1,828 | 1,715 | |
Gross unrealized gains on fixed income securities | 8 | 27 | |
Gross unrealized losses on fixed income securities | 4 | 1 | |
Estimated fair value of fixed income securities | 1,832 | 1,741 | |
U.S. Treasury and agency securities | |||
Summary of Cash, Cash Equivalents and Investments | |||
Cost of fixed income securities | 314 | 394 | |
Gross unrealized gains on fixed income securities | 0 | 4 | |
Gross unrealized losses on fixed income securities | 0 | 0 | |
Estimated fair value of fixed income securities | 314 | 398 | |
Non-U.S. government securities | |||
Summary of Cash, Cash Equivalents and Investments | |||
Cost of fixed income securities | 5 | ||
Gross unrealized gains on fixed income securities | 0 | ||
Gross unrealized losses on fixed income securities | 0 | ||
Estimated fair value of fixed income securities | 5 | ||
Municipal securities | |||
Summary of Cash, Cash Equivalents and Investments | |||
Cost of fixed income securities | 367 | 359 | |
Gross unrealized gains on fixed income securities | 3 | 6 | |
Gross unrealized losses on fixed income securities | 1 | 0 | |
Estimated fair value of fixed income securities | 369 | 365 | |
Commercial paper, corporate bonds and medium-term notes | |||
Summary of Cash, Cash Equivalents and Investments | |||
Cost of fixed income securities | 587 | 492 | |
Gross unrealized gains on fixed income securities | 2 | 8 | |
Gross unrealized losses on fixed income securities | 2 | 1 | |
Estimated fair value of fixed income securities | 587 | 499 | |
Asset-backed and mortgage-backed securities | |||
Summary of Cash, Cash Equivalents and Investments | |||
Cost of fixed income securities | 555 | 470 | |
Gross unrealized gains on fixed income securities | 3 | 9 | |
Gross unrealized losses on fixed income securities | 1 | 0 | |
Estimated fair value of fixed income securities | 557 | 479 | |
Publicly traded equity securities | |||
Summary of Cash, Cash Equivalents and Investments | |||
Equity investments cost | 22 | 11 | |
Equity investments unrealized gain | 39 | 36 | |
Publicly traded equity securities, gross unrealized losses | 3 | 2 | |
Equity investments estimated fair value | 58 | 45 | |
Equity investments in privately-held companies | |||
Summary of Cash, Cash Equivalents and Investments | |||
Equity investments cost | 561 | 121 | |
Equity investments unrealized gain | 82 | 25 | |
Publicly traded equity securities, gross unrealized losses | 14 | 7 | |
Equity investments estimated fair value | 629 | 139 | |
Money market funds | |||
Summary of Cash, Cash Equivalents and Investments | |||
Total Cash equivalents | 3,556 | 4,209 | |
Municipal securities | |||
Summary of Cash, Cash Equivalents and Investments | |||
Total Cash equivalents | 22 | $ 6 | |
Commercial paper, corporate bonds and medium-term notes | |||
Summary of Cash, Cash Equivalents and Investments | |||
Total Cash equivalents | $ 10 |
Cash, Cash Equivalents and In_4
Cash, Cash Equivalents and Investments (Contractual Maturities) (Details) $ in Millions | Oct. 31, 2021USD ($) |
Cost | |
Due in one year or less, cost | $ 393 |
Due after one through five years, cost | 878 |
Due after five years, cost | 2 |
No single maturity date, cost | 1,138 |
Cost of fixed income securities | 2,411 |
Estimated Fair Value | |
Due in one year or less, estimated fair value | 395 |
Due after one through five years, estimated fair value | 878 |
Due after five years, estimated fair value | 2 |
No single maturity date, estimated fair value | 1,244 |
Estimated fair value of short-term and long-term investments | $ 2,519 |
Cash, Cash Equivalents and In_5
Cash, Cash Equivalents and Investments (Narrative) (Details) - USD ($) | 12 Months Ended | |
Oct. 25, 2020 | Oct. 27, 2019 | |
Fixed income securities | ||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||
Impairments of investments | $ 0 | $ 0 |
Cash and Cash Equivalents (Gain
Cash and Cash Equivalents (Gain (Loss) on Equity Investments) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Debt and Equity Securities, FV-NI [Line Items] | |||
Total gain (loss) on equity investments, net | $ 99 | $ 9 | $ 36 |
Publicly traded equity securities | |||
Debt and Equity Securities, FV-NI [Line Items] | |||
Unrealized gain | 14 | 14 | 28 |
Unrealized loss | (11) | (17) | (5) |
Realized gain on sales | 2 | 1 | 2 |
Equity investments in privately-held companies | |||
Debt and Equity Securities, FV-NI [Line Items] | |||
Unrealized gain | 65 | 18 | 13 |
Unrealized loss | (12) | (7) | (6) |
Realized gain on sales | 48 | 8 | 5 |
Realized loss on sales or impairment | $ (7) | $ (8) | $ (1) |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - Senior Notes - USD ($) $ in Millions | Oct. 31, 2021 | Oct. 25, 2020 |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||
Long-term debt principal amount | $ 5,500 | $ 5,500 |
Estimate of Fair Value Measurement | Level 2 | ||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||
Long-term debt fair value | $ 6,400 | $ 6,600 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 |
Assets: | |||
Estimated fair value of fixed income securities | $ 5,526 | $ 6,071 | |
Equity investments with readily determinable values | |||
Equity investments, fair value | 687 | 184 | |
Restricted cash equivalents included in deferred income taxes and other assets | 106 | 115 | $ 0 |
Money market funds | Deferred Income Taxes and Other Assets, Net [Member] | |||
Equity investments with readily determinable values | |||
Restricted cash equivalents included in deferred income taxes and other assets | 106 | 115 | |
U.S. Treasury and agency securities | |||
Assets: | |||
Estimated fair value of fixed income securities | 314 | 398 | |
Non-U.S. government securities | |||
Assets: | |||
Estimated fair value of fixed income securities | 5 | ||
Municipal securities | |||
Assets: | |||
Estimated fair value of fixed income securities | 369 | 365 | |
Commercial paper, corporate bonds and medium-term notes | |||
Assets: | |||
Estimated fair value of fixed income securities | 587 | 499 | |
Asset-backed and mortgage-backed securities | |||
Assets: | |||
Estimated fair value of fixed income securities | 557 | 479 | |
Publicly traded equity securities | |||
Equity investments with readily determinable values | |||
Equity investments, fair value | 58 | 45 | |
Fair Value, Measurements, Recurring | |||
Equity investments with readily determinable values | |||
Equity investments, fair value | 58 | 45 | |
Assets, fair value disclosure | 5,584 | 6,116 | |
Fair Value, Measurements, Recurring | Money market funds | |||
Assets: | |||
Estimated fair value of fixed income securities | 3,662 | 4,324 | |
Fair Value, Measurements, Recurring | U.S. Treasury and agency securities | |||
Assets: | |||
Estimated fair value of fixed income securities | 314 | 398 | |
Fair Value, Measurements, Recurring | Non-U.S. government securities | |||
Assets: | |||
Estimated fair value of fixed income securities | 5 | 0 | |
Fair Value, Measurements, Recurring | Municipal securities | |||
Assets: | |||
Estimated fair value of fixed income securities | 391 | 371 | |
Fair Value, Measurements, Recurring | Commercial paper, corporate bonds and medium-term notes | |||
Assets: | |||
Estimated fair value of fixed income securities | 597 | 499 | |
Fair Value, Measurements, Recurring | Asset-backed and mortgage-backed securities | |||
Assets: | |||
Estimated fair value of fixed income securities | 557 | 479 | |
Fair Value, Measurements, Recurring | Publicly traded equity securities | |||
Equity investments with readily determinable values | |||
Equity investments, fair value | 58 | 45 | |
Fair Value, Measurements, Recurring | Level 1 | |||
Assets: | |||
Estimated fair value of fixed income securities | 3,958 | 4,699 | |
Equity investments with readily determinable values | |||
Equity investments, fair value | 58 | 45 | |
Assets, fair value disclosure | 4,016 | 4,744 | |
Fair Value, Measurements, Recurring | Level 1 | Money market funds | |||
Assets: | |||
Estimated fair value of fixed income securities | 3,662 | 4,324 | |
Fair Value, Measurements, Recurring | Level 1 | U.S. Treasury and agency securities | |||
Assets: | |||
Estimated fair value of fixed income securities | 296 | 375 | |
Fair Value, Measurements, Recurring | Level 1 | Non-U.S. government securities | |||
Assets: | |||
Estimated fair value of fixed income securities | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Municipal securities | |||
Assets: | |||
Estimated fair value of fixed income securities | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Commercial paper, corporate bonds and medium-term notes | |||
Assets: | |||
Estimated fair value of fixed income securities | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Asset-backed and mortgage-backed securities | |||
Assets: | |||
Estimated fair value of fixed income securities | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Publicly traded equity securities | |||
Equity investments with readily determinable values | |||
Equity investments, fair value | 58 | 45 | |
Fair Value, Measurements, Recurring | Level 2 | |||
Assets: | |||
Estimated fair value of fixed income securities | 1,568 | 1,372 | |
Equity investments with readily determinable values | |||
Equity investments, fair value | 0 | 0 | |
Assets, fair value disclosure | 1,568 | 1,372 | |
Fair Value, Measurements, Recurring | Level 2 | Money market funds | |||
Assets: | |||
Estimated fair value of fixed income securities | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 2 | U.S. Treasury and agency securities | |||
Assets: | |||
Estimated fair value of fixed income securities | 18 | 23 | |
Fair Value, Measurements, Recurring | Level 2 | Non-U.S. government securities | |||
Assets: | |||
Estimated fair value of fixed income securities | 5 | 0 | |
Fair Value, Measurements, Recurring | Level 2 | Municipal securities | |||
Assets: | |||
Estimated fair value of fixed income securities | 391 | 371 | |
Fair Value, Measurements, Recurring | Level 2 | Commercial paper, corporate bonds and medium-term notes | |||
Assets: | |||
Estimated fair value of fixed income securities | 597 | 499 | |
Fair Value, Measurements, Recurring | Level 2 | Asset-backed and mortgage-backed securities | |||
Assets: | |||
Estimated fair value of fixed income securities | 557 | 479 | |
Fair Value, Measurements, Recurring | Level 2 | Publicly traded equity securities | |||
Equity investments with readily determinable values | |||
Equity investments, fair value | $ 0 | $ 0 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities (Narrative) (Details) - USD ($) $ in Billions | 12 Months Ended | |
Oct. 31, 2021 | Oct. 25, 2020 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Time period for hedging of foreign currency transactions | 24 months | |
Amortization period for the loss on settlement of interest rate swap agreement | 12 months | |
Foreign exchange contracts | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative, notional amount | $ 2.1 | $ 1.6 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Gain (Loss) on Derivatives in AOCI (Details) - Cash Flow Hedging - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Effective portion - gain (loss) recognized in AOCI | $ 36 | $ (148) | |
Effective portion - gain (loss) recognized in AOCI | $ (14) | ||
Foreign exchange contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Effective portion - gain (loss) recognized in AOCI | 36 | 3 | |
Effective portion - gain (loss) recognized in AOCI | (14) | ||
Interest rate contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Effective portion - gain (loss) recognized in AOCI | $ 0 | $ (151) | |
Effective portion - gain (loss) recognized in AOCI | $ 0 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities (Derivatives in Cash Flow Hedging Relationships) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Net sales | $ 23,063 | $ 17,202 | $ 14,608 |
Cost of products sold | 12,149 | 9,510 | 8,222 |
Research, development and engineering | 2,485 | 2,234 | 2,054 |
General and administrative | 620 | 567 | 461 |
Interest expense | 236 | 240 | 237 |
Amount of Gain or (Loss) Reclassified from AOCI into Consolidated Statement of Operations | (3) | 2 | |
Amounts of Gain (Loss) Excluded from Effectiveness Testing Recognized in Consolidated Statement of Operations | (2) | 1 | |
Amount of Gain or (Loss) Reclassified from AOCI into Consolidated Statement of Operations | (4) | ||
Amounts of Gain (Loss) Excluded from Effectiveness Testing Recognized in Consolidated Statement of Operations | 9 | ||
Foreign exchange contracts | Net Sales | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain or (Loss) Reclassified from AOCI into Consolidated Statement of Operations | 4 | (2) | |
Amounts of Gain (Loss) Excluded from Effectiveness Testing Recognized in Consolidated Statement of Operations | 0 | 4 | |
Foreign exchange contracts | Cost of products sold | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain or (Loss) Reclassified from AOCI into Consolidated Statement of Operations | 2 | 6 | |
Amounts of Gain (Loss) Excluded from Effectiveness Testing Recognized in Consolidated Statement of Operations | (2) | (3) | |
Amount of Gain or (Loss) Reclassified from AOCI into Consolidated Statement of Operations | 2 | ||
Amounts of Gain (Loss) Excluded from Effectiveness Testing Recognized in Consolidated Statement of Operations | 15 | ||
Foreign exchange contracts | Research, development, and engineering | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain or (Loss) Reclassified from AOCI into Consolidated Statement of Operations | 3 | 4 | |
Amounts of Gain (Loss) Excluded from Effectiveness Testing Recognized in Consolidated Statement of Operations | 0 | 0 | |
Foreign exchange contracts | General and administrative | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain or (Loss) Reclassified from AOCI into Consolidated Statement of Operations | 1 | 1 | |
Amounts of Gain (Loss) Excluded from Effectiveness Testing Recognized in Consolidated Statement of Operations | 0 | 0 | |
Amount of Gain or (Loss) Reclassified from AOCI into Consolidated Statement of Operations | (3) | ||
Amounts of Gain (Loss) Excluded from Effectiveness Testing Recognized in Consolidated Statement of Operations | (6) | ||
Interest rate contracts | Interest expense | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain or (Loss) Reclassified from AOCI into Consolidated Statement of Operations | (13) | (7) | |
Amounts of Gain (Loss) Excluded from Effectiveness Testing Recognized in Consolidated Statement of Operations | $ 0 | $ 0 | |
Amount of Gain or (Loss) Reclassified from AOCI into Consolidated Statement of Operations | (3) | ||
Amounts of Gain (Loss) Excluded from Effectiveness Testing Recognized in Consolidated Statement of Operations | $ 0 |
Derivative Instruments and He_6
Derivative Instruments and Hedging Activities (Derivatives Not Designated as Hedging Instruments) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Foreign exchange contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain or (Loss) Recognized in Consolidated Statement of Operations | $ 60 | $ (4) | $ (8) |
Foreign exchange contracts | General and administrative | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain or (Loss) Recognized in Consolidated Statement of Operations | 0 | 0 | (8) |
Foreign exchange contracts | Interest and other income, net | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain or (Loss) Recognized in Consolidated Statement of Operations | 29 | (10) | 0 |
Total return swap | Interest and other income, net | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain or (Loss) Recognized in Consolidated Statement of Operations | (1) | (1) | 0 |
Total return swap | Cost of products sold | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain or (Loss) Recognized in Consolidated Statement of Operations | 3 | 1 | 0 |
Total return swap | Operating expenses | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain or (Loss) Recognized in Consolidated Statement of Operations | $ 29 | $ 6 | $ 0 |
Accounts Receivable, Net (Narra
Accounts Receivable, Net (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | Oct. 28, 2018 | |
Receivables [Abstract] | ||||
Accounts receivable sold | $ 1,300,000,000 | $ 1,200,000,000 | $ 1,500,000,000 | |
Discount letters of credit issued during period | 0 | 105,000,000 | 48,000,000 | |
Discount applied to promissory notes | 0 | 0 | 0 | |
Allowance for doubtful accounts | $ 29,000,000 | $ 30,000,000 | $ 30,000,000 | $ 33,000,000 |
Accounts Receivable, Net (Net o
Accounts Receivable, Net (Net of Allowance for Doubtful Accounts) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Changes in allowance for doubtful accounts | |||
Beginning balance | $ 30 | $ 30 | $ 33 |
Provision | 0 | 0 | 0 |
Deductions | (1) | 0 | (3) |
Ending balance | $ 29 | $ 30 | $ 30 |
Contract Balances - Schedule of
Contract Balances - Schedule of Contract Assets and Liabilities (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Oct. 25, 2020 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 201 | $ 148 |
Contract liabilities | $ 2,076 | $ 1,321 |
Contract Balances - Narrative (
Contract Balances - Narrative (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2021 | Oct. 25, 2020 | |
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized | $ 1,000,000,000 | |
Impairment loss on accounts receivable and contract assets | 0 | $ 0 |
Long-term Contract with Customer | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation | $ 779,000,000 | |
Long-term Contract with Customer | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-11-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Percent of performance obligation recognized | 43.00% | |
Performance obligation period | 12 months | |
Long-term Contract with Customer | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-11-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Performance obligation period | 24 months |
Balance Sheet Detail (Inventory
Balance Sheet Detail (Inventory) (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 |
Inventories | |||
Customer service spares | $ 1,251 | $ 1,270 | |
Raw materials | 1,136 | 870 | |
Work-in-process | 873 | 624 | |
Finished goods | 1,049 | 1,140 | |
Total Inventories | 4,309 | 3,904 | $ 3,474 |
Inventory at customer locations included in finished goods | 58 | 16 | |
Evaluation inventory | $ 380 | $ 416 |
Balance Sheet Detail (Other Cur
Balance Sheet Detail (Other Current Assets) (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Oct. 25, 2020 |
Other Current Assets | ||
Prepaid income taxes and income taxes receivable | $ 593 | $ 162 |
Prepaid expenses and other | 793 | 602 |
Total other current assets | $ 1,386 | $ 764 |
Balance Sheet Detail (Property,
Balance Sheet Detail (Property, Plant and Equipment) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Property, Plant and Equipment, Net | |||
Gross property, plant and equipment | $ 4,980 | $ 4,380 | |
Accumulated depreciation | (3,046) | (2,776) | |
Net property, plant and equipment | 1,934 | 1,604 | |
Depreciation | 345 | 320 | $ 306 |
Land and improvements | |||
Property, Plant and Equipment, Net | |||
Gross property, plant and equipment | 334 | 256 | |
Buildings and improvements | |||
Property, Plant and Equipment, Net | |||
Gross property, plant and equipment | $ 1,780 | 1,655 | |
Buildings and improvements | Minimum | |||
Property, Plant and Equipment, Net | |||
Useful life | 3 years | ||
Buildings 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 | $ 1,820 | 1,586 | |
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 | $ 720 | 646 | |
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 | 5 years | ||
Construction in progress | |||
Property, Plant and Equipment, Net | |||
Gross property, plant and equipment | $ 326 | $ 237 |
Balance Sheet Detail (Deferred
Balance Sheet Detail (Deferred Income Taxes and Other Assets) (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Oct. 25, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Non-current deferred income taxes | $ 1,623 | $ 1,711 |
Operating lease right-of-use assets | $ 294 | $ 252 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Deferred Income Taxes and Other Assets | Deferred Income Taxes and Other Assets |
Income tax receivables and other assets | $ 229 | $ 260 |
Deferred Income Taxes and Other Assets | $ 2,146 | $ 2,223 |
Balance Sheet Detail (Accounts
Balance Sheet Detail (Accounts Payable and Accrued Expenses) (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Oct. 25, 2020 |
Accounts Payable and Accrued Expenses | ||
Accounts payable | $ 1,472 | $ 1,124 |
Compensation and employee benefits | 924 | 800 |
Warranty | 242 | 201 |
Dividends payable | 214 | 201 |
Income taxes payable | 734 | 222 |
Other accrued taxes | 24 | 33 |
Interest payable | 39 | 36 |
Operating lease liabilities, current | $ 73 | $ 64 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accounts payable and accrued expenses | Accounts payable and accrued expenses |
Other | $ 546 | $ 457 |
Accounts payable and accrued expenses | $ 4,268 | $ 3,138 |
Balance Sheet Detail (Other Lia
Balance Sheet Detail (Other Liabilities) (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 |
Other Liabilities | |||
Defined and postretirement benefit plans | $ 193 | $ 241 | $ 212 |
Operating lease liabilities, non-current | $ 228 | $ 195 | |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Total other liabilities | Total other liabilities | |
Other | $ 271 | $ 226 | |
Total other liabilities | $ 692 | $ 662 |
Business Combination (Details)
Business Combination (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
May 02, 2021 | Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Business Acquisition [Line Items] | ||||
Deal termination fee | $ 154 | $ 0 | $ 0 | |
Kokusai Electric | ||||
Business Acquisition [Line Items] | ||||
Deal termination fee | $ 154 |
Goodwill, Purchased Technolog_3
Goodwill, Purchased Technology and Other Intangible Assets (Goodwill) (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Oct. 25, 2020 |
Goodwill [Line Items] | ||
Goodwill | $ 3,479 | $ 3,466 |
Corporate and Other | ||
Goodwill [Line Items] | ||
Goodwill | 41 | 41 |
Semiconductor Systems | Operating Segments | ||
Goodwill [Line Items] | ||
Goodwill | 2,207 | 2,208 |
Applied Global Services | Operating Segments | ||
Goodwill [Line Items] | ||
Goodwill | 1,032 | 1,018 |
Display and Adjacent Markets | Operating Segments | ||
Goodwill [Line Items] | ||
Goodwill | $ 199 | $ 199 |
Goodwill, Purchased Technolog_4
Goodwill, Purchased Technology and Other Intangible Assets (Narrative) (Details) $ in Millions | 12 Months Ended |
Oct. 31, 2021USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Goodwill, period increase | $ 13 |
Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 1 year |
Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 15 years |
Goodwill, Purchased Technolog_5
Goodwill, Purchased Technology and Other Intangible Assets (Purchased Technology and Intangible Assets) (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Oct. 25, 2020 |
Summary of Purchased Technology and Intangible Assets [Line Items] | ||
Purchased technology and intangible assets | $ 104 | $ 153 |
Purchased technology, net | ||
Summary of Purchased Technology and Intangible Assets [Line Items] | ||
Purchased technology and intangible assets | 46 | 75 |
Intangible Assets | ||
Summary of Purchased Technology and Intangible Assets [Line Items] | ||
Purchased technology and intangible assets | $ 58 | $ 78 |
Goodwill, Purchased Technolog_6
Goodwill, Purchased Technology and Other Intangible Assets (Finite-lived Intangible Assets) (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Oct. 25, 2020 |
Amortized intangible assets | ||
Gross carrying amount | $ 2,041 | $ 2,041 |
Accumulated amortization | (1,937) | (1,888) |
Carrying amount | 104 | 153 |
Purchased technology, net | ||
Amortized intangible assets | ||
Gross carrying amount | 1,687 | 1,687 |
Accumulated amortization | (1,641) | (1,612) |
Carrying amount | 46 | 75 |
Other Intangible Assets | ||
Amortized intangible assets | ||
Gross carrying amount | 354 | 354 |
Accumulated amortization | (296) | (276) |
Carrying amount | 58 | 78 |
Operating Segments | Semiconductor Systems | ||
Amortized intangible assets | ||
Gross carrying amount | 1,732 | 1,732 |
Accumulated amortization | (1,649) | (1,608) |
Operating Segments | Semiconductor Systems | Purchased technology, net | ||
Amortized intangible assets | ||
Gross carrying amount | 1,476 | 1,476 |
Accumulated amortization | (1,446) | (1,423) |
Operating Segments | Semiconductor Systems | Other Intangible Assets | ||
Amortized intangible assets | ||
Gross carrying amount | 256 | 256 |
Accumulated amortization | (203) | (185) |
Operating Segments | Applied Global Services | ||
Amortized intangible assets | ||
Gross carrying amount | 79 | 79 |
Accumulated amortization | (76) | (75) |
Operating Segments | Applied Global Services | Purchased technology, net | ||
Amortized intangible assets | ||
Gross carrying amount | 35 | 35 |
Accumulated amortization | (32) | (31) |
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 | 201 |
Accumulated amortization | (199) | (194) |
Operating Segments | Display and Adjacent Markets | Purchased technology, net | ||
Amortized intangible assets | ||
Gross carrying amount | 163 | 163 |
Accumulated amortization | (161) | (157) |
Operating Segments | Display and Adjacent Markets | Other Intangible Assets | ||
Amortized intangible assets | ||
Gross carrying amount | 38 | 38 |
Accumulated amortization | (38) | (37) |
Corporate and Other | ||
Amortized intangible assets | ||
Gross carrying amount | 29 | 29 |
Accumulated amortization | (13) | (11) |
Corporate and Other | Purchased technology, net | ||
Amortized intangible assets | ||
Gross carrying amount | 13 | 13 |
Accumulated amortization | (2) | (1) |
Corporate and Other | Other Intangible Assets | ||
Amortized intangible assets | ||
Gross carrying amount | 16 | 16 |
Accumulated amortization | $ (11) | $ (10) |
Goodwill, Purchased Technolog_7
Goodwill, Purchased Technology and Other Intangible Assets (Amortization Expense) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 49 | $ 56 | $ 57 |
Cost of products sold | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 29 | 37 | 38 |
Research, development, and engineering | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 1 | 1 | 1 |
Marketing and selling | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 19 | 18 | 18 |
Operating Segments | Semiconductor Systems | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 41 | 40 | 43 |
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 | 5 | 13 | 13 |
Corporate and Other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 2 | $ 2 | $ 0 |
Goodwill, Purchased Technolog_8
Goodwill, Purchased Technology and Other Intangible Assets (Future Estimated Amortization Expense) (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Oct. 25, 2020 |
Future estimated amortization expense | ||
2022 | $ 33 | |
2023 | 20 | |
2024 | 17 | |
2025 | 15 | |
2026 | 15 | |
Thereafter | 4 | |
Carrying amount | $ 104 | $ 153 |
Borrowing Facilities and Debt_2
Borrowing Facilities and Debt (Narrative) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2020 | May 31, 2020 | Feb. 29, 2020 | Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | Mar. 31, 2021 | Aug. 31, 2019 | |
Line of Credit Facility [Line Items] | ||||||||
Commercial paper program amount | $ 1,500,000,000 | |||||||
Debt repayments | 0 | $ 2,882,000,000 | $ 0 | |||||
Loss on extinguishment of debt | $ 33,000,000 | |||||||
Commercial paper, corporate bonds and medium-term notes | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Current portion of long-term debt | 0 | 0 | ||||||
Senior Notes | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Long-term debt principal amount | 5,500,000,000 | 5,500,000,000 | ||||||
Senior Notes | 1.750% Senior Notes Due 2030 | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Long-term debt principal amount | $ 750,000,000 | $ 750,000,000 | 750,000,000 | |||||
Stated interest rate | 1.75% | 1.75% | ||||||
Senior Notes | 2.750% Senior Notes Due 2050 | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Long-term debt principal amount | $ 750,000,000 | $ 750,000,000 | 750,000,000 | |||||
Stated interest rate | 2.75% | 2.75% | ||||||
Senior Notes | 4.3% Percent Unsecured Senior Notes Due 2021 And 2.625% Percent Unsecured Senior Notes Due 2020 | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt repayments | $ 1,400,000,000 | |||||||
Senior Notes | 4.300% Senior Notes Due 2021 | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Stated interest rate | 4.30% | |||||||
Debt repayments | $ 750,000,000 | |||||||
Senior Notes | 2.625% Senior Notes Due 2020 | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Stated interest rate | 2.625% | |||||||
Debt repayments | $ 600,000,000 | |||||||
Revolving Credit | Unsecured Debt | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument term | 5 years | |||||||
Available revolving credit agreement | $ 1,500,000,000 | |||||||
Accordion feature, increase limit | 500,000,000 | |||||||
Accordion feature, higher borrowing capacity option | $ 2,000,000,000 | |||||||
Amount outstanding | $ 0 | 0 | ||||||
Foreign Line of Credit | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Available revolving credit agreement | 70,000,000 | |||||||
Amount outstanding | $ 0 | $ 0 | ||||||
Line of Credit | Unsecured Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Available revolving credit agreement | $ 2,000,000,000 | |||||||
Amount outstanding | $ 0 |
Borrowing Facilities and Debt_3
Borrowing Facilities and Debt (Debt Outstanding) (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Oct. 25, 2020 | May 31, 2020 |
Schedule of debt | |||
Long-term debt | $ 5,452 | $ 5,448 | |
Senior Notes | |||
Schedule of debt | |||
Long-term debt principal amount | 5,500 | 5,500 | |
Total unamortized discount | (14) | (15) | |
Total unamortized debt issuance costs | $ (34) | (37) | |
Senior Notes | 3.900% Senior Notes Due 2025 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 3.90% | ||
Schedule of debt | |||
Long-term debt principal amount | $ 700 | 700 | |
Effective interest rate | 3.944% | ||
Senior Notes | 3.300% Senior Notes Due 2027 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 3.30% | ||
Schedule of debt | |||
Long-term debt principal amount | $ 1,200 | 1,200 | |
Effective interest rate | 3.342% | ||
Senior Notes | 1.750% Senior Notes Due 2030 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 1.75% | 1.75% | |
Schedule of debt | |||
Long-term debt principal amount | $ 750 | 750 | $ 750 |
Effective interest rate | 1.792% | ||
Senior Notes | 5.100% Senior Notes Due 2035 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 5.10% | ||
Schedule of debt | |||
Long-term debt principal amount | $ 500 | 500 | |
Effective interest rate | 5.127% | ||
Senior Notes | 5.850% Senior Notes Due 2041 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 5.85% | ||
Schedule of debt | |||
Long-term debt principal amount | $ 600 | 600 | |
Effective interest rate | 5.879% | ||
Senior Notes | 4.350% Senior Notes Due 2047 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 4.35% | ||
Schedule of debt | |||
Long-term debt principal amount | $ 1,000 | 1,000 | |
Effective interest rate | 4.361% | ||
Senior Notes | 2.750% Senior Notes Due 2050 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 2.75% | 2.75% | |
Schedule of debt | |||
Long-term debt principal amount | $ 750 | $ 750 | $ 750 |
Effective interest rate | 2.773% |
Leases - Lease Expense and Supp
Leases - Lease Expense and Supplemental Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Leases [Abstract] | |||
Operating lease cost | $ 79 | $ 69 | |
Weighted-average remaining lease term (in years) | 5 years 1 month 6 days | 5 years 2 months 12 days | |
Weighted-average discount rate | 1.70% | 1.80% | |
Rent expense | $ 51 | ||
Operating cash flows paid for operating leases | $ 79 | $ 70 | |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 123 | $ 156 |
Leases - Lease Maturities (Deta
Leases - Lease Maturities (Details) $ in Millions | Oct. 31, 2021USD ($) |
Operating Leases - Maturity After Adoption | |
2022 | $ 78 |
2023 | 71 |
2024 | 61 |
2025 | 48 |
2026 | 18 |
Thereafter | 39 |
Total lease payments | 315 |
Less imputed interest | (14) |
Total | $ 301 |
Severance and Related Charges -
Severance and Related Charges - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Restructuring Cost and Reserve [Line Items] | |||
Severance and related charges | $ 157 | $ 0 | $ 0 |
Employee Severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance and related charges | 158 | ||
Restructuring reserve | $ 17 | $ 0 |
Severance and Related Charges_2
Severance and Related Charges - Schedule of Severance Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Restructuring Cost and Reserve [Line Items] | |||
Severance and related charges | $ 157 | $ 0 | $ 0 |
Display and Adjacent Markets | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance and related charges | 8 | ||
Corporate and Other | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance and related charges | $ 149 |
Severance and Related Charges_3
Severance and Related Charges - Schedule of changes in severance and related charges reserves (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Restructuring Reserve [Roll Forward] | |||
Severance and related charges | $ 157 | $ 0 | $ 0 |
Employee Severance | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | 0 | ||
Severance and related charges | 158 | ||
Adjustment to provision for severance | (1) | ||
Consumption of reserves | (140) | ||
Restructuring reserve, ending balance | $ 17 | $ 0 |
Stockholders' Equity, Compreh_3
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning Balance | $ 10,578 | $ 8,214 | $ 6,845 | |
Other comprehensive income (loss) before reclassifications | 34 | (120) | (46) | |
Amounts reclassified out of AOCI | 5 | 1 | 8 | |
Other comprehensive income (loss), net of tax | 39 | (119) | (38) | |
Ending Balance | 12,247 | 10,578 | 8,214 | |
Cumulative Effect, Period of Adoption, Adjustment | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning Balance | [1] | 1,553 | ||
Unrealized Gain (Loss) on Investments, Net | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning Balance | 20 | 11 | 7 | |
Other comprehensive income (loss) before reclassifications | (14) | 16 | 22 | |
Amounts reclassified out of AOCI | (7) | (7) | (1) | |
Other comprehensive income (loss), net of tax | (21) | 9 | 21 | |
Ending Balance | (1) | 20 | 11 | |
Unrealized Gain (Loss) on Investments, Net | Cumulative Effect, Period of Adoption, Adjustment | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning Balance | (17) | |||
Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning Balance | (133) | (16) | (9) | |
Other comprehensive income (loss) before reclassifications | 28 | (115) | (10) | |
Amounts reclassified out of AOCI | 2 | (2) | 3 | |
Other comprehensive income (loss), net of tax | 30 | (117) | (7) | |
Ending Balance | (103) | (133) | (16) | |
Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges | Cumulative Effect, Period of Adoption, Adjustment | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning Balance | 0 | |||
Defined and Postretirement Benefit Plans | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning Balance | (199) | (188) | (137) | |
Other comprehensive income (loss) before reclassifications | 20 | (21) | (57) | |
Amounts reclassified out of AOCI | 10 | 10 | 6 | |
Other comprehensive income (loss), net of tax | 30 | (11) | (51) | |
Ending Balance | (169) | (199) | (188) | |
Defined and Postretirement Benefit Plans | Cumulative Effect, Period of Adoption, Adjustment | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning Balance | 0 | |||
Cumulative Translation Adjustments | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning Balance | 13 | 13 | 14 | |
Other comprehensive income (loss) before reclassifications | 0 | 0 | (1) | |
Amounts reclassified out of AOCI | 0 | 0 | 0 | |
Other comprehensive income (loss), net of tax | 0 | 0 | (1) | |
Ending Balance | 13 | 13 | 13 | |
Cumulative Translation Adjustments | Cumulative Effect, Period of Adoption, Adjustment | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning Balance | 0 | |||
AOCI Attributable to Parent | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning Balance | (299) | (180) | (125) | |
Other comprehensive income (loss), net of tax | 39 | (119) | (38) | |
Ending Balance | $ (260) | $ (299) | (180) | |
AOCI Attributable to Parent | Cumulative Effect, Period of Adoption, Adjustment | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning Balance | [1] | $ (17) | ||
[1] | Represents the adjustment related to the adoption of Accounting Standard Update (ASU) 2016-01 Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities and ASU 2016-16 Income Tax (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . |
Stockholders' Equity, Compreh_4
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Narrative) (Details) | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Oct. 31, 2021USD ($)$ / sharesshares | Aug. 01, 2021$ / shares | May 02, 2021$ / shares | Jan. 31, 2021$ / shares | Oct. 25, 2020$ / shares | Jul. 26, 2020$ / shares | Apr. 26, 2020$ / shares | Jan. 26, 2020$ / shares | Oct. 27, 2019$ / shares | Jul. 28, 2019$ / shares | Apr. 28, 2019$ / shares | Jan. 27, 2019$ / shares | Oct. 31, 2021USD ($)employee_stock_purchase_plan$ / sharesshares | Oct. 25, 2020USD ($)$ / sharesshares | Oct. 27, 2019USD ($)$ / sharesshares | Sep. 01, 2021shares | Mar. 31, 2021USD ($) | Mar. 11, 2021shares | Feb. 28, 2018USD ($) | |
Equity [Line Items] | |||||||||||||||||||
Tax effects on the unrealized loss on derivative instruments qualifying as cash flow hedges | $ | $ 33,000,000 | ||||||||||||||||||
Stock Repurchase Program | |||||||||||||||||||
Authorized amount | $ | $ 7,500,000,000 | $ 6,000,000,000 | |||||||||||||||||
Remaining authorized repurchase amount | $ | $ 5,000,000,000 | $ 5,000,000,000 | |||||||||||||||||
Dividends | |||||||||||||||||||
Cash dividend declared (usd per share) | $ / shares | $ 0.24 | $ 0.24 | $ 0.24 | $ 0.22 | $ 0.22 | $ 0.22 | $ 0.22 | $ 0.21 | $ 0.21 | $ 0.21 | $ 0.21 | $ 0.20 | $ 0.94 | $ 0.87 | $ 0.83 | ||||
Payments of dividends | $ | $ 838,000,000 | $ 787,000,000 | $ 771,000,000 | ||||||||||||||||
Employee Stock Incentive Plan | |||||||||||||||||||
Share-based Compensation | |||||||||||||||||||
Increase in capital shares reserved for future issuance (in shares) | 10,000,000 | ||||||||||||||||||
Employee Stock Purchase Plan | |||||||||||||||||||
Share-based Compensation | |||||||||||||||||||
Increase in capital shares reserved for future issuance (in shares) | 11,300,000 | ||||||||||||||||||
Number of employee stock purchase plans | employee_stock_purchase_plan | 2 | ||||||||||||||||||
Employee Stock Purchase Plans | |||||||||||||||||||
Purchase period | 6 months | ||||||||||||||||||
Number of shares issued under the ESPP (in shares) | 3,000,000 | 3,000,000 | 4,000,000 | ||||||||||||||||
Employee Stock | |||||||||||||||||||
Share-based Compensation | |||||||||||||||||||
Performance of total shareholder return | 100.00% | ||||||||||||||||||
Total unrecognized compensation expense | $ | $ 512,000,000 | $ 512,000,000 | |||||||||||||||||
Weighted average period for unrecognized compensation expense to be recognized | 2 years 6 months | ||||||||||||||||||
Employee Stock | Employee Stock Purchase Plan | |||||||||||||||||||
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) | 0 | 0 | 0 | ||||||||||||||||
Stock Options | Employee Stock Incentive Plan | |||||||||||||||||||
Share-based Compensation | |||||||||||||||||||
Number of shares available for grant | 35,000,000 | 35,000,000 | |||||||||||||||||
Stock Options | Employee Stock Purchase Plan | |||||||||||||||||||
Share-based Compensation | |||||||||||||||||||
Number of shares available for grant | 16,000,000 | 16,000,000 | |||||||||||||||||
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 | ||||||||||||||||||
Weight of metric (as a percent) | 50.00% | ||||||||||||||||||
Additional performance-based awards to be earned upon certain levels of achievement (in shares) | 1,200,000 | 1,200,000 | |||||||||||||||||
Performance Shares/Performance Units | Executive Officer | |||||||||||||||||||
Stock Options, Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | |||||||||||||||||||
Award measurement period | 5 years | ||||||||||||||||||
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 | Minimum | Executive Officer | |||||||||||||||||||
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% | ||||||||||||||||||
Performance Shares/Performance Units | Maximum | Executive Officer | |||||||||||||||||||
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 | Minimum | |||||||||||||||||||
Stock Options, Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | |||||||||||||||||||
Stock options scheduled to be vested | 3 years | ||||||||||||||||||
Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | Maximum | |||||||||||||||||||
Stock Options, Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | |||||||||||||||||||
Stock options scheduled to be vested | 4 years | ||||||||||||||||||
United States | Employee Stock Purchase Plan | |||||||||||||||||||
Share-based Compensation | |||||||||||||||||||
Number of employee stock purchase plans | employee_stock_purchase_plan | 1 | ||||||||||||||||||
Non-US | Employee Stock Purchase Plan | |||||||||||||||||||
Share-based Compensation | |||||||||||||||||||
Number of employee stock purchase plans | employee_stock_purchase_plan | 1 |
Stockholders' Equity, Compreh_5
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Stock Repurchases) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Equity [Abstract] | |||
Shares of common stock repurchased (in shares) | 28 | 12 | 60 |
Cost of stock repurchased | $ 3,750 | $ 649 | $ 2,403 |
Average price paid per share (in dollars per share) | $ 134.03 | $ 56.32 | $ 39.86 |
Stockholders' Equity, Compreh_6
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Effect of Share-based Compensation) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation | $ 346 | $ 307 | $ 263 |
Income tax benefits recognized | 43 | 39 | 37 |
Cost of products sold | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation | 118 | 103 | 89 |
Research, development, and engineering | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation | 129 | 116 | 99 |
Marketing and selling | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation | 43 | 36 | 31 |
General and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation | $ 56 | $ 52 | $ 44 |
Stockholders' Equity, Compreh_7
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. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | Oct. 28, 2018 | |
Shares | ||||
Beginning Balance (shares) | 15 | 18 | 18 | |
Granted (shares) | 5 | 6 | 8 | |
Vested (shares) | (6) | (8) | (7) | |
Canceled (shares) | (1) | (1) | (1) | |
Ending Balance (shares) | 13 | 15 | 18 | 18 |
Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest (in shares) | 13 | |||
Weighted Average Grant Date Fair Value | ||||
Beginning of Period (in dollars per share) | $ 45.36 | $ 35.78 | $ 32.64 | |
Granted (in dollars per share) | 92.04 | 53.89 | 36 | |
Vested (in dollars per share) | 43.11 | 31.25 | 28.41 | |
Canceled (in dollars per share) | 59.41 | 42.61 | 34.59 | |
Ending Balance (in dollars per share) | 63.29 | $ 45.36 | $ 35.78 | $ 32.64 |
Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest (in dollars per share) | $ 63.37 | |||
Weighted Average Remaining Contractual Term | ||||
Weighted average remaining contractual term | 2 years 2 months 12 days | 2 years 2 months 12 days | 2 years 1 month 6 days | 2 years |
Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest, Weighted Average Remaining Contractual Term | 2 years | |||
Aggregate Intrinsic Value | ||||
Aggregate Intrinsic Value | $ 1,752 | $ 914 | $ 985 | $ 600 |
Expected to vest, Aggregate Intrinsic Value | $ 1,724 |
Stockholders' Equity, Compreh_8
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (ESPP Fair Value Assumptions) (Details) - Employee Stock Purchase Plan - $ / shares | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Weighted Average Assumptions Used for ESPP Granted | |||
Dividend yield | 0.72% | 1.41% | 1.99% |
Expected volatility | 41.30% | 48.20% | 35.50% |
Risk-free interest rate | 0.05% | 0.58% | 2.21% |
Expected life (in years) | 6 months | 6 months | 6 months |
Weighted average estimated fair value (in dollars per share) | $ 33.77 | $ 17.30 | $ 10.61 |
Employee Benefit Plans (Narrati
Employee Benefit Plans (Narrative) (Details) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021USD ($)Plan | Oct. 25, 2020USD ($) | Oct. 27, 2019USD ($) | |
Employee Bonus Plans | |||
Charges to expense under Employee bonus plans | $ 631 | $ 471 | $ 292 |
Defined Benefit Pension Plans of Foreign Subsidiaries and Other Post-Retirement Benefits | |||
Company contributions expected for next fiscal year | $ 7 | ||
Executive Deferred Compensation Plans | |||
Number of unfunded plans | Plan | 2 | ||
Executive Deferred Compensation Plans | |||
Executive Deferred Compensation Plans | |||
Amounts payable under EDCP | $ 206 | 151 | |
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 | $ 61 | $ 52 | $ 49 |
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. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Change in projected benefit obligation | |||
Beginning projected benefit obligation | $ 674 | $ 617 | $ 524 |
Service cost | 15 | 13 | 11 |
Interest cost | 8 | 8 | 10 |
Plan participants’ contributions | 1 | 1 | 1 |
Actuarial (gain) loss | (1) | 6 | 84 |
Settlements | 0 | 0 | (1) |
Foreign currency exchange rate changes | 3 | 33 | (5) |
Benefits paid | (15) | (10) | (8) |
Plan amendments and other adjustments | 0 | 6 | 1 |
Ending projected benefit obligation | 685 | 674 | 617 |
Ending accumulated benefit obligation | 626 | 627 | 578 |
Change in plan assets | |||
Beginning fair value of plan assets | 431 | 409 | 365 |
Return on plan assets | 49 | 0 | 30 |
Employer contributions | 22 | 12 | 27 |
Plan participants’ contributions | 1 | 1 | 1 |
Foreign currency exchange rate changes | 3 | 19 | (5) |
Settlements | 0 | 0 | (1) |
Benefits paid | (15) | (10) | (8) |
Ending fair value of plan assets | 491 | 431 | 409 |
Funded status | (194) | (243) | (208) |
Amounts recognized in the consolidated balance sheets | |||
Noncurrent asset | 1 | 0 | 5 |
Current liability | (2) | (2) | (1) |
Noncurrent liability | (193) | (241) | (212) |
Total | (194) | (243) | (208) |
Estimated amortization from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal period | |||
Actuarial loss | 11 | 14 | 12 |
Prior service credit | 0 | 0 | 0 |
Total | 11 | 14 | 12 |
Amounts recognized in accumulated other comprehensive loss | |||
Net actuarial loss | 200 | 242 | 226 |
Prior service credit | 1 | 0 | 0 |
Total | 201 | 242 | 226 |
Plans with projected benefit obligations in excess of plan assets | |||
Projected benefit obligation | 472 | 674 | 424 |
Fair value of plan assets | 277 | 431 | 211 |
Plans with accumulated benefit obligations in excess of plan assets | |||
Accumulated benefit obligation | 413 | 627 | 385 |
Fair value of plan assets | $ 277 | $ 431 | $ 211 |
Minimum | |||
Range of assumptions to determine benefit obligations | |||
Discount rate | 0.60% | 0.40% | 0.50% |
Rate of compensation increase | 2.40% | 2.30% | 2.30% |
Maximum | |||
Range of assumptions to determine benefit obligations | |||
Discount rate | 6.60% | 6.50% | 3.10% |
Rate of compensation increase | 10.00% | 10.00% | 3.60% |
Employee Benefit Plans (Plan As
Employee Benefit Plans (Plan Assets Allocation) (Details) | Oct. 31, 2021 | Oct. 25, 2020 |
Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets — allocation | 35.00% | 38.00% |
Debt securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets — allocation | 33.00% | 43.00% |
Insurance contracts | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets — allocation | 23.00% | 9.00% |
Other investments | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets — allocation | 9.00% | 10.00% |
Employee Benefit Plans (Fair Va
Employee Benefit Plans (Fair Value of Plan Assets) (Details) - USD ($) $ in Millions | Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | Oct. 28, 2018 |
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | $ 491 | $ 431 | $ 409 | $ 365 |
Total assets at fair value | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 345 | 232 | ||
Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 218 | 177 | ||
Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 17 | 16 | ||
Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 110 | 39 | $ 36 | |
Assets measured at net asset value | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 146 | 199 | ||
Equity securities | Total assets at fair value | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 137 | 103 | ||
Equity securities | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 137 | 103 | ||
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 | Total assets at fair value | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 79 | 72 | ||
Debt securities | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 79 | 72 | ||
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 | Total assets at fair value | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 110 | 39 | ||
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 | 110 | 39 | ||
Other investments | Total assets at fair value | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 17 | 16 | ||
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 | 17 | 16 | ||
Other investments | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 0 | 0 | ||
Cash | Total assets at fair value | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 2 | 2 | ||
Cash | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 2 | 2 | ||
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 |
Employee Benefit Plans (Level 3
Employee Benefit Plans (Level 3 Instruments) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Change in plan assets | |||
Beginning fair value of plan assets | $ 431 | $ 409 | $ 365 |
Currency impact | (3) | (19) | 5 |
Ending fair value of plan assets | 491 | 431 | 409 |
Level 3 | |||
Change in plan assets | |||
Beginning fair value of plan assets | 39 | 36 | |
Purchases, sales, settlements, net | 72 | 1 | |
Currency impact | (1) | 2 | |
Ending fair value of plan assets | $ 110 | $ 39 | $ 36 |
Employee Benefit Plans (Net Per
Employee Benefit Plans (Net Periodic Benefit Costs) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Components of net periodic benefit cost | |||
Service cost | $ 15 | $ 13 | $ 11 |
Interest cost | 8 | 8 | 10 |
Expected return on plan assets | (21) | (22) | (20) |
Amortization of actuarial loss and prior service credit | 14 | 12 | 7 |
Net periodic benefit cost | $ 16 | $ 11 | $ 8 |
Weighted average assumptions | |||
Discount rate | 1.18% | 1.23% | 1.98% |
Expected long-term return on assets | 4.80% | 5.10% | 5.40% |
Rate of compensation increase | 2.74% | 2.69% | 2.74% |
Employee Benefit Plans (Future
Employee Benefit Plans (Future Expected Benefit Payments) (Details) $ in Millions | Oct. 31, 2021USD ($) |
Defined Benefit Plan, Estimated Future Benefit Payments [Abstract] | |
2022 | $ 11 |
2023 | 13 |
2024 | 15 |
2025 | 14 |
2026 | 15 |
2027-2031 | 99 |
Total | $ 167 |
Income Taxes (Components of Inc
Income Taxes (Components of Income Taxes) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Components of income from operations before income taxes | |||
U.S. | $ 512 | $ 92 | $ 363 |
Foreign | 6,259 | 4,074 | 2,906 |
Income before income taxes | 6,771 | 4,166 | 3,269 |
Current: | |||
U.S. | 462 | 196 | 240 |
Foreign | 344 | 263 | 260 |
State | 17 | 20 | 12 |
Total current provision for income taxes | 823 | 479 | 512 |
Deferred: | |||
U.S. | (3) | (3) | 8 |
Foreign | 67 | 76 | 46 |
State | (4) | (5) | (3) |
Total deferred provision (benefit) for income taxes | 60 | 68 | 51 |
Provision for income taxes | $ 883 | $ 547 | $ 563 |
Reconciliation between the statutory U.S.federal income tax rate to actual effective income tax rate | |||
Tax provision at U.S. statutory rate | 21.00% | 21.00% | 21.00% |
Effect of foreign operations taxed at various rates | (7.00%) | (5.90%) | (5.90%) |
Changes in prior years’ unrecognized tax benefits | 0.20% | 0.50% | 2.60% |
Resolutions of prior years' income tax filings | (0.10%) | (1.00%) | (0.10%) |
Research and other tax credits | (0.90%) | (1.30%) | (1.10%) |
Other | (0.20%) | (0.20%) | 0.70% |
Effective income tax rate | 13.00% | 13.10% | 17.20% |
Deferred tax assets: | |||
Allowance for doubtful accounts | $ 4 | $ 4 | |
Inventory reserves and basis difference | 112 | 119 | |
Installation and warranty reserves | 29 | 14 | |
Intangible assets | 1,281 | 1,355 | |
Accrued liabilities | 31 | 24 | |
Deferred revenue | 25 | 32 | |
Tax credits | 369 | 326 | |
Deferred compensation | 133 | 130 | |
Share-based compensation | 34 | 30 | |
Lease liability | 61 | 55 | |
Other | 89 | 96 | |
Gross deferred tax assets | 2,168 | 2,185 | |
Valuation allowance | (361) | (314) | |
Total deferred tax assets | 1,807 | 1,871 | |
Deferred tax liabilities: | |||
Fixed assets | (93) | (76) | |
Right of use assets | (62) | (54) | |
Undistributed foreign earnings | (37) | (39) | |
Total deferred tax liabilities | (192) | (169) | |
Net deferred tax assets | 1,615 | 1,702 | |
Reconciliation of gross unrecognized tax benefits | |||
Beginning balance of gross unrecognized tax benefits | 496 | 845 | $ 374 |
Settlements with tax authorities | 0 | (446) | (1) |
Lapses of statutes of limitation | (4) | (3) | (2) |
Increases in tax positions for current year | 26 | 44 | 33 |
Increases in tax positions for prior years | 23 | 91 | 441 |
Decreases in tax positions for prior years | (4) | (35) | 0 |
Ending balance of gross unrecognized tax benefits | $ 537 | $ 496 | $ 845 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||
Jul. 28, 2019 | Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Income Tax Examination [Line Items] | ||||
GILTI benefit reversed | $ 96 | |||
Tax holiday benefit | $ 370 | $ 215 | ||
Tax holiday benefit per diluted share (in dollars per share) | $ 0.40 | $ 0.23 | ||
Unrecognized tax benefits, decrease resulting from settlements with taxing authorities | $ 0 | $ 446 | $ 1 | |
Increases in tax positions for prior years | 23 | 91 | 441 | |
Income tax penalties and interest expense (benefit) | 14 | 24 | 24 | |
Unrecognized tax benefits that would impact effective tax rate | 442 | 410 | 758 | |
Noncurrent Liabilities | ||||
Income Tax Examination [Line Items] | ||||
Interest and penalties related to uncertain tax positions | 88 | 74 | $ 50 | |
Research and development tax credit carryforwards | State and Local Jurisdiction | ||||
Income Tax Examination [Line Items] | ||||
Tax credit carryforwards | 369 | |||
Carried over until exhausted | State and Local Jurisdiction | ||||
Income Tax Examination [Line Items] | ||||
Tax credit carryforwards | 345 | |||
Carried over the next fifteen years | State and Local Jurisdiction | ||||
Income Tax Examination [Line Items] | ||||
Tax credit carryforwards | $ 20 | |||
Tax credit carryforward, term | 15 years | |||
SINGAPORE | ||||
Income Tax Examination [Line Items] | ||||
Foreign statutory income tax rate | 17.00% | |||
Income tax expense recognized from settled tax audits | 26 | |||
SINGAPORE | Foreign Tax Authority | ||||
Income Tax Examination [Line Items] | ||||
Income tax paid or accrued | 72 | |||
Unrecognized tax benefits, decrease resulting from settlements with taxing authorities | $ 374 |
Income Taxes (Valuation Allowan
Income Taxes (Valuation Allowance) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Changes in allowance for doubtful accounts | |||
Increases | $ 0 | $ 0 | $ 0 |
Decreases | (1) | 0 | (3) |
Valuation Allowance of Deferred Tax Assets | |||
Changes in allowance for doubtful accounts | |||
Beginning balance | 314 | 257 | 230 |
Increases | 47 | 57 | 27 |
Decreases | 0 | 0 | 0 |
Ending balance | $ 361 | $ 314 | $ 257 |
Warranty, Guarantees, Commitm_3
Warranty, Guarantees, Commitments and Contingencies (Narrative) (Details) $ in Millions | 12 Months Ended |
Oct. 31, 2021USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Products warranty period | 12 months |
Maximum potential amount of future payments for letters of credit or other guarantee instruments | $ 500 |
Parent guarantees to banks | $ 144 |
Warranty, Guarantees, Commitm_4
Warranty, Guarantees, Commitments and Contingencies (Warranty Reserves) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Changes in the warranty reserves | |||
Beginning balance | $ 201 | $ 196 | $ 208 |
Provisions for warranty | 223 | 165 | 148 |
Changes in reserves related to preexisting warranty | 9 | 2 | 7 |
Consumption of reserves | (191) | (162) | (167) |
Ending balance | $ 242 | $ 201 | $ 196 |
Industry Segment Operations (Na
Industry Segment Operations (Narrative) (Details) | 12 Months Ended |
Oct. 31, 2021segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Industry Segment Operations (Re
Industry Segment Operations (Reportable Segment) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Segment Reporting Information [Line Items] | |||
Net sales | $ 23,063 | $ 17,202 | $ 14,608 |
Operating Income (Loss) | 6,889 | 4,365 | 3,350 |
Deprecation/Amortization | 394 | 376 | 363 |
Capital Expenditures | 668 | 422 | 441 |
Accounts Receivable | 4,953 | 2,963 | 2,533 |
Inventories | 4,309 | 3,904 | 3,474 |
Operating Segments | Semiconductor Systems | |||
Segment Reporting Information [Line Items] | |||
Net sales | 16,286 | 11,367 | 9,027 |
Operating Income (Loss) | 6,311 | 3,714 | 2,464 |
Deprecation/Amortization | 194 | 219 | 202 |
Capital Expenditures | 228 | 226 | 168 |
Accounts Receivable | 3,886 | 2,061 | 1,543 |
Inventories | 2,586 | 2,139 | 1,703 |
Operating Segments | Applied Global Services | |||
Segment Reporting Information [Line Items] | |||
Net sales | 5,013 | 4,155 | 3,854 |
Operating Income (Loss) | 1,508 | 1,127 | 1,101 |
Deprecation/Amortization | 32 | 34 | 25 |
Capital Expenditures | 29 | 30 | 47 |
Accounts Receivable | 922 | 764 | 790 |
Inventories | 1,561 | 1,545 | 1,535 |
Operating Segments | Display and Adjacent Markets | |||
Segment Reporting Information [Line Items] | |||
Net sales | 1,634 | 1,607 | 1,651 |
Operating Income (Loss) | 314 | 291 | 294 |
Deprecation/Amortization | 27 | 31 | 22 |
Capital Expenditures | 32 | 29 | 43 |
Accounts Receivable | 207 | 179 | 246 |
Inventories | 153 | 195 | 214 |
Corporate and Other | |||
Segment Reporting Information [Line Items] | |||
Net sales | 130 | 73 | 76 |
Operating Income (Loss) | (1,244) | (767) | (509) |
Deprecation/Amortization | 141 | 92 | 114 |
Capital Expenditures | 379 | 137 | 183 |
Accounts Receivable | (62) | (41) | (46) |
Inventories | $ 9 | $ 25 | $ 22 |
Industry Segment Operations (Ne
Industry Segment Operations (Net Sales and Operating Income (Loss)) (Details) - Semiconductor Systems - Net sales - Product Concentration Risk | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Segment Reporting Information [Line Items] | |||
Percentage of net sales | 100.00% | 100.00% | 100.00% |
Foundry, logic and other | |||
Segment Reporting Information [Line Items] | |||
Percentage of net sales | 60.00% | 59.00% | 52.00% |
Dynamic random-access memory (DRAM) | |||
Segment Reporting Information [Line Items] | |||
Percentage of net sales | 19.00% | 20.00% | 22.00% |
Flash memory | |||
Segment Reporting Information [Line Items] | |||
Percentage of net sales | 21.00% | 21.00% | 26.00% |
Industry Segment Operations (Se
Industry Segment Operations (Segment Reconciling Items) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Net sales | $ 23,063 | $ 17,202 | $ 14,608 |
Share-based compensation | (346) | (307) | (263) |
Severance and related charges | (157) | 0 | 0 |
Deal termination fee | (154) | 0 | 0 |
Income from operations | 6,889 | 4,365 | 3,350 |
Corporate and Other | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Net sales | 130 | 73 | 76 |
Unallocated cost of products sold and expenses | (725) | (533) | (322) |
Share-based compensation | (346) | (307) | (263) |
Severance and related charges | (149) | 0 | 0 |
Deal termination fee | (154) | 0 | 0 |
Income from operations | $ (1,244) | $ (767) | $ (509) |
Industry Segment Operations (_2
Industry Segment Operations (Net Sales and Long-lived Assets) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Sales | $ 23,063 | $ 17,202 | $ 14,608 |
Long-lived assets | 2,087 | 1,777 | |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Sales | 2,038 | 1,619 | 1,871 |
Long-lived assets | 1,965 | 1,628 | |
China | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Sales | 7,535 | 5,456 | 4,277 |
Long-lived assets | 10 | 14 | |
Korea | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Sales | 5,012 | 3,031 | 1,929 |
Long-lived assets | 16 | 21 | |
Taiwan | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Sales | 4,742 | 3,953 | 2,965 |
Long-lived assets | 62 | 59 | |
Japan | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Sales | 1,962 | 1,996 | 2,198 |
Long-lived assets | 9 | 16 | |
Europe | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Sales | 1,097 | 736 | 820 |
Long-lived assets | 12 | 21 | |
Southeast Asia | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Sales | 677 | 411 | 548 |
Long-lived assets | 13 | 18 | |
Total outside United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Sales | 21,025 | 15,583 | $ 12,737 |
Long-lived assets | $ 122 | $ 149 |
Industry Segment Operations (Pe
Industry Segment Operations (Percentage by Customer) (Details) - Net sales - Customer Concentration Risk | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 25, 2020 | Oct. 27, 2019 | |
Samsung Electronics Co., Ltd. | |||
Entity-Wide Revenue, Major Customer [Line Items] | |||
Percentage of net sales | 20.00% | 18.00% | |
Taiwan Semiconductor Manufacturing Company Limited | |||
Entity-Wide Revenue, Major Customer [Line Items] | |||
Percentage of net sales | 15.00% | 18.00% | 14.00% |
Intel Corporation | |||
Entity-Wide Revenue, Major Customer [Line Items] | |||
Percentage of net sales | 12.00% |